Social Welfare Bill 2010: Second Stage

I move: "That the Bill be now read a Second Time."

Last month, the Government outlined, in the national recovery plan, the blueprint for a return to sustainable growth in our economy. In particular, it sets out the measures that will be taken to restore order to the Government finances, and specifies the reforms the Government will implement to increase employment and accelerate economic growth. The plan is necessary to bridge the gap between Government expenditure and revenue which is currently filled by borrowing. Unless the rate of borrowing is reduced, the burden of debt servicing will take up an increasing proportion of tax revenue. This would mean that expenditure on vital schemes and services, such as those provided by my Department, would become increasingly unsustainable.

My Department currently accounts for approximately 38% of the total gross Government expenditure and therefore it is not possible to stabilise and reduce public spending without impacting on the Department's budget. Accordingly, the plan provides for significant reductions in expenditure by my Department over the next four years.

These will be achieved through the following: reduction in the live register through economic growth; more intensive labour force activation measures designed to help people get back into employment and therefore reduce live register costs; enhanced control measures in order to better direct expenditure only to those who need it; major structural reform of the welfare system in order to rationalise and simplify supports available to people of working age and to ensure there is always an incentive to take up a job; and through such reductions in rates of payment as may be necessary to ensure that the overall savings targets are met.

From my Department's point of view, our focus will be on enhancing the Department's current fraud and control measures to try to make the bulk of our savings there, on our labour activation measures, which would lead to a reduction in the live register, and on structural reform. If we can make substantial progress in these key areas, reductions in individual rates of payment can be limited over the period of the plan.

Budget 2011 is the first step in achieving the goals of the recovery plan. This will involve an €873 million reduction in expenditure by my Department. Even after this reduction, expenditure by my Department will still amount to €20.62 billion in 2011. As Minister for Social Protection, I am fully aware that the expenditure changes in this budget will affect the living standards of many citizens in the short term. However, if we put off these changes, there will be a much greater burden in the future on those who can least bear it, including people with disabilities, families with children, the unemployed, carers and pensioners. I assure the House that the Government, in the context of a very tough budgetary environment, has done its utmost to protect the most vulnerable people in Irish society. These savings for 2011 will be achieved through the following: greatly enhanced control measures; proactive labour activation initiatives, including the introduction of a brand new community work placement programme called Tús operated by my Department; structural reform measures designed to deliver more effective income and housing supports in a sustainable way; and reductions in rates of payment.

Before I detail the areas where changes are being made, I would like to outline the supports which are being fully maintained at their current levels, so as to provide reassurance to people who had been concerned that they might be cut. Similar to last year, we have been able to maintain pensions and other payments to people aged over 66 at current levels. This includes payments for pensioners' dependent spouses who are aged under 66. This means that approximately 490,000 people aged over 66 are being fully protected in this budget. Extra allowances which are paid to pensioners who live alone and those who are aged over 80 will continue at their current rates.

I have preserved welfare supports for pensioners generally as I believe that all pensioners are entitled to a minimum level of guaranteed support by the State. For many pensioners, social welfare pensions, be they contributory or non-contributory, are their only source of income and most do not have the ability to earn. However, pensioners who can afford to pay towards the economic recovery will contribute through the changes in the taxation system which were announced by my colleague, the Minister for Finance, yesterday.

A number of valuable other payments have also been fully maintained. These benefit not alone pensioners, but also people with disabilities, carers and all on low income regardless of age. These include the household benefits package, which includes the free television licence, electricity-gas allowance and telephone allowance, as well as the free fuel and free travel schemes. The half-rate carer's allowance scheme and the extra payment for caring for more than one person are retained as well as the respite care grant at its current value of €1,700 per annum. The half-rate illness benefit and jobseeker's benefit payments for widows or lone parents will also remain. The current payment arrangements for lone parents and people with a disability who participate in community employment schemes are also being retained without change. The family income supplement scheme, which benefits lower income families with children, is also unchanged.

Bearing in mind the recent bad weather, I am also providing for a special once-off additional two weeks payment worth €40 of fuel allowance. This will be paid to most recipients in the next two weeks, with the remainder of recipients getting this payment in early January. This payment will cost approximately €14 million.

Is it worth the Minister's while splitting it?

The Minister should proceed without interruption.

