We had virtually concluded comments on this amendment which seeks a single date on which all social welfare payment increases would come into effect. I shall not rehearse all the arguments raised before lunch. This is an important amendment and I put it to the Minister that, like his colleagues on the other side of the Irish Sea who operate a policy whereby an announcement is made to increase payments and it is done in the next number of days, we should move to that position. I await January 2002 to see how the situation develops but I am not confident about it, having heard the Minister's response on how the increases will be implemented from 1 January, given that this matter was flagged for two years.
Adjournment Debate Matters. - Social Welfare Bill, 2001: Report Stage (Resumed).
Debate resumed on amendment No. 3:
In page 5, between lines 13 and 14, to insert the following subsection:
"(3) The Minister shall, as soon as may be after the passage of this Act prepare and lay before both Houses of the Oireachtas a report on the rationale for the differing commencement dates of social welfare payment increases.".
–(Deputy Hayes).
Mr. Hayes
Amendment put and declared lost.
Amendments Nos. 4 to 8, inclusive, not moved.
Amendment No. 10 is related to amendment No. 9 and both may be taken together by agreement.
Mr. Hayes
I move amendment No. 9:
In page 6, between lines 19 and 20, to insert the following:
"(3)The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the increases granted to unemployment benefit recipients, having regard to the impact of such increases on:
(a)the local authority differential rent scheme, and
(b)the rental subsidy scheme for private accommodation.”.
These amendments were also tabled on Committee Stage. The Minister conceded local authority tenants had difficulties when they received a modest increase in their social welfare payments because it was hoovered up by the local authority under the differential rent scheme. This also applies in respect of the operation of the health board rent subsidy where increases given to social welfare recipients are clawed back.
This highlights a general problem in the social welfare system. When small increases are given, there is a tendency for another agency of the State to claim some of the increases. The objective of amendment No. 9 is to highlight this loophole and to request the Minister and his Department to be proactive with their colleagues in the Department of the Environment and Local Government to iron out these difficulties, particularly in the context of the housing issue.
The difficulty with the differential rent scheme is that it is not uniform throughout the country. Each local authority operates a different version of the scheme even though guidelines have been laid down. Sometimes when people obtain a small increase their rent is increased and they do not benefit. The Minister should also be proactive in regard to the rent subsidy scheme. His Department allocates considerable sums to health boards to administer the scheme. More than £110 million is invested in it. However, the money is wasted because it goes directly into the pockets of landlords who are provided with a rent subsidy. These anomalies must be ironed out. I ask the Minister to introduce a reporting mechanism whereby we can get to the root of this problem and iron out difficulties where small increases are given to people but are then clawed back by other agencies. These amendments are necessary and I hope the Minister will adopt them.
There is no point in giving small increases, such as £8 or £9 per week, under these schemes only to find they have been eaten up by other agencies. That further marginalises people who are on low incomes and they are not encouraged to fully participate in society. It is one of the hidden poverty traps that exists within social services, whether in housing or in the social welfare system.
I support my Fine Gael colleagues. There has been a catch 22 situation for many years in regard to the operation of differential rent schemes. In some local authorities, such as my own, there is a clear rule that 15% of any increase is the maximum that can be claimed back under the scheme.
All local authorities are drafting their strategic housing plans in compliance with the new planning Act. The private rented sector is a source of profound concern. Rents of £1,000 per month are common in my constituency and young people are in a terrible catch 22 situation because their income is primarily expended on rent and their ultimate aim of owning a house must be put on the back burner. Many people who are offered housing find that much of their rent supplement is clawed back or is set well below the rent of the house.
I apologise for not being present to move amendments Nos. 6, 7 and 8. I was at a meeting with the Carer's Association and the National Association for the Mentally Handicapped of Ireland. Representatives of both associations are in the House and are interested in a number of the amendments. They want the amendments tabled by Deputy Hayes and myself to be moved successfully.
As I said on Committee Stage, this issue arises for people on rent and mortgage interest supplement who get an increase in the budget that is greater than the standard increase in supplementary welfare allowance rates, as has been the case with pensions in recent years following the greater increases than normal. For example, in April single pensioners will get an increase of £10 per week as opposed to the standard increase of £8 whereas couples of pension age will get £25 per week as of 5 April as opposed to the standard increase of £15.
However, up to now pensioners who were on the SWA rent or mortgage interest supplement did not get the benefit of the additional increase as it was automatically clawed back by way of a reduction in their SWA supplement. I do not know whether the Deputies are aware that as part of the budget package I announced that the first £5 of the additional increases in social welfare pensions will be disregarded for the purposes of rent and mortgage interest supplement. As a result, instead of a reduction of £2 per week in their rent and mortgage interest supplement, single pensioners will receive an increase of £3 per week and will, therefore, be £13 better off per week. Instead of a reduction of £10 per week in their rent and mortgage interest supplement, couples of pension age will lose £5 per week so that overall they will be £20 per week better off.
This applies to only some payments. People in receipt of the one parent family allowance, unemployment assistance, unemployment benefit and payments under other schemes are not affected by the clawback of budget increases. The rate of rent and mortgage supplement will not be affected where the weekly payment increases rise by £8 for a single person and £15 per couple. The operation of the clawback will be examined again in the fundamental review of the SWA which is under way.
Members will be aware in regard to the differential rent schemes that each local authority has direct responsibility for setting its own scheme subject only to the broad guidelines laid down by the Department of the Environment and Local Government. They will also be aware that local authorities, in excluding any social welfare increase from rent assessment, must have regard to the implications for local responsibility and the financial effect on them, including their capacity to carry out proper management and maintenance of their own dwellings.
The nub of my comments earlier was that as a result of the greater increases that have been provided by the Government in the past few years for old age pensions, some people have been negatively affected by the clawback. We came across this difficulty last year as a result of which I brought forward this amelioration of the situation in this year's budget. In particular, single old age pensioners rather than having their increase of £10 reduced by £2 will get an increase and be better off by £13 as opposed to £8, and I think this will be welcomed by Deputies.
Mr. Hayes
I welcome the fact that the SWA review of the clawback is ongoing. We need to resolve the problem as soon as possible. I know the Minister is aware of the Living in Ireland survey which puts the poverty line at £97.63. If this figure is adjusted in line with prices in 2001, the poverty line is just over £102. If we are serious in addressing poverty it makes no sense that people who receive an increase have to pay part of the increase to other agencies. Much greater co-operation is necessary at an interdepartmental level between the Minister's Department, the Department of the Environment and Local Government and the Department of Health and Children. I hope this point will be clear following our discussion on Committee and Report Stages. We are expecting people to live on very small sums of money and it is unacceptable that any other agency, be it Dublin Corporation, Cork Corporation, Limerick Corporation, etc., has a right to take those small increases back through other means. I hope that through discussing these amendments some of the difficulties will be ironed out for the future.
Amendment, by leave, withdrawn.
Amendment No. 10 not moved.
I move amendment No. 11:
In page 6, between lines 39 and 40, to insert the following:
"6.–The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the implications of introducing a personal childcare payment of £20 per child per week.".
This amendment seeks to introduce a personal child care payment of £20 per child per week. As we said this morning in the discussion on child benefit, the significant increases introduced this year are very welcome. An interesting article in the Irish Independent on Monday showed the cost of rearing a child. I am not sure of the years—
Mr. Hayes
The cost was £43,000.
The cost was £43,000. I presume the article was talking about children up to 12 or 14 years of age. We must address the issue of a fundamental basic income for children. Our colleagues in the Combat Poverty Agency and other agencies have a target of £34 or £35 per week per child. Therefore, reaching £67 per month is a long way off that target. We have just about reached the rate for the third and fourth child which has been paid in the UK, although after today's debate in the House of Commons the UK rate may well again surpass ours. The Minister still has a fair way to go in terms of a basic income for children, despite the very welcome and significant increase this year. We expect that the Minister will make further progress if the current Government introduces another budget.
The reaction of most people to whom I have spoken to the welcome increase in child benefit is that in effect the Minister has confused the issue of child income and child care, which are definitely not the same thing. Up to very recent times we have made very little progress in terms of child care. Some of the reasonable proposals made by the ICTU and various other bodies in relation to the interface between tax and social welfare have received very little welcome from Government. Even support for capital child care projects has been very limited up to this year. My constituency is typical of many others where capital child care projects are at long last receiving some reasonable support from the Minister for Justice, Equality and Law Reform. However, child care is an ongoing issue and has not been addressed by the Government. In his response on Committee Stage the Minister said that child benefit was the route to take. However, we have a significant way to go before we have a basic income for children which is adequate, particularly for children from deprived backgrounds.
