I call Deputy Jack Wall who has 15 minutes.
Social Welfare (Miscellaneous Provisions) Bill 2008: Second Stage (Resumed).
The following motion was moved by the Minister for Social and Family Affairs, Deputy Mary Hanafin, on Tuesday, 11 November 2008:
That the Bill be now read a Second Time.
Debate resumed on amendment No. 1:
To delete all words after "That" and substitute the following:
"in view of the series of measures announced in budget 2009 and proposed in the Social Welfare (Miscellaneous Provisions) Bill 2008 which target the unemployed, children, the poor and people with disabilities resulting in the fact that
unemployed people will lose over €2,500 due to changes to jobseeker's benefit,
parents of 18 year olds will lose almost €2,000 due to changes to child benefit,
parents of 5 year olds will lose approximately €800 due to changes to early childcare supplement,
tenants dependent on rent supplement will effectively get no increase at all in 2009 due to increases in the minimum contributions they must now make to their rent,
fewer unemployed people will qualify for jobseeker's benefit because of new restrictions on entitlement,
fewer people with disabilities, injuries or illnesses will qualify for welfare support, and for those who do, the duration of payment has been capped,
part-time workers will receive less when they claim jobseeker's benefit because of a new cap on their rate of payment,
Dáil Éireann declines to give a Second Reading to the Bill.".
(Deputy Róisín Shortall).
I wish to share time with Deputies Upton and Morgan.
I thank the Minister for dealing with a matter regarding the social welfare office in Newbridge. The office was dealing with a backlog of eight weeks. I raised the matter in the budget debate and I have since been informed by the Minister that three additional staff positions have been allocated and five more will be approved for October. This will make a significant difference to dealing with the backlog which is affecting so many people in the Kildare area. According to the letter I received from the Minister, 11,000 claims consisting of 8,000 jobseeker's benefit claims and 2,000 one-parent family payments are currently being processed in the Newbridge office.
I will argue against the budget from the perspective of the poor. The rent subsidy will be clawed back from the payments received by an old age pensioner or a single parent. I have no doubt that on 1 January 2009, these old age pensioners and single parents in rented accommodation will be given a new book but on the same day they will receive a cheque from the HSE which will be €5 short of the original payment they had received. I cannot understand how the Minister thinks that those people will be able to survive on an increase of €1.50 a week, given the rise in ESB, fuel, food and clothing costs. The Minister stated that this increase would bring these individuals in line with local authority tenants. However, recent newspaper reports highlight the significant difference between a person in a local authority house and those in rented accommodation. Those in rented accommodation are at the behest of landlords who in many instances use agents as a go-between. It is practically impossible for the senior citizen or the single parent to obtain information about repairs to the house.
A newspaper report last week stated that one fifth of rented accommodation inspected by the local authorities, a total of 3,000 out of 12,000, as unfit for habitation, yet the Minister states that this is acceptable. She is not allowing for the fact that the people in rented accommodation are the poorest in the land. Any of us canvassing in last year's election campaign or in the local election campaigns could easily identify these people because they were living in hovels. In many instances the landlord was preparing to raze the building but leased out some of the rooms to recoup his costs. Heating and lighting were non-existent and ventilation was very poor. These premises were not suitable living accommodation, yet there was no recourse because many of the local authorities did not insist on these properties being upgraded to an acceptable standard.
The Minister stated yesterday that she was in consultation with the Minister for the Environment, Heritage and Local Government. I raised the matter of rented accommodation with the Minister for the Environment, Heritage and Local Government because the local authority in County Kildare had raised the rent excessively.
The Deputy's time has expired.
Have five minutes expired?
Yes.
I am asking the Minister to consider phasing in this increase to facilitate these people. The guidelines state it is important that authorities should ensure that rent increases do not absorb an excessive amount of income of tenants on low incomes dependent on social welfare payments and in particular old age pensioners. As a general guideline it is considered that no more than a 15% increase in such pension income should be absorbed by an increase in rent.
The most alarming aspect of this social welfare Bill is its almost total disregard for those people it was meant to protect. Everybody is hit such as the old, people with disabilities and young children. It has no regard for the fear and vulnerability of those groups. Where disadvantage is rife, the impact of this Bill will be felt more than anywhere else.
