European Council Regulations: Motion.

Minister of State at the Department of Health and Children (Deputy Pat The Cope Gallagher)

I move:

That Dáil Éireann approves the exercise by the State of the option, provided by Article 3 of the fourth Protocol set out in the Treaty of Amsterdam, to notify the President of the Council that it wishes to take part in the adoption and application of the following proposed measure:

proposal for a Council Regulation extending the provisions of Regulation (EC) 883/2004 and its implementing Regulation (Regulation (EC) No [. . .]) to nationals of third countries who are not already covered by these provisions solely on the ground of their nationality, a copy of which proposed measure was laid before Dáil Éireann on 21st August, 2007.

I thank Members of the House and Whips for making time available to discuss the exercise by the State of the option under the fourth Protocol to the Treaty of Amsterdam in respect of a proposal for a Council regulation extending the provisions of Regulation 883/2004, which will replace the existing EU social security co-ordination rules in Regulation 1408/71. There is a three-month time limit for notifying the President of the Council of our wish to take part in the adoption and application of any such measures and as this proposal was presented to the Council on 25 July 2007, if Ireland wishes to take part in the adoption and application of this instrument from the beginning, it has until 24 October 2007 to inform Council of its intentions.

At its meeting on Tuesday of this week the Government agreed that Ireland should exercise the option provided by Article 3 of the fourth Protocol to the Treaty of Amsterdam to notify the President of the Council of the European Union that it wishes to take part in the negotiation of the proposed Council regulation on the extension of the provisions of Regulation 883/2004 to nationals of third countries who are not already covered by these provisions solely on the ground of their nationality. The exercise by the State of any such option is, under the Constitution, also subject to the approval of both Houses of the Oireachtas.

The social security rights of people living and working in the EU are governed by EU Regulations 1408/71 and 574/72. The regulations co-ordinate social security systems within the EU and are designed to remove obstacles to freedom of movement which would otherwise arise from loss or reduction of social security cover or entitlements when a person moves from one country to another.

Since the adoption of Regulation 859/2003, which was approved by the Government and by the Oireachtas in March 2002 and came into force on 1 June 2003, third country nationals who have worked in two or more member states and their family members and survivors can rely on Regulation (EEC) 1408/71 on the same basis as EU nationals, provided they are legally resident in the territory of an EU member state. A third country national, therefore, who becomes unemployed having worked legally in the UK and Ireland can rely on an aggregation of social insurance paid in both states to qualify for jobseeker's benefit.

The current Commission proposal aims to extend to third country nationals the provisions of Regulation (EC) 883/2004. This regulation will replace the existing Regulation 1408/71. However, the scope of Regulation (EC) 883/2004 is wider than Regulation (EEC) 1408/71 in that the former also covers persons who are not professionally active, not just workers as heretofore but all legally resident third country nationals.

There are a number of reasons it is considered that the State should respond positively to this proposal. First, the conference which adopted the Amsterdam treaty amendments took note of the declaration by Ireland that it intended to exercise its right under Article 3 of the protocol on the position of the UK and Ireland to take part in the adoption of measures under Title IV of the treaty establishing the European Union to the maximum extent compatible with the maintenance of the common travel area with the UK.

The proposal is also in keeping with the spirit of conclusions of the 1999 Tampere European Council, in which Heads of State stressed that member states must ensure fair treatment of non-EU nationals who reside legally on their territory. This includes better integration of third country nationals who are legally resident in the territory of a member state by giving them rights that are as close as possible to those enjoyed by EU citizens. This position was echoed by the Justice and Home Affairs Council in 2005. The extension of the EU regulations on social security to third country nationals is an important means of achieving these EU policy goals. Ireland supported the extension of Regulation (EEC) 1408/71 to third country nationals on the basis that this extension was fully in line with national policy. Therefore, to continue this policy we should support the current proposal from the Commission.

Additionally, as there are no nationality conditions in Irish social security legislation, people who are legally resident here and who take up or are entitled to take up work in Ireland have the same social welfare entitlements as Irish nationals. I want also to emphasise that these extended rules do not give entitlement to third country nationals to enter, stay or reside in a member state or to have access to its labour markets.

