Dáil Éireann díospóireacht -
Wednesday, 22 Mar 2000

Vol. 516 No. 4

Social Welfare Bill, 2000: Report Stage (Resumed).

Debate resumed on amendment No. 14:

In page 7, between lines 7 and 8, to insert the following:

"7.–The Minister shall, within 3 months of the passing of this Act, lay before Dáil Éireann a detailed report on the implications of the extension of family income supplement to the families of persons who are self-employed.".

–(Deputy J. O'Keeffe).

Mr. D. Ahern

On the issue of FIS for the self-employed and farmers, Deputy Jim O'Keeffe alleged that the scheme discriminates against self- employed people and asked whether there was any logic to that. The scheme was established in 1984 specifically to provide an incentive to low paid employees with families to take up or return to full-time employment. Deputy O'Keeffe was appointed as a Minister of State at the Department of Finance in 1986 and I do not doubt that he had an opportunity to change the scheme had he wished to do so. Deputy Dukes was the Minister for Finance at that time and former Deputy Barry Desmond was the Minister for Social Welfare. There may well have been some dispute between Deputy Dukes and Barry Desmond on the matter.

In 1996, under Partnership 2000, the then Government could also have changed the scheme. I clearly recall that the scheme did not form part of Partnership 2000, particularly in regard to farmers. Deputy De Rossa was the Minister for Social Welfare at that time and Deputy Quinn was the Minister for Finance. There are practical difficulties associated with the extension of this scheme to the self-employed and they cannot be underestimated.

Arrangements are already in place for self-employed people on low incomes through the unemployment assistance scheme and there is a substantial cost involved there. Deputy Broughan acknowledged my Committee Stage comment that this issue might be better addressed through the taxation system and the Programme for Prosperity and Fairness contains a commitment to examine the issue.

On the matter of assistance for self-employed people who pass out of the back to work allowance scheme, it was stated that assistance was withdrawn after a period of two years when, in fact, assistance is provided for four years. A number of initiatives has been introduced to assist self-employed people – a training and technical fund is available to self-employed scheme participants to assist them in areas such as book-keeping and marketing and to assist in the purchase of equipment, and arrangements have also been put in place by my Department, in conjunction with the First Step organisation, to allow self-employed people to avail of interest free loans. Assistance is available to self-employed people under the back-to-work allowance scheme. I cannot accept the amendments.

Mr. J. O'Keeffe

I am disappointed with the Minister's response. I would have thought he would care as much about the self-employed, particularly those who are not well off, as I do. The Minister traced the origins of the scheme from 1984. I am proud to have been involved as a Minister of State in the Government which introduced the family income supplement. I accept that it was introduced for PAYE workers but I do not accept that it was never intended as income support for the general population. Circumstances have changed in the meantime and many back-to-work schemes are directed at get ting people into self-employment as opposed to PAYE employment.

The crunch issue is not getting people started in employment as support in this area is available. However, there is no reason someone leaving a back-to-work scheme three or four years later to paddle his or her own canoe should not receive the same benefits as a PAYE worker with a comparable income. The Minister referred to practical difficulties and I presume he is talking about Revenue problems and obtaining honest accounts. I see no reason properly produced accounts should not be acceptable to the Department of Social, Community and Family Affairs in the same way as they are now acceptable to the Revenue Commissioners.

If a scheme for the self-employed can work in Northern Ireland, why can it not work here? There is a cost involved and I quoted the figure of £47 million, excluding farmers and one of £80 million including them. This does not matter – it means the low income self-employed are being discriminated against as they are the same as low income PAYE workers with families. It is unfair and I will continue to campaign on this issue. In the meantime, all I can do is urge the Minister to accept my amendment.

Mr. D. Ahern

This issue has been floating around since 1984 and no Government has done anything about it. As I said, there are practical difficulties but this Government has committed itself, in the Programme for Prosperity and Fairness, to examining the further development of the family income supplement and its payment through taxation rather than social welfare. Deputy Broughan agreed that it is probably better to deal with the entire population than a section of it. It is not true that the Government or I do not have sympathy for low income self-employed – of course we do. However, historically, this scheme was designed for PAYE workers. It needs to be radically reformed and we have committed ourselves to this in the Programme for Prosperity and Fairness.

Mr. J. O'Keeffe

Given the Minister's commitment, I am prepared to withdraw the amendment at this stage. However, I will be closely monitoring the situation.

Amendment, by leave, withdrawn.

Amendment No. 15 not moved.

