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Dáil Éireann díospóireacht -
Wednesday, 24 Feb 1999

Vol. 501 No. 1

Social Welfare Bill, 1999: Second Stage (Resumed).

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

Before the break I was dealing with the issue of the new farm assist scheme. Section 15 provides a new allowance which will be payable to farmers aged between 18 and 66 who satisfy the means test. The maximum rate of the payment will be equivalent to the long-term rate of unemployment assistance which next June will be £73.50. Increases for qualified adults and child dependants will be provided on a similar basis as for social welfare payments generally. Income from capital will be assessed on the same basis as for other long-term social assistance payments.

Section 16 provides for the assessment of means for entitlement to the new payment. Under this section the farmer's net income from self-employment, including farming, will be assessed at a rate of 80 per cent instead of on a pound for pound basis as currently applies under the smallholders' unemployment assistance scheme. In addition, in the case of a farm family, an amount of £100 per annum for each of the first two children and £200 for each subsequent child will be disregarded when assessing the net income from the farm.

The budget allocation for a full year was an additional £15 million on to the existing smallholders' scheme which, at last count, was in the region of £33 million.

Recently, the Government provided an extra £5 million in the current year in order to allow for payments under the farm assist scheme from the first week of April 1999. This issue has been raised by members of my own parliamentary party. It is the view of the House generally that once this Bill passes and the scheme is available, application forms and explanatory memoranda in relation to the scheme should be available almost immediately. We are doing our level best in the Department to ensure that is the case. Obviously, we cannot second guess what ultimately will occur when the legislation is passed and whether or not it is to be amended in this regard. However, we are doing our utmost, in view of the urgency of the situation, to have everything up and ready so that this scheme can start in the first week of April.

To allow for necessary means testing and other preparatory work, the first payments, including arrears, will be made sometime in the first week of June. An additional £5 million has already been allocated to the scheme in 1999, bringing the total allocation for the year to £10 million.

Because the farm assist scheme is being introduced shortly, I have already decided that the signing on arrangements for smallholder's assistance are being suspended for those who now apply to seek a review of their existing claim. Any person thereby qualifying for smallholder's assistance will be transferred automatically to the new farm assist scheme with effect from June next, and will have their additional entitlements under the new scheme backdated to the first week of April. This was decided by the Government subsequent to the announcement of this scheme in the budget, in order to react positively to the difficulties in the farming sector.

In addition, applications for smallholder's assistance will be taken as an application for the new scheme for those who fail to qualify for smallholder's assistance but who may be entitled to some payment under the farm assist scheme. Application forms for the new scheme will be available from my Department's offices in March.

Section 19 of the Bill provides for the introduction of a bereavement grant to replace the existing death grant scheme. I have secured an additional £10 million from the Government to improve this scheme, which was introduced in 1970 to alleviate the cost of funeral expenses. I was interested to note that on an RTE programme recently, Pat Kenny, who is well known for his knowledge in all matters, did not even know there was such a thing as a death grant. I suppose that would indicate that the general public does not know what a death grant is either.

Not too many qualify for it.

Some 10,000 such grants are payable each year at a cost of £1 million to the social insurance fund. We are increasing this by £10 million to bring it to an annual spend of £11 million in one fell swoop. The maximum grant currently payable is £100 and a reduced grant of £95 is payable where the contribution conditions are partially satisfied. The new section 19 provides for three significant improvements in the scheme. First it provides for a substantial increase from £100 to £500 in the level of the grant. The last such increase was made in April 1982. Members will agree that this represents a really worthwhile contribution towards funeral expenses incurred by families. Under section 4, I am providing that the amount of the funeral grant payable under the occupational injuries scheme will also be increased to £500.

Second, I am extending the scope of the scheme to include other insured persons such as the self-employed and people covered by the modified rate of social insurance, for example – I am happy to say – public servants. At present the scheme is largely confined to employees who pay the full rate of PRSI contribution. It makes no sense that people in such categories as I mentioned earlier cannot qualify for a death grant but may qualify for a widow's or widower's contributory pension.

Third, I am proposing a substantial easement of the contribution conditions so that as many people as possible can qualify under the scheme. The present conditions require the insured person to have a minimum of 26 contributions paid since starting work or since 1 October 1970, and to have either 48 contributions paid or credited in a recent income tax year or an average of 48 contributions per year since October 1970 or since starting work, if later. The grant should be payable to insured people with a minimum level of contributions paid under the social insurance system. In addition, I am proposing that a grant be payable automatically on the death of a person receiving a contributory pension or deserted wife's benefit, his or her spouse or qualified dependants, a person receiving orphan's contributory allowance, or his or her guardian.

I will also introduce an amendment on Committee Stage to provide for even further easement in the contribution conditions for entitlement. These new arrangements will operate from the first week of April and will cost £10 million in a full year. The additional cost is being met fully out of the social insurance fund. In our election manifesto we promised we would do something in the area of bereavement and we proposed certain changes in the social welfare system in this regard. I have gone in a slightly different direction to what we promised in our election manifesto and in the programme for Government. I have done so because it is probably the more acceptable way and will bring money to people at one of the most difficult times of their lives. I commend this change to the House. I thank my Government colleagues for allowing this additional cost of £10 million in a full year to be put into this scheme. It will now be called the bereavement grant instead of the death grant, as it was termed heretofore.