Elderly people are, to some extent, just recovering from the shock of having their medical cards removed in another part of this budget, but I do not think the U-turn has reassured them and they are still living in fear of what might be coming down the wires at them. They are also coming to terms with the fact that inflation is running at around 4.3% and any of the increases in this Bill are approximately in the region of 3% for most people. While they might not make that direct connection between inflation and the increase they are being given, they certainly make the connection between the increase they are being given and the cost of food and fuel. It is not too long ago that people were being told to shop around in order to get best value for food. Even when replete with a bus pass, it is impossible for elderly people to hawk around from one supermarket to another. Most of them will shop in their local convenience store where food is even more expensive. There is a genuine element of fear among many of those people about the cost of food. They have also been traumatised by the cost of fuel and fuel poverty has made a significant impact on them. Just last week, three different people came to me and told me about the conditions in which they live. They are literally afraid to turn on the heat for the winter because they are not able to meet the increased cost of fuel. With regard to unemployment, the Minister of State should take the time to drive or perhaps be driven through my constituency, particularly Thomas Street, where he will see a very extended dole queue which is longer than has been seen in many a day. That is just the immediate and striking effect this is having in my constituency.
In the past, we have had education opportunities, which were welcome. However, while the area I represent is one where education is highly prized, it is also one where it has been less than accessible to many people. The drop-out rate for second level is high and access to third level is a luxury for very many parts of that constituency. This comes at a time when doors were just beginning to open, schools were putting in a huge effort and different opportunities were being made available. The cuts in education have had a huge impact.
I link this to the fact child benefit is being removed for those over 18. The impact of this is that people who had an aspiration to stay on at school or even to go to college will not be able to do so. The cuts for those over 18 will amount to almost €1,000 in 2009 and approximately €2,000 in 2010, and this will apply into the future. A parent told me last week that his daughter had hoped to be able to go to college. He is literally saving and managing every cent but because of the impact of this cut on him and his family, there is no way they will be able to send that child to college — he directly attributes it to this cut.
The living alone allowance is an area that causes serious concern for older people. The point is always made, and is absolutely true, that the value of the living alone allowance is not anything like what is needed because, as the cost for one person is significantly greater than half of what it costs a couple to live, the benefit is significantly reduced. The allowance has not increased in line with inflation, or in line with anything, since 1996. I have already referred to heating as a huge issue for people living alone because, in terms of spreading the budget, it is effectively twice what it would have been if they were living with somebody else.
The Bill has nothing on back to education initiatives, no improvement in the status of lone parents and no strategy for carers. The Labour Party will oppose the Bill for two reasons — because of what is in it, and what is omitted from it.
I thank Deputies Upton and Wall, and the Labour Party, for sharing time. I welcome the opportunity to address Second Stage of the social welfare Bill. The Bill amounts to a serious attack on the income and welfare of some of the most vulnerable groups in society and, unless it is substantially amended, Sinn Féin will vote against it. It highlights the Government's disconnect from the needs of the people of this island and its bankruptcy of ideas on how to deal with the shortfall in the public finances and the downturn in the economy.
The Minister has made a decision through this Bill that she will target our welfare support for vulnerable groups in society regardless of the consequences. The Bill is mean-spirited. The latest CSO data has shown we have already reached 250,000 in the number signing on the live register. All indications are that the unemployment rate will increase over the next 12 months. As people are losing their jobs, they need adequate protection but, rather than protecting vulnerable families, the Government has decided to exclude them.
The doubling of the required number of PRSI contributions from 52 to 104 for the jobseeker's allowance is very disappointing. This will prevent a large number of people over the next 12 months from availing of welfare at a time when they need it most. This targeting of mainly younger people and workers who recently joined the workforce is unnecessary and will compound the difficulties these people face when they are let go. The Minister has provided no alternative for these younger people so they can move into other areas of work. This is simply a knee-jerk reaction to the shortfall in public finances. There is no plan here to help young people who will have to cope with unemployment. The restriction will simply leave them exposed to utter hardship.
Another extremely disappointing aspect of the Bill is the targeting of child welfare. The Bill gives no increase in the main income supports for families in the child benefit scheme and the early child care supplement. As inflation is currently at 4.3%, this decision devalues child welfare. It is, of course, an effective cut. What is even worse is that there are cutbacks in both the child benefit and early child care supplement which will exclude families dependent on this welfare. The changes in eligibility in the early child care supplement, which affect five and a half to six year olds, will lead to a loss in income for struggling parents of up to €550.
