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Dáil Éireann díospóireacht -
Wednesday, 5 Mar 1997

Vol. 475 No. 8

Social Welfare Bill, 1997: Second Stage.

I move: "That the Bill be now read a Second Time."

The purpose of the Bill is to give legislative effect to the wide range of social welfare improvements announced in the budget last January. However, to see the Bill merely as updating legislation does not do it justice. It must be considered in the context of the Social Welfare Bills which the Minister has introduced over the past three years.

Is the Minister not in the House? Is he still in court?

The provisions contained in previous Social Welfare Acts, combined with those contained in this Bill, have brought about a transformation of the social welfare system. The significant change in the focus and ethos of the Department is now underpinned by a solid body of legislation. This change in focus stemmed from a realisation that it was no longer sufficient for the Department to concentrate all its energies on delivering essential income support payments to the elderly, unemployed, people with disabilities, low wage workers and families, although that remains, and rightly, a central part of its work. It was also necessary for the Department to ensure that the social welfare system is able to support the aspirations of people to improve their conditions and reduce their level of dependency by facilitating them in gaining access to training, education and employment.

We do not claim the system is now perfect; it is not. There is still need for further reform but it is a more coherent and flexible system. It is responsive to the varying needs of society. This Bill represents a further stage in its transformation.

The 36 sections of the Bill comprise a comprehensive package of measures which provides for an improvement in the living standards of all who depend on social welfare through increases in weekly rates of payment which are double the projected rate of inflation for the year; continues the pro-work and pro-family policies which have been central to the work of this Government; provides a programme of improvements for old age pensioners and carers; completes the process of ensuring equal treatment of men and women in all social welfare schemes; brings about further significant reform of our social welfare system through the introduction of, for example, new pro rata pensions and a new sickness allowance; strengthens the social insurance system by enhancing the benefits available to all workers who pay social insurance; and reverses the damage caused by the infamous “dirty dozen” cuts introduced by the previous Fianna Fáil-Progressive Democrats Government.

I wish to concentrate on a number of specific measures in the Bill which are of particular significance. I am pleased to provide for the introduction of pro rata contributory pensions. The present conditions require a minimum average requirement of 20 contributions over a working lifetime in order to qualify for the minimum rate of pension. Under the new arrangements in section 12, reduced rate old age contributory pension will now be payable to persons who have a yearly average of between 10 and 19 contributions over the period from when they first became insured until the end of the contribution year before reaching the age of 66 years. The details will be contained in regulations to be made under the section.

The new arrangements will come into effect in November and will be of benefit mainly to people who have had broken or sporadic contribution records over their working lifetime. Included in that category are married women who worked for a number of years before they married, then spent a long period outside the paid workforce and who may have returned to paid employment in recent years. It will help returned emigrants whose work period abroad cannot be reckoned for pension purposes in Ireland. It will also benefit self-employed people who started on their own before 1988 when PRSI for the self-employed was introduced.

In line with the recommendations in the final report of the National Pensions Board, section 12 provides for an increase in the number of paid contributions required for entitlement to old age contributory pension from 156 or three years to 520 or ten years. This increase is being introduced in two phases with lengthy timescales which recognise the need for a long lead-in time when making fundamental changes to State pension entitlements in order to meet people's expectations and allay fears as much as possible. The timescales proposed are more generous than those envisaged by the National Pensions Board.

The second issue I wish to highlight is dealt with in section 13 which amends the conditions governing requalification for unemployment benefit and which is aimed at improving the position of workers in a typical employment. The categories of workers involved include seasonal and casual workers such as dockers, firefighters, creamery workers, hotel staff and people in the tourism industry.

By virtue of changes introduced by Deputy McCreevy as part of his notorious "dirty dozen" cuts, these workers were precluded from requalifying for unemployment benefit until they had a further 13 PRSI contributions paid after they had exhausted their entitlement to unemployment benefit. In practice, this meant that, until such time as they acquired the necessary 13 PRSI contributions, they had to have recourse to unemployment assistance which is means tested and which took account of whatever earnings they had from their casual employment in the previous tax year. The method by which those earnings were assessed gave rise to difficulties in areas where the volume of casual work available was declining and many workers found themselves on a reduced rate of unemployment assistance, or no payment at all, on the basis of past earnings which had been spent and/or projected earnings which had not yet materialised.

Under the Bill, a person can requalify for unemployment benefit by having the necessary 13 PRSI contributions paid at any time after the 156th day of unemployment, that is, six months. This means that instead of having to have recourse to unemployment assistance for 13 weeks, a claimant can, in certain circumstances, requalify for a further 15 months of unemployment benefit. At least 5,000 workers who are currently receiving reduced rate unemployment assistance will gain an average of £11 per week from this change. There is also an important non-monetary gain: the additional security which derives from knowing their benefit will generally continue at a particular level during bouts of unemployment, hitherto made worse by financial uncertainty.

A third notable feature of the Bill — to which sections 15 to 18 refer — involves the introduction of a new social assistance scheme to be known as sickness allowance. Under the existing arrangements, people who are incapable of work due to illness but who do not satisfy the contribution conditions for disability benefit or the qualifying conditions for receipt of disability allowance must have recourse to the supplementary welfare allowance in order to secure income support.

During 1995 supplementary welfare allowance was paid to more than 12,000 people who were unable to work due to illness but had no entitlement to either disability allowance or disability benefit. Supplementary welfare allowance was never intended as a sickness payment and, consequently, provision is being made for the introduction of the new sickness allowance which will complete the cover available under the social welfare system for those who are unable to work due to illness or injury.

Sickness allowance will be payable at the same rate as unemployment assistance i.e. at the short-term rate of assistance for the first 15 months and at the long-term rate thereafter. To qualify for the allowance a person must be aged 18 years or over and under age 66, be incapable of work and satisfy a means test. The provisions as to the assessment of means will be specified in regulations. It is envisaged that sickness allowance will provide for an estimated 13,500 people per year who are incapable of working due to illness and are currently forced to seek supplementary welfare allowance.

A further important reform of the social welfare system is provided for in sections 19 to 21 which introduce a new scheme to be known as the widower's (non-contributory) pension scheme. The introduction of this new payment represents the final step in the implementation of equal treatment for men and women throughout the social welfare code. The new payment is designed to meet the needs of widowers who are not rearing children — those who are will continue to receive the one-parent family payment — and will be available to widowers on the same basis as the existing widow's (non-contributory) pension. This Part of the Bill also extends entitlement to the new widower's pension to divorced men, on the death of their former spouse, provided they have not remarried and continue to satisfy the other conditions of entitlement. Similar provisions have already been put in place for widows in the Social Welfare (No. 2) Act, 1995.

Partnership 2000 contains an important commitment in relation to continuing the reform and development of the social insurance system over the period of the new programme. The programme for Government contains a similar commitment. This is important because of the crucial role social insurance plays within the overall social welfare system. PRSI contributions are paid by approximately 1.35 million workers and amount to £1.81 billion each year, which is sufficient to pay for almost half of all social welfare expenditure. Most importantly, the social insurance system reflects inter-generational solidarity as well as solidarity between the different income groups. Those who are active in the economy support those who are no longer active, while those at work who are best off support those who are unable to work and are least well off.

The PRSI provisions in the Bill reflect the changes announced in the budget last January. Section 8 provides for a reduction of 1 per cent, from 5.5 per cent to 4.5 per cent, in the standard employee contribution rate. This section also increases from £22,300 to £23,200 the annual earnings ceiling up to which social insurance contributions are payable by employees and increases from £26,800 to £27,900 the earnings ceiling up to which contributions are payable by employers.

The weekly earnings limit for the lower, 8.5 per cent, rate of employer's contribution is being increased from £250 per week to £260 per week. Section 9 increases from £22,300 to £23,200 the income ceiling up to which social insurance contributions are payable by the self-employed. All of these changes will come into effect on 6 April next.

The Minister recently met a delegation from the Small Firms Association to discuss the ways in which the social welfare system supports the needs of small business and whether and how this can be improved further. It was agreed that the black economy was a major check on bona fide employment growth, it puts honest employers at a disadvantage and defrauds all taxpayers. The Minister outlined the improvements which have been put in place over the past six months by my Department to tackle black economy fraud.

The Small Firms Association welcomed the range of supports for employers in recruiting extra staff, particularly from the long-term unemployed, but pointed out that there was a problem in getting the information to employers. Small employers, in particular, did not have the resources or expertise to avail of schemes which were very complex to implement or which required a big administrative input from the employer.

The back-to-work allowance scheme and the employers' PRSI exemption scheme were cited as positive examples of schemes that are easy to understand and apply and consequently work well. In response, the Minister undertook to arrange for the Department, through its regional network, to work with the Small Firms Association in a systematic and focused way to inform small business of the supports available to them through the social welfare system. In this context, the Small Firms Association will work with the Department in preparing a guide for employers on how they and their employees can avail legitimately of support from the social welfare system.

I wish to outline the provisions of the various sections. Sections 1 and 2 contain the usual provisions relating to short title, construction and definitions used throughout the Bill. The increases in the weekly personal and adult dependant rates of social insurance and social assistance payments announced in the budget are provided for in sections 3 and 4. All personal rates are being increased by £3 a week, while all adult dependant allowances are being increased by £1.50 a week. This gives substantial increases of between 4 per cent and 4.8 per cent, which is approximately twice the expected rate of inflation for this year.

As a result of these substantial increases more recipients than ever are now at, or very close to, the minimum rates recommended by the Commission on Social Welfare. Some recipients, such as contributory pensioners, are currently at 113 per cent which is well ahead of those target rates while others, such as invalidity pensioners, will now reach 100 per cent for the first time. Those previously at 95 per cent of the target rate will now move up to 98 per cent while those on supplementary welfare allowance and short-term unemployment assistance will move from 92 per cent to 95 per cent of the target rate. The significant progress made over the past three years in reaching those minimum target rates is the clearest indication possible of the Government's commitment to achieve the rates recommended by the commission.

