Vol. 503 No. 4
39 Mr. Broughan asked the Minister for Social, Community and Family Affairs if he will make a statement on the report, "The Disincentive Effects of Secondary Benefits", prepared by Goodbody Economic Consultants; the discussions, if any, he has had with the social partners regarding the report; when these will be concluded; and if he will make a statement on the matter. [10561/99]
The report prepared by the consultants, which I published recently, sets out to examine the range of issues associated with the interaction of secondary benefits and the incentive to take up employment and training opportunities. The report sets out the background to the evolution of arrangements for the retention of secondary benefits by long-term unemployed people who take up work or engage in certain labour market programmes. It makes a number of recommendations on how these arrangements might be refined in order to deal with inconsistencies and anomalies which have arisen. These recommendations cover a number of issues, including for instance the medical card and the local authority differential rent scheme which are outside the remit of my Department and which are being pursued by the Departments concerned.
Other wider issues, such as those relating to information provision, will be the subject of further consideration by the interdepartmental steering group established to oversee the study undertaken by the consultants.
In so far as my Department is directly concerned, the key issue relates to the rent and mortgage interest supplements paid under the supplementary welfare allowance – SWA – scheme. As the Deputy will be aware, Partnership 2000 contains a commitment to consider ways of dealing with the employment trap arising from the withdrawal of these allowances once a person takes up full-time work of 30 hours or more per week.
Following publication of the report, my Department immediately initiated discussions with the social partners on this issue. The first consultative meeting with the social partners was held on Friday last and a further meeting has been scheduled for next month. The purpose of these discussions is to seek to devise cost effective solutions to the employment trap identified in Partnership 2000. It is an extremely complex issue and all parties to the discussions are conscious of the need to take full account of such issues as equity within the SWA scheme. Equally, they are conscious of the need to ensure that any proposals emerging from the discussions do not give rise to employment or poverty traps elsewhere within the system.
I am confident that the discussions with the social partners will be fruitful and that they will facilitate the development of proposals which can be considered in the context of the next budget.
Like most Deputies, I found the report prepared by Goodbody Economic Consultants to be particularly thought provoking. Was the Minister surprised to find that only 2 per cent of respondents in the survey highlighted the loss of benefits as the major deterrent to taking up employment? Was he surprised that approximately one-third of respondents specifically highlighted the effect of low wages? Would he consider that the recently renewed determination to ensure the minimum wage is introduced by this time next year is critical in terms of the elimination of poverty?
In the recommendations the back to work scheme receives great commendation in terms of retention of benefits, as does the job assist scheme. Are there any ways in which the attractiveness of the back to work scheme could be further increased in order to entice more people back to the workforce?
Can the Minister do anything about FÁS trainees and their lack of entitlement to rent supplement in many if not most areas? Deputy Wall has tabled a question in this regard.
I am conscious of the question tabled by Deputy Wall. It is one of the issues which prompted the examination of this matter. There is no doubt that the job assist scheme and particularly the back to work allowance are extremely useful. No matter where I go people come to me and compliment the Department on the back to work allowance as it allows people re-enter the workforce while retaining benefits.
It is an extremely difficult issue as movement in one direction tends to create anomalies. I agree with the Deputy and this is one of the reasons the Government in its programme committed itself to bringing forward a minimum wage and why the Tánaiste, who has responsibility in this area, is very keenly aware of the need to bring this forward as quickly as possible.
I acknowledge the points made by the Deputy in his earlier question relating to the respondents' replies and which. to a certain extent, might surprise people. However, people are beginning to understand that there are schemes operated by the Department of Social, Community and Family Affairs and other Departments under which they can retain secondary benefits. Efforts have been made over the years by previous Governments to ensure secondary benefits are not lost as it has always been acknowledged that, at least according to anecdotal evidence, the perception of losing them prevented people from taking up employment. There is still some work to be done and that is why we have already set up discussions in this regard with the social partners. I would like to think proposals would come forward from these discussions sooner rather than later.
One of the chief themes of the report is the information deficit. Many citizens are not aware of the schemes administered by the Department, such as job assist and the back-to-work allowance, to encourage social welfare recipients to join or return to the workforce. Has the Minister given consideration to launching a major campaign in this regard? On medical cards and rent supplement, there is an uneven pitch. Less than one third have a medical card in the Eastern Health Board area. In parts of the west the figure is 50 per cent.
When the disincentive effect of the differential rent system was raised previously I expressed my desire to ensure uniformity across local authorities. There has been contact with the Department of the Environment and Local Government in that respect. My Department is probably one of the better Departments when it comes to the provision of information. I fully accept, however, that some are reluctant to approach a Government Department for information. That is the reason I provided substantial extra resources in the last two years to the independent National Social Service Board which operates a network of 80 plus citizen information centres throughout the country which are to be upgraded and computerised. I intend to invest further in the service to alleviate some of the difficulties highlighted in the report.
On rent allowance, a young girl, a single parent, came to see me recently. She had taken up work in a local hotel and was earning approximately £80 a week. She discovered that this would affect her rent allowance. She decided as a result to give up work. Will the Minister consider this anomaly? If one is working, it improves one's outlook on life.
I am conscious of this anomaly, which is the subject of the one of the main recommendations in the Goodbody report. The Government gave a commitment in Partnership 2000 to consider ways of addressing it. As changes could have significant drawbacks elsewhere in the system, the matter is being discussed with the social partners which met last Friday and which have agreed to meet again next month.