The Bill proposes to shut out parents of 18 year olds from child care benefit. This is a particularly crude measure in light of the financial burden on parents of older children. Raising older children is estimated to cost between 20% and 80% more than raising younger children. At a time when we have rising food and energy costs for families, the Minister proposes to remove up to €1,000 per annum from the income of families with children aged 18 years. Many of these are teenagers in low income families who are still in second level education and, at 18, will rely on child care benefit while they are doing the leaving certificate. Removing the child care benefit will place these teenagers in an impossible position and will force at least some to drop out of school. This is at a time when young people need qualifications such as the leaving certificate more than ever. The compensation up to the end of 2010 will be of little comfort to those who will be excluded from child benefit. It does not go anywhere near meeting the loss of income families in this position will experience.
Another cutback for low income families with children in education is the removal of funding under the school books scheme for the children of low income families attending non-DEIS schools. This has been estimated to cost between €15 and €55 per child. It beggars belief that a former Minister for Education and Science could preside over a cutback which will effectively make access to education far more difficult for low income families. In total, these cutbacks in child welfare will result in losses of between 20% and 50% in the value of child care supports for welfare-dependent children in these age groups. This in itself shows the insincerity of the Minister when she claims to be protecting the most vulnerable in society.
Another scandalous aspect of the Bill is the restriction in eligibility for illness benefit. Again, by simply doubling the amount of qualifying contributions, the Minister is placing the lives of people with disabilities, injuries or illnesses in jeopardy. These people may have no alternative source of income and it will of course expose them to poverty.
Not only has the Bill excluded people from welfare protection, it has done nothing to protect those in receipt of welfare. The increases provided in the Bill of €7 in pensions and €6.50 for people of working age, the disability benefit and the carer's allowance are miserly and will not offset the soaring costs people with low incomes are experiencing at present. In 2008, food and energy costs have more than doubled while overall inflation is running at 4.3%. The increases for basic welfare in the Bill are inadequate and should have been raised to €15 per week.
The minute gains for people through the increases in the fuel allowance were lost through the hike in the minimum contribution to the rent and mortgage supplement from €5 to €18. In addition, more limitations have been placed on the mortgage interest supplement through caps on the amount which will be imposed by the HSE.
There have also been many areas of welfare the Bill has ignored. There is nothing in the Bill for the living alone allowance and there are no changes in the back to work allowance to make it more accessible.
We have always supported the work of the Money Advice and Budgeting Service. However, the proposals to amalgamate the body into the Citizens Information Board is totally unacceptable. MABS is doing good and important work and rather than reduce its standing, it should be strengthened by putting it on a statutory footing.
My party has for a number of years called for an overhaul of the social welfare system. We believe a fairer and simpler system would ensure that people are properly protected from the downturn in the economy and that their applications for welfare could be processed more efficiently. This can be achieved through a longer term benchmarking scheme against which the evolution of social welfare rates can be measured. We have repeatedly asked for the removal of anomalies in social welfare that are preventing people returning to work and even from applying for welfare.
We all accept we are facing difficult economic circumstances and that the current public finances require prudent spending. We do not, however, agree on cutting back on welfare supports upon which the poorest people in society have relied. These are unjustified and will damage the lives of the people who need support. There are areas where the Government could have raised revenue but it chose not to. It decided to retain tax breaks for private hospitals and to continue to protect the wealthiest in society but went for the soft targets — the elderly, children and the unemployed.
The Minister's decision to strip the Combat Poverty Agency of its independent statutory status and to integrate it with the Office for Social Inclusion is nothing short of censorship. The Combat Poverty Agency had for almost two decades highlighted the issue of poverty and the impact of State policies on people living in poverty. The research and findings the agency brought into the public domain demonstrated the failure of successive Governments to address poverty. Due to this independent critical voice and because the Minister wants the reality of poverty to be hidden from the public, she has decided to silence the agency.
Yesterday on Question Time, the Minister was not able to state the costs attached to merging the Combat Poverty Agency and the Office for Social Inclusion. There does not appear to be any proper plan as to how the two bodies can be integrated. This in itself demonstrates it is not a cost-saving measure or proper reform but simply a political decision to gag the only independent body which could provide the public with high quality independent research on poverty in Ireland.
The decision to revoke a body, created in primary legislation through an amendment on Committee Stage of the Social Welfare (Miscellaneous Provisions) Bill is unprecedented and cynical. The Minister made a decision some time ago that the agency would be wound up. She could have easily expressed her decision in the Bill. The manner in which the Combat Poverty Agency is being dealt with is nothing short of a disgrace.
The Bill is dishonest, mean and targets the poor.
I wish to share time with Deputy Chris Andrews.
Is that agreed? Agreed.