Section 5 provides for increases in child benefit which is the best mechanism we have for supporting families and tackling poverty. In line with the policy direction established in the past two budgets, child benefit is being increased as part of a planned strategy of reforming income support for children, removing disincentives and working towards putting in place a system of basic income for children.

The increase of £1 in the lower rate and £5 in the higher rate of child benefit with effect from 1 September next will bring the rates to £30 per month for each of the first two children and to £39 per month for each subsequent child. A family with three children will now receive £99 a month while a family with six children will receive £216 a month. During the past three years child benefit has increased by 52 per cent for a three child family and by 54 per cent for a five child family. In 1991 a four child family received approximately £70 a month, while this year it will receive £138, which is approximately double.

An increase of £10 at each point in the weekly income thresholds used to determine entitlement to family income supplement is provided for in section 6. As a result of this threshold increase virtually all current recipients will get an extra £6 in their weekly payments from mid-June next. The new weekly thresholds range from £205 for a one child family to £344 for a family with eight children or more. This section also provides that from 12 June next the rate of FIS payable will be calculated on the basis of gross earnings less any superannuation, PRSI and levies which may be payable. This revised calculation method is an important first step towards meeting the commitment in Partnership 2000 to base FIS entitlement on net rather than gross income: it only leaves income tax deductions to be removed from the calculation.

Last year Social Welfare Act provided for the continued payment of child dependant allowances for up to 13 weeks to people unemployed for a minimum of 12 months who take up employment which is expected to last for at least four weeks. This measure has greatly helped to overcome the disincentives facing unemployed people with families who are trying to get back to work. Section 7 extends these provisions to other groups, namely, people on community employment immediately before taking up employment and people on the live register or on community employment who take up employment under the Jobs initiatives announced last year.

Sections 8 and 9 are concerned with new rates of PRSI contributions and increases in the earnings ceilings.

Sections 10 and 11 provide for a further enhancement of the social insurance system through the extension of maternity benefit and adoptive benefit to women in insurable self-employment along the same lines as currently available to women in insurable employment. These sections also provide for a consequential amendment to section 18(1) of the Social Welfare (Consolidation) Act, 1993 which extends the benefits covered by self-employment contributions to include maternity benefit and adoptive benefit.

I described earlier the introduction of reduced rate old age contributory pensions, and section 12 gives legislative effect to this measure. I also referred earlier to the reform of the arrangements for requalifying for unemployment benefit. The relevant legislative changes are provided for in section 13.

Section 14 relates to the occupational injuries benefit scheme and provides for two improvements in this area. First, it removes the more restrictive conditions applying to widowers in the scheme, thus ensuring that widows and widowers are treated equally. It also abolishes the requirement that the claimant must be living with, or have wholly or mainly maintained by, the decease. This brings the conditions of entitlement into line with those applying to widow's and widower's contributory pension.

Second, this section extends the scope of the scheme to provide for payment of pensions to widows and widowers to the surviving spouse of a recipient of disablement benefit whose degree of disablement is assed at 50 per cent or more, irrespective of the cause of death. This provision is designed to overcome a problem which arises with the existing arrangements when the cause of death cannot be attributed directly to the occupational disease or injury.

I spoke earlier about the introduction of a new social assistance payment, to be known as sickness allowance. The relevant legislation provisions are contained in sections 15 to 18. I should mention also that section 17 provides for disability benefit to be renamed sickness benefit and invalidity pension to be renamed disability pension to more accurately reflect the contingencies these payments are designed to meet.

I have spoken already about the introduction of the new widower's non-contributory pension scheme, the legislative basis for which is contained in sections 19 to 21.

Section 22 introduces a number of improvements to the disability allowance. It provides for regulatory powers to extend entitlement to disability allowance to persons who reside in an institution on a part-time basis and otherwise reside at home. The allowance will be payable to such people at half of the standard rate, subject to means. This measure is in line with the views contained in the recent report of the Commission on the Status of People with Disabilities. Section 22 also provides that where one of a couple is in receipt of disability allowance and the other is in receipt of old age non-contributory pension or invalidity pension, each of the couple may receive the full personal rate of payment. This section also provides that the cost of medical certificates issued for the purpose of claiming disability allowance and the new sickness allowance scheme will be met by the Department.

Section 23 provides for two important improvements to the carer's allowance. First, provision is being made for the payment of an additional amount, equivalent to 50 per cent of the existing personal rate, to caters providing full-time care and attention to more than one person. This measure goes some way towards recognising the particular difficulties faced by those caring for more than one person. It is estimated that up to 2,000 carers will benefit from this improvement. Second, this section provides regulatory powers to relax the conditions requiring full-time care and attention so as to entitle to the allowance carers of incapacitated persons attending rehabilitation training or day care centres on a limited basis. This measure has been sought for a long time.

Section 24 provides that people who cease to be entitled to the one parent family payment or the carer's allowance may qualify for pre-retirement allowance without first having to have been in receipt of unemployment payments for 15 months.

It has been one of our objectives to bring about a more uniform, consistent and even-handed treatment of capital for means test purposes across all social assistance schemes. The provisions contained in section 25 mark a further step along that mail by applying new and more generous rules to all means tested pensions and to carer's allowance.

Section 26 consolidates the provisions relating to amounts disregarded in the assessment of means for social assistance payments. It also makes provision for disregarding rental income from the assessment of means for old age non-contributory pension where the income is in respect of a person who lives with and pays rent to the pensioner. Section 27 simply provides that the measures contained in sections 22 to 26 will be brought into effect by way of commencement order.

The House will recall that the Minister announced in the budget an important reform of the way the earnings of low paid workers are treated in relation to social welfare. The measure announced was designed to deal with the poverty and unemployment trap created by the withdrawal of the adult dependant allowance and half of the child dependant allowance once the earnings of the spouse of a claimant exceeds £60 per week. It involves the introduction of a tapered withdrawal of the adult dependant allowance in the case of recipients of a number of social welfare payments. The provisions of section 28 are being introduced as a direct consequence of that reform.

Under existing provisions, where the spouse of a claimant to a social assistance payment is not his or her dependant, the claimant is assessed with the joint means of the couple. Section 28 amends these provisions so as to provide that on the introduction of the tapered rates of adult dependant allowance, a person in receipt of reduced rate adult dependant allowance will only be assessed with half the joint means of the couple.

Section 28, together with Schedule F, also replaces the term "adult dependant" used for the purposes of paying an increase of benefit or assistance in respect of a spouse or partner with the term "qualified adult". This change in terminology is in line with a commitment the Minister gave during the passage of last year's Social Welfare Bill. It reflects his wish to completely remove the concept of dependency from the social welfare code and is a small but significant step towards that goal.

Section 29 provides for a significant change to the existing provisions governing decisions relating to what are known as "liable relatives". Under the existing provisions, where one parent family payment or supplementary welfare allowance is paid to a person, any other person who is liable to maintain the beneficiary, and any child in respect of whom an increase is payable, is liable to contribute such amount as may be determined by the Department, or the health boards in the case of SWA, towards the benefit or assistance payment in question.

These decisions are made on an administrative basis in that they are not formal decisions made by deciding officers appointed under the social welfare Acts. As a result, the person concerned currently does not have the right to appeal. Section 29 provides that such decisions will now become a deciding officer function and will thus afford the person concerned the right of appeal to the independent social welfare appeals office.

In addition, it provides for regulatory powers to specify the basis on which the contribution a person is required to pay is to be calculated. Section 29 also provides that a divorced person will remain liable to contribute towards the cost of the benefit or assistance paid to their former spouse and extends the definition of "order of the court" to include maintenance, lump sum, variation and interim orders in respect of maintenance made by any court. These provisions will be brought into effect by way of commencement order.

Section 30 contains a number of provisions relating to unemployment payments. First, it provides that the provisions under which a person is not paid for the first three days of a claim for unemployment benefit, known as waiting days, will not apply in the case of a claim for benefit made following a claim for disability benefit in the same period of interruption of employment. Second, it provides for regulatory powers which will be used to eliminate the requirement to serve waiting days for unemployment assistance purposes, in certain circumstances. Third, it enables the Minister for Social Welfare to make regulations specifying the circumstances under which an unemployed person will be regarded as being available for and genuinely seeking employment for the purposes of entitlement to unemployment benefit and unemployment assistance. Finally, Section 30 provides that people who, prior to their participation in the European voluntary service pilot action programme, were in receipt of unemployment benefit or unemployment assistance can resume such entitlement on completion of the programme. This programme, which was recently launched by the Commission of the European Union, is open to young people between the ages of 18 and 25 and is administered on behalf of the Department of Education by Léargas.

The provisions of section 31 state that, where a person who receives a social welfare payment by way of personation is subsequently convicted of the criminal offence of larceny, the amount of the payment to which the offence applies may be recovered from any social welfare payments to which the person is or becomes entitled.

Section 32 provides for the collection of PRSI by the Department of Social Welfare from certain categories of self-employed contributors. The House will be aware that, for purposes of administrative ease, PRSI is normally collected by the Revenue Commissioners on behalf of the Department. These new powers will enable PRSI to be collected from people, such as certain artists, who are exempt from tax liability.

Section 32 also provides that a person who became insured as a self-employed contributor after reaching age 56, and who was previously insured as an employee, will be entitled to a refund in respect of the old age contributory pension element of their self-employment contribution in cases where they do not qualify for old age contributory or non-contributory pension.

This section also provides for regulatory powers to refund part of the employer's portion of contributions paid in respect of seafarers.

The primary purpose of section 33 is to allow for the amendment of a number of references to regulatory provisions contained in the Social Welfare (Consolidation) Act, 1993. These regulatory provisions relate to employment contributions and the need for the amendments arises from the consolidation in 1996 of regulatory provisions relating to contributions and insurability.

