Vol. 492 No. 5
33 Mr. McGrath asked the Minister for Social, Community and Family Affairs when the fuel allowance at £5 per week was introduced by his Department; the cumulative rate of inflation since that time; the current value of the allowance if it had been indexed linked since its introduction; and the plans, if any, he has to increase the allowance. [14580/98]
The standard rate of fuel allowance was last increased in October 1985, when the rate was raised to £5 per week. An additional smokeless fuel allowance of £3 per week was introduced in October 1990 to assist people living in the built up areas of Dublin to meet the additional costs arising from the ban on the sale of bituminous coal in these areas. This was later extended to Cork city and adjacent areas to coincide with the ban on the sale of bituminous coal which came into effect there on 13 February 1995. The smokeless fuel allowance will be further extended to Limerick city, Wexford town, Arklow, Drogheda and Dundalk and to their contiguous built up areas from October 1998 to coincide with the introduction of a ban on the sale of bituminous coal in these areas.
The fuel and light component of the consumer price index rose by 7.8 per cent between August 1985 and May 1998 — details are provided in a tabular statement which I will make available to the Deputy. Increasing the basic allowance by 7.8 per cent would increase the rate from £5 to £5.39 per week. The estimated cost of increasing fuel allowances for all recipients by 39p per week in the 1998-9 fuel season is £3 million.
The fuel allowance payment rate cannot be viewed in isolation from the rate of weekly pensions, benefits and assistance payments, which have increased ahead of the rate of inflation since the current rate of the fuel allowance was fixed. Substantial increases in all the social welfare primary payments of either £3 or £5 per week are being paid from the beginning of June 1998. Any increase in the fuel allowance payment rate would have to be considered in a budgetary context, having regard to increases in basic payment rates and the modest increase in domestic fuel prices during that time.
In addition to the national fuel scheme, there is a facility to assist people in certain circumstances who have special heating needs which is available through the supplementary welfare allowance scheme. Under the SWA scheme, a person who has exceptional heating costs due to ill health or infirmity may qualify for a heating supplement. This can be paid as a weekly supplement in addition to other social welfare payments. An application for a heating supplement may be made by contacting the community welfare officer at the local health centre.
The Minister's time is concluded. The remainder of his reply will be included in the Official Report.
Additional Information.
Where a person would not normally qualify for a heating supplement there is provision under the SWA scheme for an exceptional needs payment. The purpose of ENPs is to help prevent hardship by providing for essential, once-off, exceptional expenditure, which applicants could not reasonably be expected to meet out of their weekly income. ENPs are payable at the discretion of the health board taking into account the requirements of the legislation and all the relevant circumstances of the case.
I put it to the Minister that the CPI has changed by 33 per cent between 1985 and 1995. I take that figure from the review of the national fuel scheme by Goodbody consultants. The Minister did not refer to that review, which recommended that the fuel allowance should be increased to £10 per week. He has been in office for a year and has had a chance to take action. Does he consider it reasonable to pay heed to the consultants' recommendations? They considered it a well targeted scheme for those in need.
I considered this scheme in the context of last year's budget. I decided that it would be far more focused on the needs of the elderly and less well off to give a substantial increase to those over 65 or 66 years as appropriate, although it is a more costly option. Therefore, I had no scope for changing the free fuel scheme. The figures for the fuel and light component of the CPI cover electricity, gas, coal and other domestic fuels and they show that from August 1985 to May 1998 there has been an increase of 7.8 per cent.
The Goodbody report recommends a £10 increase over the next few years and I will consider that in the context of budgetary changes. As I said, I felt it would be preferable to give an increase of £5 for 52 weeks a year rather than an increase in the free fuel allowance for a 26 week period.
The Minister is aware that a predecessor of his reduced the period from 30 to 26 weeks. Does he agree that £5 per week will not buy much fuel? One cannot buy a bag of coal for less than £8. The fuel scheme is well targeted——
I ask the Deputy to be brief as time is limited.
Will the Minister make a substantial increase in the fuel allowance in the next budget?