Even in good times, social welfare is always important for people, who for one reason or another fall into the safety net, or older people who are no longer earning. It is even more important in difficult times, especially in the current economic context in which unemployment is rising rapidly. Much of this debate has been devoid of the overall budgetary and financial context. It is important to emphasise that approximately €20 billion will be paid on social welfare next year, a 15.5% increase. Taking account of social insurance fund expenditure, it comes to 17.7%. There is no other substantial area of Government expenditure that is showing this type of increase.
I congratulate both the Minister for Social and Family Affairs and the Government for protecting the social welfare system and ensuring it can continue to function in providing a safety net. I do not perceive any cuts that are substantial, let alone savage. There has been a flood of rhetoric from various quarters which does not stand up to any serious examination.
I am proud of what the State has achieved in social welfare over the past 40 years. In the mid-1960s the social welfare system existed but was very Spartan. I do not wish in any sense to claim that social welfare is luxuriant today. It is difficult to live on social welfare alone at any time. However, there have been large improvements since the 1960s. I am proud of what my party has been able to contribute in this area. I also acknowledge the contribution of Opposition parties when in Government. Former Deputies, such as the late Frank Cluskey and Proinsias De Rossa, come to mind. Proinsias De Rossa began the increase in child benefit in the mid-1990s which has been carried on and greatly amplified under Fianna Fáil.
The social welfare increases of between 3% and 3.8% are well above the predicted inflation rate for next year. There are different measures of inflation which range from 2% to 2.5%. All Members know that prices in many areas are falling sharply. Living standards are, by and large, being protected. We must also keep at the back of our minds the fact that there is a serious global financial and economic situation. Next year's State borrowing, equivalent to 6.5% of GDP, is the limit to what is prudent. The European Commission is querying that figure which, in all probability, will be the highest borrowing level of any EU member state.
Inevitably, there has to be some trimming in certain areas of expenditure. I am glad, however, we have been able to give pensioners an extra €7 per week. In an ideal world, there would be no trimming. We have shown in the past several years what we can do when the resources are available. I recall in the mid-1980s a former Minister for Finance warned that social welfare recipients could not necessarily expect an increase every year. The draft 1987 budget, before Fine Gael went out of office, stated increases would only begin in November of that year. Even in much better times, in 1995 the increase for old age pensioners was only 2.5%. In this context, I believe we have done well. As the Minister pointed out, the lowest social welfare payments are now over €200.
The child dependant payment, stopped for over ten years, has been resumed. In 1996 a Government study argued the payment was increasing the poverty trap. Circumstances have changed since and, therefore, the policy. Child benefit and the early child allowance have only been trimmed at the edges. The majority of children are now in school by the age of five and a half years. The burden of child care payments for small children should have eased off at that point. Extending child benefit beyond the age of 18 years might have been desirable. It will be continued in a transitional way for those on the lowest incomes. That is something we perhaps cannot afford in the current circumstances. Undoubtedly there is a tightening in the system and individuals and families will in specific instances be adversely affected. However, the whole point of the budget is to protect our ability to pay for social services in the future, and if we do not address that problem we will be in deep difficulty.
I was impressed by an article I saw last Saturday in The Irish Times by former Taoiseach and Deputy Garret FitzGerald, which ended by asking whether it was possible to have a serious economic and financial debate in this country. The Opposition parties have been adopting an approach of making hay while the sun shines. For them, cuts are savage and the young and old are being hit. Deputy Gilmore never talks about the medical card situation except in terms of taking medical cards from old age pensioners, and he says that without any qualification whatsoever. However, it is up to the Government to take responsibility and, if necessary, to bear unpopularity. If the Opposition parties simply want to adopt a populist approach, so be it. That is their right.
There has been little mention of the disability payment, probably because the problem has been sorted out. The Minister was correct to adjust the payment. There were well-founded reasons for bringing in the change she wanted to make but there were also counter-arguments and, in the end, the counter-arguments prevailed. Last week I launched the new edition of the Tipperary Historical Journal, which is published in the Minister’s home town of Thurles. It contains the wonderful story of a 91-year-old veteran of the Peninsular War who fought under the Duke of Wellington. One of the things the veteran told to the person who wrote down the story was the maxim, “A good retreat is better than a bad stand”. That has particular relevance to this issue.