An Leas-Cheann Comhairle

Amendments Nos. 16, 17, 19, 20, 21, 22, 34 and 47 are related and may be discussed together. Is that agreed? Agreed.

Mr. J. O'Keeffe

I move amendment No. 16:

In page 8, between lines 22 and 23, to insert the following:

"10.–The Minister shall consider the implications of—

(a) paying the respite care grant to all carers including those who are presently excluded by the means test,

(b) increasing the present weekly income disregard to £250 per week, and

(c) removing the disqualification whereby Carers in receipt of social welfare payments are effectively excluded from qualifying for a carers allowance,

and shall report to Dáil Éireann thereon within 3 months of the passing of this Act.".

The issue of carers is close to my heart. I put down this amendment in an effort to get the Minister to accept we are not doing enough for them. It goes without saying that we all, including the Minister, appreciate the work of carers. However, we should show our appreciation in a practical way along the lines proposed in my amendment. We must examine how a large number of carers providing full-time care for the elderly and disabled are getting no support from the State. We must look into our consciences and decide if we really appreciate the work they are doing.

There is a change to carers' benefit in the Bill which will be of help to some but will not achieve as much as the Minister says. Despite that, two-thirds of carers will be left with no support. It is socially just and economically smart that we provide that support. This combination is an imperative for the Minister to get on his bike and do something. The problem is that the measures being taken are too little, too late. I am concerned that many carers will be unable to continue because of financial or other reasons and more people will be put in the care of the State and extra institutional costs will arise.

I am pressing for the respite care grant to be given to all carers. The carers' organisations are seeking the payment of the carer's allowance without a means test. My heart is with them but I do not see that happening immediately. However, there is a strong case for some recognition for those who do not qualify under the means test. The payment of the respite care grant to all those presently excluded by the means test will be a step in the direction of abolishing the means test. The cost would not be enormous. It would recognise the work of those providing full-time care for the elderly and disabled and would cost about £300 per year which is less than £6 per week. As well as being an income support, it would benefit those who could take a short break from the constant care they provide. This is the approach to adopt for those who do not qualify under the restrictive means test.

The Minister will tell us about all he has achieved in the past two or three years for carers. However, he has not improved the means test – the disregard of £150 still stands. This is the core issue. It is easier to work around the edges and increase respite care from £200 to £300. All these measures are good in their own way.

Mr. D. Ahern

Their introduction is what matters.

Mr. J. O'Keeffe

The Minister has avoided the core issue; the real problem for carers who do not qualify for the carer's allowance is that they are totally excluded. It is important to consider if are we prepared to relax the means test which involves increasing the weekly disregard to £250 for married couples and £125 for single people. By doing so, the Minister would show he is committed to making a positive contribution to those just above the limit. It would include another 10,000 carers who are most in need and are receiving nothing. They would receive full or partial payment under this relaxation. That is the fundamental approach required on the way, hopefully, to abolishing the means test. I am not seeking the sun, moon and stars but a realistic instalment, an instalment the Government can afford.

The last point I wish to raise grieves me. People on social welfare are effectively excluded from qualifying for a carer's allowance. The more one thinks of it, the more outrageous it is. The people who are generally regarded as the poorest, weakest and most vulnerable section of society are excluded from receiving the carer's allowance. The meanest aspect of the already mean means test is that if one is on social welfare, one does not qualify. The Minister can claim that, technically, I am not correct and that a social welfare recipient can qualify for the carer's allowance. However, one would have to give up one's existing allowance and therefore, effectively, one would not qualify for anything additional. How can that be justified? I read the report on the carer's allowance which made the anodyne, innocuous point that it is generally accepted that people on social welfare should not receive a second payment. Who accepts that? I do not accept it. Why should we effectively exclude the weakest and most vulnerable section of society from this payment? Who is excluded from receiving the carer's allowance? People who are regarded as being too well off if the income disregard of £150 per week knocks them out of the scheme and, at the bottom, those who have a social welfare payment. How can we justify operating a scheme in that fashion?

The time is right for a radical review of the scheme. It is a good scheme. I tabled an amendment to the Social Welfare Bill ten or 12 years ago seeking the establishment of this scheme. It has developed well over the years and the Minister has made some improvements. However, let us now do what is right, just and economically sensible. Let us develop the scheme quickly. That is why I urge the Minister to accept the approach suggested in the amendments.