The Government has not addressed the fundamental issue of child care. This simple amendment, which echoes the plan of the child care 2000 campaign, asks the Minister to address this much more vigorously. Last week, and last year on the same issue, the Minister said we must keep things simple and not have a variety of systems. I have sympathy with the Minister in relation to the zero to five years age group. My colleagues on the Left made proposals that children in this category should have a higher income than those aged above five years. In practice it is very difficult to envisage the operation of cut-off points as people note how strictly the Department cuts off the child dependant allowance as soon as a child reaches his or her 18th birthday. If the child is not in education then the child dependant allowance is no longer paid. Therefore, the idea of a child losing money once they turn five or six years of age would not seem to be beneficial.
A major effort is necessary from the Department to support child care. While the increases provided this year are welcome, and I commend the Minister on persuading his colleague, the Minister for Finance, to invest such a large amount of money in child benefit, they do not address the problem of child care, an ancillary but different problem. My amendment seeks to go some way towards addressing that problem.
Mr. Hayes
I support the amendment which seeks to introduce a personal child care payment of £20 per week. Deputy Broughan referred to the article which appeared in the Irish Independent earlier this week. It is astonishing to consider the costs involved in rearing a child. The article stated the cost associated with a child in the zero to five years age group is £43,000, which includes food, maternity costs, clothing, equipment, toys, etc. It is a considerable cost irrespective of whether they are in child care.
The Minister said he set aside £350 million in this year's budget to deal with child benefit. I recognise there has been a significant increase in child benefit.
The figure is £330 million.
Mr. Hayes
The Minister said he had made a commitment to do the same next year. The £330 million covers a period from 1 June to 31 December, so if the Minister is committing himself—
It is a full year cost.
Mr. Hayes
From June to June?
That is the additional money going into child benefit.
Mr. Hayes
So if the additional money is £330 million this year—
It is a 12 month cost.
Mr. Hayes
So it is June to June. I am sorry, I took the Minister up wrong.
If the Minister is making the same argument about the money he intends putting into next year's commitment, it still will not bring us up to the kind of support we need for child benefit. I will not discuss a later amendment which deals with this matter but the Government has been slow to move in the direction of substantially increasing child benefit as a means of dealing with child poverty.
My party had some views on this some years ago and argued, whether one agreed or not with our original proposal for zero to five and then from five upwards, for a substantial increase in child benefit for which the surpluses were there to provide. The Government has moved substantially in that policy direction this year but it has taken four years in office to do so. We should have had this movement in policy much earlier, then we would have been able to effect the kind of policy changes the Minister wants to introduce but cannot.
I support the amendment. There are two different arguments here and one useful aspect of Committee Stage was the opportunity we had to unravel the kind of confusion that exists about child benefit. Virtually all young parents in Dublin must now work to pay their mortgages. We are either serious about providing child care for parents who have to work or we are not. Despite all the announcements and strategies which have been put in place by the Minister, we have fewer child care places in the city this year than last year. That is due to a number of reasons and not just because of capital costs, which I accept. It is also a result of the implementation of new health board regulations, which is welcome, but the difficulty is that we have fewer child care places this year than last year.
That is the route to take to provide people with the chance to enter the labour market if they wish to do so. However, that alternative does not exist now because we do not have the supply and the changes in this Bill will not affect supply but will, if anything, push demand up even further. I support this amendment and encourage the Minister to move in that direction.
It is a bit late for this amendment. It looks like an amendment from last year as nobody is lobbying on this matter any more. For a couple of years, while the Government was discussing the direction it would take on child care, various lobby groups pushed their own agendas. This was one issue they raised – a separate child care payment as distinct from child benefit. There were all sorts of lobby groups and the fact that they knew the Government was considering this seriously encouraged certain groups to go off in all sorts of directions. I understand the Government has now made a clear decision on this. There are huge increases this year and in the next two years.
I remember being at one meeting with many of these groups and they ended up fighting with each other, not to mind us. The Government has made a decision and for right or wrong has picked the option of increasing child benefit as the fairest way of dealing with this matter. I am personally disappointed that we did not go back to the situation years ago when we had a tax allowance for children. I do not know why that was done away with and I would like it partially restored. If one goes for the tax option one is doing nothing for the unemployed. The Government seems to have picked this option and it is hard to tell the Administration is wrong.
On Committee Stage there was debate as to what child benefit is for. Is it for minding a child, for feeding a child or for buying shoes for a child? The Government and the Minister are not trying to tell people what they are supposed to do with child benefit. That does not matter a damn. It is a supplement for parents to cater for the needs of children as they see fit. There does not need to be any deep, logical, consistent thinking involved. It is not a case of saying that people must spend child benefit on crèches or child care. It is a supplement for parents to spend as they will. I am surprised to see this amendment as I thought the main lobby groups had accepted that the Government had made a clear decision and that they had gone away. The Deputy who put down this amendment is looking at last year's agenda.
Mr. Hayes
They have not gone away.
I think they have and that the Deputy is trying to resurrect them. There are only embers left. The Government made a clear policy decision and the Minister made a commitment as to what he will do for the next three years. These lobby groups breed and multiply when there is indecision but when there is a clear decision by and large they accept it and drift away.
Regarding Deputy Ahern's comments about tax allowances for children, that may or may not be the best approach but all the research shows that child benefit is the best way to put money in the hands of mothers; it is they who, by and large, look after children, particularly younger children. Although the number of families with only one person working has decreased, over the years tax allowances for children would have put money into the hands of husbands and fathers rather than mothers. However, child benefit is generally accepted as going to the mother.
Deputy Hayes said it took the Government four years to do this but that is incorrect. We tend to have short memories about these matters but last year the Government gave what was in effect a 25% increase in child benefit. There was an increase in child benefit of approximately £110 million, which was an increase of 23% to 25%. We gave £8 for the first two children and £10 for the third and subsequent children. That was way above anything given the previous year or any other year. It is amazing to look at the figures over a ten year period. In some years child benefit was not increased at all; the last budget of the Rainbow Coalition gave £1 to the first two children as opposed to the £25 we gave.
Mr. Hayes
What was the surplus?
It gave £5 to the third and subsequent children as opposed to the £30 we gave. This year alone, on top of the 23% to 25% increase from 1999 to 2000, we have given a 58.8% and a 53.6% increase in child benefit. Anyone who could find fault with that is being mealy-mouthed and incorrect. Last year's child benefit was £106 million so it is incorrect to say we have only started this year. The Government agreed this year to do it on a multi-annual basis and indicated that over a three year period starting from this year, £1 billion would be invested in child benefit.
That is way ahead of anything suggested in any of the partnership agreements. As Deputy Noel Ahern eloquently put it, there are different signals coming from different lobby groups and from within lobby groups. Deputy Broughan's proposal is, to a certain extent, a change from the amendment proposed by some of the lobby groups. He is not going as far as they did in suggesting that the child care payment should be taxed and I would be surprised if he did.
It is not in the amendment.
There has been an ongoing argument in relation to child care and child benefit and the Government has watched it develop over the past two years. There is anything but unanimity on how to deal with child care. To try to reduce the price of child care for parents is a little like trying to reduce the price of houses, that is, by increasing the supply, which we have successfully done. The same applies to child care places. To reduce the prices for parents, we must give them more choice and deal with the supply side issues, in other words, we must increase the number of places.
The number of places is not as good as we would like but we are starting from a low base. That is the reason the Government dedicated a substantial sum of money in the national development plan to this and, in order to accelerate the provision of places, front loaded some of that money. Instead of the original designation of £46 million in the first year, we decided to allocate £104 million. Even today, the Minister is dealing with grant applications in this area. Deputy Broughan is correct that a sizeable number of grants are being paid to groups. I welcome that.
That is one side of the equation. The other side is what is called the demand side. There were many conflicting views on this. One lobby group thought we should deal with it through tax, a suggestion that had merit but which would leave out the approximately 30% of people who do not pay tax. We had to be conscious of that. There were also many issues in relation to women who mind their children in the home and who would not have received any assistance on foot of some of the suggestions that were made. The Government decided, in equity, to deal with this issue by giving families, particularly mothers, an amount of money over the three year period so they could make their own choices. We believed it to be the most equitable option. After the three years there will be a sizeable amount of money in people's, mainly mothers', pockets.
With regard to the number of children, there will be a big difference in the payment. A family with four children, for example, will get an increase of over £25 per week as a result of this year's change. That will be a big help. Last year, when the child benefit books were sent out in September, a number of mothers asked me if they would be paid the £8 or £10 every month. They were surprised at the increase. I have no doubt that when they get the increase of £25 per month for each of the first two children and £30 for each subsequent child in June, they will be particularly pleased.
I accept it will not pay parents' entire child care costs but anybody who suggests that the taxpayer will be able to pay parents their child care costs is being unrealistic.
Mr. Hayes
Over a period of time?
Yes, even over a period of time. Perhaps with a new leader, Fine Gael will be able to come up with a credible policy in this regard—
Mr. Hayes
The Government is following us.