The MABS system is important and valuable and will retain its identity, although in co-ordination with the Citizens Information Board. I pay tribute to the work of the Combat Poverty Agency over the past 20 years and more. It has made a valuable contribution to public debate. At the same time, however, it is the job of the Government and, more particularly, the Department of Social and Family Affairs to combat poverty. I hope the intellectual resources of the agency will be well used. It is nonsense to say there is now no independent critic in this area. The ESRI does great work in the area of poverty and income distribution and has often been critical of the Government. It will continue outside the public sphere altogether, and agencies such as CORI will not lose their voices. I do not think the fears are justified in this regard.
I noted with interest figures from the OECD which show that Ireland stands in the middle among countries with regard to income distribution. We have not done too badly. The paradox is that the so-called gap between rich and poor, which ignores the fact that many people are middle class, narrows in recessionary times and tends to expand in good times. Therefore, those figures will probably improve in the current circumstances. This does not mean, of course, that real poverty will not increase at the same time.
I thank the Ceann Comhairle for the opportunity to speak on the Social Welfare (Miscellaneous Provisions) Bill. Reading the Bill, one would be forgiven for being unaware of the extreme difficulties faced by the economy. When one takes into account that more than 75% of funds in the recent budget went on health, education and welfare, one can see that the Government is committed to showing fairness and equity to vulnerable sections of communities throughout society.
We find ourselves in changed economic circumstances compared to this time 12 months ago. There is no doubt that tough decisions will have to be made. As the Taoiseach recently announced, it is estimated that in 2009, 10% of the public sector bill will be paid for through borrowing. This will have a significant effect on public finances and we must take this into consideration, as the Minister of State, Deputy Mansergh, has just outlined. I am pleased the Bill ensures that continued payments will be made to those who are most in need and that it targets resources at the most disadvantaged. Targeting disadvantaged sections of society is more important now than it has ever been. Looking at the budget, one can see the Government is committed to doing this.
While there has been some alleviation of pressure due to reductions in interest rates and the decreases in the price of oil, these have not always been passed on to customers straight away. I have advocated and will continue to advocate the passing on of these benefits to customers immediately. The banks, particularly in recent times, have shown a great reluctance to pass on interest rate cuts to the consumer, and this must be highlighted. Given that measures have been put in place to support the banks, they now need to step up to the plate and support the hard-pressed consumer. However, it is important to remember that these reductions in cost, while alleviating inflationary pressures, do not always confer a direct benefit on those most in need. I therefore take this opportunity to welcome the announcement made two weeks ago by the Minister, Deputy Hanafin, that an extra payment would be made to social welfare recipients at Christmas.
This Bill provides for more than €515 million in increased support for pensioners, families and job-seekers. Spending on social welfare will grow by almost €2.6 billion to more than €19.5 billion in 2009. Given the economic climate, this is an ambitious target.
As I will not have time to examine every aspect of the Bill I will focus on three main areas: its effects on older people, families and job-seekers. From the start of January 2009, there will be an increase of €7 per week in the maximum personal rates of payment for contributory and transition State pensions. This will bring the new weekly rate to €230. The State non-contributory pension is also being increased by €7 per week, bringing the new rate to €219 per week from January 2009. This will be of direct benefit to more than 440,000 pensioners.
The fuel allowance is important, as people across the country recognise that fuel for older people is a key issue. I am pleased that the fuel allowance is increasing by €2 per week to €20 per week from January 2009, an increase of 11%. In addition, the number of weeks covered by the allowance is to be extended by two to 32 weeks from April next year. Critics may argue this is not enough, but it is a move in the right direction. Not everything happens as quickly as we would like, but given the economic climate it is a very positive move in the right direction. I hope fuel costs will continue to decrease. The cost of this scheme is €30 million in 2009 and will affect nearly 300,000 households. That has a significant impact on families across the country. When loneliness and social exclusion are constant threats we must ensure the vulnerable and older people are not left behind, and this budget ensures that.
Budget 2009 will provide increases for families with children in receipt of social welfare payments. Social welfare dependent parents receive an extra €24 per week for each child on top of their basic social welfare payments through the qualified child increase. From January 2009 this will be increased by €2 to €26 per child. The family income supplement, FIS, paid to low-income working families will be increased by €10 per week in respect of each child, giving an average extra payment of €6 per child per week. It is estimated that 29,000 families will benefit from FIS in 2009. Approximately 2,000 additional families are likely to become eligible for a FIS payment. It is vital those families most in need are targeted with increased payments. Budget 2009 sees reforms to the child benefit system whereby the payment of child benefit to over 18 year olds will be phased out between now and 2010. This is designed to ensure the most vulnerable and those too young to work will continue to receive payments. The Social Welfare (Miscellaneous Provisions) Bill contains provisions to extend the number of people eligible to claim back to school clothing and footwear allowances, which I welcome.