This section also provides for the deletion of subsection 212(7) of the Social Welfare (Consolidation) Act, 1993, which provides that a person shall not be required to give any evidence or answer questions tending to incriminate himself. This provision is regarded as unnecessary in that there is a recognised common law right against self-incrimination and it would be more appropriate for a court to decide whether the right may be relied upon in the circumstances of a case.

Section 34 provides for the amendment of the functions of the National Social Service Board which were bestowed on the board when it was originally established under the aegis of the Department of Health in 1984. In 1995, responsibility for the board transferred to the Department of Social Welfare and, consequently, it is appropriate that its functions should be reviewed in the light of that transfer of responsibility.

In broad terms, the revised functions reflect more accurately the important role of the National Social Service Board in promoting and supporting independent information, advice and advocacy services throughout the country to ensure that all citizens have access to accurate, comprehensive and clear information on the full range of social services. Specifically, the revised functions reflect the reality of activities undertaken by the National Social Service Board in recent years, such as its role in providing impartial social policy feedback on issues of concern to social services users and also its role in providing information, training and development services to the independent voluntary social services sector. The opportunity is also being taken in this section to substitute the Minister for Social Welfare for the Minister for Health in the original legislation — regulations made in 1995 already provided for that — and also to revoke a number of former functions which are no longer relevant in the context of the transfer of responsibility to the Department of Social Welfare.

We are glad to have this opportunity to review the functions of the National Social Service Board and, in that context, to reiterate our support for the continued development of high quality independent information services so that all our citizens can exercise choice in relation to information provision.

Sections 35 and 36 serve three related purposes. First, they provide for an increase from £188 to £197 in the weekly earnings limit below which employees are exempt from liability for health contributions and the employment and training levy. Second, they provide for an increase from £9,750 to £10,250 in the annual income limit below which self-employed people are exempt from these levies. Finally, they exempt from liability for the levies a distribution from an Irish resident company received by a person who is not an Irish resident. These changes will come into force from 6 April 1997.

This Bill should be viewed in the context of a strategy designed to make the social welfare system more equitable, more innovative, more reforming and more responsive to the diverse needs of Irish society today. It has all of these attributes and it will serve to further enhance the Social Welfare system. This is a substantial Bill which will have the effect of protecting and enhancing the living standards of people who, for one reason or another, are outside the active labour force; further enhancing the pro work and pro worker focus of the socila welfare system; completing the process of bringing about full equality between men and women under the social welfare system; continuing the pro family policy direction which has been central to the reforms that have been introduced in the past few years; and reversing the damage done by the Fianna Fáil-Progressive Democrats dirty dozen social welfare cuts.

This Bill is a carefully sculpted social and economic document designed to encourage participation in the workforce, assist those who are not in the workforce to meet their payment requirements, and to chart the course in the next 12 months in a way that is positive, progressive and supportive. I commend the Bill to the House.

I am sorry the Minister is not with us today. The Minister of State did not apologise on his behalf, but I understand from a note he sent to me yesterday that he is busy in the Four Courts and cannot be here on this occasion.

This Social Welfare Bill implements the strategy adopted by the rainbow coalition in its third consecutive budget. The Minister of State emphasised that this was one of three budgets. These three budgets together have been a bitter disappointment for widows, old age pensioners, unemployed people and others who depend on social welfare payments. What it boils down to is that when this Bill is implemented an old age pensioner will have received, over three years, a mere £2.33 increase on average per week in each year. That is nothing to have a song and dance about. A widow will have received £2.20 per week over the same period, and a person on long-term unemployment assistance or on disability allowance will have received even less at £2.17 per week.

This shows how, in times of greatly increased national prosperity, Fine Gael, Labour and Democratic Left have once again turned their backs on the poor and disadvantaged at a time when the Taoiseach is embarrassed by the wealth of the country in the context of EU grants we will receive in the future. The Minister criticised his predecessor who negotiated considerable grants. He should have stayed quiet because he will not deliver anything. He will not be there, so he probably does not care very much.

At a time when the Taoiseach is embarrassed by the size of the wealth, the growth and the GDP per capita, created by his predecessors and on which he got a free ride which is just over, all that the widow, the old age pensioner, a person on disability allowance or on unemployment assistance has received is between £2.17 and £2.33 per annum in each of three years. The Minister for Finance highlighted that when he said that in the three years old age pensioners would receive a £7 increase. He did not stop to think, however, that that is an average of £2.33 per annum. They are the harsh realities. That is where the real poverty, the disadvantage lies. It was Fine Gael that reduced the old age pension by one shilling, to nine shillings, and it will never live that down.

The Deputy is living in a time warp, but I did not think he would go back that far.

At a time of enormous prosperity, the Government gave old age pensioners £2.33 per year over three years.

That is twice the rate of inflation.

The Deputy should not talk about inflation but about the wealth in the economy, about GDP and the growth in national income.

It sticks in the Deputy's throat to talk about it.

That is where the real income is. The Government is ensuring that while it is in office those who depend on social welfare will not benefit.

Each Social Welfare Bill provides an opportunity to improve existing schemes and introduce new ones. The major element in the Bill, the one for which the people look to the Government, is the increase in basic payments on which people live from week to week. That is where the need is greatest.

What about the dirty dozen?

The Minister and his rainbow partners paid much lip service to the poor, but failed to deliver where it really matters, in the payments on which people live. That is the criterion that will sink this rainbow coalition because the people who receive those payments know what is happening.

What about the dirty dozen?

I will come to that. The Minister for Social Welfare, Deputy De Rossa, made it a baker's dozen by introducing another very severe cut which will have a great effect, but I will come back to that matter. The people deserve better from their leaders. In the past three years the Government has been stagnant in the social welfare area. It simply carried on the work that had already begun — before I left office I mapped out the disability allowance.

Did the Deputy map out the dirty dozen? Is he claiming responsibility for that?

The same applied with other measures, and if the Minister asks his officials he will find out that is the case. He should not crow about normal developments. What really matters is that people get their money, and the Government will find that out in due course.

The Government did not introduce one new scheme or take innovative action to improve the lives of those who depend on social welfare. On the other hand, it recently removed half the butter vouchers provided to widows, pensioners, carers and unemployed people on means tested assistance payments. More than 900,000 people are affected by that move. The income of those people, the poorest of the poor, the most defenceless, has been ruthlessly cut back, and nobody takes the blame. The Minister for Social Welfare blames the Minister for Agriculture, Food and Forestry who, in turn, blames the European Union. Everybody blames somebody else. The reality is that the Government allowed the ball to slip. It was not concerned about the elderly or widows, the people who depend on social welfare, as can be seen by its actions.

We dropped the dirty dozen.

The Minister should talk to the people. The record of the Government, when measured against the achievements of previous Fianna Fáil Governments, is very poor. Fianna Fáil showed leadership and flair by introducing children's allowance, free travel, carer's allowance, back to work allowance, second chance education for the long-term unemployed and many other initiatives which had a fantastic impact on the lives of many thousands of people. The whole approach to social welfare is badly in need of updating to cope with our dramatically changing lifestyle in the Ireland of the new millennium. People are living longer, the birth rate is falling and flexi-time, part-time work and job-sharing opportunities are increasing. Many other changes are taking place which we must anticipate and for which we must be prepared.

Young people are staying in education longer. Drop-out rates in primary and second level education are remarkably low. The needs of the family in the new millennium are changing and must be addressed. The social welfare system must be sufficiently flexible to respond to the demands placed on it by these changes. If we are to be successful, we must forget a new partnership with the many community and voluntary organisations working in the area of family and social affairs. Many of those were set up by the Department of Social Welfare over the years. That is an area in which the Department was involved in innovation and change, in meeting the need.

The Minister said there has been a significant change in focus and ethos in the Department of Social Welfare, but that change has been made in innumerable innovations over the years. We must build a new partnership for the future. The Minister said that he recognises the importance of community and voluntary organisations, but it is not sufficient to find out what happened in the past ten years or so, we must look forward to the new partnership for the future. The responsibility is to plan ahead, have a vision and develop that vision, but that is not being done here.

The range of programmes which come under the umbrella of social welfare is vast. This spread of activities and their importance to the community needs to be recognised in the way in which the system is administered. A new approach is needed to successfully meet the challenges which face us today. In an increasingly prosperous society there is a grave danger that the most vulnerable groups will be overlooked. All disadvantaged groups must be supported in ways which improve their circumstances through adequate incomes, educational opportunities and participation in the workplace.

The interim report of the Commission on the Family highlights a fact which we recognised a long time ago and which needs to be developed further, that if we want to overcome poverty and disadvantage we must develop many kinds of education, some of which have not been introduced yet. We must work with local communities and groups in tackling the real problems and build on the educational opportunities — I am very happy the current schemes are operating so well in the Department. In so doing we must set clear priorities and be flexible enough to alter those priorities as circumstances change. The priorities should include supporting families and directing resources to pensioners, widows and those who are poorest and most disadvantaged. If we are to achieve our objectives we must mount a new assault on poverty and disadvantage. That is what I had hoped to see in this Bill, a new assault, a new approach, further development, looking ahead rather than simply filling in the pieces that are falling into place from work done earlier.

There is an onus on all of us to balance our improved economic prosperity with being a caring society. It is remarkable and encouraging that young people today want a caring society. They want to do well in life, but not at the expense of those who are genuinely disadvantaged. They want the Government to tackle disadvantage. Fianna Fáil has a proud and excellent record in this regard. We have the vision, enthusiasm and imagination to implement policies that will ensure the social balance we desire is achieved.

The Progressive Democrats does not have a similar vision on social welfare matters.

I will deal with that later. In contrast, the Government's approach which underlies this Social Welfare Bill is shortsighted and irresponsible. The Minister, Deputy De Rossa, stated he would like the social insurance fund placed on a solid basis. He also claims to be concerned about pensioners' incomes. The rhetoric is attractive, but the reality is different.