I applaud the Minister for introducing the carer's benefit, although it did not justify the major publicity generated by its launch. It will be of benefit for some people but it is limited by the fact that it is only payable, in practical terms, to a worker who gives up a job to provide care. The scheme could be improved by adoption of the approach outlined in amendment No. 17 whereby the payment could be made to the spouse or partner of the qualifying person with the agreement, obviously, of that person and the qualifying person. That would be a substantial improvement and would be economically wise. It would enable the qualifying person to continue working and allow the spouse or partner of that person to draw the benefit. The amendment is sensible and I hope the Minister will have a positive response.

I have covered the main issues of concern with regard to the carer's allowance. I ask the Minister to offer serious commitments in response to the reasonable case I have made.

Mr. D. Ahern

I do not accept that I or the Government have done little in this area. This scheme was started in 1990 and £100,000 was allocated for it in the Estimates. We estimate that by the end of this year the payment for carer's allowance will be £78 million. That is a dramatic increase in just ten years.

When I was appointed to office the total payment on carer's allowance was approximately £36 million. During my tenure that increased to £78 million. I have heard comments by Members of the Opposition and the lobby groups that the number of people in receipt of carer's allowance has not increased. That is incorrect. Since this Government took office just two and half years ago the figure has increased by 60% and we estimate that by the end of this year it will have increased further to between 17,000 and 18,000. The figure was 9,500 when we took office.

The Deputy accused me of tinkering with the system. When one brings forward a scheme which deals primarily with a health issue but is administered through the social welfare code, which is designed for people on low incomes, the scheme might not develop in the way people expect. When we took office, the 9,500 carer's allowance recipients were not in receipt of the free schemes. They now qualify for all of them. The 17,000 to 18,000 recipients this year will also get the free schemes, something none of them received three years ago.

The Deputy is incorrect in stating that I have done nothing in relation to the income disregard. In 1999, I made changes whereby the first £150 of joint weekly income for married carers is not taken into account in the means test and the first £75 of weekly income is disregarded in respect of single carers. Much has been made of abolishing the means test. There is no social welfare payment—

Mr. J. O'Keeffe

From what was the figure of £150 increased?

Mr. D. Ahern

It is the first £150 of joint weekly income.

Mr. J. O'Keeffe

What was it before that?

Mr. D. Ahern

There was a single limit of £150.

Mr. J. O'Keeffe

There was no effective change.

Mr. D. Ahern

There was. The Deputy can check the record.

Mr. J. O'Keeffe

The £150 was there previously.

Mr. D. Ahern

The Deputy does not understand the changes that were made. He should check it. These changes benefited people and it is nearly two years since they were made.

Some, although not all, lobby groups want the means test abolished. Child benefit is the only social welfare scheme that is not subject to means test. It is a universal scheme. It is paid to every family irrespective of income. The richest and poorest people get the same child benefit. Every other social welfare scheme is means tested. They are means tested to ensure the money available to the State through the social welfare system is paid to the people who are most in need, low income families. It is unjust that a a person on a big salary or with a high income should be entitled to a carer's allowance equivalent to somebody on a very low income. Abolition of the means test means spreading the load. It reduces the amount of money that is available to target people on low income. Whether it is a reflection of a socialist leaning in me or my type of politics, I believe that if millions of pounds are available they should be targeted at those who cannot afford to care for somebody in the home. No one side of the House holds a monopoly of regard for carers – we all have regard for them. No matter who is in Government on this side of the House, the request to abolish the means test will not be entertained because the strongest advice given to any Minister in my position is that it should not be done and that funding should be targeted at those most in need.

I instigated a review of the carer's allowance because in the space of ten years it has increased from £100,000 initially to £78 million. The review was published 18 months ago and I am glad Deputy O'Keeffe read it since Committee Stage. I suggested he do so. He will acknowledge that all but one of its recommendations have been implemented. Indeed, we have gone further. All the lobby groups involved in this area had an input to the review. As Minister I gave a commitment to implement its recommendations as quickly as possible and I did so over two budgets.

Moves are afoot in regard to the continual care payment, linked to the needs assessment issue, of which the Deputy is aware. I would like to think action will be taken sooner rather than later, but Deputies will appreciate it is a difficult area. The payment is made to people based on a doctor's note and it does not take into account the degree of necessity or need by both the carer and the those cared for. In view of the fact that all other recommendations of the carer's allowance scheme have now been implemented, I have made a commitment to look at the issue of income disregard over the next few budgets with a view to increasing it so as to include more people.

I cannot accede to some of the issues raised in the amendments, but they will be looked at in the context of next year's budget. The issue of whether somebody could qualify for two social welfare payments was looked at. It is a principle of social welfare that a person cannot avail of two payments and the Deputy is incorrect when he says there would be no benefit to somebody going on carer's allowance. It is a fact that somebody would qualify for a higher rate of payment, perhaps not as much as they would like.