Third country nationals who are covered by these provisions must be legally resident on the territory of a member state and therefore must have a temporary or permanent right of residence. Movement to another member state must be in compliance with the second state's national legislation on entry and residence. While I am satisfied that the purpose of the current proposal is to extend social security protection to non-active third country nationals on the same basis as non-active EU nationals, Ireland would be keen to partake in the discussions of this proposal to ensure that Ireland's existing conditions for such payments would apply. It is important that Ireland is in a position to influence the negotiations on the proposal.

Given that certain third country nationals already enjoy protection of social security rights, it is considered that the fact that the scope of Regulation (EC) 883/2004 also covers people who are not professionally active will not have a significant impact on the burden borne by member states as the number of persons who will be covered over and above the current situation will be low. Like Ireland, the UK opted into the extension of Regulations 1408/71 and 574/72 to third country nationals but it is not known at this stage what the UK intends to do in regard to the current proposal. Should the UK not opt in, it is considered that this will have no implications for the common travel area as both the UK and Ireland would continue to operate their existing immigration controls in regard to third country nationals and the proposal does not confer any new entitlement of residence.

For the reasons I have outlined, I recommend the motion to the House.

Deputy Olwyn Enright

I thank the Minister for his contribution, however, I am disappointed at the manner in which the proposal has come before the House. The Minister thanked all sides of the House for the opportunity to bring this motion forward. The Fine Gael Party did not want to prevent this happening because of the timescales involved.

The proposal was presented to the Council on 25 July 2007, with a three-month timeframe for Ireland to notify the Council if it wished to take part in the negotiations. This is the fourth week of the Dáil term and it is disappointing the proposal was discussed at Cabinet only last Tuesday when effectively, the last day it could come before the House would be next Tuesday. We were notified after 9.30 p.m. on Tuesday last that this motion would be discussed today. That notice is inadequate to tease out the intricacies of a proposal, that could have important consequences.

I support the proposal for better integration of third country nationals who are already legally resident in the European Union. Does the Minister have statistics on the number of people who will fall under this measure, on a temporary and permanent basis? I accept the figure can change over time, but were the regulation to be enacted in the next year, what is the likely number? Extending the provisions of the EC regulation will have cost implications. The Minister will understand that I do not have much faith in Government statistics on non-EU nationals given its appalling inability to calculate the numbers in the recent past, for example on the social welfare early childhood supplement. I think the Government did not realise it would have to be paid to non-nationals. At one point we were told by the then Minister for Social and Family Affairs that it would cost €10 million. The Department of Health and Children also had a figure of €10 million, but the Taoiseach originally said it would cost €1 million, but at this point it has cost upwards of €10 million. I appreciate that the introduction of the early childhood supplement was a Government proposal that had been suggested by the Fine Gael Party in advance of the Government's announcement. We need accurate figures on the numbers that will fall under this measure.

The briefing note on this motion states the Government is looking for consent to take part in the negotiations and further states that it wishes to take part in the adoption and application of the instrument. Does that mean the Government proposes putting forward changes in the instrument to date? Is there room for negotiation?

The Minister may have seen reports on the social insurance fund, in particular a report by Mercer Consultants to the Minister for Social and Family Affairs which states that PRSI contributions will not be enough to pay for welfare benefits in three years time, at which point the system will face huge deficits. What impact will these proposals have on the social welfare system? This brings us back to the numbers who will be eligible to be paid from social welfare, which is under quite a degree of pressure.

I support the motion, but questions need to be answered on it. While I appreciate the Minister of State, Deputy Pat The Cope Gallagher, does not have ultimate responsibility for this, he is representing the Minister for Social and Family Affairs and I hope he can answer some of these questions when concluding.

Deputy Róisín Shortall

The Labour Party is happy to facilitate the passage of this proposal. I thank the Minister's officials for providing a briefing document for the Opposition spokespersons. However, why have we had such late notice on this proposal? The decision to approve the Council regulation was made at European level on 25 July last and I think the Minister owes us an explanation as to why at the last minute and with very short notice we have been told about it. Quite clearly the Dáil schedule of business did not include time for this matter. Why did it occur to somebody only at a late stage that this issue needed to be dealt with before 24 October? I notice also from the briefing document that the matter was brought to Cabinet just this week. Again, given that the Department knew about this since last July, why was it so late in being brought to Cabinet and subsequently being brought to this House? We are entitled to an explanation. Too often different proposals are sprung on us. Very little time is provided to examine them in any kind of detail. While nobody wants to hold up an important provision such as this, there is an issue as to whether we are doing business professionally and properly and the extent to which we can consider or examine the proposals put before us. It is unfair of the Government to put the Opposition in a position where there is inadequate time to consider the proposal.