The jobseeker's allowance will be a particularly contentious issue over the coming years and the number of people signing on to the live register has increased to over 260,000 earlier this month, which is the highest figure in over ten years. Jobs are being created every week in Ireland. Unfortunately we do not always hear about it. Some commentators are reluctant to mention it in case it gets in the way of the doom and gloom story some like to peddle. Government policy is committed to continuing to attract investment and promote indigenous industries. We had a presentation from Guaranteed Irish and it is a very cost effective scheme. It is important that consumers and retailers highlight the need to buy Irish.
I welcome the increase in social welfare expenditure of €2.6 million next year. I also welcome the targeting of resources towards the most vulnerable in society. We need to be prepared and realistic when planning in the future. We must ensure the Exchequer is looked after responsibly and that future welfare support payments are there when we need them. This Bill gets the balance right and I commend it to the House.
Deputy Crawford and I will share our time equally. As with any downturn in any economy, in this economic climate social welfare has become so much more important. So many people who lose their jobs will turn to the State to help them financially and in providing opportunities for them to get back into the workforce, which would be the objective of most of the population. Last week we saw a large increase in unemployment to 260,000 people and it is expected to increase to 300,000 by the end of 2009. That is a lot of people who had not anticipated this and do not want to be in that situation. It is a problem for the Minister in that it will add to her expenditure and the number dependent on the Department of Social and Family Affairs.
I would like to concentrate on that area, particularly those who find themselves unemployed or in a low-skill job and would like to upgrade their qualifications. They will look to the back to education allowance for support on that. Yet people are not entitled to the allowance unless they have been signing on for jobseeker's allowance for a year or six months in some cases. This is a barrier to people who are in low-income jobs and a disincentive to take up a training place. It is an insult to people whose skills are low but who wish to avail of further education to increase their skills and ability to seek alternative employment. They must sign on and avail of social welfare payments for six or 12 months, depending on the course. This does not make sense, particularly in an era of lifelong learning and upskilling when we have so many second and third level courses available to people who would not have benefited from such high quality education. So many courses are available, yet we create such a barrier to them. I would have hoped this was an opportunity for the Minister to change this scheme and help people who want to get back to work.
Last week we had a discussion in this Chamber on the type of workers who are losing their jobs. Many were in the construction sector and these young people find themselves without employment — many of them without the ability to finish a training course they started. We should and must help these people. In September a woman visited my clinic in Cork. She was a mother of four young children, the youngest of whom had just started primary school. She wanted to avail of a training course where she could develop her confidence, upskill herself and get back into the job market and seek work. However she was prevented from doing this because she had not been signing on in the previous year. The options were very limited. She had not signed on before the children went to school as she was not seeking work because she wanted to be with them. Somebody like her should be supported. She needs the skills and confidence that would have been available to her in an education course, so she will sign on for 12 months and wait until next September. This does not make sense. Some 300,000 people are expected to be on the live register next year. It would have made much more sense to support these people rather than force them to sign on for jobseeker's allowance. That was one of the Fine Gael's pre-budget proposals and I am very disappointed the Minister has not addressed it.
Deputy Chris Andrews mentioned energy poverty. The fuel allowance has increased to €20 per week and the number of weeks in which it is paid has increased to 32 weeks. That is welcome, but we are in an era where energy costs are soaring and it will make very little difference to people who depend on the fuel allowance for the winter months. Most of them are elderly. The ones that come to my mind live in poor quality accommodation that is not insulated. They are dependent on this fuel allowance to keep them warm in the winter months. The Commission for Energy Regulation approved a 17.5% increase in electricity costs from September 2008. Gas is due to increase by 20%. The regulator announced this week that there will be further increases in January. The increase in energy prices was not matched by the increase in the fuel allowance. Fuel poverty is a real issue in this country. In 2004-05, people earning low incomes spent an average of 13% of their disposable incomes on energy. The highest earners spent just 1.7% of their wages on energy. The Society of St. Vincent de Paul had to spend €3.4 million last year on supporting people who were struggling to heat their homes. As energy costs such as gas and electricity prices increase, many people will have to turn to the society again this year to help them out in difficult times, unfortunately.