This scheme was never designed to compensate or pay people for minding people in their home. The State would never be able to afford that, nor to introduce a system to that effect. It was designed to assist the people on low income who are caring for people in their home. I referred to the cost of caring allowance, under the remit of the Department of Health and Children. It will be looked at as a commitment under the Programme for Prosperity and Fairness.

Any objective look at the carer's allowance scheme over the past two and a half years will show that by far the most changes have been made during my tenure as Minister. We will not stop there. Between now and the end of the term of office of the Government in two years we will have made other significant changes, not only in the area of social welfare but also in finance, where over two budgets we have already introduced changes to caring in the home. We have also dramatically increased the disabled person's grants under the Department of the Environment and Local Government.

The issue of carers primarily rests with the Department of Health and Children. Substantial funding has been allocated to assist not only carers but especially those cared for, who are the people in need, especially the people with disabilities. Substantial additional funding has been allocated in the past two years, especially in the last budget. We aim to continue with this for the remainder of our term of office.

Mr. J. O'Keeffe

The Minister is floundering on the issue of the carer's allowance. He has contradicted himself. He says he cannot agree with the principle of abolishing the means test because that would result in a universal payment with the result that people who are too well off would get the allowance. He also says he wants to focus payments on low income families, yet the lowest income families, those on social welfare, are totally excluded and will continue to be excluded. It is true that somebody on social welfare can change their existing welfare payment to a carer's allowance if it provides a marginal improvement, but they lose their existing allowance.

The Minister is not credible on this issue. It is one I intend to pursue relentlessly because it has given rise to huge unfairness and injustice. I agree with the Minister that while it would be good to have no means test, that must not be the focus, at least initially. It can be supported at a later stage. In the short term, the focus should be on those who need it financially.

It is wrong that the poorest people are excluded from the carer's allowance. The position with regard to those just above the limit is also wrong because the Minister has not increased the £150 disregard, although he has tinkered around in the middle. It is wrong that those who are caught by that limit continue to be caught.

In pressing this amendment I must say I am glad the scheme has developed because it is a very good one. I am also glad the Minister has made the free schemes available to perhaps the third of the people who will qualify for them. However, my heart bleeds for the two-thirds or three-quarters of people who qualify for nothing. I will press this amendment and I intend to relentlessly pursue the Minister on these issues.

Mr. D. Ahern

In my earlier reference to this amendment I did not refer to a major change to the carer's benefit, which I introduced. Deputy O'Keeffe suggested it may not affect too many people. It is built into the question of whether there should be a means test for the carer's allowance. The carer's benefit is not means tested and we conservatively estimate that about 6,600 people will gain from the scheme. One of the reasons I chose to put many of my eggs into this basket this year was to get the foot in the door, as was done in 1990 with the carer's allowance for which an estimate of £100,000 was given then and which has since risen to £78 million. The carer's benefit is a very important scheme and, once it is up and running, it will stand the test of time, especially given that so many people are now in the workplace. There have been huge changes from 1990 to 2000. In 1990, only one million people were working and now 1.7 million are at work. Obviously many more people will benefit.

I do not accept Deputy O'Keeffe's criticism. I am prepared to stand on my record which has been second to none. When I leave office, I have no doubt that more will be done in this area. I accept that more needs to be done but it requires a broader examination of this area. That is one of the reasons I recently established a structure between myself and the Minister for Health and Children to examine the medium to long-term issues of caring for an aging population. I have already said that the Government took an incredibly strategic decision in putting money aside for pensions for the future. We must also examine caring for the growing elderly population into the future. That is one of the reasons we should examine this and see if there are other areas of assistance which can be given to people, such as releasing equity in houses or the German system where people are entitled to take out insurance policies to cover any care they might need.

Amendment put and declared lost.

Mr. J. O'Keeffe

I move amendment No. 17:

In page 8, between lines 22 and 23, to insert the following:

"10.–The Minister shall as soon as may be after the passing of the Social Welfare Act, 2000, prepare and lay before both Houses of the Oireachtas a report on the payment of carer's benefit to the spouse or partner of the qualifying person subject to the agreement of both spouses and partners.”.

Amendment put and declared lost.

Amendments Nos. 18 to 22, inclusive, not moved.

An Leas-Cheann Comhairle

Amendments Nos. 23, 25 and 44 are related and may be discussed together by agreement.