In one step today the Government has undermined the solvency and stability of the social insurance fund by substantially reducing its income. This will mean a deficit of some £114 million this year. This is a workers' insurance fund to provide for illness, maternity benefit, occupational accidents and pensions. When we handed over the fund at the end of 1994 it was breaking even for the first time in many years. As employment and income to the fund increased we reduced contributions.

That is not correct.

That is correct. The Deputy should get his facts right before heckling me.

The Deputy is wrong.

I allowed the Minister of State to speak without interrupting him.

The Deputy should not mislead the House.

I am not misleading the House. I am stating the facts. Reducing the fund will weaken the position of workers because every future Minister for Social Welfare will have to go cap in hand to the Minister for Finance to get taxpayers' money to meet the annual deficit before seeking funds to protect workers and increase pensions to meet the needs of pensioners.

This is a disastrous strategic error by the Minister, Deputy De Rossa, and his Labour and Fine Gael partners in Government. Rather than attempting to buy pre-election popularity by reducing the PRSI contributions by 1 per cent, the Government had an alternative which would not have damaged the social insurance fund. It could have removed the 1 per cent levy, or an equivalent part of it, without undermining the fund. Why did the Minister not insist on reducing the levy? Why did he reduce the social insurance fund which he wants to place on a solid basis? That will not happen because of this Bill. The Taoiseach is in Brussels today pleading for funds from 1999 onwards while at home we are reducing a fund that would provide for pensioners, widows and workers from 1999 onwards.

He will not be £3 billion short when he comes back.

The Minister had an alternative but did not take it. He is delivering a sharp and undeserved slap in the face to pensioners because they are excluded from the Government's pre-election sweetener. Pensioners paid into the social insurance fund all their working lives to provide for retirement, invalidity or widowhood, but in retirement, on relatively low incomes, they are still required to pay the 1 per cent PRSI levy. This cunning Minister is specifically excluding pensioners from the 1 per cent PRSI reduction to the social insurance portion of the PRSI contribution, a mean and calculated step by the Government to exclude pensioners from the benefit of the pre-election hand-out. The rainbow coalition is telling vulnerable pensioners they must continue to pay the levy because it is the better off who need the relief. Pensioners know they pay a 1 per cent levy from which they will not benefit.

The Deputy must be reading from the wrong page. He must be talking about a previous year.

I am not. Before we left office at the end of 1994 I transferred the disabled person's maintenance allowance, the main support for people with disabilities, from the Department of Health to the Department of Social Welfare. Our plan was to introduce a disability allowance and this has been accomplished. We wanted to improve the scheme and make it more relevant. We must support and encourage people with disabilities in their quest for paid work. Accordingly, the earnings allowances should have been raised to match those provided for the one parent family allowance. If those on disability allowance had benefited under the new working arrangements they could have gained a foothold in the jobs market. Unemployment among people with disabilities is currently as high as 80 per cent. That matter must be dealt with urgently.

There is a strong argument in favour of individual pensions for adult dependants, who are mostly women. The case for such a development is most obvious when the adult dependant is an old age pensioner. On a non-contributory pension she will receive the princely sum of £40 per week. I am sure most commentators and the Government would agree that is not acceptable. What has the Minister done for these people? Adult dependants received an increase of approximately £1.17 per week in each of the three budgets and associated Social Welfare Bills, about which the Minister of State boasted in his contribution. That would buy about two litres of milk. Why does the Government not see what it is doing?

Because what the Deputy is saying is not correct.

He is talking rubbish.

If the Minister of State does his sums he will know what I am saying is correct. That is rainbow reality for some 120,000 adult dependants on unemployment payments and retirement and non-contributory pensions.

The Government parties should hang their heads in shame at their miserly treatment of the lowest paid in our society. A miserable increase of £1.17 per week shows how little value this spendthrift Government puts on the well-being of those women, the foundation on which this modern society was built.

Fianna Fáil's introduction of social security for the self-employed in 1988 was a major breakthrough. It provided old age and widow's pensions for the first time for many thousands of people — small business people, skilled contract workers, professionals and farmers. Great concern was expressed about the collection of the contributions and the solvency of the fund. Contributions increased from £46 million in 1989 to £93 million in 1996. To date self-employed people have contributed £587 million to the social insurance fund. The scheme is working well and funds are available to improve benefits.

Two priority areas for improvement are as follows: extending the benefits to include occupational injury benefit and invalidity pension. Contract workers on building sites must have cover for occupational injury and fishermen and farmers should also be covered as should other categories of self-employed people; and providing pensions for those who were over 56 years of age when they were brought into the system. Since they have less than ten years' contributions, they cannot receive old age pensions unless previously insured. The Government, notwithstanding the success of this cash rich scheme, has failed to take the steps necessary and feasible. Instead, it raided the scheme, and took cash from it to gain electoral popularity in this election years. This scandalous and highly irresponsible action is one of the hallmarks of this rainbow coalition. The addition of maternity benefit to the scheme is welcome but, as the Minister knows, is a relatively inexpensive addition.

This was a year when the Government could have advanced the date for the payment of increases in social welfare to 6 April in line with the new tax year. With an unprecedented cash income, this was the year to make a once-off investment to bring forward the increased payments from mid June. However, the Government decided against this option. It was Fine Gael and Labour during the coalition Government of the mid 1980's who, when short of cash to balance the budget, put the date of payment of increases back to late autumn.

Fianna Fáil brought the date back to July and later this Government brought it back to June. Widows, unemployed people and thousands of pensioners expected that the pay date for increases would be restored this year to April but alas, more disappointment for them. It may be a good year but not for those who depend on social welfare. This is another missed opportunity by the Minister which affects 1.4 million people.

The increases for widows, those on disability allowance and long-term unemployed people, especially if they have families, are much less than the Government claims. For instance, a widow on a contributory pension with three children gets an increase of only 2.5 per cent. Similarly, a person on disability allowance with a dependant spouse and three children gets an increase of 2.9 per cent while a person who is long-term unemployed gets 3.2 per cent. The larger the family, the smaller the percentage increase. The Minister likes to talk about personal rates which are the highest rates, but not about the adult dependant or children. A widow with five children will only get an increase of 1.9 per cent in her widow's pension.

I tell families not to heed the rhetoric because the rainbow coalition does not care. It gives me no pleasure to recall the appalling financial irresponsibility of the 1983-7 coalition which brought the country to the verge of bankruptcy. The dire state of the nation's finances in 1987 was successfully tackled over the period 1987 to 1994 because of the political courage of Fianna Fáil led Governments. Ultimately, these Fianna Fáil Administrations succeeded in retrieving the State's financial viability because of the willingness of the people in every sector of our society to accept temporary sacrifices to secure the long-term good.

It took a great deal of hard work to bring about the current prosperity which was built on good strategy, work and a good relationship with the social partners set up under a Fianna Fáil Government. That partnership is the basis for the present low interest rates, cheap mortgages, low inflation and excellent growth in the economy.

However, under the rainbow coalition, the partnership is doing little to tackle the main problems facing our society, including social deprivation, long-term unemployment and spiralling crime, particularly the increasing levels of drug abuse. Those in need — for example, the long-term unemployed — have only one opportunity each year to achieve a change in the payments they receive from the State, namely the budget. In contrast, an employed person can perhaps look forward to three routes through which his general well-being may be enhanced, namely Partnership 2000 pay increases, tax and PRSI changes in the recent budget and annual salary increments.

It is, therefore, interesting to note that income distribution under the rainbow coalition via three budgets, two years of the PCW and one year of Partnership 2000 will do little for people who are most in need. One only need examine some figures to realise how this Government has failed to fulfil its social obligations. According to CORI, a single person will be £338 a year better off if long-term unemployed while a person earning £20,000 will be £1,763 better off and a person earning £40,000 will be £2,532 better off. That makes stark reading. So much for the rainbow coalition's idea of social partnership.

The Minister talks about the famous dirty dozen, the bulk of which were long gone before he came into office. If one reads the booklet on how to qualify for the old age contributory pensions one will see that a person needs to be over 66 years of age and satisfy PSRI contributions, that is, 156 PRSI paid contributions. The Minister said that in future a person will need 520 or ten years paid contributions.

It will be phased in.

That is the baker's dozen — number 13. How will an unemployed person qualify if he does not have enough paid stamps?

The Deputy's party was more effective with the dirty dozen, which hurt more people.

The Minister is excluding such people. That is the baker's dozen and it is all down to the Minister, Deputy De Rossa. Workers should know that in future they will need 520 or ten year paid contributions to qualify. Although the Minister will phase it in, he will have left Government before it happens. He will have high tailed it out of here when the baker's dozen comes home to roost.

The function of the Department of Social Welfare is to look after the less well off — the unemployed, the unemployable, the poor and pensioners. Although the economy is doing well the greatest blackspot is unemployment. I will not criticise the increases because it is the Minister's function to provide increases in the budget, in line with inflation, to old age pensioners and the unemployed. However, the increases were small. As my party has been preaching for many years, there is a remedy which I will outline.

An expanding economy should mean less pressure on the welfare budget. When the economy is expanding, employment should be expanding and when the numbers at work are rising the numbers out of work should be decreasing, even allowing for an increase in the labour force. When one considers that unemployment payments account for more than one quarter of the welfare budget, the message is clear. Economic growth and falling unemployment should yield huge savings to the Exchequer. It is estimated that for every 1,000 people who leave the live register the Exchequer saves £3.5 million per year, before taking into account the extra taxation that will be collected when people start to work. That does not seem to be the case in Ireland.