As I pointed out on Committee Stage, I vehemently opposed the proposal made by the Fine Gael Party, as did many lobby groups.
Mr. Hayes
Why is the Minister opposed to spending?
The party was suggesting, in effect, that children become less expensive when they reach certain ages. In my experience, children become more expensive as they get older. I accept there are different stages and circumstances but we looked at every aspect of this issue.
Deputy Broughan referred to the Combat Poverty Agency. That agency was extremely pleased with the increases in child benefit and with the commitment to increase it exponentially over the next two years. Another major reason we chose the route of child benefit and provided for substantial increases is that it has a particularly important influence on child poverty, an issue of great importance which this Government is endeavouring to address. Child benefit is a universal payment which is not taxed, unlike other child care suggestions for the tax code that are regarded as benefit in kind and so forth. This is untaxed money that goes into the hands of those who are looking after children.
Our commitment in this area is second to none. This amendment is somewhat out of date. We will commit ourselves to an extra £300 million after this year and I like to think that, irrespective of what Government is in office, the policy would not be changed and that the investment of £1 billion in this area would be completed.
The core of this issue is that the Minister does not recognise that child care and a basic income for children are two separate issues. Even if one accepted the Minister's opinion and if this amendment were passed tonight, if that could be done, there would still be a problem. I referred to the Combat Poverty Agency's estimate, compiled with ESRI and various other agencies, of the most basic income one would need for a child to exist, that is, a basic living income for a child. The Minister has provided about £17 per week for the first two children but even with an additional £20 per week, it would be just about at the agency's income target. The real issue, however, is the cost of caring. It is an issue the Minister still has not addressed.
He says parents can consider what is the most appropriate caring mechanism if they are both working. I mentioned capital and gave credit for the developments that have taken place. However, this Government will be out of office, whatever happens, before there will be any type of reasonable network, whether it is done through the schools, through local projects throughout the country under the aegis of the Minister for Justice, Equality and Law Reform or through other initiatives under this Minister's community programme. The capital requirement will not even have begun to be met. The real issue will still be the significant costs of child care and that will not have been addressed. The Minister could address this issue by way of this amendment, by giving parents vouchers or, as the chairman of the committee on social affairs suggested, through the tax system. It should be done as the issue remains to be addressed.
When we canvas in the next general election this will be one of the four or five issues which people will raise. That is why I will press the amendment.
Mr. Hayes
Despite what the Minister may think, child care is one of the most important issues we face, particularly in urban areas. The Minister likes to lecture us about his propaganda of the past number of years. However, he forgets that this is his fourth year in office. It is a bit rich for him to start enunciating revolutionary policies at the end of a Dáil term. The Minister has failed to adequately deal with this issue as have all other Ministers. They realised child care was an issue when Fine Gael and other parties highlighted it over the past number of years. Ministers came together in a cabal and had to come up with the policy and slowly moved towards our position.
I welcome the fact that the Minister has moved towards the position as outlined by Fine Gael in 1998 in respect of providing a significant sum of money to deal with child benefit. How we distribute the money is another matter but the Government has moved in our direction. However, it is too little, too late.
At the next election the Minister and his colleagues will have to account for their actions to the people. The facts are that child care costs have gone through the roof, the Minister has not put the infrastructure in place, he was late to the debate when he realised we had stolen the ground from under his feet some years before and he thinks he can turn the situation around at the last minute. People will not buy that approach.
A number of women from my constituency appeared on RTE on budget night and expressed considerable disappointment with the increases in child benefit. While the Minister was in the House believing his own propaganda and talking about the £25 and all the rest of it, people on the streets were wondering on what planet the Minister was living. He is out of touch with the fact that he has failed to deal with this issue over the past four years.
The Minister said he has set aside £1 billion over the next three years. If he has set aside the money and it is a firm policy commitment, what are the rates? Surely he should be able to make a projection as to how much he wants to give people if he has set out the broad policy parameters in terms of the amount of money he has to spend.
I do not accept any of the Deputy's comments. He is trying to make a case. However, in 1999, which is only two years ago, the overall child benefit budget was £470 million. This year it will be £900 million – a huge increase.
Mr. Hayes
What about the surpluses? Let us put them on the record.
The Deputy's party was in office four years ago and we have more than doubled the amount of money going to child benefit.
Deputy Hayes referred to vox pops. The reality is that many of the women probably did not realise what was on offer to them over the next three years.
Mr. Hayes
What is on offer?
An average family with two children will get an extra £50 when, just a couple of years ago, they were getting £2 under the rainbow coalition's last budget.
Mr. Hayes
They could afford to buy a house.
They were getting £2 as opposed to £50. Under the previous Government, a family with three children would get £7 as opposed to £80 under this Government.
Mr. Hayes
That was four years ago.
I have no problem even if the next election comes before the next budget. We are the first Government to bring forward increases in child benefit payments from September to June. When the payments come into effect in June, women in particular will know which Government has looked after them as regards child benefit. After the next budget they will be more than happy with the amount of money being put into child benefit for the first time.
The fundamental issue of child care has not been dealt with and that will be one of the Government's legacies. We need to put in place some financial supports for child care but the Minister has failed to do so. On that basis I wish to press the amendment.
Amendment put.
The Dáil divided: Tá, 63; Níl, 72.
Tá
Níl
Tellers: Tá, Deputies Stagg and Bradford; Níl, Deputies S. Brennan and Power.
Amendment declared lost.
Barnes, Monica.
Barrett, Seán.
Bell, Michael.
Belton, Louis J.
Bradford, Paul.
Broughan, Thomas P.
Browne, John(Carlow-Kilkenny).Bruton, Richard.
Burke, Liam.
Burke, Ulick.
Carey, Donal.
Clune, Deirdre.
Connaughton, Paul.
Cosgrave, Michael.
Coveney, Simon.
Crawford, Seymour.
Creed, Michael.
Currie, Austin.
D'Arcy, Michael.
Dukes, Alan.
Durkan, Bernard.
Finucane, Michael.
Fitzgerald, Frances.
Flanagan, Charles.
Gilmore, Éamon.
Gormley, John.
Hayes, Brian.
Healy, Seamus.
Tá–continuedHiggins, Jim.
Higgins, Joe.
Higgins, Michael.
Hogan, Philip.
Howlin, Brendan.
Kenny, Enda.
McCormack, Pádraic.
McDowell, Derek.
McGahon, Brendan.
McGinley, Dinny.
McGrath, Paul.
McManus, Liz.
Mitchell, Jim.
Moynihan-Cronin, Breeda.
Naughten, Denis.
Neville, Dan.
Noonan, Michael.
O'Keeffe, Jim.
O'Shea, Brian.
O'Sullivan, Jan.
Owen, Nora.
Penrose, William.
Perry, John.
Quinn, Ruairí.
Rabbitte, Pat.
Reynolds, Gerard.
Ring, Michael.
Ryan, Seán.
Sargent, Trevor.
Shortall, Róisín.
Stagg, Emmet.
Stanton, David.
Timmins, Billy.
Upton, Mary.
Wall, Jack.
Ahern, Bertie.
Ahern, Dermot.
Ahern, Michael.
Ahern, Noel.
Andrews, David.
Ardagh, Seán.
Aylward, Liam.
Brady, Johnny.
Brady, Martin.
Brennan, Matt.
Brennan, Séamus.
Briscoe, Ben.
Browne, John(Wexford).Byrne, Hugh.
Callely, Ivor.
Carey, Pat.
Collins, Michael.
Coughlan, Mary.
Cullen, Martin.
Daly, Brendan.
de Valera, Síle.
Dempsey, Noel.
Dennehy, John.
Doherty, Seán.
Ellis, John.
Fahey, Frank.
Fleming, Seán.
Flood, Chris.
Foley, Denis.
Fox, Mildred.
Gildea, Thomas.
Hanafin, Mary.
Haughey, Seán.
Healy-Rae, Jackie.
Jacob, Joe.
Keaveney, Cecilia.
Kelleher, Billy.
Kenneally, Brendan.
Killeen, Tony.
Kirk, Séamus.
Kitt, Michael P.
Kitt, Tom.
Lenihan, Brian.
Lenihan, Conor.
McCreevy, Charlie.
McDaid, James.
McGennis, Marian.
McGuinness, John J.
Martin, Micheál.
Moffatt, Thomas.
Moloney, John.
Moynihan, Donal.
Moynihan, Michael.
Ó Cuív, Éamon.
O'Dea, Willie.
O'Donoghue, John.
O'Flynn, Noel.
O'Hanlon, Rory.
O'Keeffe, Batt.
O'Malley, Desmond.
O'Rourke, Mary.
Power, Seán.
Reynolds, Albert.
Ryan, Eoin.
Smith, Brendan.
Smith, Michael.
Treacy, Noel.