Section 21 provides for the payment of a special rate of old age contributory pension to certain self-employed persons who were aged 56 years or over on 6 April 1988 when social insurance was extended to this group. The Government is delivering on the commitment made to this group in our election manifesto by introducing a special rate of contributory pension for those with at least five years' paid contributions since that date. This is delivering on something we promised when we were in Opposition. Other parties in the House spoke about this when in Opposition but did nothing about it when they were in Government. We are doing what we can in this regard.

Entitlement to the new pension will begin from the first week in April but payments will not be made until October. This allows my Department to examine all the relevant claims and to ensure that refunds of contributions made to more than 3,000 contributors in this group are recouped. Any arrears of payment due will be issued in October. The new pension will be payable at 50 per cent of the maximum personal rate, plus 50 per cent of appropriate increases for qualified adults and child dependants, where applicable. We estimate that up to 10,000 people – 8,000 pensioners and 2,000 qualified adults – will benefit from this measure at an estimated additional cost of over £18 million.

A comprehensive review of the qualifying conditions for entitlement to old age and retirement pensions will be undertaken by my Department this year. I am doing this in response to representations from all sides of the House, including my own parliamentary party's sub-committee which deals with social welfare areas.

Particular attention will be given to the yearly average test. It will also deal with the treatment of pre-1953 contributions and the commitment given in the programme for Government to allow women who take time out for family reasons, to continue contributions for pensions purposes. I will report back to the House when the review is completed.

Section 22 provides for new arrangements under the unemployment assistance scheme aimed at benefiting low income fishermen. The new arrangements, which will be known as fishing assist, represent a substantial response from the Government to the difficulties experienced, during periods of prolonged bad weather, by fishermen who operate out of small boats right around our coastal communities. The new provisions involve changes to the means test for unemployment assistance including 80 per cent of all income from self-employment being assessed instead of 100 per cent as at present, child related disregards of £100 per annum for each of the first two qualified children and £200 per annum for each subsequent child and a relaxation of the signing on arrangements. An additional £1 million is being made available on a full year basis for these new arrangements which will take effect from the first week of April.

Section 23 provides that lone parents who are temporarily absent from the State for less than 12 months will continue to retain their entitlement to social assistance under the former schemes of deserted wife's benefit and allowance and prisoner's wife's allowance. I will introduce a further provision on Committee Stage dealing with the continued entitlement of certain people to deserted wife's benefit. On a sad note, I should mention that I brought forward this amendment, having been prompted by a parliamentary question tabled by the late Deputy Upton a few weeks ago. I take this opportunity to extend my condolence to his wife and family.

Section 26 strengthens the powers of social welfare inspectors to allow them to remove or secure for later inspection documents or records from employers' premises and to require employers to provide reasonable explanations of their contents. These additional powers will facilitate inspectors in making sure employers are meeting their PRSI obligations and that their employees are not concurrently working and claiming social welfare benefits.

Section 26 also makes specific provision for an inspector exercising his or her statutory powers, accompanied by a Garda in uniform, to stop any vehicle he or she reasonably suspects is being used for the purpose of employment or self-employment and to make inquiries of any persons in such a vehicle or require them to produce any record in their possession in connection with their employment or business.

Over the past year, at the invitation of the Garda, my Department and the Departments of Enterprise, Trade and Employment and Environment and Local Government and the Revenue Commissioners participated at checkpoints in Counties Dublin, Kildare, Wicklow, Monaghan, Cavan, Louth and Meath. Some people said they had not heard about these checkpoints, but they were widely publicised in the media during the past year. These checkpoints have largely focused on commercial vehicles or those used in the course of employment or self-employment. From my Department's perspective, it is primarily aimed at people who may be concurrently working and claiming social welfare payments.

As a result of follow up by social welfare officers in respect of these multi-agency checkpoints, to date a total of 118 social welfare claims were disallowed giving savings of £350,000. In addition, the Garda and Customs detected a number of road traffic, road transport and customs offences. This approach has been very effective in detecting serious levels of fraud and abuse. For example, one checkpoint in February last year detected no less than 10 per cent of fraud cases in 100 vehicles checked. A number of cases involving people from Northern Ireland are being followed up through the normal liaison arrangements with the social security agency there.

To date social welfare inspectors operated under general powers contained in existing legislation, namely, section 212(3)(d). I have been advised that it would be more appropriate to replace these existing general powers with more specific provisions. Concern was expressed by some Members about the exercise of such powers, but I assure the House these powers will continue to be used responsibly.

This programme is not aimed at ordinary citizens going about their business. Some Members pontificate as if they are the only people who represent the ordinary people. Ordinary citizens are being ripped off by defrauders, including social welfare defrauders. It is those in most need, old age pensioners, carers, widows, lone parents and the unemployed, who lose out by this. I make no apology for doing all I can to stamp out fraud in the social welfare system. Every £1 taken in fraud means there is £1 less for the needy in our society.