Total spending on social welfare has risen by almost 40 per cent or £1.2 billion during the past five years. This should have been sufficient to fund generous increases in the rates of benefit payable to most welfare recipients. For the most part, that has not been the case. Mass unemployment lays claim to £1 billion in the social welfare budget each year. If a fraction of this was available for distribution to other welfare recipients, we could bring about a real improvement in their standard of living. Ireland is probably unique in combining rapid economic growth with mass unemployment. This appears to defy all the laws of economic logic.

When the rainbow coalition came to power two and a half years ago there were 272,000 registered as unemployed. Following the most rapid economic expansion ever, the figures are almost unchanged today. It seems we have succeeded in translating economic growth into higher employment. The numbers at work are on the increase but why is it that we are unable to translate economic growth into lower unemployment?

Tax is the key issue. A typical worker is taxed four times on his or her income. He or she pays income tax, PRSI, training and health levies. This places a heavy burden on the average worker and means that those on modest wages pay high rates of tax. A single man on £200 per week pays approximately £43 per week in tax and PRSI.

There is a major problem in relation to the higher rate of tax. In other countries workers are taxed at the higher rate only if they fall into the higher income bracket. That is not the case here. A worker is hit at the higher rate of 48 per cent when his or her earnings go above £262 per week, which is well under the average industrial wage. It is hardly a fortune. He or she is also caught for PRSI, training and health levies. This means that if he or she receives a pay rise of £10 per week or £10 in overtime, the Government will take £5.50. It cannot be right that the Government should receive more than the man or woman concerned.

The system of taxation is a disincentive to work. Throughout the country one hears the same refrain from unemployed persons: "Why should I go out to work when I am just as well off on the dole?" Nobody is saying that benefits should be reduced but everybody recognises that taxes should be. We need to focus on employees' and employers' PRSI as well as income tax. In simple terms, we must make it worthwhile for the unemployed to take up employment and for firms to create it. Unless we are prepared to tackle this issue in a radical way, we will never be able to deal seriously with the unemployment problem.

We must look at the system of public administration. Many years ago we had a network of labour exchanges, as they were then known, but we have reached the stage where no labour is exchanged in these centres. We have two arms of State doing different jobs. The Department of Social Welfare is concerned with registering individuals as unemployed and paying them benefits as efficiently as possible, while the unemployment services division of FÁS is concerned with helping them to find work.

The upshot of this is that the basic regulations are no longer being properly enforced. To qualify for the dole a person must be available for and actively seeking work but the Department of Social Welfare has made little or no effort to ensure this is the case. We should not be too shocked at the findings of the CSO report published last year which showed there was massive abuse of the system. In the 12 weeks after the report was published approximately 25,000 people stopped signing on. There is still a huge gap, however, between unemployment as measured by the live register and that measured by the labour force survey. The difference between the two figures is approximately 80,000.

The system is not fair to the taxpayer or the unemployed. The Government has a duty to the taxpayer to ensure money is properly spent and to the unemployed to ensure their needs are properly met, but that is not happening. We need a single agency, a national employment service, to meet the needs of the unemployed, from benefit payments to assistance, in searching for jobs. This agency should provide a professional service and treat the unemployed as its clients. Its success should be measured by the number of people it places in paid employment. I understand the Minister for Enterprise and Employment is working on this idea as part of the White Paper. Will we see this document before the forthcoming general election?

The White Paper should also deal with issues such as training and education. It is clear that we have considerable problems to contend with in this area. Even though there are almost 300,000 people out of work, there is increasing evidence that firms are unable to fill vacancies when they arise because of the low wages on offer but it is hardly the full answer. This week ISME, the small and medium enterprises body, published a report on the way the jobs market is operating. It points out that there are skills shortages and companies are finding it difficult to fill vacancies in high-tech areas such as the computer industry. It seems strange that this is the case. After all, the IDA is trying to attract high-tech industries while FÁS is spending £150 million per year in training individuals to take up jobs which are becoming available in industry.

The term "misfits" is used in the report to describe certain sections of the unemployed. I disagree strongly with this. The unemployed are no different from the rest of us. The vast majority are willing to work and we must do everything we can to help them find suitable job opportunities. The use of emotive language is not helpful at this time.

The issue of unemployment and training must be addressed by the Government. It makes no sense to have hundreds of thousands of people drawing the dole while companies cannot find people to work for them. The strategy on unemployment and training seems to have gone seriously wrong.

The system is costing the taxpayer a fortune. We are paying out £20 million per week in dole payments. The unemployed are excluded from the rest of society, a marginalised group which cannot share in the fruits of economic growth. It is better for people to be at work than on the dole as it gives them the opportunity to play a normal role in society.

We have shown that we are capable of achieving much in the economic field. We have shown that we are capable of creating jobs but we have yet to show that we are able to deal with the problem of unemployment. There must be a shift from the welfare system to employment. That should be the Government's number one priority and I have no doubt it will be in the case of the incoming Government.

I welcome the opportunity to speak on this legislation as it is one of the major Bills in the financial and social area which this House must deal with each year. The main Opposition spokesperson's speech was a terribly long moan and groan. The important point is that this Government has substantially reformed the social welfare code in the past three years. The Minister for Social Welfare did not throw money at every unproductive area in the social welfare system as those who criticised him said he would when he came into office. He reformed the system by targetting the anomalies.

The report of the Commission on Social Welfare was published some years ago and it outlined what should be the minimum payments. Deputy Woods was the Minister for Social Welfare the year it was published.

I was not.

The progress in realising the targets set down by the commission during his term in office was minimal. The Minister stated that contributing pensioners are now on 113 per cent of the target contribution, other categories have reached 100 per cent while the worst cases have reached 95 per cent. I contrast that with the abysmal failure of Deputy Woods and his colleague Deputy McCreevy as Minister for Social Welfare.

Look at the facts.

This is a fundamental method of examining the performances of respective Governments and respective Ministers for Social Welfare in recent years.

Deputy Woods continued in a rather incoherent way about the Taoiseach being in Brussels negotiating for Objective One status in structural funds. This has nothing to do with social welfare. Whatever the Taoiseach achieves, he will have accurate figures and will not be wrong by at least £2 billion as the previous Taoiseach was. We all remember Deputy Reynolds's famous statement after the Edinburgh summit when he said there was more than £8 billion in the bag.

The Government enjoys spending the money.

He had to shake hands afterwards on a final deal which gave the country £5.9 billion. That is how wrong he was. This is irrelevant to the debate but I say it in response to Deputy Woods.

There are a number of provisions in the Bill which I welcome and they relate to matters on which I have spoken during debates on Social Welfare Bills since 1989. I especially welcome the reduction of the minimum contributions to qualify for contributory old age pension from an average of 20 weeks during one's working life to an average of ten, halving the previous requirement. Many have examined this issue over the years, including the Commission on Social Welfare and the Ombudsman, and all have said it was unjust. I am delighted the Minister and the Government have introduced this badly needed reform. It is especially gratifying to see that persons with an average of between ten and 14 weeks' contributions will now qualify for half the maximum contributory pension. Persons with average contributions of between 15 and 19 will now qualify for 75 per cent of the maximum. Many people whose working lives have been interrupted may have had almost full contributions for ten years. Those who worked prior to 1953 lost the value of their contributions prior to that date by a legislative action of this House. Many people worked for ten years, ceased work to go into business or raise a family and found on retiring that they did not have the average of 20 weeks' contributions to qualify for a contributory pension. They naturally had a great sense of injustice on finding that, after the contributions they made during their working life and the contributions they made to society in business or raising a family, they did not qualify for a contributory pension. Every compliment must be paid to the Minister and the Government for bringing about this badly needed reform which I welcome.

I also welcome the introduction of a new sickness allowance for people on unemployment assistance. If a person on unemployment assistance became ill and was not able to declare availability for work on a weekly basis he was given supplementary welfare allowance which was much harsher in its qualifying conditions. Many people also had small means and found during their illnesses that it was taken into account thus reducing the amount they received under the supplementary welfare allowance. Many people receiving reduced rates of unemployment assistance who became ill and badly needed that money, small as it might be, to sustain them found that they qualified for nothing under the supplementary welfare system. Every compliment must be paid to the Minister and the Government for introducing this badly needed reform.

I welcome the ending of the notorious "dirty dozen". The Minister received a deputation led by me from the National Union of Firefighters which, along with people in my constituency working for Bord na Móna, were examples of those adversely affected by these measures in the Social Welfare Bill, 1993. I am delighted the injustice which existed for three or four years has been removed and I pay every compliment to the Minister for removing it.

I also welcome the introduction of a widower's pension, thus removing the discrimination which existed between widows and widowers in the area of pensions. There was a pension for widowers who qualified if they had a family but it was a maintenance for their children, not for them. I raised this on previous Social Welfare Bills on Second and Committee Stages and I am delighted the issue has been addressed so generously by the Minister. Widowers are now treated the same as widows in that they can claim maintenance by the medium of a widower's pension as a result of the loss of a spouse.

I welcome the introduction of a 50 per cent supplement to someone caring for a second elderly person. Many adult children found themselves caring for their elderly parents but were only paid in respect of caring for one person. In some cases, there might have been three elderly people and I have known of cases with more than that where elderly people had to be cared for by an adult, usually a family member living with them. It is welcome that there is now a supplement of 50 per cent to care for a second person who qualifies under the carers' allowance scheme.

I propose a further reform of the carer's allowance scheme. I raised this matter before. Many carers, for one reason or another, cannot live with the person for whom they care. They can live beside them or in close proximity to them but not under the same roof. Nevertheless, they provide the same level of care as carers who live with those for whom they care. A provision to extend the scheme to carers who do not live with the person they care for should be included in the Bill and a prescribed distance, necessarily one of close proximity, should be set in terms of where the carer and the cared for person lives. Many members of families provide care for parents, an aunt or uncle and often full-time care for an elderly neighbour, but they do not live under the same roof as the person they care for. While this reform would have a financial implication, the scheme should be extended to cover such carers. Those who are cared for often have to be moved at a later date to one of our welfare hospitals, homes or care for the aged homes. That type of care as opposed to that provided by a carer involves a much greater cost for the taxpayer. I ask the Minister to consider this proposal in the context of further reforms to the carer's allowance scheme.