Wade, Eddie.
Wallace, Dan.
Wallace, Mary.
Woods, Michael.
Wright, G. V.
I move amendment No. 12:
In page 6, between lines 39 and 40, to insert the following:
"6.–The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the implications of bringing the child benefit for twins into line with the provision for multiple births of 3 or more children.".
On committee stage, the Minister said he was sympathetic to the issue concerning parents of twins, who effectively get one and a half rates of child benefit. Parents of triplets and parents in the case of other larger multiple births get double benefit. The organisation representing parents of twins has made a very eloquent and well argued case that the same concession should apply to twins as to larger multiple births. The Minister said on Committee Stage that he would look at the matter seriously, along the lines of the amendment. I urge him to accept the amendment.
Mr. Hayes
We had an extensive discussion on this on Committee Stage. It has cropped up on every social welfare Bill, for as long as I have been in the House. There is an unfair distinction between children in multiple births, as Deputy Broughan has quite rightly said. I pay tribute to the work of Mairéad Hilliard, from the Lucan area, who has been pointing out the glaring anomaly which exists in the current code. I suggest that the Minister, who has substantial funds at his disposal and who makes great play, at various times, of disbursing that money, could greatly assist the relatively small group of people in the multiple births category by providing for an equitable distribution.
It is wrong that there should be discrimination in child benefit payments as between twins and triplets or other multiple births. The Government is moving towards a policy of individualisation. Yet, this is a classic case where each child is not treated individually or fairly. The Minister has the money and the opportunity to correct this anomaly. I hope he will move in the direction of our amendments.
I now have more complete figures than I gave earlier in this debate. In 2001, the total expenditure on child benefit will be £760 million, as compared to £500 million last year and £444 million in the previous year. Back in 1995, it was £300 million.
On the issue of double payments for twins, I compliment Mairéad Hilliard for her work over a long period. When in opposition, my party undertook to take action on this issue and a document was submitted to Ms Hilliard in May, 1997. Deputy Woods, as our party spokesperson on social welfare at that time, made a number of commitments, including a commitment to increase child benefit by 50% for twins. That was subsequently included in our policy document. On coming to office, I had further correspondence from Mairéad Hilliard in October 1997, calling on the Minister for Finance and me to honour that commitment by providing for a 50% increase in the December 1997 budget in the monthly payments for all twins in receipt of child benefit. We did that. In our 1997 budget, we totally fulfilled our pre-election commitment. The Labour Party is making plenty of promises these days. My party fulfils its pre-election promises, as we did on this issue in the first budget and the first Social Welfare Bill of this Government.
It is important to outline how this payment has evolved. Before 1993 there was a once-off grant of £300 payable on the birth of triplets and £400 where four or more were born together. I accept that births of four children or more are infrequent, but these were the grants in vogue at the time in question. These arrangements were extended to include births of twins in 1993, when a grant of £200 was introduced. Up until then, there was not any recognition of the extra costs involved for people who had twins. In 1996, my predecessor, Deputy De Rossa, increased the grant payable in respect of twins from £200 to £500. In addition, he introduced a new grant of £500 which would be payable when the twins reached the ages of four and 12. These were the only changes made at the time and they cost a measly £700,000.
When I entered office, a much more dramatic change was made. We introduced two key improvements in the Social Welfare Act, 1998, which were designed to improve the overall package of benefits to parents in the case of multiple births. First, the rate of child benefit payable in respect of twins was increased to 150% on foot of a promise we made in the months preceding the last election. Second, we went further by extending the £500 grant, previously confined to families with twins, to include families with multiple births of three or more children. Both of these measures took effect in September 1998. Those enhanced child benefit payments were given at the appropriate level within the child benefit scheme and they were in recognition of the extra costs incurred by families with twins.
I have been lobbied by Members on the opposite side of the House and by Members of my party – the latter raised the issue at Parliamentary Party meetings and on an individual basis because they were, in turn, lobbied by Mairead Hilliard – about this matter. I did not revisit this issue until now because I had to deal with other pre-election commitments which had to be fulfilled during the lifetime of the Government. Given that its term of office is drawing to a close, other ancillary issues, such as increasing the payment for twins to 200%, will obviously be placed on the agenda. I cannot make any promises but I have indicated that the matter would be up for consideration.
Since entering Government, my party has delivered on the commitments it made prior to the last election. We have gone slightly further in respect of grants and we have substantially increased rates of child benefit. The more we increase child benefit rates, the more costly it will become to give the additional 50% in respect of twins that Mairead Hilliard is requesting. We estimate that to give double child benefit, based on this year's figures alone, would cost an extra £10.2 million. That figure has risen substantially because of the sizeable increases in the rates of payment.
As far as I am concerned, this issue needs to be addressed and it will be placed on the agenda. I would like to think we will be able to do something, but I cannot make any promises. I reiterate that we fulfil our commitments. I have been circulated with a number of items of correspondence, from Deputies on all sides of the House, by Mairead Hilliard. On 2 March, Deputy Hayes wrote a letter to Ms Hilliard stating that the Fine Gael amendment had been refused.
Mr. Hayes
What I wrote was a matter of fact.
However, he neglected to mention the great changes made by the Government in relation to this issue since it came to office. I also received a letter which was sent to Mairead Hilliard by my predecessor on 10 December 1990 which stated that she had a justifiable case. That is very strange because Deputy De Rossa, who was Minister for three years, did virtually nothing about this issue. Deputy Broughan's party was a member of the Government in which Deputy De Rossa served as Minister. In his letter, Deputy De Rossa referred to former Deputy Eric Byrne who is no longer with us.
Mr. Hayes
Politically speaking.
He will be back.
It is important to state that, in terms of the social welfare system, our record is second to none.
Mr. Hayes
The Minister just wants to keep informing us of that fact. He should realise that we got the message earlier.
In our first budget we fulfilled our election commitments in this area. I have indicated that we will return to this issue between now and the time we leave office.
The Minister has spent a great deal of time rambling through ancient history.
It is very important to do so.
The economic background of the period in question is the key relevant variable. When the rainbow Government was in office—
It is a matter of priorities.
—a number of profound initiatives were introduced, despite the obvious constraints. As already stated, for example, Joan Burton put forward the idea of assigning to child benefit the key role of providing assistance to parents with children and Deputy De Rossa doubled the numbers of people who were eligible for carer's allowance. We can point, with justifiable pride, to achievements on the part of members of the Labour Party when they were in Government.
Will the Minister accept the amendment? I also pay tribute to Ms Hilliard, with whom I have had correspondence over the years. If the Minister is sincere in his claims about this matter, he should accept the amendment. He should show us that he means business.
Mr. Hayes
I nearly reached for the Kleenex when listening to the Minister's contribution because the tears had begun to flow. His comments are a sign that he is on the ropes and on the defensive, given the approach of the general election. He agrees with the amendments, but he saw fit to provide us with a retrospective look at recent history.
The Minister claims to have gone some of the way to dealing with matters in the first Social Welfare Act he introduced. Deputy Broughan and I are asking him to go all the way. The Minister makes big play of the fact that this massive measure will cost £10.2 million. That is out of a budget at his disposal this year of £6.5 billion. Last year, the budget stood at £5.3 billion which means that there has been an increase of £850 million. When compared to such an increase, £10.2 million is mere peanuts. If the Minister accepts the amendment I will praise him greatly. This is his big day; it is his opportunity to do something for the families concerned. Despite his habit of giving history lessons, I know the Minister wants to take action. This is his chance to impress the families to whom I refer. A sum of £10.2 million is peanuts when compared to the £6.5 billion at the Minister's disposal this year.
Is the Minister serious about wanting to deal with this anomaly? He has not addressed the issue I raised at the outset. If we are determined to proceed with individualisation, why is it that twins are dealt with differently than triplets, etc.? Why do they have to be discriminated against when we have such a wealth of money at our disposal? The Minister now has a chance to prove that he is the revolutionary he portrays himself to be.
I do not accept what Deputy Hayes said. Deputies Broughan and Hayes accuse me of giving history lessons but they keep referring back to what they say were the hard old times but they will not give this Government, and my party particularly, any credit for assisting in the economic prosperity we now enjoy. They keep saying it started long before our time, that it started in 1994, yet the history from 1994 to 1997 was abysmal when one considers that old age pensioners got an increase of £1.80.
In relation to this issue, despite Deputy Hayes's crocodile tears, virtually nothing was done when his party was in Government. He may say there was less money around but it is a question of the priority one puts on certain issues and as far as this Government is concerned, the priority is to help those on social welfare. Our record speaks for itself in that regard because in the past year we more than doubled the increase in the social welfare budget which, for the information of Deputy Hayes, is £6.15 billion. The Deputy claims we should allocate £10 million out of that budget to this area, but what other area does he wish us to delete from that £6.15 billion to make way for this allocation? If Deputy Hayes is ever lucky enough to be—
Mr. Hayes
All the consultants and the spin doctors.