Mr. J. O'Keeffe

I move amendment No. 23:

In page 13, between lines 14 and 15, to insert the following:

"13.–The Minister shall, having regard to the financial difficulties encountered by widows and widowers, prepare a report and lay same before Dáil Éireann on the feasibility of extending to all widows and widowers—

(a) the Free Travel Pass,

(b) the Free Electricity Allowance, and

(c) the Free Telephone Rental Allowance,

which report should also review the possibility of a special increased payment to widows and widowers who have no other source of income other than Social Welfare.".

The amendment deals with a section of our society who are forgotten to a large degree and neglected to some degree, namely, widows and widowers. Improvements which have been made have largely passed by widows and widowers who are entitled at this stage to a little more of the national cake. It is not that their demands are enormous or that they are marching on Leinster House, but taking into account the difficulties many of them suffer as a result of the loss of their spouse and the consequent financial problems which often occur, we should do more for them.

On that basis, I examined an approach which was practical, would provide assistance and would not be too expensive. I would like to provide that assistance now and then examine the situation again to see if more could be done. Providing the free travel pass to widows and widowers would not cost too much. Neither would it cost too much if we were to provide some support through the free electricity allowance. That would be a help in many cases, as indeed would be the free telephone rental allowance. These are good and worthy schemes which are availed of by many elderly and some disabled people. Consideration could be given at this stage to extending those schemes to widows and widowers.

Perhaps the Minister could examine the possibility of some further payments to widows and widowers where they have no source of income other than social welfare. I am firmly convinced that there are many in those circumstances who are in hardship. If that is so, surely there is a duty on us to examine what can be done to relieve that hardship. Anomalies also exist in that regard which have not been resolved. If people are over 60 when their spouse dies and that spouse availed of the free schemes, the surviving partner can continue to receive those schemes. However, if they are 59 when their spouse dies, they are not entitled to avail of the schemes when they reach 60 unless they can prove their late spouse availed of them. Anomalies exist which need to be remedied.

What is needed at this stage and what I would hope to secure from the Minister is a political commitment to upgrade the position of widows and widowers in the list of priorities. We should examine the situation to see how we can provide a helping hand where the Government has a great deal of money, not enough of which is being given to the Minister. It is important to get the Minister on board at this stage and, if the political will exists to try to find a new and better deal for widows, we should work towards that. That is the purpose of the amendment. I do not expect the Minister to immediately accept the approach I adopt but, if he were prepared to give a commitment to work towards that approach, perhaps progress could then be made. I urge the Minister to do that.

Mr. D. Ahern

I thank the Deputy for his words on this issue. I acknowledge what he said. My parliamentary party has been vociferous on this issue in the past year and, as a result of those representations and representations from all parties in the House, I agreed to examine the issue of giving some assistance to widows. In the previous budget I raised the bereavement grant from £100 to £500 which would have helped widows and all families who were bereaved. In this budget, of which this Bill is a part, I brought forward a special bereavement grant for widows with children which was my response to those representations which have been made in the past year.

I examined the issue of extending the free schemes and a number of other proposals which we might have been able to deliver. However, there were difficulties in all those areas primarily because, if widows were to be cared for, it would discriminate against other single parent families who would feel justified in pointing out that special circumstances relating to widows were being cared for and they were not, although they were in a similar situation, something which might make them feel aggrieved. Given the issue of equality of social welfare payments, the strong advice is that we cannot do anything to segregate widows without having some knock-on implications for other groups, such as lone parents. I assure the Deputy it is a high priority on my agenda to look at this issue over the next two budgets. I do not know if we can crack the nut without equality implications, although I am not using that as an excuse. We tried to examine all these issues and the best we could come up with this year is that from 1 December widows with children will be entitled to a once-off payment of £1,500 on the death of their spouse. This is a small help to them at their time of bereavement. We also made other changes subsequent to the budget which are part of this Bill, including eliminating the anomaly associated with the extra social welfare payment for six weeks after the death of a spouse. We will continue to make such changes.

Mr. J. O'Keeffe

I will not take away from the changes the Minister has introduced but they only apply to new widows and widowers not to existing ones. I am like Oliver Twist in that I am looking for more. The benefits are good for someone who lost their spouse since last December but they are of no benefit to those who became widows or widowers before that.

I do not accept the Minister's point about the equality of social welfare payments. An answer will always be found if the political will exists. One will find an inequality if one is looking for an excuse not to do something. There are inequalities and anomalies, for example, in child dependant allowances. Deputy McGrath is familiar with the three different rates of child dependant allowance. The child dependant allowance payable to a widow is less than the child dependant allowances payable otherwise.