Another reform relating to old age contributory pensioners should be made. A relatively small number of people, a few hundred or more, on reaching retirement age do not apply for contributory pension. They may have good reasons for not doing so. Some people who enjoy good health continue to work after reaching the age of 65 or 66 and consider they are not entitled to claim their contributory pension because they are working, but they are entitled to do so. They learn later that they could have drawn their pension for two or three years. Under the old rule, the Minister could decide at his discretion to give those contributory pensioners benefits backdated for six months. It has now been changed to 12 months and that is welcome. However, those contributory pensioners should be entitled to claim their pension benefits from the date they reached retirement age. The Minister should exercise the ultimate discretion. They paid their contributions and were entitled to claim them on reaching retirement age. The social welfare code should recognise that. If contributory pensioners claim their pensions two or more years after retirement age, their pension benefits should be backdated to when they reached retirement age provided they can give a good reason for their delay in claiming their pension, which is often an error or oversight on their part.

The Department of Social Welfare should notify, in writing, persons who qualify for old age contributory pension on the basis of their contributions record and do not claim their entitlements because they may be engaged in economic activity for which they receive remuneration and may wish to continue doing so for another year or two. Such information should be given to that category of pensioner. The Minister and Minister of State should give this matter careful consideration.

I welcome the inclusion of capital allowances or an allowance for capital write-down for means testing, which I have sought for many years. For example, farmers who applied for small farmer's assistance whose income was determined following the deduction of expenses from the gross income earned from sales, subsidies and so on, were, like old age pensioners, not allowed to make a write-down for capital allowances as one could under the tax code. I am delighted capital allowances will be included for means testing. I congratulate the Minister and the Minister of State on introducing this change.

In my contributions on previous Social Welfare Bills I have criticised medical referees employed by the Department of Social Welfare. They treat unfairly the people they examine periodically who are in receipt of disability, invalidity or other benefits. That has been proven because most of their decisions are appealed. They are dealt with by appeals officers usually at oral hearings. The vast majority of decisions made by medical referees are overturned by the appeals officers. The instructions given to medical referees may not have been updated for many years. This area needs to be addressed. I knew a man who was taken off disability benefit on the basis that he was able to work and one week later he died of a heart attack. The instructions circulated to medical referees need to be updated.

I compliment the social welfare appeals office and the appeals officers on their work. That office is almost independent of the Department of Social Welfare. I have some experience of dealing with the staff in that office as I often attend oral hearings with constituents. I have found them, especially since the introduction of the new regulations which made that office more independent, to be fair and impartial in their decisions. They do excellent work. They do not get credit for it and often unfavourable comments are made about them, but they are highly professional, well informed and in recent years have become more informed of the realities facing the people who come before them.

I welcome the changes to the occupational injuries benefit scheme. The acting chairman and I represent the same constituency which had a mining industry. Many miners in our constituency suffered from miner's lung and subsequently died. Their widows found they were not entitled to claim benefit under the occupational injuries benefit scheme because the primary cause of death of their husbands was not lung disease but perhaps flu — that was often recorded on their death certificates. This reform addresses that problem and I welcome it. I am sure the Acting Chairman, who may have had as many representations on this issue as I, will also welcome it.

Social welfare is not only about increases in benefit. Increases in line with the cost of living must be given. However, I remind Deputy Woods that the across the board increases in social welfare in this year's budget are twice the rate of inflation. When Deputy Woods and his successor, Deputy McCreevy, were Ministers for Social Welfare, I always criticised them for giving increases that did not even meet the rate of inflation. I set Deputy Woods's record as Minister in compensating people for cost of living increases against what the current Minister and the Government has done. We have not only compensated people but have given them an increase at twice the rate of the cost of living index in the past year.

Deputy Connor needs to get his pen out and do some calculations. He will find it is not so rosy.

I have criticised the Department of Social Welfare, which requires further reform. This Bill is a major step towards badly needed reform. I hope the Minister will be here for years to come to continue all the reforms needed.

I am delighted to have the opportunity to talk about this Bill. We welcome certain provisions relating to equality between widows and widowers. However, I do not thank the Minister for that because under all current legislation, males and females have to be treated alike. It was a remaining anachronism. Before the provision was announced, I tabled a parliamentary question on the matter. I am delighted the anomaly has been corrected.

In reality, nothing fundamental has been done as regards social welfare reform in the past few years. Some of us thought this Minister would have been a reforming Minister having known what it is like to depend on social welfare. All he has done is tinker with the system here and there.

I agree with Deputy Connor that there is a need to look at the carer's allowance. It should be a money saver. If generous provisions are made for carers in the home we will not have the huge cost of institutional care, which can never replace home care as long as a person can be cared for at home. This Minister has not seen fit to change the rule of having to live in the same house. He has a problem with and is anathema to rural Ireland. Anything which is common in rural Ireland and does not relate to his constituency is forgotten about or denied.

Every rural Deputy knows of the common situation in rural Ireland where over the years, sons and daughters of farmers have built houses immediately adjacent to the family homestead. The houses may only be 50 yards apart and the two households interact daily. As the members of one household get older, the young family in the adjacent house give them more care. At all times, they preserve the independence that most old people like to retain as long as is possible. It is a sensible arrangement. Under current regulations, which the Minister is unwilling to change, unless either the young people move out of the new house or the old people move out of the house where they have lived their lives, they cannot get carer's allowance. That is bureaucracy gone mad. It is about time that regulation which does not pay any heed to normal social relationships, traditions and values was changed.

I want to highlight means tests. Time and again we table questions on means testing to the Minister for Social Welfare. We ask him about means testing and the self-employed, for example, people who may have three or four cows, which is common in my constituency. The Minister is under the great illusion that if someone owns two cows, he is a millionaire. I assure him that a farmer in my part of the country who, after a rigorous means test, has a net assessable income of £6 or £10 and a little social welfare, is not a millionaire. I invite the Minister to come to my constituency and visit the islands, Connemara, Leitir Mór or Tír an Fhia to see for himself what the people there are trying to do.

Fine Gael talk about enterprise and people helping themselves and sit idly by while a pound for pound means test is imposed on small farmers, currach fishermen and those who keep a few guests for three or four months in the summer. This means that unless someone can get a PAYE job, all the self-employed income is assessed at a 100 per cent rate. The net effect of that is that the person who has done a year's backbreaking work, finds out he is no better off than if he sat at home for the year and did nothing.

Does the Minister have any idea of the hard work involved in shellfish farming or fishing from small boats and the hazards involved? I do not know how he can continue to assess them by a pound for pound means test. I compliment Deputy Woods, who, during his time as Minister, recognised this problem and was dealing with it step by step. He dealt with it in the case of the Mná Tí Ghaeltachta in one of the most innovative and progressive moves. He dealt with it in relation to the seaweed harvesters, to whom he gave an exemption. I have no doubt that if he had continued as Minister, this situation would have been dealt with in a reasonable manner.

The Minister has come up with the most ingenious arrangement which makes a mockery of everything. We have received the old, fallacious, anti-development and anti-enterprise excuse that to do something about the problem would cost money. However, this year the Minister introduced an exemption of £6,000 per annum or £115 per week in the case of a lone parent family, which was a progressive move. It is good because it gives lone parent families a chance to earn some money and move up from the bottom rung of the ladder. However, surely we are constitutionally obliged to treat people equally, particularly families.

The Minister has tried to dodge parliamentary questions I have tabled on this issue. For example, can he explain how a household of a husband, wife and child with a self-employed net assessable income, after a means test, of £115.38 when the new rates come into force next June, is entitled to net unemployment assistance of £3.82 per week? Next door, a family with one parent and one child, with a net assessable income of £115.38 per week, under the new rates, is entitled to assistance of £82.70. I do not begrudge them one penny of it. Will somebody on the Government side explain how two families living side by side, with the same net assessable income, can apply to the same Department, yet one winds up with £78.88 a week less even though there is one less member in the household? Will somebody explain the rationale of having three people living on £78.88 a week less than two people? It is a question that begs an honest answer. The Minister of State looks surprised but that is the way it is. After twice tabling parliamentary questions I elicited the correct information in replies from the Minister for Social Welfare. The Minister of State had better explain it to the people in my constituency.

Someone rang me about a means test which had been carried out by social welfare officers. They asked me why they were being means tested because they were a married couple with one child. I told them the best thing they could do was for one spouse to get rid of the other because under our current social welfare system they would do a lot better apart than if they stayed together.

As rents increase and property becomes dearer, more and more people on unemployment assistance, particularly in cities, are dependent on rent allowances. As we have operated the rent allowance system there is a pound for pound claw back. In simple terms that means people are caught in a poverty trap because if they get part-time employment and earn above the basic social welfare allowance, they find there is no net gain. Somebody in receipt of £50 a week rent allowance has to get a net increase, after social welfare deductions, greater than the rent allowance before they have any profit from employment. This is the Government of enterprise and progress. My proposal is that rent allowances should not be paid by health boards but incorporated into the social welfare system in such a way that we would have a comprehensive system. We would abolish, once and for all, the pound for pound clawback.

The assessment of board and lodgings against parents' income is another issue that is costing the State a huge amount of money. It could be abolished without any net cost and would introduce equity into the system. We all know the reality of that chestnut. Any unemployed young person who wants to have independent means and is living with parents who happen to work is forced by the system to leave the family home and live in rented accommodation. They end up getting full social welfare payments while the State has to pay their rent allowance. Is this a good use of national resources? If this is considered to be efficient I would like to know how it can be explained. It is adding to our housing problems. Everybody knows this is happening. It is putting pressure on the rented housing sector, pushing up rents and costing us in rent allowances. Everybody knows that no one will sit at home and get £5 a week if they can leave home and receive £67.50 a week plus a rental allowance, but this Government is not doing anything about it. It is incredible.