—in my position, and I doubt he will, he will get a certain package of money at budget time and within that package he will have to in effect adopt the miracle of the loaves and fishes with all the demands from Mairéad Hilliard, the carers, the old age pensioners, the lone parents, the widows, etc.
Mr. Hayes
The Minister is not enjoying his job. The pressure is getting to him.
It is a matter of balancing all those demands, particularly in relation to pre-election commitments my party made. Our first priority is to fulfil those commitments and in relation to this issue, we have more than fulfilled our commitment and as I said earlier—
Mr. Hayes
The Minister needs a holiday.
—it is an issue to which I would like to return.
I do not understand why the Minister will not accept the amendment because the issue is not the £10 million he mentioned to my colleague. Is he prepared to give a guarantee that he will seriously look at this before the next Social Welfare Bill? That is all I am asking him to do this evening. I simply ask him to accept the amendment.
Amendment put and declared lost.
We now come to amendment No. 13 in the name of Deputy Broughan. Amendments Nos. 14 and 36 are related and we will take amendments Nos. 13, 14 and 36 together, by agreement.
I move amendment No. 13:
In page 6, between lines 39 and 40, to insert the following:
"6.–The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the implications of providing for a uniform rate of child dependant allowance by increasing the different rates to the maximum rate and of increasing the child dependant allowance for widows and widowers to £20 per child per week.".
We discussed in depth the mechanisms whereby we can attempt to increase the income of children and assist parents with young children. Obviously there are disagreements on both sides of the House as to how this can best be achieved. Before Christmas, as I mentioned on Committee Stage, a number of the most significant interest groups who work for people on low incomes and on social welfare made a powerful case that for the first time in seven years we should examine child dependant allowances and consider increasing them this year. There was a general demand, which I tried to encapsulate in the amendments in the name of myself and the Labour Party, that we should move the basic rate of £13.20 upwards to at least the higher rate of £17, which is the rate for widow and widower families, and that that rate should be moved upwards to £20. That would be a much fairer way of examining the future of these allowances.
The Society of St. Vincent de Paul made a strong case for this in our pre-budget consultations on the basis that one of the areas in which the Minister and this Government have failed is child poverty. Even by the Minister's own estimates, at least 12% of our children are still living in persistent poverty. I am not talking about being poor relative to the richer families in our society. This is 12% of our children living in poverty in this State. That is the reality and the Minister has failed to reach those children. He has increased child benefit but he has done that across the board for every family but I am talking about the children of families who are the most vulnerable in our society, particularly those on long-term social welfare benefit and assistance.
The Minister has refused to respond to those demands. He said the rate will be left at a miserly £13.20 per week and he indicated to me last week that with the child benefit plus the child dependant allowances, the portion of child benefit of that total sum has increased significantly over recent years. I acknowledge that but a powerful argument was made by the advocates of the poorest children in our society that we should at least do a little more for them. One simple indication of our determination to do this would be to examine child dependant allowances this year and to increase them.
I want to refer specifically to the children of widows and widowers. Often in society there are small groups which, due to social circumstances and the many conflicting demands the Minister has already mentioned, are almost forgotten by Administration after Administration. One of those groups is widows and widowers with young families. My predecessor as spokesperson, Deputy Moynihan-Cronin, put forward many innovative ideas on how we can reach out to those families. I have had strong representations, particularly in relation to the hard heartedness of this Minister towards people who are eligible and who had their own employment record, for example, and those who are on disability benefit. The Minister steadfastly refuses to allow those people draw the widow's pension and the full disability pension to which widows would be entitled. I make a special plea tonight on behalf of those families.
The reason I tabled these amendments, in particular amendment No. 13, is that I received many representations from young widows who wanted to know why the rate was only £17. That is significantly higher than what most of the other people on social welfare benefit and assistance receive but why is it not at least £20 or perhaps higher? That is a major question the Minister could answer. I know we have had policy discussions about child benefit. That is the way to go but a huge proportion of our children live in persistent poverty which the reviews of the social inclusion projects have highlighted again and again.
We have had some appalling international comparisons of child poverty and the performance of this Government over the past year or two. When I questioned the Minister in the House about it, he dismissed it as based on the 1995, 1997 figures and so on. Even on the most recent assessments, a very significant proportion of children are in persistent poverty. The child dependant allowance mechanism is one way of delivering extra money to those families. The Minister and Deputy Noel Ahern, Chairman of the Joint Committee on Family, Community and Social Affairs, acknowledged that we have had widespread discussions about child care and child income. It is one of the most important social issues. We must look at and develop child benefit. We are looking at taxation and I suggested that we might give child care payments to families directly or through a voucher system. That has been discussed. However, the problems of the poorest families and children remain.
After seven years, despite what the Minister may say, we have reached a point where we must look at it again. Social affairs specialists say there might be a disincentive effect. On Committee Stage, the Minister stated that it might be a disincentive to widows and widowers to remarry. That is an extraordinary reason to give regarding the possibility of increasing benefits in this area. We must look at the child dependant issue. All we can do is ask the Minister to consider it for next year which means it will be eight years since there will have been an increase.
Thanks to the strong economic performance, we have fewer people in long-term unemployment. Our local agencies are targeting people with disability, those who had addiction problems, ex-offenders and others to encourage as many as possible into work. I agree with the Minister that having a job is the fastest way out of the poverty trap. However, there is still a core significant group of children who are most deprived and child dependant allowances are a way to combat that given that there is general disdain for taxing child benefit to help more deprived children. The only other mechanism we have is child dependant allowances. I urge the Minister to accept these modest amendments.
Mr. Hayes
I speak to amendment No. 36 but I support amendments Nos. 13 and 14 in the name of Deputy Broughan. While we had an opportunity to debate this on Committee Stage, I am not clear about the Minister's reasons for not increasing the child dependant allowance and have one uniform rate. I do not understand his arguments. It is unacceptable that the child of an unemployed man or woman gets £13.20 while the child of an invalid person gets £17 and a widow's child receives £15. What is the justification for classifying this allowance on the basis of whether someone is a widow or widower, or is unemployed. Whatever the arguments about having two rates for children under and over 12, which my party has commented on before, there cannot be any argument about increasing the allowance for those under 12, or any argument for the distinction between different classifications of people because of the allowances they receive. As Deputy Broughan said, we have poverty traps because of this distinction.
I want the Minister to tell us what amendments Nos. 13, 14 and 36 will cost the Exchequer? I reckon approximately £30 million to £35 million to have one unified rate for all child dependants. As Deputy Broughan said also, there has not been any improvement in recent years. The facts speak for themselves. Just more than one million people, 29.6%, of the population, are children. We have higher than the EU average of 21%. Recent research shows that 25% of our children live in households with half the average income. That is "in your face" poverty and this is one of the few measures which can be targeted towards them because they live in households with small incomes.
Fine Gael believes a unified rate should be implemented and that the child dependent allowance should be increased. It is not a major cost to the Exchequer. The Minister can do something significant with £30 million to £35 million for the poorest families, which find themselves in a difficult situation. He trumpets his £25 increase in child benefit but is silent on the issue of child dependant allowance. I ask the Minister to reconsider this since the amount is small given his £1 billion spend this year.
This is the nuts and bolts of this Bill. Why does the Minister continue to distinguish between the amounts of money given on child dependant allowance to one classification of person by comparison to another? Why is the widow's son different to the son of an unemployed man? Why is that distinction made?
Does the Minister not have the opportunity to do something important by unifying the system and increasing the allowance? He argues how effective increasing child benefit is for all income classifications because the wealthy and the poor get the same. However, this allowance is really targeted towards those who are on low incomes and live on small sums. In his contribution on previous amendments, the Minister stated that he wants to prioritise certain groups. This is the opportunity to prioritise groups on small incomes. A unified system and increased allowance will make a difference for that group. The Minister has done little about this. It is not the headline strategy because it does not win middle-class plaudits. It is a measure that will focus resources on groups who need them. Where better could he apply prioritisation?
These three amendments call for reports. They do not look for a change in the Bill. Would calling for a report create another com mittee that would talk, think, discuss? This is a feature of all these amendments. There is a great deal of talk but no action.
Mr. Hayes
It would clarify the debate were the Deputy aware that under Standing Order 123, I am not allowed to put amendments forward that would incur an additional expense on the exchequer. The way around that is to put forward amendments which articulate the point, and put pressure on the Government to come back on report.
I accept what you say, but it seems a difficult way of conducting matters.
Mr. Hayes
I agree.
I wonder if something a little more imaginative could have come about with a little more thought on the Deputy's part.
We do not have any choice. Deputy Hayes's amendments are imaginative.