Surely those who find fault with the multi-agency effort to detect fraud are not asking us to turn a blind eye to what we all know is going on. If so, they are being hypocritical in the extreme. Fraud is fraud. Those most vocal on this cannot have it both ways. These powers will only work if they are used in a sensible and responsible manner. I can assure the House that is the way they will be operated under my stewardship and that is how they were operated in the past.

At the request of the Department of Health and Children, section 27 extends the scope of the legislative provisions I introduced last year for an integrated social services system to include the General Medical Services Payments Board and the voluntary hospitals operating in the health services area. Deputies will recall that the provisions introduced last year provided for the standardisation of the RSI number as a unique public service identifier, the introduction of a public service card and a payment card and the sharing and transfer of personal information between specified public bodies for the purposes of determining entitlement to certain social services and for the control of such services, of which six were specified.

The General Medical Services Payments Board and 28 voluntary hospitals are now being added to the existing list of specified bodies. That list includes Government Departments, local authorities, health boards, the Revenue Commissioners, FÁS, An Post, the GRO and the Legal Aid Board.

My Department consulted a wide range of specified bodies on how the new system will work. Plans are well advanced to launch a combined PPSN and public service card initiative across the public service in 1999 to heighten public awareness of the potential it offers for improved service delivery. This initiative will include the development of a common means database accessible to agencies delivering means tested public service schemes. It will also explore ways the public service card could help achieve greater integration of public services, better access for individuals and for its adoption as a payment card.

The Departments of Education and Science, Agriculture and Food and local authorities expressed a keen interest in implementing it in the near future. The Department of Health and Children has plans for the voluntary hospitals to use the number for patient records and screening programmes. The GMS Board will use it for the creation of a national patient index in the consolidated drug subsidisation scheme. All data-sharing will obviously be governed by the existing legislative provisions.

Sections 28 and 29 include two important provisions dealing with the handling of social welfare claims by the CAB. Officers of the Minister currently working in the bureau have the power to investigate and determine entitlement to social welfare payment in claims made by people involved in criminal activity. The identity of these officers is protected under the relevant legislation. Under existing legislation, civil proceedings can only be brought at the suit of the Minister or initiated by an authorised officer of the Minister. The identity of such officers is not protected under the Criminal Assets Bureau Act. Section 28 is designed to provide that civil proceedings in such cases can be taken by the bureau.

Section 29 provides that an appeal to the Circuit Court in social welfare cases dealt with by the bureau must be submitted within 21 days from the date of notification of the chief appeals officer's direction in this matter. A similar time limit currently applies to appeals to the independent social welfare appeals office.

I intend to introduce a further provision on Committee Stage to provide the bureau officers with the powers to investigate and determine entitlements to supplementary welfare allowance payments in cases made by people involved in criminal activity. At present such claims are processed only by the health boards and the provision will address concerns about the present levels of protection of their staff in those circumstances.

Section 32 provides for an increase in the health contribution from 1.25 per cent to 2 per cent and for an increase in the weekly exemption threshold from £207 to £217 from 6 April next. Section 33 repeals the relevant provisions underpinning the 1 per cent employment and training levy which, as announced in the budget, is being abolished from 6 April next. The net effect of this will be an overall reduction of 0.25 per cent in the levies.

I have been concerned for some time about the issue of integration, the process whereby occupational pensions effectively top up the social welfare pension to provide a total pension specified in the rules of the occupational pension scheme, and I referred to this issue on a number of occasions, most recently in my budget speech last December.

The Minister's time has concluded. However, if the House agrees, the Minister may continue. Is that agreed? Agreed.

Integration is normally on a once-off basis at the point of retirement, but in a small number of pension schemes, the process is continued on an ongoing basis after retirement under a "total pension income" approach, which is provided for in the rules of these schemes.

In considering any reforms in this area, I have to bear in mind that occupational pension schemes are voluntary arrangements. Nevertheless, I consider that certain reforms in this area are warranted, and as a first step, I am providing that any reduction in occupational pensions in payment, as a result of increases in the social welfare pension, will be prohibited.

While there is little, if any, evidence that any pension scheme rules allow for such a reduction, the prohibition will obviously outlaw such a practice if it exists, and will also prevent any employers considering such a rule in the future. Such a prohibition was recommended by the Pensions Board in its report on the national pensions policy initiative.

On the general issue of post-retirement integration, I have decided it should best be examined in the overall context of a review of the indexation of occupational pensions generally and I have requested the Pensions Board to prepare a report on this. I will consider the board's report and revisit the specific issue of post-retirement integration in the context of the Pensions Bill, which I hope to publish later this year.

In the last election we promised to do three things; to cut taxes, crime and dole queues. We have succeeded dramatically in all three, for example, a major reform of the taxation system was announced in this year's budget by standard rating the basic single and married personal allowances and the PAYE allowance. The full year value of the main personal reliefs amounts to £581 million. Crime has been cut by some 16 per cent and the live register has dropped by more than 45,000 since this Government took office.