The greatest reform of all is the increase in the dependent spouse's disregard from £60 to £90 on a sliding scale. Even though I read it several times I could not believe it. It cannot be true. I do not know who worked this out. Maybe I just do not understand but, as I see it, if your spouse has an income of up to £60 and you are in receipt of a means-tested social welfare payment, such as unemployment assistance, you are still entitled to the dependent spouse's allowance which is £38.50 at present and will rise in June to £40. When you go over £60 you lose the whole £38.50 and £6.60 for each dependent child.

The Minister says he will taper it off on a sliding scale between £60 and £90. The difference between £60 and £90 is £30. It still means that a person will lose a minimum of £40 plus £6.60 for every dependent child, while the maximum gain is £30. If you reach the magic figure of £90 you will lose a minimum of £10 for getting an extra £30 income, plus £6.60 for every dependent child. If you manage to get £70 you will have lost an equivalent proportion, one third, of that amount, yet we talk about reform and providing an incentive to work. If it had been tapered off at £120 at least you would have received 10 pence for every £1 you earn, which is something, but to call it a major reform when for every pound you earn you are still losing money has to be one of the greatest non-giveaways of all time.

This Government has been very unfair to the children of the most disadvantaged in society — those dependent on social welfare. We have all benefited equally from the increases in child benefit. However, it must be noted that since Deputy De Rossa became Minister for Social Welfare not a ha'penny increase has been added to the child dependent allowance paid to social welfare recipients. A millionaire gets the same child dependent allowance increase as a pauper. That is not social equity. When we talk about big increases in child benefit we must not forget that there has been no increase in the child dependent allowance.

We should also remember that it is easy to increase child benefit because the demographic dividend — or to simple people like myself, the reduction in the number of children in the country — has meant that there is no net cost in giving more money because there are fewer children to give it to. One reform that could have been introduced would have been to extend child benefit to students in full-time education up to 21 years of age. This has not been done, yet it needs to be because that is the age at which parents find their children most expensive. This Government cannot understand that, however.

The reforms are more a mirage than a reality. All the old problems that have existed in the system for a long time still remain. We will have to wait until Fianna Fáil returns to office to see major reform in the social welfare code.

I wish to share my time with Deputy Ring.

Is that agreed? Agreed.

I congratulate the Minister on his excellent stewardship since taking over this portfolio. I have full confidence in him; he is doing an excellent job, having inherited an incredible mess in his Department. The Department is in need of reform which could be effected over a number of years. For that reason alone it is important that this Government continues in office for a further five years to complete its programme.

I pay tribute to the Minister of State at the Department, Deputy Durkan, who is also doing a marvellous job. Most of my representations are made through his office. Invariably I receive immediate, well researched, detailed replies which I very much appreciate. The social welfare payments system is complex and recipients need to have the appropriate facts spelled out for them. There is need to streamline all facets of that Department, so that all relevant factors are taken into account in assessing people's needs. I am happy that the necessary reforms, which will take some time to introduce, will be implemented.

I welcome the substantial increases in social welfare payments granted in the last three budgets, particularly the most recent one which, with low inflation, will be all the more beneficial. While they are not sufficient, at least it is being acknowledged that those on social welfare are entitled to the standard of income expected within our booming economy.

The carer's allowance is a most important aspect of social welfare. Its recipients care for the elderly, those who handed on this State to us and who must receive proper attention. Tragically, institutionalisation had been the norm over the past 20 years. The trauma created for old people sent to the local county home was not fully realised. Old people feared being put into the local county home. Although I acknowledge the tremendous work done by the staff in those homes and institutions who looked after the elderly we must remember that elderly people have similar feelings to younger people, want to remain in the home they have built, and to be cared for and die in dignity there.

The carer's allowance goes a long way to meeting that requirement. It involves a saving for the State, but those who undertake this work are entitled to recognition by the State. Their services are much less costly than institutions and their attendant expenses.

I do not agree with all of Deputy Ó Cuív's remarks but he touched on the matter of carers and the position in rural areas where many young families build homes adjacent to one or other set of parents, and live as a family unit but independent of each other. Any younger couple in such circumstances will care, but it is grossly unfair that because they are not doing so under the one roof, they will not be entitled to a carer's allowance. That anomaly could be overcome by one or other of the young couple moving in with the elderly relatives. Believe it or not, even if that young couple were to extend the roof of their house, making a corridor between the two houses, they would be eligible for a carer's allowance. Young people caring for the elderly should be recognised and be eligible for the appropriate allowance, an aspect that should be seriously examined.

Means-testing is another problem, particularly in the case of small farmers, who have worked hard throughout their lives ending up with some little savings of between, say, £3,000 and £5,000, which sum could very easily be spent on a month's holiday in the south. Rarely will such farmers take such a holiday, preferring to retain their savings for a decent burial. It is grossly unfair that such savings, not easily acquired, are means-tested. Even if such an elderly couple own a couple of cows, looking after them is therapeutic. Why are they means-tested? People experience enormous difficulty making a living from 60 acres, yet an old couple with 20 or 30 acres, two or three cows and a few calves are means-tested. It is time that practice ceased, particularly since looking after the few cows involves occupational therapy for old people. In means-testing, rather than the Department going into the nitty gritty, it should examine people's overall circumstances, remembering that their homes are dwelling places involving no great expenditure, probably containing a radio and television, their only means of communication and entertainment.

Another matter brought to my attention I should like examined by the Minister's officials is the case of those people who formerly paid voluntary PRSI contributions. I have had representations in respect of two such people who will reach the appropriate age in November next but who will be nine months short of fulfilling the requisite ten years' contribution criterion. I have made inquiries but I am uncertain whether they will qualify for the contributory old age pension. Having begun to contribute in 1958, now being nine months short of the relevant contributions, surely they could buy the relevant number to become eligible. Since such contributions would have represented quite a dent in their income over the relevant period, there should be greater flexibility in assessing them.

I might revert now to the family income supplement and FÁS. Although I may not have homed in sufficiently on this, I must admit that the schemes being operated by FÁS are excellent and remove many people from the live register allowing them engage in constructive work for which there is considerable demand. The relevant rate of pay is approximately £173 less £5 for some social contribution, leaving a take-home pay of £168, in the case of a husband, wife and four children. Yet I note that the minimum income which would render them eligible for the family income supplement is approximately £250, £205 in the case of a husband, wife and one child and up to £344 in the case of a husband, wife and eight children. In the case of the family income supplement, a husband, wife and four children would be entitled to something in the region of £250 to £270 whereas, as participants in a FÁS scheme, their take-home pay amounts to £168 only. I have spoken to one couple, three of whose children attend secondary school, who have told me they have no social life and simply cannot make ends meet. They thought they were eligible for the family income supplement. If the husband was engaged in some type of private employment — that level of wage being available in many small industries — he could take on other odd jobs to supplement his income. But participation in FÁS schemes precludes him from so doing.

When the family income supplement falls under the heading of social welfare such a family is not deemed to be eligible. If the qualifying limit in the case of the family income supplement is £250, surely another arm of social welfare, FÁS, should pay what is considered to be a minimum wage. Obviously there is a conflict which should be examined. We cannot have one arm of the Department of Social Welfare paying £250 under FIS and a lesser amount under FÁS. This will not encourage people to take up these meaningful and worthwhile jobs. I am aware of a number of young people who have gone into the building industry, having acquired skills with FÁS.

The Ministers are doing excellent work and people's incomes have increased. There are anomalies but I have every confidence the Minister can deal with them. However, it will take another five years because in the previous ten very little happened.

To those in the Department of Social Welfare, those on the ground, in employment exchanges and those who assess clients I say well done. I do not have much time for the Civil Service in general. I wrote to a particular Department in November and I had to write to the Minister later as I had not received a reply by 1 February. That is not the way the Civil Service should work, it should be efficient and on the ball. The best and most efficient Department is the Department of Social Welfare. I do not say it is always right but it is the most efficient and can respond to the public. I ask the Taoiseach and the Government to take every other Department on a tour of the Department of Social Welfare to show how the Department works, how to deal with queries, problems and public representatives. I pay tribute to the officials in the Department of Social Welfare and those I mentioned earlier for work well done.

I was pleased with the budget as were most people who are in receipt of social welfare. For the first time in many years an increase was paid which was above the rate of inflation. It says much for the Department that 19,000 people who collected social welfare under false pretences have come off the live register. Those who draw social welfare under false pretences are taking money from those who need it. If more money can be saved, more money can be spent on those in genuine need.

Without wishing to get into a political argument I remind the Progressive Democrats that in the west and many other parts of the State people depend on social welfare. Irrespective of what Government is in office after the next election or what Government will be in place for the next 20 years we will not have full employment. There will always be a need for the Department of Social Welfare and there will always be people in need of an income from the State. There is nothing wrong with that.

Since coming to office the Government has tackled some of the difficulties which had not been dealt with for many years. In respect of child benefit, the Government has granted major increases over the last three budgets for which it must be complimented. There is a strongly held view that, for many years, Governments did not look after the family. For a husband and wife who have three or four schoolgoing children there is no such thing as free education. Every day my children have to get a few pounds because the schools are always asking for help or assistance. We are always contributing towards the upkeep of the school, for extra teachers and so on in addition to what is being provided by the State. It is extremely difficult for the family and I am pleased the Government has recognised the problem. The best way to help a family is to provide assistance in the form of child benefit to the mother. It is right and proper that it is paid to mothers, and it must continue, because for too long men collected child benefit and spent it on drink. The people accept the increase has been generous.