Unfortunately, it will be necessary in this budget to introduce a rate reduction in working age payments from January 2011 in order to produce the necessary savings required in 2011. While there have been some increases in inflation in recent months, consumer prices are back at April 2007 levels and we have managed to maintain the payment rates for all aged 25 to 66 in 2011 at rates higher than those paid in 2007. No reduction is being made to the qualified child rate, which will remain at current levels. In addition, the reduced rate of €100 per week for jobseeker's allowance recipients aged under 21 is also unchanged.

Accordingly, the rates of payment to those aged under 66 are being reduced by €8 per week or an average of 4.1 %. Increases for qualified adults on working age schemes are being reduced proportionately. This will bring the personal rates of jobseekers' payments, one-parent family payment, illness benefit and associated schemes in 2011 to €188 per week or €2.20 per week in excess of the rate which applied in 2007.

The Bill provides for the new lower rates of payment for people of working age. The Bill also provides for a reduction of €10 or 5.1% in the weekly rate of supplementary welfare allowance. The qualified adult allowance for a spouse or partner will reduce by 4.1%, or €5.30 in most cases. The rates of maternity benefit will also decrease by €8 per week.

Even taking into account the reductions that were applied in 2010 and 2011, the Government has delivered unprecedented increases in welfare rates since 2004. Over that period, jobseekers' payments, disability allowance and one-parent family payment have increased by 39.5% while the cost of living has increased by 11.8%. The Government appreciates that reductions in rates will be difficult for people but we also know that if action is not taken now, we risk putting social welfare payments at greater risk in future.

As I said, the weekly rate of supplementary welfare allowance will be reduced by €10 per week or 5.1%. Supplementary welfare allowance is normally paid to persons who are awaiting entitlement to another welfare payment. The rate of payment for the rural social scheme and community employment scheme will be revised in line with the changes in social welfare rates and will become €208 for a single person.

Issues have been raised in regard to blind pension, invalidity pension, disability allowance, widow's-widower's pension and carer's benefit. I have looked at the issue of disability in detail since I came into the Department of Social Protection. I accept there is a need for long-term reform in regard to payments for people with disabilities that is much more tailored to individual situations and levels of disability. I will continue work on this agenda for as long as I am in the Department. To exempt all of these from the rate reduction would have meant exempting approximately a further 260,000 people. The effect of this, in order to achieve the same savings, would have required a cut of €11 per week in jobseeker's personal payments and €18.30 per week for a couple. It must be remembered that people on disability allowance are also entitled to the full households benefits package, free travel pass and a companion pass, where appropriate. These are worth approximately €20 per week.

Disability allowance, blind pension and invalidity pension are paid to over 150,000 people at present. I have huge empathy for people with disabilities who have no capacity to work.

The Minister has a funny way of showing it.

It is urgent that we would develop a system to allow us to differentiate between various levels of disability in a way similar to the partial capacity scheme coming before the Dáil in the Social Welfare (Miscellaneous Provisions) (No. 2) Bill. This would allow for differentiated payments based on the level of disability and for a more nuanced approach based on people's individual need. However, within the current schemes and within the timeframe I have been in the Department, it has not been possible for me to bring such a proposal to fruition. I will continue to work on this and believe it is important that whoever is in the Department would bring this idea to fruition and make it a priority.

I will now turn to supports for children. Between 2000 and 2010, the monthly rates of payment for child benefit increased from just €53.96 for the first child and €71.11 for the third and subsequent children to €150 and €187, respectively. In the same period, overall expenditure on child benefit grew from just €638 million to approximately €2.2 billion per year. As a result, approximately 10.6% of gross social welfare spending in 2010 was on child benefit.

This Government is proud to have been able to deliver such significant increases in payments to families when the resources were available. However, in the current economic environment, we cannot afford to keep spending at the same level as we did when our tax revenue was much higher. In that context, we have decided to reduce overall expenditure on child benefit.

In considering the various options for making savings in this area, we were conscious that the payment can be an important source of income for all families, for different reasons. Accordingly, the Government has decided against withdrawing child benefit completely from any family.

From January, the lower rate of child benefit which is paid in respect of the first and second child is being reduced by €10 to €140 per child per month. The payment for the third child is being reduced by €20 to €167 per month. This is still €27 greater than the payment for the first and second child. The payment for the fourth and subsequent children is being reduced by €10 to €177 per month, €37 more than the basic payment for the first and second child.