I know the Minister discussed the issue of rent supplement during Question Time yesterday. Many of us who represent people living in cities are regularly contacted by constituents who have difficulty meeting the rent requirements of their landlords. The cap on rent supplement payments has proven to be unrealistic in many areas, particularly large urban districts. As some one who tracks rents on various websites, I do not envisage that rents will decrease in the near future. I pay particular attention to two-bed and three-bed units, as many of those who avail of the rent supplement scheme tend to live in such units. Rents are not decreasing. As the downturn in the housing sector continues, more and more people are choosing to stay in rented accommodation rather than to buy houses. That, in turn, is ensuring that rents are remaining artificially high. People regularly appeal the decision to award them a particular level of rent supplement. Community welfare officers and other people working on the ground face great difficulties because they are restricted in what they can do. I ask the Minister to work with local authorities to ensure responsibility for the rented accommodation scheme is transferred as quickly as possible. It is a slow process. It will be very effective because it will guarantee standards in accommodation and ensure tenants enjoy lower rent levels.
Earlier this week, a report indicated that the quality of rental accommodation is quite low. Some 20% of those who were surveyed did not believe that their accommodation met the required standards in terms of heating, lighting and ventilation. The results of the survey were published earlier this week. The level of inspection of rented premises is low. We need to get to grips with this. Local authorities need to be more reactive in terms of their responsibilities in this area. I have always supported the rental accommodation scheme. I would like it to be expanded and developed as soon as possible. The rate of progress in my local area is slow. I can see it happening, but it is not matching the requirements of those who depend on rented accommodation. As I have run out of time, I will speak about carers at a later stage.
I welcome some aspects of this legislation. For some reason, the economy, which was in the black to the tune of €6 billion just over two years ago, is now in the red to the tune of €15 billion. That cannot be entirely attributed to outside economic issues. Some people have to answer for what has happened. I welcome the fact the social welfare budget has increased by between 15% and 17%, depending on how one interprets the figures. That increase was necessary, unfortunately, as a result of this country's economic problems.
I listened with interest to the complaint made by the Minister of State at the Department of Finance, Deputy Mansergh, to the effect that people have been taking a populist stand. The Government has done some populist things over recent years. It has taken out big advertisements, at massive expense to the taxpayer, to publicise matters like the introduction of medical cards. The Minister of State said we should be realistic when we talk about medical cards. We were told five years ago that 200,000 extra medical cards would be introduced to the system within the lifetime of the last Government. Just 30,000 such cards were provided, however. That is the reality. It contrasts with the Government's populist hype. I am glad the Government rowed back, to some extent, on the decision it initially took to abolish the automatic entitlement of people over the age of 70 to the medical card. It got its answer on the streets from people who are not to be ignored. I am pleased the Government also did a U-turn on the issue of disability payments. That is important and valuable.
As someone who deals with cross-Border issues, I would like to mention a letter about such an issue I received from the Department of Social and Family Affairs some time ago. I had been trying to get child benefit and children's allowance payments to be made to the family of a man who lives in the South but works in the North. I was told in the letter that the man in question was better off availing of the Northern Ireland child allowance and the tax benefits available to him in that jurisdiction, rather than the allowances available here. We often hear propaganda to the effect that payments are much higher in this State than elsewhere. When one assesses the various packages, one finds the reality is different.
Like the last two speakers, I would like to mention the increase of €2 in the fuel allowance payment and the extension by two weeks in the period in which the payment is made. While those measures are welcome, the reality on the ground is totally different. The fuel allowance scheme does not take account of the fact that the cost of oil, electricity and gas has increased dramatically over recent times.
I mentioned the living alone allowance during previous debates. The allowance is possibly more significant in rural areas than it is anywhere else. Deputy Clune compared the housing problems of cities with those of rural areas. The living alone allowance is extremely important for those in rural areas. If two people are living together on an old farm or in a village, but one of them dies or goes into a nursing home, the person who is living alone still has to keep the car on the road and heat the house. A miserly living alone allowance of €7 is being paid to a person in such circumstances. I appreciate a change cannot be made in this year's budget. If the Minister is still in the Department of Social and Family Affairs this time next year, I urge her to consider increasing the living alone allowance. I ask her to reflect on the economic realities of rural areas. Drivers in such areas have to contend with increased petrol and car tax costs. I appreciate that car insurance costs are not as bad as they used to be. This issue needs to be dealt with.