The carer's allowance is one area about which I am not satisfied with the performance of this or any Government. The allowance is paid to those who look after elderly people in the home. I do not understand the reason civil servants and the Minister will not deal with this issue and give carers a proper income. That the allowance is means tested is wrong. Any person who is caring for an elderly person and keeping them out of a State institution saves the taxpayer and the Government a huge sum of money. I cannot understand the reason it will not give carers £50, after which they can be means tested. The Government has examined the carer's allowance and is considering that a threshold of about £150 be written off. This is wrong and I ask the Minister's officials to examine the matter before the next budget. It is cheaper for the Government to give money to carers to look after the elderly at home than it is to put them into a nursing home, a hospital or in State care. I do not understand the reason the Department of Social Welfare has to means test the first £50.

Many people come to my clinics who are genuinely looking after elderly people and doing a good job. Because their husband has a good job they do not qualify for the carer's allowance. That is wrong and the Government will have to examine the matter for the October budget. While I do not know who will present that budget I am confident the Government will be in office. I ask the Minister's officials — they will not be going before the people — to examine the carer's allowance regardless of who is in Government. Any person or Deputy who knows their neighbours and friends will realise an injustice is being done. We talk about the family and the elderly. It was a tradition here that, regardless of who inherited the homeplace, some member of the family looked after the elderly. Italy had a similar tradition and looked after its elderly. For too long we have depended on the State to look after the elderly. I never want to see the day when the elderly must be put into State homes. There is nothing wrong in giving families a generous contribution towards caring for an elderly member of the family at home.

A problem can arise when there is a dispute about the amount of money people should get from the Department of Social Welfare. Such a dispute must be referred to the appeals system. The system should be examined because in certain cases it takes too long for appeals to be heard. Can something be done to speed up the process? The delays are wrong. People should also not lose their income until the appeals system is exhausted. Usually people's benefits are withdrawn and they must go to the community welfare officer for payments until their appeal is heard. They should not lose their income until after the appeal has been heard and, if moneys are owed to the State, arrangements can be put in place for repayment. That would lead to a more speedy appeals system.

It is great to see people of the calibre of the Minister and the Minister of State having responsibility for the Department of Social Welfare. They understand the operations of that complex Department and they have done an excellent job. I hope they will look at the issues I have mentioned. A welcome development is the provision of benefits for people who adopt children. It is only right that adoptive parents who have paid their contributions should be given the same benefits as other parents. I compliment the Taoiseach, the Minister and the Department for their work.

I wish to share my time with Deputy Killeen.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

The Minister is not present due to circumstances beyond his control but Deputy Eric Byrne will be capable of adequately representing him.

The proposed changes in the Social Welfare Bill are worrying. The rate of increase in the old age pension is derisory. It is equivalent to the price of a pint of Guinness.

The pint is expensive in the Deputy's area.

The price of a pint can hurt. The Minister of State is aware that £2.30 per week is the scale of the increase. He might claim there is no inflation but the rate of inflation will outweigh the increase being given to pensioners.

It will not.

Time will prove me correct. Under this Government, old age pensioners have been given the lowest increases ever. They are not enough to sustain them in reasonable comfort.

It is 110 per cent of the recommendation.

Is Charlie complaining?

People who are dependent on social welfare are the people who are most in need. We cannot walk away from that fact. Deputy Ring referred to the carer's allowance. I support the suggestion that the carer's allowance should have a minimum element that is not means tested while additional payment should be means tested. The saving to the State as a result of somebody being kept out of an institution is approximately £450 per week, a considerable amount of money. The health board cost of maintaining a patient in a geriatric hospital is approximately £450. Private nursing homes cost between £200 and £300 per week and patients are usually given a subvention. A proper carer's allowance would generate major savings for the State.

The Bill provides for subtle changes. Section 12 provides for changes in the number of PRSI contributions to qualify for certain benefits. There is a need to warn people that they should ensure their contributions are paid and recorded. People should also be notified on an annual basis as to whether their contributions have been lodged with the Department of Social Welfare and the Revenue Commissioners.

Major discrepancies have been discovered with regard to contributions paid during the 1950s and 1960s. The records in the Department for those decades do not appear to be thorough. Every Deputy has had problems trying to trace contributions for constituents who are approaching pension age. That issue should be examined with a view to establishing a system to resolve the problems encountered by such people. The fact that self-employed people are now making PRSI contributions is important. They should be made aware of the fact that if their contributions are not up to date they will be in difficulties when they require retirement and old age pensions.

There is also a need to examine the unemployment benefit and unemployment assistance schemes. In some cases people have a great desire to go to work but there is no incentive for them to take up lower paid jobs. While the FIS and other schemes are helpful, in some cases factors such as the cost of travelling to work make it unattractive for unemployed people to take up those jobs. The Department should examine the possibility of giving these people an extra benefit if they take up work in their local communities for a number of hours per week. Similar schemes exist but they are not being publicised to the maximum extent to give people the opportunity to go back to work. Most of the unemployed want to go back to work and those who say the unemployed are unemployable are being most discourteous to people who are genuinely seeking work and are unable to get it.

There are major unemployment problems in both rural areas and cities. Sometimes one's address will decide whether one will get a job. It is wrong that the area in which one lives can determine whether one can get a job. That attitude imposes a social stigma and it must be got rid of before it causes long-term damage to communities.

The Bill provides only nominal increases for some social welfare recipients. Previous increases in child benefit were considerable but the increases this year are low. Short term unemployment payments have been increased by £3 for a single person but by less than £5 for a married couple. That is worrying. One must worry about the standard of living such recipients will have. We do not want people caught in the poverty trap to be sent into the black economy. Our unemployment benefit and unemployment assistance schemes must be sufficient to maintain people. The increases provided for in the legislation are not sufficient to meet recent increases in some local authority rents. I worry when I am confronted with tenants of local authority houses seeking an explanation as to why their social welfare increases are insufficient to meet increases in their rents. That is a serious problem.

That should not occur.

They should get in touch with their local authority.

That is correct.

The local authority has a job to do. If it does not have the money to carry out necessary repairs it has a serious problem.

That is not correct.

Look at the percentage of social welfare benefits taken by a local authority and look at the effect on recipients and on their standard of living. This problem must be addressed urgently.

The free telephone rental scheme is also running into problems. People in receipt of pensions from outside the State do not qualify for the full allowance. A disabled single person in receipt of an American pension of £80 per week has been told he is not entitled to free telephone rental because he is under 66 years. Qualification for this allowance should be decided on a case by case basis, not on a global basis.

I ask the Minister to reconsider the eligibility criteria for companion passes. Some people in rural areas who are not able to travel on their own have been refused companion passes on very thin grounds, to put it mildly. An appeal system to consider such cases should be put in place and the necessary medical certification from specialists should be accepted. I know a person who has cataracts in his eyes and who has to make regular visits to a doctor in Dublin but who has been refused a companion pass on the basis that he is not in receipt of a blind pension. A person with impaired vision or a very serious heart condition who has to travel for medical reasons should be entitled to a companion pass. The increases proposed in the Bill are not sufficient to meet the needs of people on social welfare.

Does Deputy McCreevy agree with the Deputy?

That is a sore point.

This Bill tinkers around with the social welfare code but does not address the basic deficiencies in it. The entire social welfare code needs to be overhauled and the Government will not be able to do this if it continues to address it from different angles.

The last person who made a decent attempt to overhaul the system was Deputy McCreevy. It is only fair to assess the requirements at that time when there was a different economic climate. The attack on the then Minister which followed that overhaul underlined the paucity of talent among those who mounted it. That attack was shortsighted, dishonest and showed a lack of analysis and inability to face up to the issues. The improvement in the economy since then has to some extent taken the focus off the need to address these issues. Nevertheless, they still need to be addressed in a fundamental manner. I did not agree with some of the measures taken at that time but it was an honest attempt to address the weaknesses in the social welfare code. If we do not address these issues now we may not be in a position to do so in the future. The Government could have availed of the opportunity in the Bill to deal with these issues.

The increases in the basic social welfare rates are paltry and, in a three year context, disgraceful. Those in Government circles who recognise reality will agree with me. Deputy Ring and others referred to the carer's allowance, which has been increased by 50 per cent in cases where there is a second incapacitated person. This increase has more to do with public relations than giving recognition to the work carried out by carers who save the State millions of pounds but who have been badly treated over a long period. However, the attempts to rectify this in the Bill are very weak. This is tied into other issues relating to health boards, health provision, respite places and the provision of care by the health boards. However, it must be recognised that carers provide a very important service but are not being properly looked after.

I wish to refer to a family in my constituency who are trying to build a house which meets the needs of their wheelchair-bound ten and 12 year old children. I have made representations to all Ministers who have a responsibility in this area and who refer to their concern for the downtrodden and those in need. The father of these children is unable to work as a result of an accident. If the family qualifies for the £3,000 new house grant it will not qualify for the £8,000 grant for the building of an extension to an existing house to cater for incapacitated family members. If the State was genuinely committed to helping such people it would find a way of giving this family both grants. Having raised the matter at every level, the caring face presented by the Government is not reflected in its actions when it is put to the test.

Section 25 amends the provisions dealing with property. In the past the provisions in this area created problems. Many elderly people who worked hard over the years managed to put aside some money, most of which was assessed for means purposes under the social welfare system at 10 per cent. While I welcome the decision to reduce the rate to 7.5 per cent in some cases, the Minister has only made a half hearted attempt to address the problem. He should give further consideration to this point.

This problem could be dealt with through the introduction of schemes in which these people could invest their hard earned income and be exempt from the provisions of the social welfare code. Given that it would apply for such a short-term in most cases, there is an excellent case for doing this purely from a mathematical point of view. If the money was invested in credit union and post office schemes it could be used to benefit the community or the nation as a whole. I exclude the commercial banks from this proposal as I am no great admirer of their modus operandi or systems generally. The Minister has recognised this problem but he has not gone far enough in addressing it.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
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