Ceist:
1 Mr. Hayes asked the Minister for Social, Community and Family Affairs if he will make a statement on the students summer jobs scheme. [15342/01]
Ceisteanna–Questions. Priority Questions. - Departmental Schemes.
The students summer jobs scheme was first introduced in 1993 to provide income support for less well off students who were disqualified under social welfare legislation from receiving unemployment assistance during the summer months. When the scheme was introduced unemployment levels in Ireland were among the highest in the EU and students found it difficult to obtain work during the summer holiday period. Consequently participation levels in the scheme initially were very high. For example, in 1994 more than 9,000 students took part. This increased to more than 15,000 in 1995, 1996 and 1997. Since 1997 the take-up has been dropping gradually, coinciding with the upsurge in the economy and the wider availability of alternative and well paid summer jobs. Last year 5,800 students took part in the scheme. The bulk of these came from the western seaboard. This year we anticipate a further drop of about 20% in participation levels.
That the level of interest in the scheme has been in decline in recent years due to the wide availability of well paid summer jobs is an encouraging trend, as it is obviously better for students to obtain work in the open market than to have to rely on support from the scheme. Furthermore, any scheme which removes young people from the mainstream labour supply could have a negative impact on, for example, the hotel and tourism industry, particularly during the busy summer period.
The scheme will operate this year from 1 June to 30 September and approved students will be allowed to undertake 200 hours work at £3 per hour, giving a possible total maximum tax free payment of £600. In order to focus resources where the need is greatest, if the student comes from a household which is dependent on social welfare payments he or she will be paid at a rate of £4 per hour, providing for a maximum payment of £800. In addition, approved students who are in receipt of disability allowance or blind person's pension will be eligible to participate in the scheme this year.
Mr. Hayes
Why has the Minister set an hourly rate of pay for this scheme of £3, which is £1.40 less than the national minimum wage? The Minister is aware that minimum wage legislation was passed in the year 2000 and sets out clearly that the basic rate of pay per hour should be £4.40. Why is the Minister breaking the law, flouting the regulations and introducing sweatshop rates of pay for very important work in the community?
The scheme pre-dates the minimum wage legislation. It was not included in the legislation and was not intended to be. The minimum wage only applies to commercial employment where there is an income tax and PRSI liability. In this instance there is no employer, as such, and the work is community based. It is completely different from the commercial type of employment. In recent years employers have been crying out for people to work, particularly in the hotel and tourism industry during the summer months. Students have been voting with their feet by going into better paid summer employment. It is better for the State and taxpayers that students are not a burden.
This was a good scheme when there were high levels of unemployment, particularly in the early 1990s. That is why the scheme was introduced by my predecessor, Deputy Woods. Times have moved on. Schemes which were relevant several years ago are not relevant now and I am thankful for that.
Mr. Hayes
To what sections of the National Minimum Wage Act does the Minister refer when he suggests the scheme is exempt from the minimum wage legislation? The Minister is applying double standards. He is asking businesses and others in the public and private sector to obey the national minimum wage legislation while he and his Department are operating a scheme which pays less than the minimum wage.
The numbers involved in the scheme will decline again this year. However, the real losers will not only be students but the many voluntary and community activities which need students' participation during the summer period.
To what section of the Act does the Minister refer when he says he believes the scheme is excluded from the legislation?
I do not have the legislation before me. The Deputy is not comparing like with like. The scheme does not provide the type of paid commercial employment which was envisaged in the minimum wage legislation. Jobs provided by the scheme carry no tax or PRSI liability and there is no employer. It is my view and the view of my Department that it is not covered in the minimum wage legislation.
Mr. Hayes
The Minister and his Department are now open to a legal challenge from any student who is employed under the scheme. Section 5 of the National Minimum Wage Act does not refer to the students summer jobs scheme and the advice he has been given by his officials is deficient.
I ask him again to review the paltry sum of money he is offering students this summer under the scheme. Does he believe it morally right that he should lecture the private sector about its obligations when he is running schemes in his Department which pay £1.40 less than the national minimum wage?
This year I have included an additional £1 per hour for students who come from households which are dependent on social welfare payments. It was Fine Gael and Labour who introduced this provision in 1995 and abolished it in 1996.
Mr. Hayes
The Minister should answer the question. He is leaving himself open to a legal challenge. This is sweatshop labour again.