I appreciate that cuts in child benefit will be difficult for some families. However, it should be recognised that the payment will still be very generous compared with that in other countries and that the Government is making a substantial contribution towards child care provision, including the continuation of a free pre-school year.

As I have stated, the qualified child increase payable with welfare payments is fully maintained. The domiciliary care allowance, paid to parents and guardians of certain children who are ill or who have a disability under 16 years of age, is also unaffected, and the family income supplement and back-to-school clothing and footwear schemes are unchanged. The arrangement for multiple births, of twins and triplets, is also unchanged. The changes in these payments to those on social welfare bring levels back to those that obtained in 2008. For those not in receipt of a child dependant allowance or the family income supplement, the level has returned to that of 2005.

My Department will be initiating a number of reforms to the rent supplement schemes in order to generate savings of €60 million in the next year. These reforms include entering discussions with the Department of the Environment, Heritage and Local Government with a view to aligning more closely the minimum contribution payable by household couples with that paid by equivalent households under the local authority differential rent scheme; reviewing entitlement of people who refuse local authority housing; the reduction of payments made to landlords with a corresponding reduction in rent limits, where appropriate; and increased control activities through efficiencies arising from the transfer of the community welfare service staff to the Department of Social Protection.

The introduction of a €2 differential between the rate of basic supplementary welfare allowance and other schemes from January 2011 will generate over €10 million in savings in the rent and mortgage interest schemes. These will arise as entitlement to rent and mortgage interest supplement is based on the weekly rates of supplementary welfare allowance. Pensioners, carers and people on supplementary welfare allowance will not be affected by this change. Following these reforms, it is estimated that the rent supplement scheme will still cost €465 million in 2011.

The value of the household benefits package is being fully maintained in 2011. However, I am considering a number of reforms, some of which may require legislative change, to make schemes work on a more efficient and less costly basis.

As announced in the national recovery plan, expenditure on the free television licence and free travel schemes, respectively, will be capped at the levels provided for in the 2010 Revised Estimates volume. This will not affect individual entitlement but does generate savings in the long term.

The availability of job opportunities with real financial incentives to take these up is of crucial importance over the next few years. Beyond the immediate financial benefit to the worker, work benefits the psychological and general health of individuals in addition to the wider community and the economy generally.

Activation and support for the unemployed comprise a key priority for the Government. Earlier this year, the Taoiseach announced a number of changes to improve the delivery of employment, training and community services to the public by bringing together related responsibilities in these areas. These changes included the restructuring of departmental responsibilities with the aim of providing a streamlined integrated response to the income support and job search needs of people who are unemployed.

In this regard, the employment and community services operated by FÁS are being transferred to my Department in January and the budget day Estimates provided for this. As part of this integration, the national employment action plan is already being revised in order to provide more efficient interventions with jobseekers on a more frequent basis, and this process commenced last October. A key element of the new initiatives will be more intensive and more regular engagement by my Department's services with unemployed people in helping them get back to work and ensuring that all jobseekers are genuinely available for and seeking work.

I am also announcing the creation of a new community work placement programme called Tús and it is intended that it will become operational in the near future. It will provide up to 5,000 places and will provide quality, targeted, short-term working opportunities for people who are unemployed while at the same time carrying out beneficial work within communities.

The 52 local development companies will have responsibility for delivering the work opportunities. The programme will be delivered in the Gaeltacht areas through Údarás na Gaeltachta. Community and voluntary organisations will be asked to provide quality working opportunities for potential participants and a number of national, sporting, cultural and social organisations in addition to care and disability services will also be given the opportunity to participate. Participants will work for 19.5 hours per week for a duration of 12 months and there may be some degree of flexibility in terms of the schedule of hours. The rate of payment will be equivalent to the maximum rate of the person's underlying social welfare payment plus an additional top-up of €20 per week. The employment will be insured for all benefits under the social insurance system.

Participants will be selected through the processes used for the national employment action plan. My Department will contact people on the live register who satisfy the scheme criteria and offer them the opportunity to participate. Those interested in participating will be referred to the local development company, which will maintain a panel from which recruitment will be effected. As is required by law, persons in receipt of jobseeker's allowance must be genuinely and actively seeking employment. Where a person refuses a work opportunity including a work opportunity on the new scheme, that person's continuing entitlement to a payment will be examined.