Widows and their families are a very important segment of society, who have particular needs. It is wrong to say this Government is not looking after them and their families as regards social welfare and taxation. It is difficult to separate social welfare from the overall situation without taking taxation into account. Not every widow is at the lowest economic and social scale. The Government has come up with imaginative proposals as regards the taxation of widows, with extra allowances being allowed in this budget.
It is generally accepted that child benefit is a better way of paying for children than the child dependant allowance, which is an historical anomaly. Child benefit is more useful and more equitable. These amendments regarding the child dependant allowance have been put down because of the existing situation where child dependant allowance is part of the system. To see an increase of £25 for the first and second child, and one of £30 for the third and subsequent children is very significant. Similar increases, I understand, will come about in 2002 and 2003. When the Government came into office, it stated that the contributory old age pension would be £100 before it went out of office. Only 80% of the way through the term of office, the pension is £106. Although the Government says there will be increases in the next two years, I hope the estimates will be exceeded, which would be consistent with what the Government has done since 1997.
The numbers of people caught in consistent poverty is a problem. I am a Deputy for Dublin South Central, and recently I looked at the map of the socio-economic demographics of the country. It immediately showed that the area I represent is the most socio-economically deprived area in Ireland, including other constituencies in Dublin. My constituency colleagues, Deputies Gay Mitchell, Briscoe, and Upton, as well as Deputy McGennis, are very involved with poverty in the south west inner city in areas like Fatima Mansions, Dolphin House and St. Teresa's Gardens. This Government has made a huge infrastructural input in such areas for children in consistent poverty. The past three years have seen a significant alleviation in that poverty, due to increases in child benefit and other social welfare payments. Deputy Flood and the Minister of State, Deputy Eoin Ryan have worked to see that these areas get more money.
I am sure Deputy Hayes would agree that the effects can be seen in areas like Fettercairn, in his constituency. A huge number of community groups, voluntary and paid groups, have set up child care facilities which will alleviate the poverty that is endemic in certain areas of Dublin and Cork. Poverty goes further than a lack of money, which can be used to buy cigarettes and an odd pint, which nobody would deny to anyone.
Charles Haughey once said that money could solve most problems.
There is an educational deficit in these areas, but the former and current Ministers for Education and Science, Deputies Martin and Woods, have put an immense amount of money into the early educational endowment of poor sections of society, for example through the "Breaking the Cycle" programme. If we add the child benefit payments that are included in this Bill, indisputably large inroads are being made into child poverty.
Deputy Broughan stated there is a general disdain for taxing child benefit. A couple of months ago I was on television with an esteemed former Labour Party TD and Minister for Social Welfare, who suggested that child benefits be taxed. I asked whether it was Labour Party policy to tax child benefit, and obviously there is a cohort within that party who believe it should be. I am glad, therefore, to hear Deputy Broughan speak of the general disdain for that form of taxation, and I accept that his colleagues agree.
I am speaking for the Labour Party.
Was Michael D.?
The Deputy does not know the difference between parental child care and child benefit. His whole speech is riddled with inconsistencies and inadequacies.
Allow Deputy Ardagh to continue without interruption.
Deputy Hayes has a new found concern for the socially and economically deprived since he became spokesperson on Social, Community and Family Affairs. It is not too long ago that he advocated that parents of children who engaged in anti-social behaviour should be put out of council estates.
Mr. Hayes
It is Government policy. The Deputy should read the Housing (Miscellaneous Provisions) Act.
It most certainly is not.
Mr. Hayes
I will debate that with the Minister any day.
I would ask Deputy Hayes to allow Deputy Ardagh to speak without interruption, and I suggest that if Deputy Ardagh addresses his remarks through the Chair he would not invite interruption.
I apologise.
Mr. Hayes
You do not have a notion. He should read the legislation his colleague, Deputy O'Donoghue, produced.
Let us hear Deputy Ardagh without interruption.
You are advocating that they be thrown out – the ultimate sanction.
Mr. Hayes
I will debate that with you any day of the week. I look forward to the debate.
Hitler would not be in it with you.
Will the Minister allow Deputy Ardagh to continue without interruption?
Mr. Hayes
You would not know those estates if you looked for them. You have never gone into one of them.
It is very important—
You are advocating the ultimate sanction.
Mr. Hayes
You should read the legislation your colleague produced.
I read your statement.
All Members of the House should address their remarks through the Chair when they are called by the Chair to speak. I would ask Deputies not to interrupt and to allow Deputy Ardagh to continue.
Mr. Hayes
I was just setting the record straight.
Deputy Hayes is an excellent Deputy for his constituency. Not alone that, Deputy Hayes is my representative in the Dáil in that I live in his constituency, and I am sure that somewhere along the card I will be able to give him a vote at the next general election. Having said that, before simplistic statements to the effect that people should put out of council estates because their children have engaged in anti-social behaviour are made, the underlying causes of such behaviour must be looked at. Like Deputy Hayes's constituency, there are estates in my constituency—
Why did the Deputy vote against the joy riding Bill?
We are talking here about consistent poverty of children. I am addressing the amendment. It is important that people do not simply say we should put the parents out if the children engage in anti-social behaviour. We have to look at the underlying causes of anti-social behaviour. What we must do is ensure, as this Government is, that there are community facilities, educational opportunities, child care, homework clubs, in other words, every incentive for these children not to engage in anti-social behaviour. Before throwing families out of estates and moving them into private rented accommodation where they are looked after by health boards, which will do the children no good and retard any development that might have happened, that should be taken on board.
Mr. Hayes
Does that include pushers?
I would not blame children for the actions of their parents. What the Deputy is talking about are the actions of the children.
Deputy Hayes is advocating it. He used the term "minors". He said that the parents should be thrown out for the sins of the minors.
The emphasis should not be on the child dependant allowance but on the child benefit scheme which has been increased significantly in this budget and will be further significantly increased in the coming years.
If we are ever to break the cycle of poverty, we must target child poverty. We know, through the National Economic and Social Forum, that about 250,000 children live in households which are solely dependent on means tested social welfare payments. We also know that about 12% of children live in consistent poverty and that about 20% live in relative poverty. There is an unanswerable case for giving significant increases in child dependant allowances because that is one way in which we can target child poverty and break the cycle of poverty. If we do not break it with children who are living in poor families then we have little hope of breaking the whole cycle of poverty. One of the factors in relation to this is that the child dependant allowance has not been increased for seven years and that makes it more and more difficult for children from poor homes to remain in education. Where they remain in education, many of them are working, and that does not lend itself to obtaining an education because if they are working in pubs and clubs during the school term, at weekends and on week nights they are not in a fit state to attend school on Monday morning. They are so involved trying to ensure a reasonable standard of living in the household that their studies take second place.
I was surprised, almost shocked, to hear Deputy Ardagh's suggestion that there should be no child dependant payments. Is that what this Government is about? Are we seeing the phasing out of child dependant allowances? That there has not been an increase for the past seven years suggests an ulterior motive. I hope that does not reflect the policy of Fianna Fáil or of any other politician in this House. Many agencies, including the St. Vincent de Paul, CORI and the Combat Poverty Agency have made a very strong case for increasing child dependant allowances because they are a significant way of targeting child poverty and breaking the cycle of child poverty.
Successive Governments have in the past made the excuse that resources were not available. However, this year and for the last number of years, a significant budget surplus has been and continues to be available, and that money should be targeted in this area. The Minister suggested during this debate that the whole area of social welfare is a matter of prioritising. If there is a case for prioritising, there is a very significant case for prioritising child dependant allowances because then we would not continue to be in a situation where approximately 12% of our children live in consistent poverty. That should not be allowed to continue. We should target poor children through the child dependant allowance and I would ask the Minister to look at that possibility in the future. We should target poor children through the child dependant allowance. I ask the Minister to give consideration to this proposal.
Depending on the way one looks at them, I have some sympathy with the proposals in the amendments. One could say that the expert report issued some years ago, which seems to be the Bible in this area, said that we should go in the direction of child benefit rather than the child dependant allowance. This has been the gospel for the past few years. Six or seven years ago everyone agreed that the child dependant allowance acted as a disincentive for people to take up employment. Is Deputy McGrath saying I have taken it up wrong?
That might have been valid but the back-to-work scheme made it invalid.
Please allow Deputy Ahern to proceed.
I am putting the two points of view. I hate it when quangos or expert commissions put forward proposals which try to tie down the political system and to take away flexibility.
In recent years the Minister has spent the money on child benefit. While there is a logical reason for so doing, it may be time after six years to look again at the child dependant allowance. This might be a case of politicians wanting to have two bites of the cherry. We have gone in the direction of child benefit, but if it is decided to go in the direction of the child dependant allowance we should try to amalgamate and co-ordinate them. It is difficult to understand why one person receives £13.20, while others receive £15.20 or £17. The Minister may say that he has allocated his money for the next three years to the huge increases in child benefit. It is difficult to see how he can make savings in this area, unless he is brave and takes on board the Dáil committee recommendation, which he does not like, that the same amount should be given to every child in child benefit and that the concept of the first and second child be abolished. When we drift back to the child dependant allowance in two or three years the first step should be to amalgamate and co-ordinate it with child benefit before moving forward.