Will the Minister provide a detailed explanation in his concluding remarks as to why it has taken over three months to bring this proposal to Cabinet and subsequently to the Dail?

The proposal is undoubtedly welcome. It ensures that third country nationals working in more than one EU state can combine social welfare contributions made in those states in order to claim social security benefits. That is a good thing. Up until the turn of the century, EU immigration policy was very much dominated by the security side of the issue. The social and welfare aspects of immigration policy, that is the rights and entitlements of legitimate workers from outside the EU, were much less developed. That mirrored a situation across the EU institutions whereby welfare type policies were very slow to develop. This strikes at the heart, purpose and legitimacy of the EU. If it is ever to serve its citizens, the EU must be much more than just a common market. The fact that we are opting into this proposal suggests we have still quite a long way to go in terms of welfare provision. It is welcome nonetheless and the Labour Party is happy to support this proposal.

There is a general need for more legal protections for immigrant workers. Obviously this reform will be useless to employees, if unscrupulous employers do not pay PRSI contributions for them. One suspects that third country nationals are more vulnerable than EU nationals in this regard. Last year only six fraud cases taken against employers resulted in a fine. It is very hard to know why that is the case. I am not sure if this reflects how small the problem is or how inactive the Department is, but clearly there must be rigorous enforcement of the law against errant employers if the proposal before us is to have any real meaning. On the basis of anecdotal evidence, there would seem to be a serious problem of non-nationals, whether from the EU or outside the EU, working in the black economy. That fuels much of the racism in Ireland because Irish workers see non-nationals working for low wages, driving down wages generally and undercutting them. Much of the evidence of this is anecdotal but there seems to be something to it.

It is extraordinary that last year there were only six cases in which fines were levied against employers who were not living up to their commitments. Until recently, the number of labour inspectors was so low, there was a sense of a free-for-all for employers. This opened the gates for widespread abuse with few attempts made by Government to provide an adequate inspectorate to ensure employers were adhering to the law. There is a long way to go and while it is welcome that people are coming in from the EU and elsewhere, because our economy depends on them, it is essential that the law is applied to employers and that they are obliged to keep to their commitments in terms of safeguards for their workers, regardless of whether they are Irish. I am not convinced that the current system ensures that happens.

I noticed from the recent report of the Comptroller and Auditor General that there is a high rate of fraud and overpayment of child benefit among non-national recipients. The Minister may be aware that a survey conducted by his Department revealed a fraud rate of 14% among non-nationals whereas the Irish rate was 2.6%. This resulted in a combined liability of €31.6 million, a considerable sum. The Department has indicated that steps are being taken to address the problem but, clearly, given the proposal before us, it is important to eradicate these problems before we extend entitlement further. We certainly do not want to be seen as the soft touch of Europe. Fraud on this scale going undetected, that we only found out about because the Comptroller and Auditor General has been doing his job so well, leads to a lack of confidence in the system. The Minister is obliged to ensure the system is robust and that it cannot be defrauded. A fraud rate of 14% is worrying.

I agree with the comments of the previous speaker on the social insurance fund but wider issues arise. The actuarial review of the social insurance fund was published yesterday and it presents a worrying scenario in respect of the future of social insurance. In three years' time, our expenditure on social welfare will exceed contribution income. It goes from a minor discrepancy in 2011 to a considerable shortfall over the following 30 years. Those are serious findings for the future of social welfare provision in this country.

In light of that review and those projects, we must ask how and why Fianna Fáil gave an undertaking to voters before the election that it would reduce the level of PRSI contribution from 4% to 2%. Fianna Fáil knew at that point the problems the social insurance fund faced but it blatantly defrauded the electorate by promising to reduce the level of PRSI contributions. That is a serious matter on which we are entitled to a response from the Minister for Social and Family Affairs and the Taoiseach.