This is an important new initiative to provide quality short-term working opportunities for the unemployed. It is essential that it be properly targeted at those who will benefit most; can be easily accessed and administered; does not impose excessive burdens on community organisations; and provides quality suitable work opportunities and beneficial outcomes to the community. It is anticipated that this scheme will cost up to €30 million in 2011, and provision is made for this in the budget day Estimates. Overall, it is anticipated that activation measures generally, including the refocused and reinvigorated national employment action plan, will save up to €100 million next year. In addition, the skills development and internship programme and the work placement programme operated by the Department of Education and Skills will provide up to 10,000 places in the private and public sectors.

Welfare fraud is theft. It is a serious crime and the Department of Social Protection is doing everything that it can to crack down on people who abuse the system. There are over 600 staff working in areas related to the control of fraud and the abuse of the welfare system. Between January and the end of October this year, over 585,000 individual claims were reviewed.

The level of fraud on most schemes is very low. As reported by the Comptroller and Auditor General, the percentage of expenditure resulting from fraud identified in the Department's fraud and error surveys was 0% for pensioners, 0.1% for illness benefit recipients, 0.8% for family income supplement recipients, 1.8% for child benefit recipients and 2.3% for disability allowance recipients.

When high risk areas are identified, targeted control measures are put in place to reduce the risk of fraud and abuse of the system. For example, certification was introduced regarding child benefit claims from non-Irish nationals and to other customer segments in schemes where any form of high risk has been identified.

Next year, my Department will begin the phased introduction of the public services card, with key security features, including a photograph and signature, which will be used to authenticate identity of individuals. One of the anticipated advantages of the public services card is that it will help to reduce fraud and error which result from the incorrect identification of benefit claimants. These cards will issue to approximately 3 million people over the next number of years and they will replace cards currently in use, such as the social services card and the free travel card.

Fraud detection systems have also been improved through data matches with organisations such as the Revenue Commissioners on commencement of employment data, the General Registrar's Office on marriages and deaths information, and many other organisations including the Departments of Justice and Law Reform, Environment, Heritage and Local Government, Education and Skills, and other State bodies. I assure the Deputies that my Department will continue to use every available means to crack down on welfare fraud, and savings will be generated by streamlining our approach in line with international best practice.

I would like now to look ahead to the welfare system of the future. Structural reform of the welfare system is crucial in the short to medium term to deliver better targeted supports while always encouraging participation in work. If we do not reform our systems, we will have no alternative but to make further cuts to achieve savings. I favour making savings from structural reform when and where possible.

In recent weeks my Department has published three reports which will assist with key areas of reform. These reports cover important areas of social welfare, namely, child income supports as well as payments to people of working age and to people who are ill or have a disability. These reports will make a valuable contribution to the transformation agenda and share common themes, with the main objective being the improvement of outcomes for people and their families who are dependent on my Department's support.

Structural reform changes should include the development of a rebalanced and integrated income payment system; and the development of a single social assistance payment to replace the different means tested working age payments, including some secondary and supplementary payments, as part of a more purposeful labour activation strategy. This new single working age means tested system would help to minimise the existing benefit traps and incentivise recipients to move back to work or move from part-time employment to full-time employment. Implementation will have to be done on a step by step basis to make the system more friendly to atypical working; and the disability allowance review proposes that customers should have their employment capacity assessed at the point when they first apply for the allowance in order to facilitate a greatly improved matching of services and needs.

The Minister for Finance announced yesterday that new bonds which will facilitate a sovereign annuity will be available for pension schemes from January 2011. I will now set out details of this initiative. The National Treasury Management Agency, NTMA, will issue bonds which will assist in the creation of sovereign annuities. The bonds will be available for purchase by any investor, including pension funds. The interest rate applying to the bonds will be announced in January in the light of prevailing market conditions. Any sovereign annuities issued by the insurance industry on the basis of these bonds will be certified by the Pensions Board.