The employment action plan which we launched in September is having a significant effect. The numbers signing off from the live register have increased significantly since it was introduced. A key focus of the Government is providing training and education both for unemployed people generally and for people who are long-term unemployed.

The Social Welfare Bill demonstrates the Government's commitment to looking after the needs of our older people, carers and others who are dependent on the social welfare system for income support. This is clearly evident when one considers the additional resources being made available for these improvements – £192 million this year and £317 million in a full year. I commend the Bill to the House.

I do not wish any disrespect to the House, but I have to leave promptly to attend the funeral service for the late Deputy Pat Upton.

I understand the Minister's position and wish I too could attend. However, the business of the House must go on under the circumstances. I join the Minister in extending my sympathy to Mrs. Upton and her family on the sudden and tragic death of the late Deputy Upton. We were his friends and will all miss him sorely.

For the first time in our history we have the means to help the "have-nots", to improve the lot of the disadvantaged and to tackle poverty. In 1999, we are budgeting for a current surplus of £2,300 million, a figure which, based on previous understatements, will probably be substantially exceeded. In contrast, the additional moneys from the Exchequer over and above the pre-budget social affairs' Estimate, amount to a mere £77.9 million. Clearly we are not using the resources available to us to make any significant impact on the quality of life of the half of our society which is not benefiting from the Celtic tiger.

The Social Welfare Bill provides the opportunity to cater for the poorer half of society. While there are some good provisions in this Bill, an historic opportunity has been missed. It galls me a little to hear the smug self-satisfaction of the Minister when he spoke about increasing rates of payment by a few pounds when he clearly does not realise the huge spread of poverty in our society, unaffected by the boom which has contributed so much to the wealth of the upper half of society.

I know there are lies, damned lies and statistics; the Minister mentioned £381 million which is a ridiculous figure; an extra £381 million will not be spent from the Exchequer in the current year. That is a fact on which I challenge the Minister. We are not discussing this year's expenditure; we are discussing the 1999 Bill and expenditure for 1999. The 1999 budget statistics and tables state that the additional expenditure from the Exchequer for the Department of Social, Community and Family Affairs post-budget is £77, 930, 000. How can we explain that?

There are a number of reasons. However, it is clear that the social insurance fund is now in surplus. The credits of the outgoing social insurance fund last year came to £53.3 million. We are not talking about extra Exchequer funds if we are paying increases on contributory pensions or contributory payments of any kind. Those are paid, not by the Government but through it, from the social insurance fund, out of the contributions of the workers. It is a great position to be in. In the hard times of the past, contributions from the Exchequer had to be paid into the social insurance fund. Now it is in surplus. However, the Minister should not claim any credit for the moneys being paid from the social insurance fund to which the workers contributed.

I reiterate how an historic opportunity has been missed. We are at a crossroads. Are we to use the available moneys to make a decent impact on poverty in our society? That is the test which confronted this Government when it was compiling the 1999 figures. It flunked, because the modest moneys allocated to the Minister for 1999 will make no impact of any consequence. This is not the first year that money was available. However it is the first year there was an admission in advance that money was available. Money was available last year but the cautious Minister for Finance, Deputy McCreevy, projected a deficit of £89 million.

That he ended up with a substantial surplus is a scéal eile. However, from the beginning, he projected a deficit. It is different this year; now there is a projection of a current budget surplus of £2,300 million. There is even a projection of an Exchequer surplus of £925 million, taking capital expenditure into account. On a net basis, even going by the Minister's cautious estimates, there will be £925 million extra at the end of the year; I guarantee this figure will be substantially exceeded.

We must align the allocations made by the Minister in the Social Welfare Bill against this and put them in perspective. There has been a miserable effort to deal with the problems of the disadvantaged in our society. There is no point in the Minister replying that the figures are higher than in other years. They should be. That is a starting point. There is a great deal more money around and the Exchequer is stuffed to the gills. What answers can we give to the poor, the disabled, and those who have an inadequate standard of living, when the Government is like Croesus and is prepared to let only the crumbs from the table fall to them? There is no answer. I do not believe this Government has a full understanding of the poverty in our society or any feeling for the disadvantaged when it trumpets the miserable few pounds being given in this Bill as being of consequence to the disadvantaged.

It is twice as much as the Deputy's party gave when in Government.

I am hugely disappointed. According to figures from the Combat Poverty Agency, which operates directly under the Department and is not a loose cannon, one-third of all children in Ireland live in poverty. Its report also states that we have the second highest rate of child poverty in the European Union and that it is increasing. The Minister may say in reply, and I could write the script for him, that that is based on figures in 1994 and that things have changed since then. Perhaps the situation has improved slightly but they have not improved to the extent that the basic statistics produced by the Combat Poverty Agency have substantially changed. There is substantial poverty, in particular child poverty. Experts agree the best response to child poverty is to increase substantially child benefit payments and child care provision. We have more than one million children, one-third of whom are living in poverty according to the Combat Poverty Agency.