Deputy Finian McGrath

I welcome the opportunity to speak on this motion on a European Council regulation on social security. Across the EU there has been a drift away from assisting those in need at the fringes of society. Regardless of our massive wealth, there are still pockets of serious social and educational disadvantage. When we look at the social security system, it is appropriate to have this debate. Just because many people are doing well in a vibrant economy does not mean everyone is moving on. Every Member of the Oireachtas has a responsibility to ensure the bottom 20% of Irish society is given a leg up.

One of the most important strategies to achieve this is the use of social security policy. The regulations co-ordinate social security systems within the EU and are designed to remove obstacles to freedom of movement which otherwise arise from loss or reduction of social security cover or entitlements when a person moves from one country to another.

Since the adoption of Regulation 859/2003, third country nationals who have worked in two or more member states, and their family members and survivors, can rely on Regulation 1408/71 on the same basis as EU nationals provided they are legally resident in the territory of an EU members state. Therefore, a third country national, for example, who becomes unemployed having worked legally in Ireland, can rely on the aggregation of social insurance paid there and in another state to quality for job seeker's benefit. We must support those who find themselves unemployed, not just Irish people but everyone who has contributed to the economy. Those countries in the west with strong economies also have an international responsibility to distribute wealth to poorer countries. This is a national, European and international issue.

The current Commission proposal aims to extend to third country nationals the provisions of the regulation. The current proposal pursues the same objective as Regulation 859/2003. The scope of Regulation 883/2004 is wider than Regulation 1408/71 in that the former also covers persons who are non-active, not just workers as heretofore, and legally resident third country nationals.

The legal basis for this regulation allows the Council to adopt measures to uphold the rights and conditions of nationals of third countries who are legally resident in a member state to reside in other member states. We have a moral, political and international responsibility to ensure that people in all European countries receive the relevant social support to which they are entitled. We should heed all viewpoints in this most important debate.

Minister of State at the Department of Health and Children (Deputy Pat The Cope Gallagher)

I thank the Opposition spokespersons and Deputy Finian McGrath for their contributions and the interest they have shown in this matter. I also thank them for agreeing to take this motion today.

I wish to clarify, as I have been requested to do, that this proposal was published at the end of July. In administrative terms, Europe closes down in August and we did not return here until the end of September. The Minister would like to have given more time for debate but this was not possible as the Department of Social and Family Affairs had to consult with other Departments. As a result, the Government decided on this matter last Tuesday, which necessitated its passage by both Houses of the Oireachtas this week. We are obliged to report to the President of the Council by next Wednesday, 24 October 2007, which explains this measure's swift passage through the House. While I am willing to apologise for this, the timescale did not permit a longer consideration of the motion. Although it is not a fait accompli, this Commission proposal ensures that we are in a position to participate in any negotiations. As Members know, it could take some time before the proposal is finally decided upon by the Council.

At this stage, it is hard to quantify how many people will benefit from the measure. Given that certain people are already covered by these EU regulations — including stateless persons, refugees and third country nationals who have already worked in at least two member states — it is considered that the numbers over and above these will be relatively low. Consequently, it is expected that the costs will be minimal.

The Government has a responsibility to support the social insurance funds by contributions from the Exchequer if there is a deficit from time to time. It is suggested that there could be such a deficit in a number of years and, if so, those who have contributed to social welfare insurance over the years have no need to be apprehensive because the Government must provide the deficit from the Exchequer. As with the Green Paper, we must take time to digest the report to which Deputies have referred before coming up with a response.

Deputy Róisín Shortall

The Government has had it since last April.

Deputy Pat The Cope Gallagher

I do not wish to be frivolous, but much the same was said five years ago. If people have any worries about the deficit, they will see from the report of five years ago that it is by and large the same.

I am somewhat alarmed, as is the Minister, by the high rate of 40% which was referred to, together with the 2.6% from Irish nationals costing some €36.1 million. It is alarmingly high. The Minister, Deputy Cullen, is unavoidably absent this morning but he will be taking the motion in the Seanad. He is anxious to try to curb this as much as possible.

We will be a party to the negotiations on this proposal and will play an important role as we do in all aspects of European legislation, regulations and directives. This motion provides us with an opportunity to do that. I thank the House for its co-operation in this matter.

Question put and agreed to.

Dáil Éireann díospóireacht - Thursday, 18 Oct 2007