My colleague also referred to the social housing issue, which will become more serious in the coming year. Local authorities have depended on builders to provide their percentage of social housing but no construction is taking place now. The Government will have to re-examine this issue. Building has been under way on a number of sites in my home town of Monaghan for a few years but social housing has not been provided as a priority. When it will be provided is a different story. As the years go by, significantly less development will be undertaken and, therefore, less housing will be provided. The Government has the choice of buying up available housing to provide social housing for those who need it or to adjust the rental allowance scheme to make sure claimants can live in proper houses. I met a couple recently who pay €160 per week to rent a house. The woman has just had a baby and the man is on short-term work, yet the owner of the house would not agree to them availing of the rent supplement scheme. This is a serious issue and it is one of many that are coming more to the fore than previously.
I refer to another young couple to highlight another issue. The young man is a non-national and he married an Irish girl three years ago. He was only able to start work eight or nine months ago because he had to await documentation. His job is slowly ebbing away and it is not for the want of trying. He is working as hard as he can and his company has retained him because of his effort. If he is made redundant at Christmas or in the new year, he will be caught in a bind because of the increase in stamp contributions from 52 to 104 to claim unemployment benefit. Will the Minister re-examine this proposal to consider how it will affect individuals who are genuinely trying? It is not easy for her and others from an economic point of view but we do not want people living in desperation. This young couple has a mortgage to pay and other commitments to meet and they are under severe pressure
Further education initiatives and support from employment and training agencies are needed to get people back to work. Contrary to what was said about job creation, the number of people signing on in Carrickmacross has increased from 500 this time last year to 1,000, yet I cannot say factories have closed down because cutbacks have been made all round. A factory in Monaghan town employed between 230 and 250 people only a few years ago. While it has not closed, only 15 people work there now. The situation is dire.
Farm assist is an important issue and I urge the Minister to promote that scheme in order that farmers have an opportunity to get that benefit. Many of them in recent years have worked off the farm in the building industry and so on to supplement their incomes and they do not have that opportunity any longer. They must be facilitated.
I am grateful for the opportunity to contribute to the debate. Fine Gael appreciates the economic problems of the country. In spite of what the Taoiseach and others have said, we put forward meaningful and realistic proposals to save money and to make sure money was available to address the issues I have raised. Cuts in the social welfare budget are unfair and, unfortunately, we have no choice other than to oppose the legislation.
It is an honour to represent the people of Longford-Westmeath.
What about the people of Roscommon? The Deputy represented them for a while as well.
I did, along with the good Deputy. I have fond memories of my time representing the people of Roscommon because I gave good representation. My grandfather came from Creggs, County Roscommon, and he moved to Longford in 1887. Deputy Naughten is a decent man and we represented the people of Roscommon well. I was sorry to have to leave them but, at the same time, I am delighted to represent Westmeath.
I am delighted to support my friend and colleague, Deputy Hanafin, a compassionate and caring Minister. The commitment she and her family have given to Ireland is well documented and I do not need to tell everybody about their social conscience. I am pleased to support the legislation, which will implement a €550 million package of social welfare improvements announced in the budget. In difficult economic circumstances, the package will bring total expenditure on social welfare in 2009 to €19.6 billion, an increase of €2.6 billion or 15.5% on the 2008 Estimates. At a time when public expenditure must be tightly controlled, the increased provision for social welfare is a clear signal of the Government's commitment to protect the vulnerable and less well off in society.
People still cannot fathom the gravity of the worldwide financial crisis and while I do not want to bring it up all the time, sadly, facts must be faced. This is a major disaster throughout the world. The Bill prioritises the protection of pensioners. Increases in welfare payments, an increase in the length of the fuel allowance scheme and the rate payable and an additional allocation of €55 million to implement the fair deal nursing home scheme are among the measures included. Significant moves have been made over the past ten years to prioritise the elderly in our communities and I am happy the Minister is continuing this good work. The fuel allowance scheme will be extended by two weeks and the rate payable by €2 a week to €20, which will ease the burden of increasing fuel costs for many people.
The Government will also enhance pensions by increasing the full personal rate of the State contributory and non-contributory pensions by €7 per week. The State contributory pension will then be €230.30 per week and the non-contributory pension will be €219 per week. The qualified adult allowance will also increase by €6.30 for those aged over 66 and by €4.60 for those aged under 66. The Government is determined to target its resources at those in greatest need and universal entitlement, irrespective of means, does not target them. However, other supports will be available for people who find themselves in difficulty. These measures underline the Government's commitment to honour the debt we owe to a generation whose hard work laid the foundation for the economic success we enjoyed over the past few years. Despite the difficult economic times we are experiencing, it is now more important than ever to look after the most vulnerable in our society.
Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.