I will look at this issue in a budgetary context as I will look at many other issues which the Deputy will no doubt raise today. I remind him that his party was in Government for a number of years between August 1985 and now, and it did not see fit to increase the free fuel allowance.
The Minister is in the driving seat.
I made a policy decision to give all old age pensioners on the maximum rate £5 — anyone over 66 or 65 years as appropriate — and I am proud of that because they get it for 52 weeks rather than 26.
34 Mr. McGrath asked the Minister for Social, Community and Family Affairs if his attention has been drawn to the fact that families who are recipients of unemployment benefit can, in certain circumstances, receive substantially lower weekly payments than similar size families who are in receipt of unemployment assistance and the plans, if any, he has to alleviate this anomaly. [14412/98]
The Deputy's concerns centre on the nature of child income support provided in conjunction with unemployment benefit and long-term unemployment assistance. Child dependant allowances are payable with social welfare payments in respect of children up to the age of 18 years. The allowances continue to be payable where children are in full time education up to the age of 22 years, or up to the end of the academic year after the twenty second birthday, provided that the claimant is in receipt of a long-term social welfare payment. These arrangements do not apply to short-term payments such as unemployment benefit, disability benefit, short-term unemployment assistance and supplementary welfare allowance.
The more favourable treatment of people on long-term payments, including long-term unemployment assistance, is in recognition that families with children on long-term payments face a higher risk of poverty. It is possible, therefore, that a recipient of long-term unemployment assistance with a child or children aged over 18 and in full-time education could have a higher income than a claimant of unemployment benefit in similar circumstances, assuming that neither household had any other sources of income. Given the rationale I have outlined for drawing a distinction between long-term and short-term payment recipients, I do not agree with the Deputy's view that this is an anomalous situation.
He will be aware the thrust of child income support policy in recent years has been to target resources towards providing increases in child benefit, as part of a strategy aimed at ensuring child income support is more neutral vis-à-vis the employment status of the parents. Child benefit remains one of our more effective means of tackling poverty, as it channels resources directly to families most in need. It is of particular importance to families on low incomes.
In this regard, the Deputy will be aware the child benefit scheme will be further enhanced with effect from September. The payment will be increased by £1.50 per child per month for the first two children and by £3.00 per child for the third and subsequent children, thus bringing the lower rate up to £31.50 and the higher rate up to £42. In addition a special supplementary payment in respect of twins will be introduced.
Does the Minister agree it is unjust that a person who has paid PRSI for many years could receive up to £27 less per week than a person with a similar sized family? He is also denied the Christmas bonus, butter vouchers, fuel allowances, etc. Does he further agree it is unjust that an individual who contributed to this scheme should be treated in that way? What steps will he take to amend it?
I do not want him to repeat his statement that child benefit is more focused. I agree with him, but it is unfair that somebody who contributed to the scheme over a number of years should be penalised. If he refers to child benefit again, he might mention the great improvements made to it by the previous Government.
There is no doubt the previous Government and others before that decided on a policy of freezing CBAs and putting the available money into child benefit because it is more focused on the people that matter and is delivered more directly, particularly to families on low income. It also does not act as a disincentive to going back to work, unlike CBAs. The issue of treating long-term payments differently to those short-term payments is in recognition of the fact that long-term social welfare recipients are much more at risk from poverty than short-term recipients.
Does the Minister agree it is difficult to justify that to an individual who made weekly contributions for years and finds he gets £27 per week less than his neighbour? Does the Minister consider this to be unfair, in addition to the other supplementary welfare benefits he loses? Will he concede there is a justifiable case for anger in an individual who made such contributions?
It may very well be, in the case to which the Deputy refers — perhaps he could give me details of it — that there are different circumstances and he is not treating the two cases equally. There may well be extra income in the UB family which, in effect, reduces the level of benefit. People are treated differently in this respect because of the principle of assisting people who are on long-term as opposed to short-term social welfare assistance.
I refer the Minister to Question No. 273 of 4 November 1997, where the Department sets out the case on why the difference exists.
