Jim O'Keeffe
Ceist:22 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs the proposals, if any, he has to ease and simplify the means test for smallholders and fishermen. [16490/97]
Other Questions. - Social Assistance Means Tests.
I refer the Deputy to my previous reply to Question No. 47 on Wednesday, 15 October 1997. The means tests which apply in the case of the various social assistance schemes are designed to ensure available resources are targeted at those in most need and that people in similar financial situations are, as far as possible, treated in the same manner.
Self-employed people, such as farmers and fishermen, are nevertheless treated more favourably than other unemployed people in terms of qualifying for unemployment assistance. For instance, claimants in general must be fully unemployed for each day they claim unemployment assistance. However, self-employed persons, such as farmers and fishermen, whose income falls below the rate of unemployment assistance appropriate to their family circumstances are entitled to claim it.
In assessing means for social assistance purposes in the case of farmers and fishermen, account is taken of the value of the net income derived from either fishing or farming, less the expenses actually and necessarily incurred in producing that income. For example, in the case of a smallholder, sales of milk, livestock, crops and subsidy payments, such as headage payments, will account for gross income, while expenses may include such items as the cost of fertilisers, veterinary expenses, interest on borrowing for farm purposes, hired labour, repairs to farm buildings and machinery etc. The balance of gross income over allowed expenses represents means and this is set against the scheduled rate of the particular payment they have claimed. In the case of unemployment assistance, for instance, the scheduled rate is then reduced by £1 for each £1 of means.
In effect, therefore, unemployment assistance for smallholders and other self-employed persons, for example, boat owners, acts as a form of income supplement, similar to family income supplement which applies in the case of employees with families.
Fishermen who are employed under a contract of service are insurable for class A PRSI contributions and are, accordingly, covered for all social insurance benefits, including unemployment benefit during periods of unemployment. Fishermen who do not have sufficient PRSI contributions to qualify for unemployment benefit may claim unemployment assistance instead. In such cases, where a fisherman is unemployed for at least three days in any period of six consecutive days, they continue to receive their weekly rate of unemployment assistance, less 60 per cent of their net income from employment. In addition, persons without children are allowed a £10 disregard for each day worked, with the balance of earnings assessed at 60 per cent.
A significant improvement in the means test for smallholders was provided for in 1996 with the introduction of a substantial disregard of up to £2,000 in moneys received by way of the rural environment protection scheme, REPS. In addition, costs incurred by farmers in implementing the agri-environmental plan, as provided for under REPS, are offset against income from other farming activities for the purposes of assessing means. Therefore, the combination of these two measures represents a significant incentive for farmers who are receiving social assistance payments, such as unemployment assistance, pre-retirement allowance or old age non-contributory pension, to participate in REPS. The operation of this exemption limit means that farmers receiving unemployment assistance who are also in receipt of REPS payments in excess of £2,000 are at least £2,000 better off in terms of their overall income position.
Any proposal to ease the means tests in the case of farmers and fishermen would have cost implications and would, therefore, have to be considered in a budgetary context and in the light of available resources and existing priorities.
I apologise for the length of the reply, but it is necessary to put on record the full issue raised in the question.
It is clear from the reply there was a significant improvement, particularly for small farmers, in 1996. My interest arises from an infamous document circulated earlier this year with the Fianna Fáil election manifesto. In that document there is a clear, specific and unequivocal commitment to ease and simplify the means tests for smallholders and fishermen. That commitment was presumably designed to encourage fishermen and small farmers to vote for Fianna Fáil candidates. What was in mind in giving that commitment?
The commitment was given in one of our policy documents and the Department is examining that issue. Even when the Deputy was Minister he did not achieve all his objectives in the first couple of months in office. We will consider the issue in the context of the position over the next five years.
I want to know what Fianna Fáil meant when it gave that commitment, not what it means after examination within the Department. Was the commitment given to ease the means test and give a better range of payments to small farmers and fishermen if they voted for Fianna Fáil and elected that party into Government? Is that not very dishonest?
The Deputy is being selective in his quotation from the policy document, which also states that family income supplement is probably the best option for farmers and the self-employed. That issue will be considered in the coming months and years.
Fianna Fáil rejected that the last time.
There are priorities which must be considered in a budgetary context. Issues such as those are under consideration, but ultimately the resources at our disposal must be made available to the people who most deserve them. Down the years — this scheme was not introduced in 1996 — 8,000 smallholders have benefited from the scheme. They receive an average of £72 per week, which is a considerable income supplement.
Will the Minister consider issuing an information fact sheet on means testing to applicants? Does he realise the terror people experience when meeting social welfare officers for the first time? An increasing number of smallholders and fishermen along the west coast will soon meet social welfare officers for the first time and, while they know what constitutes income, many of them do not know what they can claim in expenses. An information fact sheet would be helpful in that regard.
I will investigate the Deputy's suggestion, if it has not already been taken up.
There are three Deputies offering. They can ask brief supplementaries, following which the Minister may reply.
Will the Minister clarify what Fianna Fáil meant when it stated in its manifesto that it would ease the means testing facility for smallholders and fishermen? Will family income supplement be extended to include the self-employed? The Minister implied that in his reply.
No, I did not.
Is he taking it back now?
I did not imply that in my response. The Deputy wrongly interpreted what I said. I stated it was one of the issues in the document which should be targeted.
The majority of farmers do not pay PRSI. Does the Minister intend to encourage them to pay even a basic level of PRSI which might alleviate some of these problems? Is a person participating in the farm retirement scheme, who has not been contributing for ten years, entitled to claim an old age contributory pension? This problem will arise in the next few years because of the large numbers participating in the scheme.
Has the Minister of State, Deputy Ó Cuív, been informed of Fianna Fáil's abandonment of the proposal to improve the lot of fishermen and smallholders? When he was on the Opposition benches he mounted a major campaign to have the scheme changed.
Before taking Question Time again, will the Minister read the Fianna Fáil manifesto in which there is a specific commitment on page 29? Does he consider it reasonable that small farmers and fishermen should expect some improvement in their lot by simplifying and easing the means test?
The commitments in our programme have been, and will continue to be, examined. Deputy McGrath should not take from my response that certain things will or will not happen. Matters are being examined in the context of the budget and if they are not carried through in this budget they will be examined in the context of future budgets.
They will be examined in the context of the next election manifesto.
These issues were examined by the Opposition when in Government, but it did nothing about them.
We did not make promises we did not keep.
We did not fool the people.
The Minister does not even know what was promised.
I am delighted Deputy Naughten has the interests of farmers as well as ticket holders for the Oasis concert in mind.
Many small farmers do not have credit cards either.
Problems exist regarding farmers and the self-employed in terms of their PRSI contributions and their entitlement to a contributory pension because of its implementation in 1988. This issue has been to the forefront of my mind since taking up office. I am aware of the many representations made to colleagues on all sides in this respect. It is a difficult issue which I am not sure can be resolved. The previous Government did nothing about it.
That is not true.
I will do my best to resolve it.