We are all concerned about child poverty and want to do everything possible to eradicate it and help those caught in poverty traps. Education is probably the best way of breaking the child poverty cycle. What is the definition of a "child"? There is much pressure on children to leave school early to take up employment. There are two reasons for this, poverty in the home and the attraction of low paid jobs.
In this context, I wish to refer to a specific group. Today I rang the Department following representations from a constituent regarding a low income family whose children were encouraged to do the transition year in school. One of the children, who is 19 years, no longer qualifies for child benefit and cannot draw a social welfare payment. The family is receiving no income for this child, and I ask the Minister to respond to this dilemma. The number of students in this position is small, but the pressure on them to leave education and take up employment is huge. Obviously they do not qualify for a third level grant or back-to-education allowance. There is a small but increasing number of low income families caught in this poverty trap due to the popularity of the transition year. I am interested in the Minister's response to this issue.
I plead with the Minister to deal with the issue of the child dependant allowance this year. The system is unjust, unfair and untenable. This has been brought to the attention of the Minister on a number of occasions since he took up office but regretfully he has not done anything about it.
I want to highlight the anomalies in the system by comparing the position of three children in the same class whose parents are in receipt of social welfare payments. If the parents of the first child are in receipt of unemployment assistance or the parent is in receipt of a single parent allowance he is worth £13.20 per week, if the parents of the second child are in receipt of invalidity payments he is worth £15.20 per week and if the parent of the third child is in receipt of a widow's or widower's allowance he is worth £17 per week. These children are treated unequally and unjustly. The system is helping to increase poverty traps. Since 1994 we have repeatedly asked for the system to be changed, yet successive Governments have not changed it. How can the Minister preside over a Department which says to one child that he qualifies for a payment of £13.20, while it says to another child that he qualifies for a payment of £15.20 and to a third child that he qualifies for £17? This cannot be justified.
The major difficulty facing the Minister is that the Minister for Finance, who holds the purse strings, will not give him the money to pay the higher rates. This is ironic given that the social insurance fund is in surplus and some of those payments are benefit payments to which people are entitled by virtue of having paid stamps. In recent years the Minister has put money from the social insurance fund into another fund, yet he is presiding over an unfair system.
The real reason he will not change the system is that the vast majority of child dependants under the social welfare code are being paid for at the lower rate of £13.20. The Government or any other Government would not have the gumption to reduce all rates to £13.20 but would have to go to the top rate of £17. That is the real reason you will not change the rates of child dependant allowance.
The Deputy should please address his remarks through the Chair.
My sincere apologies. Since I have been interrupted I am not sure how far I had got.
The Deputy might provoke interruptions.
The Deputy is a lost child.
I was saying that the Minister is not prepared to change those rates because he would have to bring them all up to the top rate of £17 and he realises that would be costly for his Department. I have no doubt it was one of the options given to him by his officials because they would be just, fair and honest and would bring forward this proposal every year suggesting what he should do and the cost. However, he will say that in a report on all these payments it was considered that the child dependant allowance should not be increased, that the best way of giving money to families was through child benefit. I agree with that. It is probable that he will also say that the report stated it could be seen as a disincentive to work if the rates were increased. That report was prepared some time ago and in the meantime the economy has improved, more people are at work, there is more money in the social insurance fund and wages have increased, but unfortunately poverty has not been greatly reduced.
The back to work allowance is in place and it takes into account the child dependant allowance. The back to work allowance is a percentage of the social welfare payment and is based on the number of adults and the number of children. Given that it is based on the social welfare payment, the Minister cannot conclude that that payment is a disincentive to work. There was no back to work allowance when the report was published. All that has been surpassed. The back to work scheme has been a tremendous success and it has encouraged people to return to work. The Minister's position is untenable. I hope he will have the good grace to realise, given that the money is available and the social insurance fund is flush, he should consider this measure out of justice to all children. All children of the nation should be treated fairly and justly. To have different rates of social welfare based on the recipients position under the social welfare code is unjust. I ask the Minister to reconsider his views and to accept the amendment.
On Committee Stage the Minister said he would have a look at this issue. I welcomed that because it should be revisited. What is needed is a comprehensive package to tackle child poverty. Will the Minister look at another aspect linked to this amendment, that is, setting new targets for the elimination of child poverty. The child dependant allowance could play an important role. Equally there is an urgent need for these new targets which are to be agreed with the social partners. I understand from a reply to a recent question that they have not been agreed. There is an urgency about this matter which all Members share. It is clear from the contributions that Members are of the view that this is an area that must be tackled urgently.
Given the Celtic economy, many people do not believe those rates of child poverty exist. There may be some change from the most recent figures but it still represents a substantial disadvantage for huge numbers of children who are not gaining from the opportunities and are featuring in the poverty statistics. This means Ireland has the highest proportion of child poverty in the EU. Many cannot believe that is still the case but it is the reality. A package of measures is needed, one of which is to change the child dependant allowance. Many of the voluntary groups have changed their minds and are supportive of increasing the child dependant allowance. They see it as a targeted way of dealing with the child poverty issue.
The Minister said child benefit is one mechanism to tackle poverty. As the CORI document reminded us recently, 40% of child benefit goes to low income families and 60% goes to families with higher incomes. Obviously child benefit is a mechanism for supporting families. I ask the Department to devise a range of initiatives to tackle child poverty and not to rely exclusively on child benefit because I do not think it will work. The Government assumption is that child benefit can pay for child care, but that is not the case given that child care costs are high and the supply is low. A huge problem for low income families is that the support services are not available – this was clear from the recent report on one parent families. They found it difficult to access high quality child care. It was a catch 22 in that it was difficult for them to combine work and family life simply because the support services were not available.
An issue I raised with the Minister recently is what constitutes a basic income for children in need and what is his Department's assessment of it? The most recent report on the issue is from the Combat Poverty Agency in 1992, which is out of date. Based on the figures at the time for child benefit and child dependant allowance, most families would still be short by a number of pounds. The State has not set down a basic minimum adequate payment for children as it did for adults through the Commission on Social Welfare. The cost of child rearing needs to be taken into account when deciding what constitutes a minimum income for children. Rearing children is expensive and there is huge pressure on parents. Will the Minister look at this area and outline the package of measures needed – child dependant allowance, child benefit and other initiatives – to begin to tackle a problem which, if left as it is, will have appalling consequences. Child poverty leads to disadvantage in later life. People will opt out of education and employment and will be unable to avail of the opportunities. It is a serious issue and one that all Members are agreed on. It demands a comprehensive response from the Minister and this amendment is one aspect of what that response should be.
I am gratified by the number of comments and contributions and I shall deal with as many of them as possible. Deputy Ardagh referred to the great elder lemon, Barry Desmond, who advocated the taxing of child benefit not so long ago. Deputy Broughan says he speaks for the Labour Party but I recall Deputy Michael D. Higgins advocating the taxing of such benefit also in recent times. I wonder where the Labour Party stands on the issue.
The Government will not tax the massive child benefit increases which it has provided this year nor will it do so next year or the year after when it returns to power. I will come back to Deputy McGrath on the amount people will receive in child benefit increases over the next three years.
We are debating child dependant allowances. Child benefit is covered by the next amendment.
Deputy Fitzgerald referred to the child poverty targets. The Government should be given credit in this regard. The national anti-poverty strategy was devised in 1997 by my predecessor. The targets set were extremely conservative and primarily related to unemployment. They were supposed to be achieved over ten years but were met after two years which coincided with this Government's term in office. It was decided in the run-up to the renegotiation of Partnership 2000 which resulted in the agreement of the PPF that we would agree new targets with the social partners and address other issues, among which was child poverty.
A working group was set up under the PPF which comprises representatives of the social partners, my Department and other Departments to examine child poverty. It is very much on the Government's agenda. Everybody researching this issue believes the best route to alleviate child poverty is child benefit. No so called expert in this area would say otherwise.
Mr. Hayes
Will the Minister abolish child dependant allowances?
It is important to outline the position regarding CDAs. Deputy Healy and others referred to prioritisation. The Government has not shied away from this allowance. There are three different CDA rates and the reason for that is largely historical. At one stage, as Deputy McGrath said, there were 36 different rates but the number has been reduced to three.
Not by the Minister. He has not done anything.
Please allow the Minister to reply without interruption.