I want to emphasise that this is a voluntary initiative and based on proposals from the pensions industry itself. It gives scheme trustees new options to deliver higher yields and improve the funding position of their schemes. They can buy the bonds for their scheme, in other words, invest in bonds rather than equities. They can also buy sovereign annuities from insurance companies either in the name of the scheme trustee or in the pensioner's name, or they can do any combination of these. It is up to scheme trustees to decide whether to avail of these options. I will be making changes to the funding standard to allow pension schemes that purchase these bonds or sovereign annuities re-price their liabilities to the extent of their purchase and thereby benefit from the higher yield. I am also examining further changes to facilitate greater smoothing for financial reporting purposes.

By purchasing the bonds or scheme annuities, the pension scheme continues to be responsible for investments made. In the event of a scheme wind-up, the current priority given to pensioners continues to apply. However, where sovereign annuities are purchased in the pensioner's name, this marks the end of the scheme trustees' responsibility. Every pension scheme is different in terms of its membership profile and current funding status. Therefore, we have ensured that scheme trustees are given a number of options to decide what is best for their particular scheme.

People may say that investing in Irish bonds is risky but there is absolutely no risk of Ireland defaulting on its sovereign debt. The Government has stated that on many occasions, and I want to be absolutely clear about it. It will not happen.

To be helpful to the Minister, there are just over two minutes remaining.

We have got a problem.

Is there any bit of good news in it at all?

Yes. This is very good news.

If there was we would give the Minister time but if there is not——

This is a win-win situation——

We heard that before.

——because it gives the pension funds a chance to buy sovereign annuities at a better yield than is currently available on the market. Most of them are bought at German rates. On the other hand, the funding is retained within the Irish economy and therefore there is a double win in that regard, as the Deputies will find out in time.

It might finish up a no-win situation.

It is a good idea.

That would only happen if the Deputies opposite were in government because they are the only ones proposing to renegue on the sovereign debt.

The Minister told us that about Anglo Irish Bank. We were told——

Schedule 1 to the Bill provides for the reduction in the weekly rates of social insurance benefit payable to people of working age.

Section 4 together with Schedules 2 and 3 to the Bill, provides for the reduction in the weekly rates of social assistance payable to people of working age.

Section 5 provides for reductions of €10 each in the monthly rates of child benefit for the first and second child and for the fourth and subsequent children, as well as for the introduction of a new rate of child benefit for the third child, with effect from 1 January 2011.

Section 6 clarifies the legislative provisions regarding the payment of various increases with disablement pension so as to ensure that the increases of disablement pension for qualified adults, children, etc., can only be paid where the disablement pensioner is entitled to an incapacity supplement.

Section 7 provides for changes in the reduced rate of jobseeker's benefit for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the national employment action plan.

Section 8 provides for changes in the reduced rate of jobseeker's allowance for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the national employment action plan.

Section 9 provides for changes in the reduced rate of supplementary welfare allowance for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the national employment action plan.

Section 10 provides for repeals consequential on sections 7, 8 and 9.

Section 11 provides for the abolition of the income ceiling of €75,036 applying to the PRSI contributions payable in the case of employees, voluntary contributors and optional contributors who are engaged in share fishing, with effect from 1 January 2011. The section also provides for a number of consequential amendments to the Social Welfare Consolidation Act 2005.

Currently, PRSI is levied on gross income, less any superannuation contributions payable.

Section 12 provides for the abolition of PRSI relief on employee superannuation contributions payable with effect from 1 January 2011.

Currently, both employer and employee PRSI is levied on gross income less any superannuation contributions payable. While section 12 provides for the abolition of PRSI relief on employee superannuation contributions payable.

Section 13 provides for a reduction of 50% in the PRSI relief available for employer PRSI contributions arising from the employee superannuation contributions payable.

Section 14 increases the rate of PRSI contribution payable by self-employed contributors by 1% to 4%, and brings all the rates to 4%.

Section 15 provides for the abolition of the health contribution payable under the Health Contributions Act 1979, with effect from 1 January 2011. This section also provides that any liability for health contributions assessed after 1 January 2011 in respect of tax years before 2011 are payable and that matters relating to the estimation, collection, recovery or refund of those contributions or of interest thereon or other proceedings relating to those contributions or that interest can be enforced.

I have already outlined a number of changes to the PRSI system which are included in this Bill. In addition to these changes, I will be introducing amendments on Committee Stage to provide for the application of PRSI to share options and gains and for a 4% charge to the Social Insurance Fund, with no benefits accruing, which will apply to holders of public offices.