If we want to tackle this issue and to provide additional support for widows and widowers, it can be done if the political will is there and we are prepared to allocate resources to it. The Minister was laid back in his statement about what he might do over the next two budgets. However, I do not expect him to be around for the next two budgets and that is part of his problem. If the Minister is committed to doing something for widows and widowers, he should do so now.

Mr. Perry

I support Deputy O'Keeffe. This is an important issue. Last week I met a widow in my supermarket who is the mother of five children but she cannot work as she will lose her pension entitlement. She needs financial help but she is not entitled to any free schemes. Widows and widowers should be treated equally in terms of the free travel pass, free electricity and the telephone rental allowance. A single parent needs assistance to maintain their home and family. This issue has caused unease. The Minister indicated that senior citizens will get the benefits accruing from pension entitlements. This issue, which has been neglected by successive Governments, needs the Minister's urgent attention. There is an opportunity now that there are millions of pounds in the coffers to help single parents. We should use the State's resources to extend the free schemes to widows and widowers.

Mr. Higgins

(Mayo): I support Deputies O'Keeffe and Perry. No category of people is more special than the young widow who has lost her spouse at short notice and has been left with a few children. When the initial sympathies have been extended, the number of people coming to the door peters out and the community solidarity which is part of the bereavement process trickles away, and she is left on her own. She is then faced with the raw reality of her financial circumstances and the fact she is totally dependent on either a non-contributory or a contributory widow's pension.

We appreciate that over the years attempts have been made to try to bring the level of contributory or non-contributory widow's pension up to an acceptable level. However, it is still extremely modest by any standards. A considerable amount of enterprise and ingenuity are required to keep body and soul together during a bereavement. We want the Minister to make a minor gesture.

I recently floated this idea on a local radio station. Of all the issues I have raised, none provoked such comment as this one. Widows rang the local radio station to give their personal anecdotal experiences of how difficult it is to survive on a contributory or non-contributory widow's pension.

We are talking about a free electricity allowance of 200 units during the summer and 300 units during the winter. This might seem insignificant to us but not to a widow on a widow's pension. We are also talking about free telephone rental, not calls, to enable them to afford a telephone. They would then be able to decide who to ring and to receive calls from friends. Free travel would be a significant but relatively cost free gesture which would make the life of a young widow more tolerable. How much of a burden will 200 units of free electricity in the summer and 300 units in the winter, a free travel pass and free telephone rental impose on the Exchequer?

I ask the Minister to look at one area of free travel which is anomalous. If a person has a free travel pass based on his old age pension, invalidity pension or any other form of social welfare, he is entitled to a companion pass. He could bring an assigned child with him if he does not have a spouse on an old age pension. However, a widow is not entitled to such a pass. I ask the Minister to examine the possibility of a free travel pass for widows and to assign a companion pass to widows to enable them to travel with one of their children.

I welcome the concession to remove the anomaly where one widow can retain the allowances and free schemes of her spouse and another widow cannot. This point has been conceded in terms of allowing all widows over 60 years of age, irrespective of whether the deceased spouse was in receipt of the allowance, to have free travel, electricity and telephone rental. The extension of the companion pass to widows in such circumstances to enable them to be accompanied by a child would be another important concession. If it applies to old age pensioners I cannot understand why it should not also apply to widows who will now benefit from concessions introduced by the Minister in this Bill.

The Minister has received special pleading for certain categories but no category has a more just case than widows or widowers who have lost a spouse and who are plunged into the darkness of trying to cope on their own and on a social welfare pension. However, we must acknowledge that considerable increases have come on stream in recent years.

Mr. D. Ahern

In yesterday's UK budget, a huge concession was made to give free television licences to people over 75 years of age. For years, people over 65 in Ireland have received all the free schemes which is worth about £13 to £14 per week per person. This Bill proposes that people over 75 years of age will be entitled to all the free schemes as of right, irrespective of household income or composition, or whether they are on social welfare. Our record in this regard shows that we are way ahead of the UK.

I have received representations concerning widows, particularly from my parliamentary party. We examined what we could or could not do and decided in favour of the £1,000 bereavement grant for widows with children. Invariably such widows are young. I accept the Deputy's comment that this will only apply to widows from now on and that more needs to be done. However, it would cost about £25 million to extend the free schemes to 37,000 widows under 66 years of age. In addition, one could not just extend the schemes to widows. It would also have to apply to deserted wives and one-parent families, otherwise the State would be left open to accusations of treating one type of family unit differently to other family units. To extend the schemes to lone parents, single parents and deserted wives would cost an estimated £40 million extra. This would bring the total cost to £65 million which is not an inconsiderable sum of money. However, I will look at this issue in the run up to the next budget.