The provision of good quality affordable child care is a problem. The demand for child care places is expected to rocket by up to 50 per cent during the next 12 years, yet child care costs swallow a higher percentage of the average salary in Ireland than in any other member state. It is usually the lower paid who are affected. The professional couple, where both parents may not work for economic reasons, will be hit to some degree but they will survive while the lower paid will be more substantially affected by the high cost of child care. We can make a significant contribution to the resolution of child poverty and the child care issue by substantially increasing child benefit, in particular for children under five years.

The Fine Gael Leader, Deputy Bruton, touched on this in his Ard Fheis speech when he spoke about increasing child benefit to £20 per week for children up to the age of five years. This is quite feasible and could be done tomorrow because the Exchequer has the resources. This would apply to about 250,000 children, a percentage of whom will be on the higher level already, and the cost would be less than £150 million in a full year. What changes have been made in child benefit in this Bill? The Minister has trumpeted his achievements but the only thing he has done for children is to increase child benefit by 28p per week when the Government will have a surplus of thousands of millions of pounds.

It is reasonable to suggest that is a miserable response to the problems of child poverty. Of course an increase in child benefit will not solve the problem of the provision of child care. The Government received the national child care strategy report. I recognise that the terms of reference of that report are not directed at parents who choose to care for their own children so the report does not cover every situation, but allowing for that its 27 recommendations are comprehensive and detailed and cover a range of areas. It took into account that 58 per cent of mothers who work full time outside the home avail of child care while 16 per cent of mothers who work in the home avail of child care. It is predicted that these numbers will rise substantially and we must be ready for that. The Government has kicked to touch and flunked the test. I know there are difficulties and there is the controversial question whether we should use a tax base approach, but the Government has done nothing. The increase of 28p per week in child benefit is unacceptable given that so much money is available.

Another controversial issue is the question of check-point patrols. The Fine Gael Party is against fraud, as I am, but the proposals in the Bill for additional powers to enforce social welfare laws are too draconian. In an era of falling unemployment, social welfare inspectors are being given the blunt instrument of check-point patrols which can be exercised in a random fashion. It is fine for the Minister to say how carefully the powers will be exercised but it will not be the Minister who will exercise them once they are in place. Those who exercise these powers will not be constrained in any way by legislation and the powers will be exercised in a random fashion. It is clear from the Minister's statement when he spoke about pilot projects that they have been exercised in a random fashion. Thousands of vehicles have been stopped in a random fashion to produce the results about which he spoke. Any vehicle can be stopped and the person in the vehicle questioned. There is a danger that the individual's rights and liberties will be breached and that these powers amount to an assault on people's rights to privacy and confidentiality in their dealings with the State.

The Bill provides for new statutory powers under section 26. One would have expected the Minister to have been forthcoming about these powers when circulating the Bill. I read the explanatory memorandum for an explanation of these new powers and whereas there is a reference to the inspection of premises, the check-point patrols are not mentioned. Is this subterfuge? Did the Minister think people would not notice this in the Bill? Will the Minister explain why the question of check-point patrols was not covered in the explanatory memorandum? When questioned about this issue the Minister sent out a civil servant to justify the power, however, if he were announcing an increase in benefit the civil servant would not be in the limelight. The Minister dodged the issue.

I raised the question of pilot surveys that had taken place and the Minister was caught out. To justify including this power in the Bill, the Minister gave the numbers caught out in social welfare fraud as a result of pilot check-point patrols. What was the statutory power for that? I notice the Minister tried to cover himself by saying that these things are being done at the invitation of the Garda Síochána. Is it a fact that the Garda Commissioner sent a begging letter to the Minister for Social, Community and Family Affairs asking him to allow special check-points to be set up to trap people for social welfare fraud? That is unbelievable. The Minister owes us an explanation.

More importantly, the Minister should accept that the power provided for in the Bill constitutes a bridge too far. It is a power that unnecessarily and unduly infringes on the liberty of the individual. Let us consider an example of a similar power in another legislative measure, the power of the gardaí to breathalyse people under the Road Traffic Act, 1994. A garda cannot breathalyse somebody at random. It is a serious offence. Under the 1994 Act, a garda can only breathalyse a person if the garda is of the opinion that the person has consumed intoxicating liquor. Even when dealing with that serious offence, there is a restriction on the use of that power by the Garda Síochána. Yet, this legislation gives social welfare inspectors the power to carry out random inspections and to unnecessarily interfere with the rights of citizens. They can also ignore confidentiality and privacy.

A recent newspaper article made a good point in this regard which is worth mentioning. What happens if there are four people in the car that is stopped? Does the social welfare inspector question each of them when they are together? Is it fair to somebody who might be sensitive that they are unemployed or in some other disadvantaged situation to cross examine them in the presence of other people who might not even be aware of their position? This power has not been thoroughly considered and I wish to voice my objections to its introduction in this Bill.