The Department of Social Protection currently accounts for approximately 38% of the gross Government current expenditure, and will account for 39% in 2011. Therefore, it is not possible to stabilise and reduce public spending without any impact on my Department's budget. As I stated previously, if we fail to take action now the consequences for those depending on my Department would be much more serious because in a situation in which we require to borrow money to pay social welfare, it is important that we retain that ability to borrow it. I therefore commend this Bill to the House.

I thank the Minister and thank colleagues for their co-operation. The next speaker is Deputy Ring. There is 30 minutes in the slot. I understand Deputy Ring will share time with Deputies Burke and Neville and that Deputy Ring is taking 20 minutes.

It does not give me any great pleasure to criticise this, the most savage budget since the foundation of the State. This budget is anti-elderly, anti-family and anti-children and it will have an effect on the most vulnerable in society.

I never thought the day would come when I would see the Fianna Fáil Party attacking carers, persons with disability, persons on blind benefit, pensioners and even the minimum wage. I say tonight to Fianna Fáil, to the Greens and to the Independents that tomorrow, I will give them a number of opportunities. I will be tabling amendments on carers, those with disabilities and the blind, and on child benefit, and I hope these Members will vote tomorrow with their conscience, not with their party, because what the Minister has allowed happen is wrong. This attack the Government has made on the most vulnerable is wrong.

The old age pensioners thought that they got away without any cuts in this budget. On the universal social contribution, I want the Minister to confirm to me when he is concluding this debate whether persons who are over the rate will pay that contribution. I also want him to clarify for me whether persons who currently have medical cards, who in the past did not have to pay the universal social contribution, have to pay it now with the new scheme that the Minister is introducing. I want both of these matters clarified.

In the past elderly persons, if they were leaving the country on a holiday, used get their passport free but now the Government has attacked even that. The Government is taking the passport off them because it is charging them for it. However, the most important matters are the questions I have raised on the universal social contribution, and I want those questions answered quickly.

It is outrageous that the Government has targeted the carers in this budget. The carers are those who work for their social welfare payment and I am disappointed that the Minister and the Government could not have excluded the carers, the blind, those with a disability as these people need help more than anybody. This budget is outrageous and I am disappointed with Fianna Fáil policies which has allowed this to happen, put 450,000 out of work and attacked low-income families. Fine Gael will oppose the budget unless the Government accepts Fine Gael's amendments to reverse cuts to carers, the disabled, the blind and the widows.

Carers are the only welfare recipients who work for their payment. Ireland's 160,917 family carers provide 3.7 million hours of care each week which saves the State some €2.5 billion each year, according to the National Carers' Association. Fine Gael believes we should support carers. It makes sense that carers are supported in the work they do because they save the taxpayer money in the long run. If carers are not supported they will experience physical, financial and emotional hardship and eventual burnout. The result of this is that the cared-for person will end up in expensive hospital or nursing homes and the State will have to pick up that tab.

Fianna Fáil has abandoned carers at every turn. First, it failed to look after them during the boom, it abandoned the national carers strategy in 2009 and reduced the payment to carers in 2010. Now in budget 2011, it has hit them again by reducing the payments further by €8 per week and it has also changed the home carer tax credit. This is a disgrace, it is wrong and it should be overturned.

One thing is for sure, there is no Croke Park agreement for persons with disabilities. Budget 2011 will see the disability allowance fall by €8 per week. This is on top of a €8.30 cut last year, amounting to €16.30 a week in just two years. In 2011, a person in receipt of disability allowance will get €870 less than he or she did in 2009. This is surely an attack on the vulnerable.

It has been proven time and again that there are substantial extra costs associated with having a disability including transport, heat, household improvements and supports. Rather than supporting the most vulnerable, Fianna Fáil is targeting them for savings. In Fine Gael's proposals published last Friday, we made a commitment to protect the rate paid to persons with disabilities.

At the same time on Friday last, the Minister of State with responsibility for disability, Deputy Moloney, published draft policy proposals recommending a shift from the existing disability service models towards a system of individual support. This would result in greater choice and control for persons with disabilities, would help them with the cost of living and would result in savings for the State. Fine Gael's former spokesperson on disabilities, Deputy Stanton, has been calling on the Government to implement this change for years, but nothing has happened. This is a prime example of where the Government could reform the public service to improve services while saving money. It could have done this rather than cutting desperately needed payments to persons with disabilities.