Mr. J. O'Keeffe

I am pleasantly surprised that the total cost is so manageable. If we can offer the support I outlined to 37,000 widows for £25 million per year then that would be a reasonable price tag. If, for equality reasons, we extend this support to single parents and deserted wives for an additional £40 million, this shows that the figures are manageable. We are not talking about hundreds of millions of pounds.

Mr. D. Ahern

That would be a great incentive for people to stay on social welfare.

Mr. J. O'Keeffe

Now we are getting to the core of the issue.

Mr. D. Ahern

I am not saying that regarding widows, but generally.

Mr. J. O'Keeffe

This could be easily overcome by ensuring that once people qualify they stay qualified. If there is a great rush to get them involved in the Celtic tiger and they obtain employment, then so what? Where there is a will there is a way. The costs are not too excessive and this can be done. I will press this amendment to show my concern for widows.

Mr. Higgins

(Mayo): I welcome the extension of the schemes to the over 65s. How much will this cost?

Mr. D. Ahern

I do not have the figures but I will get back to the Deputy.

Amendment put and declared lost.

Amendments Nos. 24 to 26, inclusive, not moved.

Mr. J. O'Keeffe

I move amendment No. 27:

In page 15, between lines 25 and 26, to insert the following:

"17.–The Minister shall, within 6 months from the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the effects of the new means test on the assessment of capital (provided for under the Third Schedule to the Principal Act) and any anomalies thereunder.".

This amendment deals with the new means test. For some time I have been seeking substantial reform of the inequitable means test. I am glad this campaign has been successful and that the Minister has introduced a new scheme. However, I am concerned that there may still be injustices, anomalies and inequities in the new scheme.

We are debating an approach which involves the Minister laying a report before the Houses within six months, and we usually use this mechanism to get around difficulties caused by amendments which place a charge on the Exchequer. However, I would like to see a report on the operation of the new means test. This test should be fair and just and I am concerned about the artificial nature of its construction which may give rise to anomalies and unfairness. I accept that the new test is an improvement but I am seeking to ensure that it is monitored and reviewed and that we examine it in six months.

Mr. D. Ahern

Rather than agreeing to the amendment, the social affairs committee could look at this issue in six months. There are not any explicit assessment rates under the new system. However, the effective assessment rates for those with capital above the higher disregards would, in the majority of cases, be lower than under the existing system. For example, a single person with capital of £20,000 would be assessed at 2.6% as opposed to 6.75% at present; a single person with capital of £30,000 would be assessed at 5.2% as opposed to 9%; a couple with £40,000 would be assessed at 2.6% as opposed to 3.4% while a couple with £80,000 would be assessed at 4.55%.

We carried out a sample survey and found that only a small number of pensioners had income over a certain limit and that only 0.6% of pensioners would have amounts high enough to be assessed at the top rate of £4 weekly means for each £1,000 of capital, the figure with which Deputy O'Keeffe has the biggest problem.

The Deputy's proposals would not be of any benefit to about 99% of pensioners who would be well below the threshold at which the £4 assessment applies. However, the committee might examine this issue. This is one of the best changes in the Bill because it will mean that people throughout the social welfare system will be entitled to hold a substantial amount of capital and still retain their social welfare payments. It will obviate the necessity for people to keep money at home and will encourage older people and those in receipt of social welfare to deposit it in a bank, building society or credit union.

Amendment, by leave, withdrawn.

Mr. J. O'Keeffe

I move amendment No. 28:

In page 18, between lines 19 and 20, to insert the following:

"(6) The Minister shall consider the possibility of exempting the first £2,000 of income derived from forestry premium and shall prepare and lay before both Houses of the Oireachtas a report on this issue.".

This relates to the forestry premiums which are normally paid to small farmers who are prepared to devote part of their land to forestry. It is a national objective to encourage more forestry and it is a national objective to involve more farmers as opposed to outside investors. For those reasons I am in favour of the forestry premium approach. The problem is that the forestry premium is counted as income in the means test. It could be argued that is not a bad thing. REPS payments, however, which are also paid to achieve a policy objective, are not taken into account. I do not see any difference between a forestry premium and a REPS payment. If one can be disregarded why not the other?

On Committee Stage the Minister offered theological explanations of income support as opposed to special payment compensation. The Jesuits would have been at home arguing the technical and theological points he raised but, in practical terms, there is no difference. In both REPS and forestry premiums we are trying to achieve a national policy objective by encouraging farmers to become involved.