Each year's Social Welfare Bill should provide an opportunity to examine anomalies in the legislation and to remove them. I am amazed the Minister has not dealt with some glaring examples which I previously brought to his attention. One example, which I intend to deal with in detail on Committee Stage, is the problem for the old and disabled on non-contributory payments arising from Ireland's entry into the single currency and the consequent drop in interest rates. Does the public know that the Minister is assessing these people at 7.5 per cent interest in some instances and at up to 15 per cent interest on capital in the bank and using that false, notional figure to reduce their entitlement to non-contributory pensions? The Minister's refusal to change this iniquitous system is unacceptable.

There are two major problems with this system. First, people in a weak and vulnerable position are being robbed by the Minister, which is indefensible. He talks about the problem of low interest rates and the fact that people who have a great deal of capital will qualify for a pension. If he wishes to change the system and base it on capital, let us discuss that. However, if the system and the means test are based on income, he must play according to those rules. The way he is currently using the rules is hugely unfair to the pensioners and disabled people affected.

The second problem is of even greater concern. I heard a priest from Achill recently talk about what he called "the need to decommission the biscuit tin". Essentially, he was talking about the need to encourage people to take their money from under the bed or wherever it was hidden in the house and put it into the bank, credit union or post office. The Minister, by clinging to this unfair system, will encourage the reverse. It will cause not decommissioning but the recommissioning of biscuit tins. People will be fearful of putting money in banks and receiving 0.2 per cent interest only to be falsely assessed at earning either 7.5 per cent or 15 per cent by the Department when they claim their non-contributory entitlements.

I am hugely disappointed at the delay of the Government in making progress on the national anti-poverty strategy which was introduced by the previous Government. There is enormous poverty in our society. According to the Combat Poverty Agency almost two-thirds of the economically poor live in rural areas. There is provision for farmers and fishermen in the Bill but it will not have an appreciable effect on the dreadful situation of many of them.

I have proposed on many occasions – I cannot understand why the Minister will not accept it – that the family income supplement be extended to the self-employed, not just farmers. That is the case in the UK and Northern Ireland so why not here? In the past one could point out that there was not sufficient money to do that. However, there is now. Why not have a fair system for the poor self-employed? The Minister has given no justification for his refusal to introduce this measure.

I have frequently spoken about, and I produced a policy document on, the dispersed and almost invisible poverty in rural Ireland. It contrasts starkly with the concentrated poverty in urban disadvantaged areas. Clearly, the objective must be to secure sustained social and economic development in order to improve the lives of the people in those areas through empowerment, a better quality of life, education, training and employment opportunities. What is in this Bill to help in achieving that objective? Nothing. The Government has made no progress and it has no policy designed to make an impact on urban social exclusion.

There is no effort at fairness on the part of the Government in dealing with the problems of the disadvantaged. The money is available but the Government lacks the vision, the policies and the political will to make any impact. Fine Gael will oppose this Bill as an inadequate and insignificant response to the need to create a fairer and more just society—

Is Fine Gael opposing the increases for old age pensioners as well?

Rubbish. Contributory pensioners do not get their money from the Government but from the social insurance fund. The effort of this Government, with a surplus of £2,300 million on its current account, is outrageous. The extra £77 million it has added to the Estimates to cater for the other half of society is miserable.

The Minister thunders about his care for the carers. I have always been interested in the position of carers. It was I who tabled an amendment ten years ago to the Social Welfare Bill to pay the prescribed relative allowance, which was previously paid to the pensioner, directly to the carer. The amendment was accepted and that led to the introduction of the carer's allowance. I have followed the progress of the allowance with interest and there is a further improvement in the budget.

A proposal which I have pushed for some time relates to payment for respite care and I welcome its introduction in this Bill. At £200, it is small but it is a start. However, there is a rub. It is only payable to qualifying carers. Only about 15,000 will qualify as carers. There are various estimates of the number of other carers which range from 30,000 to 100,000. Let us take an estimate of 50,000. They will continue to get nothing. I wish to press the Minister on a couple of issues. I presented this proposal initially on the basis of a respite care allowance payment to all carers. Why should all carers not receive a payment? They put the same effort into it and need the same relief. We should bear these 50,000 people in mind. We talk about the unsung heroes; we should give them some recognition rather than just talk about them. What happens to the person who gets the carer's allowance? It is counted as taxable income, giving rise to considerable difficulty for many people. The State is giving with one hand and taking away with the other.

Pensions payable on a pro rata basis are not pro rata at all. People were bored to tears with my efforts to introduce pro rata pensions for those who were forced to make contributions and for the self-employed who, under the legislation introduced by Fianna Fáil, were excluded from any pension. I am glad progress has been made but half of those people will not qualify. There is also a rather mean twist to it. If my calculations are correct, the first pensionable self-employed came into existence in April 1998. Why should the pro rata pensions – perhaps I should call them half pensions – date from the same time? Why is the Government taking advantage of that year? The people who made the contributions should be entitled to their half pension from the time the first payments were issued.

This Bill is entirely unacceptable. There are a few good things in it but it will make no impact whatsoever on the problems of the disadvantaged in our society. The worst thing about this is we have the money to do it. The resources are there but they are not being used in the manner they should. I oppose this Bill on behalf of the Fine Gael Party for that reason.

I wish to share my time with Deputy Noel O'Flynn.