With wages falling, Fine Gael recognised the need to cut social welfare for those with the capacity to work, but there was no economic or social case to cut €8 per week from the incomes of widows, carers, the blind and those with a disability. The exclusion of these groups from the cuts would have cost the State €96 million. The Government could have saved this by adopting Fine Gael's proposal to completely overhaul the welfare system by establishing a single payments and entitlements service instead of the 20 plus Government bodies that currently administer entitlements, making massive savings in administration, fraud and mistakes. This is another example of Fianna Fáil's failure to introduce the necessary public service reforms to improve services and save money at the same time.

Budget 2011 demonstrates the disjointed and chaotic approach the Government has taken towards major policy areas. In 2010, the Government applied a flat-rate cut to child benefit and increased the qualified child allowance and the child component of the family income supplement to counteract the impact on low-income families and those on welfare. Budget 2011 applies a similar reduction. Child benefit will be reduced by €10 per month from January 2011 for the first and second child, and a €20 cut will apply to the third child, with a €10 cut to fourth and other children. This year, however, there has been no increase in family income supplement or qualified child allowance, which means that low-income families are being hit harder than high income families. Had the Government got its house in order, it could have introduced the new child income support which has been in consideration for years. This new support would mean that child income supports such as child benefit, family income supplement, qualified child increase and the back-to-school clothing and footwear allowance would be amalgamated so that everybody would continue to get a payment but low-income families and families on social welfare would be targeted much more effectively. The structural change, which has been in discussion for years, would be significantly better in combating child poverty and would result in some savings for the State.

The cut in the minimum wage makes no economic sense. I cannot understand Fianna Fáil and the Government. It will not create a single extra job and it will put people under further pressure. Why did the Minister target those on low income? The Minister and I know what will happen. Employers will dismiss these people and they will ask them to come in under a new contract on the new rate. It is wrong and on Friday we will oppose it in another Bill before the House.

It would be unfair to dismiss it. It would be very expensive for an employer to do it.

The Minister has talked a good game about fraud in recent years but he has done nothing about it. Under the Croke Park agreement, why can people not be transferred from other Departments to tackle fraud? The Minister is not serious about tackling fraud——

The Minister has no place to put them.

The Minister states €533 million was saved on fraud this year. It is outrageous that this cannot be dealt with. The Minister went for the soft option; he went for the carers, the blind pension, the children and the family unit. That was never the republican party Fianna Fáil line. It was always supposed to support the family, the weak and the sick. However, in this budget it went after them and attacked them. The only good news in the budget — I hope the Minister will confirm it for me — is that pensioners were left alone with regard to the universal social contribution. Fine Gael also has it in its plan that pensioners would be left alone. Pensioners have made their contribution to society. They worked hard over the years. Whatever about not giving increases, one cannot give something with one hand and take it back with the other because it has an awful effect on people, particularly those on low incomes. If people never got it they would not miss it.

The budget targeted low and middle income families and it is wrong that it did so. There was money to be got from the rich but the Government took the easy option and attacked families on low and middle incomes. Some of these families will be down €879 a year, which is approximately €17 a week. This is wrong. The universal social charge will also have an effect on families.

The Minister talks a good game on protecting the most vulnerable but in this budget he failed. He let them down and certainly did not deal with the problems they have. I am very disappointed about this. I expected the Minister to tell the Minister for Finance that he could not touch the weak, the poor or the most vulnerable in society. I understand we have a massive social welfare bill and that cuts must be made to it, but there must be other ways of targeting these cuts rather than attacking the most vulnerable. I was disappointed.

The Minister is now discussing a new scheme to bring people into the workplace. I hope it works. I hope it will not be compulsory and I expect clarification on this tomorrow on Committee Stage. People who want to participate will do so but I do not want it to be compulsory and to expect an architect to become a carpenter. This should not happen and it should not be used to take away social welfare payments.

Good man Michael.

We need this clarified tomorrow.

I have clarified it 50 times but perhaps Deputy Ring does not hear me.

As I stated——

The law is quite clear.

——the Government states one thing and does another. It does this all the time.