The recipients are generally small farmers for whom the question of a pension can be very important. When I was practising law, I recall many older people from rural areas telling me they were "heading for the book", meaning the pension. It means a great deal to them that they can receive it. If, however, they are excluded from the non-contributory old age pension because they have been involved in forestry, having responded to the urgings of the Government, it is unfair. Their next door neighbour may get a pension because he got a REPS payment instead of a forestry premium. I urge the Minister to re-examine the issue.

Mr. Perry

Afforestation is a long-term investment. Planting may have taken place 20 years ago. The forestry premiums were promoted as a tax free fund. If REPS payments do not affect entitlement, the forestry premium, particularly when the Government encouraged people to plant areas which were of no agricultural use, should also not affect entitlement. It was a sensible investment and to penalise people for following that initiative by affecting their pension entitlements is wrong. The REPS payments are not taken into consideration; the same should be the case for any premium funded by the EU.

Mr. D. Ahern

The forest premium scheme is designed to provide an income from forestry during the period the forest is developing – for the first 20 years, for example. Payments under the forest premium scheme would equate to other forms of farm income. The forest premium is unlike REPS and compensation payments under SACs. These latter payments compensate farmers for the material and work involved, or farming income foregone, in complying with agri-environmental plans or SAC conditions for which special income disregards are already applied under the farm assist scheme. There is a difference.

I accept that it is money in the hand but, under the social welfare code, we must treat it in the same way as other forms of farm income, for example, income from ordinary farm activities or headage payments. It is, therefore, properly assessable for means testing under social welfare payments. I cannot accept the amendment.

Amendment put and declared lost.

An Ceann Comhairle

Amendments Nos. 29 and 30 are related and will be taken together by agreement.

Mr. J. O'Keeffe

I move amendment No. 29:

In page 18, between lines 19 and 20, to insert the following:

"18.–Within 3 months from the passing of this Act, the Minister shall prepare and lay before both Houses of the Oireachtas a report on the means test for the scheme of assistance to farmers (known as farm assist) provided for under Part IV of the Third Schedule of the Principal Act.".

I am glad the Minister has accepted the criticism of the farm assist scheme he introduced last year which caused such devastation to so many farmers.

Mr. D. Ahern

I did not accept criticism.

Mr. J. O'Keeffe

It is accepted on the basis that the Minister now agrees in the Bill to reduce the amount of farm income to be taken into account for the calculation of means.

Mr. D. Ahern

Am I now being criticised for making improvements? No scheme ever stands still

Mr. J. O'Keeffe

I am not criticising the Minister at all. I am glad he has accepted criticism and is now moving in the direction we indicated a year ago. I warned of the practical implications of the original farm assist scheme and said that many farmers would rue the day the Minister introduced it. Unfortunately, my predictions have been fulfilled. Of the 7,310 people who were in receipt of these payments in December 1998, more than 1,000 were removed from the scheme under the new farm assist scheme introduced by the Minister.

The situation has improved somewhat, but I am concerned that reducing the figure to 70% will not be enough. If that is the best we can get from the Minister at this stage, I will continue to return to this issue until all of those who were removed from the scheme are receiving payment again. It was the wrong thing to do when cattle prices were falling and small farmers were suffering. The Minister cannot wash his hands of responsibility for this. There has been some improvement but we will want to see more.

Mr. D. Ahern

No scheme stands still. All schemes are improved as they move along. These improvements were targeted and discussed with the social partners, particularly the farmers, under the new programme. We have delivered on our undertakings in that programme already through this Bill, even before the programme is finally accepted. Obviously, over the coming years there will be further improvements in this scheme.

Any of those who were in receipt of smallholder's assistance who no longer received ‘farm assist' were getting that smallholder's assistance on the basis of an assessment made a number of years ago. It was made clear to the farming organisations that there would be a reassessment of all incomes once we introduced the farm assist scheme. There were farmers in receipt of social welfare based on old income assessments when their incomes had since changed. This is a good scheme and this year the numbers receiving payments under it will increase dramatically. That has been acknowledged by the farming organisations.

Amendment, by leave, withdrawn.

Mr. J. O'Keeffe

I move amendment No. 30:

In page 18, between lines 40 and 41, to insert the following:

"19.–Within 3 months from the passing of this Act, the Minister shall prepare and lay before both Houses of the Oireachtas a report on the means test for the scheme of assistance to fishermen provided for under Part I of the Third Schedule of the Principal Act.".

I propose this amendment, but I am prepared to give the new approach a chance.

Amendment, by leave, withdrawn.

Amendment No. 31 not moved.

Debate adjourned.