It is ironic that Deputy O'Keeffe does not welcome the introduction of the new pro rata pensions when he, his colleagues in Fine Gael, the Labour Party and Democratic Left trooped in behind the former Minister for Social Welfare, Deputy Proinsias De Rossa, then Leader of Democratic Left, in rejecting proposals to rectify the situation for people who had commenced paying insurance contributions on 6 April 1988 and had reached pension age before ten years of contributions were paid. It is a mean attitude to adopt and the measures introduced by the Minister are to be welcomed. They have been widely welcomed by those who, prior to the introduction of this Bill, would not have been in receipt of any contributory pension.

This is the second Social Welfare Bill introduced by the Minister, Deputy Dermot Ahern. Last year's Bill and this year's Bill are progressive and I welcome them. There are widespread improvements for carers. The introduction of the farm assist scheme will be of particular importance for low income farmers. The introduction of the pro rata pensions will be of great benefit. The improvements and the additional funding provided for social inclusion measures in the budget amount to £317 million additional expenditure in 1999. That is a sizeable sum of money by any standards. It is expenditure which is welcome and which will be put to good use across the community and across all age groups by the Department.

The Minister mentioned that he was anxious to improve the lot of the older citizen in this State and the plight of carers. I welcome the fact that people who care for children in receipt of domiciliary care allowance will be eligible for the carer's allowance. The residency requirement is being relaxed. All of us knew of cases where a son or daughter lived next door to an elderly parent and, while they cared for that parent on a night and day basis, they were denied the carer's allowance on the basis that they did not live under that same roof. I am glad the Minister and the Department are making provision whereby this residency requirement can be relaxed. I hope that in the regulations which will be brought forward, the residency requirements and the distance between households will not be too stringent. It would spoil the purpose of this amendment if they were.

The extension of the free telephone allowance scheme to all people in receipt of the carer's allowance, and the extension of the free travel scheme to carers of people receiving constant attendance allowance and prescribed relative's allowance is also to be welcomed.

The proof of the improvements in the carer's allowance is reflected in the fact that the expenditure incurred will amount to a 40 per cent increase on previous expenditure. An additional £18 million is being spent on this scheme in 1999. That funding is being provided for one of the best schemes ever introduced by the Department.

We are all aware that smaller-scale farmers have had serious problems with low income over the past six months. The new farm assist scheme will be of major help, regardless of what it is called – family income support or farm assist. The bottom line is that low income farmers and their families who need support must get it. This scheme, which was devised by the Minister, his Department and the Department of Finance, is one which will benefit rural areas. The smallholder's payment is paid to 6,600 people at present. The new farm assist scheme will enable a further 6,800 low income farmers to avail of assistance. I see no logic in Deputy O'Keeffe's remarks that this scheme will be of no assistance. If a scheme which incurs expenditure of £45 million in one year is of no benefit to any sector of society, I do not know where we are going. The small scale farmers whom I represent welcome this scheme. It will provide a necessary and valuable income support for those people and their families. I reject Deputy O'Keeffe's remarks about this scheme.

It is important that in the regulations drawn up by the Minister, the farmer's net income from self-employment will be assessed at a rate of 80 per cent, not on a pound per pound basis, as currently applies under the smallholder's unemployment assistance scheme. In addition, in the case of a farm family, an amount of £100 per annum for each of the first two children and £200 for each subsequent child will be disregarded when assessing the net income from the farm. Under the smallholder's unemployment assistance scheme, when a farmer earned an extra pound, his unemployment assistance was reduced by a similar amount. That did not give anyone an incentive to improve their income, it was too restrictive. The Department's officials must process all applications as rapidly as possible. The signing on arrangements which exist for the smallholder's unemployment assistance scheme are being suspended, another welcome measure.

All of us have heard many cases of people who paid contributions for a number of years but who had not paid ten years of contributions when they reached pension age. I have seen cases where people have been short the necessary contributions by one day. I hope that a method can be found to ensure that people in that position – there would probably be very few in the country – would receive more than 50 per cent of the contributory pension. I hope some special provision will be made for those who have paid ten years' contributions, for all intents and purposes. I ask the Minister and his officials to review this matter.

The Department of Social, Community and Family Affairs now has a widespread programme of helping community development, which I welcome. The Minister stated that the work of the Department is now designed to help individuals and groups express their potential and make their contributions. I compliment the Minister and his officials in the regional office in Dundalk on their support for the very worthwhile Tullymongan Resource Centre in Cavan town. The Minister has been extremely helpful with this project and provided grant assistance for it. Assistance is also being provided for a development worker over the next three years under the Department's community development programme. That will ensure that this very worthwhile facility will be available to a large community which had no proper sporting, recreational or resource facilities in the past. It will now have a proper facility which has a playschool, crèche, kitchen, hall, games room, meeting and consultation rooms and an office. It will be an excellent facility in a large area of housing and has been driven by a very hard working group in the community. Were it not for the encouragement of the Department and some other State agencies it would not have been possible to put that facility in place. In one housing area there is a new facility that cost £256,000, and it is particularly important that the Department funds a community development worker for the next three years to ensure that maximum use is made of the facility.