Deputy McGrath is correct in regard to the loss of the CDA as a result of a life event, primarily taking up employment. However, the allowance is also a disincentive to widows to marry because they lose it. That issue is addressed in the amendment but in regard to the disincentive to work, all research, which has been followed by successive Governments, has shown that resources should be concentrated on child benefit because it is not lost when the payment stops, it is not taxed and, most important, it is paid to the primary carer. It is the best way to pay the woman who cares for the children rather that providing a tax allowance, as some people suggest, the benefit of which may not find its way into the woman's pocket.
Child benefit as opposed to CDAs does not contribute to the poverty trap and is not a work disincentive because it is a non-means tested, universal payment which is not taxed. It is a net payment.
CDAs are means tested. One must be in receipt of social welfare.
I refer to child benefit.
We referred to CDAs. The Minister should speak to the amendment.
This is part of the amendment.
The Minister is running away from the critical issues.
Please allow the Minister to reply without interruption.
The issue is whether CDAs or child benefit should be pursued. Child benefit is the way to go.
Mr. Hayes
Does the Minister want to abolish CDAs? He should spread the secrets. We would love to hear them.
The Minister has done nothing about it.
The policy of non-indexation of CDAs and increasing child benefit by more than the rate of inflation has been in place since 1994. When I took office, I examined this issue and I agreed with my predecessor, the late, great, departed darling of the left, Proinsias De Rossa, on policy.
He is still a Member of this House.
He is a life president of the Labour Party. Ceaucescu was a life president but he came a cropper.
Mr. Haughey was the Minister's Ceaucescu.
In 1994 child benefit represented 29% of the total child benefit-CDA payments for a four child family. It currently represents 47% and from June next will rise to 57%. Deputy McGrath referred to the back to work allowance but that issue is not all he makes it out to be. The reality is somewhat different.
The freezing of the CDA and concentrating resources on child benefit was examined by the tax welfare integration group which reported in 1996, three years after the back to work allowance scheme was introduced. It made a similar recommendation which was accepted by late, great, and I am not sure if he is departed, Deputy De Rossa. That defeats the Deputy's argument.
Jobs were scarce then but there is plenty of work now.
People lose their payment and the CDA under the back to work scheme. It is not an argument.
The Combat Poverty Agency, which inevitably has something critical to say of every Government, complimented us on the route we took.
Mr. Hayes
Which route?
The child benefit route. Deputy Hayes may well call on the Combat Poverty Agency but the agency would acknowledge that what we have done this year and promised for the next two years is the correct route to take.
Deputy Stanton referred to a specific case. If children in the family are in receipt of CDAs, provided they are in full-time education, that will continue until they are 22.
Over three or four years. I know it well.
Deputy McGrath suffers from a complex in that he was the last in a long line in his family and in those dark and distant days child benefit was not paid for the eighth and subsequent child.
I was the tenth.
The Deputy suffers a hang up in this regard. The issue of treating children differently is endemic in the system. Deputy Noel Ahern sometimes queries why an increase of £25 a month will be paid for the first two children in child benefit as opposed to the £1 per month increase provided by Fine Gael when the party was in Government.
We provided a £14 increase in personal payments.
The reason there is a different rate of payment between the first two and third and subsequent children is that research has shown in families with a larger number of children there is more risk of poverty.
Only if it is a long-term payment. The Minister is misleading the House.
This is accepted by the Combat Poverty Agency and the ESRI. Child benefit is given because it favours larger families. The cost of CDAs in the current full year amounts to £257 million. The introduction of a standard rate would be extremely costly and would obviously impact on the money we might be able to allocate to child benefit. To bring all CDAs up to £17 would cost £49 million and to bring them up to £20 would cost about £102 million. Deputies opposite said it is raised every year as a possible thing to do. I assure them that on no occasion since I have become Minister have my officials advocated or suggested to me that I should move in the way suggested by Deputies opposite in regard to this—
Mr. Hayes
They are not on child dependant allowance.
The research shows that it is best to put all the available money into child benefit because of lack of—
Ivory tower.
—disincentive.
Mr. Hayes
The Minister has been in power for four years. He has lost touch with the people.
The Minister without interruption.
That was confirmed by the tax and welfare group to which I referred.
Mr. Hayes
The Minister has lost the run of himself.
The disincentive in relation to CDA is one of the major reasons why we have not touched it. I acknowledged on Committee Stage that times have changed and that I accept we might look at it. However, I did not give any hostages to fortune as I believe the best route is that of child benefit.
The Minister will not be in office for much longer.
It is important to outline the increases in child benefit during our period in office. In 1998 we increased child benefit by £28 million; in the 1999 budget we increased it by £40 million; in 2000 we increased it by £106 million and this year we are increasing it by £328 million. Before coming to office expenditure on child benefit was £397 million. Our first three budgets increased this to £575 million, an increase of 40%. The increase in 2001 constitutes a full year investment of £330 million. Over the period we have been in office child benefit has increased dramatically.
Particularly for the benefit of Deputy McGrath, who will feel very aggrieved that he is not a child these days, I wish to point out that as a result of the changes we are making in June—
He is a child at heart.
Maybe he is a child. As a result of the changes we will make in June this year the lower rate will increase to £67.50 and the higher rate will increase to £86, a massive increase on last year. Next year, as a result of budget changes on 5 December which the Government hopes to implement before the next election, the lower rate following the second tranche of the three year plan will be £92.50 and the higher rate will be £116. This is if we do not give a little extra in the case of twins or put some money into CDAs. I am assuming everything will go into—
I hope this was cleared with Deputy McCreevy.
These are the figures if the moneys are all invested in child benefit – I am giving indicative figures. In 2003 when this Government will be still in office following the next election—
Mr. Hayes
Ceaucescu as right.
—the lower rate will be £117.50 and the higher rate will be £146, a dramatic increase over the lifetime of the Government. Deputies on the other side should look at the research put forward by the Combat Poverty Agency and perhaps at its statement following the most recent budget which complimented the Government on the direction we took. Deputies could also examine the research which fed into the tax and welfare integration group which again confirmed the view that it is better to freeze the CDA and to put all available money into child benefit.
On a point of order, the Minister in replying to Deputy Stanton indicated a child in transition year who is 19 years of age and is not receiving child benefit could get child dependant allowance. However, that is not correct and I am sure the Minister would not want the record to be incorrect.
That is not a point of order, but I will take it as the Deputy's second contribution to the debate.
The Minister misled the House. They would not qualify for child dependant allowance if the parents were on short-term payments, an anomaly which has not been put right. The record of the House should be amended.
These amendments are important. This is the first year the weekly rate of child benefit for the first two children will be greater than the child dependant allowance when the new rates are introduced. Therefore it is a moment when we should look back and reflect. I think Deputy Ahern and Deputy Ardagh agree that more than 20% of children are living in poverty, with 12% or one in eight of our children living in persistent poverty. The Minister has not addressed the real issue. It seems as though we cannot target these children through the tax system, and what I and the Labour Party are suggesting is that we again consider targeting a sum of £100 million, a small amount in the context of a budget of £20,000 million, at the most vulnerable children in society. I think the argument has been put strongly. The Minister prefers a poor law system of social welfare provision in which the poorest children are told what their lot will be due to the circumstances of their parents. I again ask the Minister to re-examine the situation in which the poorest children find themselves, at a time when weekly child benefit rates have overtaken child dependant rates, and the possibility of at least modest increases.
Mr. Hayes
The Minister gave us a lecture which went from Romania back to Ireland and he spoke about Mr. Ceaucescu. The Minister would know much about Mr. Ceaucescu given his close relationship with the former Taoiseach, Mr. Haughey, through the years. I understand the Minister was Mr. Haughey's chief whip for quite a number of months and learned much at that table. The Minister would also know much about consistency in tax policy given the performance of the Government last week where it did a complete U-turn in respect of capital gains tax. We were told it would be 60% while two years later it has remained at 20%. We will, therefore, take no lectures from the Minister on consistency in tax policy.
This allowance is a way to help the poorest of the poor. A blanket increase in child benefit means everybody benefits, but by increasing child dependant allowance the benefits are targeted at those who have least. I do not accept the Minister's frivolous argument that experts in his Department who know a great deal about this have advised him not to proceed with this move. I understand this recommendation originally came from the Commission on Social Welfare many moons ago, and virtually nothing has been done since 1995. The Minister has within his grasp an opportunity to use £50 million from an expenditure of £6.1 billion this year to deal conclusively with this issue once and for all.
From where should be take the £50 million? Should we take it from old age pensioners or from those on disability?
Mr. Hayes
The social insurance fund. The Minister should listen to what I am saying. He has the money—
All that money is dedicated to other people.
The Minister should allow Deputy Hayes to conclude his contribution. The Minister will have an opportunity to reply.
Mr. Hayes
The money should come from the social insurance fund. The Minister must move on this issue. He does not want to deal with child poverty and has no interest in it because—
I ask Deputy Hayes to move the adjournment.
Debate adjourned.