The Department has also given grants to many voluntary organisations, particularly in remote areas. It can be very difficult for small communities to provide worthwhile facilities in their own immediate area, and grant assistance of between £10,000 and £20,000 can make an enormous difference to a small community. It gives extra encouragement to those who are making a voluntary effort with the initiative.

I agree with Deputy O'Keeffe on the matter of savings. When one applies for a non-contributory pension it is absolutely ludicrous that there is a notional figure of the income that can be derived from savings. When the return on savings is extremely small it is time to adjust those figures considerably, and I appeal to the Minister to ensure that adequate contributory pension scheme regulations are put in place so that those who have put some savings by are not deprived of their right to enjoy a full, non-contributory pension. Those people have by and large worked hard all their lives and should not be denied the full pension payment rate when they reach pension age.

I am in favour of this Bill, which delivers on many of the commitments made in Partnership 2000 and in An Action Programme for the Millennium. The Minister's track record is second to none. This Bill puts to shame the performance of the previous Government in the social welfare area. However, I must give credit where credit is due. A change of Government has worked major wonders on those in Fine Gael who have very lately rediscovered their social consciences. Deputy Bruton in particular has discovered his since he left office. He has suddenly decided that the children of this State are deserving of more support. Deputy O'Keeffe said the Opposition is to vote down millions of pounds worth of increases for different categories of recipients. What will the public say tomorrow when it discovers that Fine Gael is going to vote against increases in pensions, etc.?

When Deputy O'Flynn has been here a while he will not go down that track.

Members would believe I am a cynic if I said that Deputy Bruton's sudden interest might be politically motivated, so I suppose I had better not say it.

Who said that before? Deputy O'Flynn sounds like Pádraig Flynn.

I apologise to those members of the Opposition who will be upset by the fact that in Government, Fianna Fáil will do what it always does: it will continue to deliver on the promises the party makes during election time. We have kept our promises to bring all social welfare payments up to the level recommended by the Commission on Social Welfare, and most payments are now over the recommended levels. Nobody can contradict me when I say that this is the most sweeping and comprehensive package of social welfare increases and improvements that has ever been presented by any Government. It is estimated that those increases will cost over £300 million extra in a full year.

Some of the areas covered by this Bill include the additional benefits that will apply to many social welfare recipients including those on old age pension, invalidity pension, disability allowance, retirement pension, unemployment assistance, family income supplement and supplementary welfare allowance. There are enhanced packages for carers, FIS recipients, child benefit, employment support, back to education support and voluntary and community services.

A contributory old age pensioner will be in receipt of £89 per week as of June 1999. We gave a commitment that we would bring that pension up to £100 per week on a phased basis, and we are well ahead of target in keeping our promise that all those pensioners will be paid that figure by the year 2002. Since we took office there will have been a 14 per cent increase in total in the level of pensions. This increase is well ahead of the social welfare increases delivered by the previous Government. However, to be fair to them, they only make pre-election promises; they do not have to deliver on them.

Provision is made for a new pro rata pension for the self-employed at a cost of £18 million in a full year, and up to 10,000 people will benefit. Self- employed pensioners who narrowly lost out on qualifying for a pension will be pleased with this Bill. Occupational pension funds are doing well out of the record pension increases we currently enjoy. The Minister has decided to provide greater flexibility for pension planning for the self-employed. It is important that protective measures be built in to protect the self-employed pensioner against unwise or incorrect investment by fund managers. We must ensure that there are mechanisms in place to guarantee that there are ample funds in place to cover pensioners when they reach retirement age.

There has been a comprehensive reform of the carer's allowance under this Bill that will enable an extra 3,000 carers to qualify for this benefit. Carers groups and individual carers have looked for certain improvements. They have asked for credits for carers and that the free travel pass be extended to other carer categories. They have asked that carers of children with special needs should qualify and they have requested the relaxation of full time care and attention rules. They have asked that the stipulation that one must live with the person one cares for be amended and they have rightly requested a respite care payment. I can think of no group that deserves it more.

All these points are addressed in this Bill, which also provides a new farm assist scheme in addition to the fodder scheme and other measures introduced by the Minister for Agriculture and Food. Farmers are treated with respect and dignity and there is extra support for farm families with children. Incentives are provided to increase income from farming and other sources. Fianna Fáil has always represented the small farmer and in the present difficult time it has moved to help them. Our record in this regard speaks for itself. Big farmers are lucky in that they are not affected as badly as the small farmer by the current farm crisis. Fishermen will benefit from the fishing assist scheme, and there will be a new method of assessment of income for fishermen claiming unemployment assistance. Qualifying conditions have also been eased.

Our commitment to increase the bereavement allowance has been honoured, and it now stands at £500. The Minister stated that this increase is intended to be used to defray the cost of funeral expenses at the very difficult time of the loss of a loved one. I fully support his view that it must not lead to increased funeral costs.

The Bill provides an extra £41 million for child benefit. It contains provisions for improvements in the family income supplement scheme to ensure families are better off at work.

Debate adjourned.
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