We passed the law. The law states an offer of employment must be suitable. Deputy Ring knows that and I know that and it is unfair for people to be peddling untruths when they know the opposite is true.

Minister——

Deputy Ring knows me long enough.

All I am saying to the Minister is that I do not want this to be used to degrade people on social welfare. I want to make sure that people who want to go out and work can do so and that those who want to be retrained will be retrained.

We do not want to see the shenanigans that went on in the past in FÁS. I welcome the movement of FÁS to the Department of Social Protection. It is the one positive in the Bill. I hope it will mean that we will have a one-stop shop whereby people will sign on for their payments and then be taken to another person who will see how they can be retrained to re-enter the workforce. I hope this will happen. What went on in FÁS over the past 20 years can never be allowed to happen in this country again. I hope the Minister will have a strong role on this. I hope he ensures that what went on in FÁS over the past 20 years will never happen again; it was a disgrace. This is why the most vulnerable, those on social welfare, are being targeted today. Those involved in FÁS lived like lords and kings, flying first class to the United States and going to basketball games and ball games and staying in the best hotels. It was no wonder. At a time when we had almost full employment we gave FÁS €1 billion more than when people were looking for work. I hope the Minister will deal with this.

Tomorrow, I will put pressure on the Fianna Fáil backbenchers and Independent Deputies. The Independent Deputies walk with Fianna Fáil and do what they are told by the Government. An Independent Deputy elected to the House should judge every piece of legislation based on what is put before him or her. Tomorrow, two or three Independent Deputies will support the Government. I will ask them to vote with their conscience and not for themselves. This is wrong and if they have any type of conscience they will know that one cannot take money away from carers, the blind, those with disabilities or the most vulnerable in society. How can anyone live on €188 a week? It cannot be done by a family.

I never thought that Fianna Fail would be so anti-family. With regard to child benefit, why did the Government not do what Fine Gael has been suggesting in recent years? Why does it not target child benefit? It is a universal payment and I never want to see it taken away from women, but sometimes universal payments do not work. However, it would work if it were targeted at the most vulnerable, the people who need it most, particularly those with large families who are on social welfare. They should be given more. This is why what the Government did yesterday with regard to child benefit is wrong and will not work. It has been cut across the board and it will have a major effect on large families who are on social welfare. It is wrong.

Tomorrow, on Committee Stage I will pose a number of questions. Earlier this year, we had a debate on jobseeker's benefit. What changes have taken place in the budget and what changes will be made in the Bill? Will the Minister clarify this when he replies to the Second Stage debate? The universal social contribution will have a major effect, particularly on pensioners and those on low incomes. We do not want to have a situation whereby it is better to be on social welfare than to have a job. People who work must be rewarded and we must encourage people to go into the workplace and take up work. We do not want people to be better off on social welfare and not taking up low paid jobs. Action must be taken on rent supplement. People in receipt of rent supplement cannot take up employment because they would be far worse off if they went to work than if they remain on rent supplement. The Minister needs to deal with this and I hope that he does so quickly.

At present, there is great anger. Since I entered politics, my e-mail, telephone and office have never been busier than they are today. People are frightened. They feel that through the cuts made yesterday people on social welfare have been targeted for the second year in a row. They are already under stress and under pressure. Yesterday, €10 was also removed from the supplementary income. It is frightening for people and they are concerned about it, particularly those awaiting appeals. At present, 20,000 people are awaiting appeals and the Minister and the Department should be dealing with these. People should not have to wait six or seven months for appeals. We need to simplify the entire process. We need to make it easier for people to get their payments or to make appeals and we need adjudication on those appeals far more quickly than happens currently. It is wrong to have a situation where people are knocked off welfare while they are making an appeal yet must wait six or seven months for their appeal to be heard.

This has been a savage budget. It has hurt the old, the weak and the sick. I appeal to Fianna Fáil backbenchers, to the Green Party and to Independent Deputies to take the opportunity we offer them tomorrow to vote against the proposed cuts, particularly the cuts in carer's allowance, the pension for the blind and child benefit. We will give them that opportunity and I hope some of them vote with their consciences and support the people who elected them. They should remember that it will not be too long before they must go before the people, who will adjudicate on them. I know how the people will adjudicate and that they will deal with these Deputies on the doorsteps.

I thank Deputy Ring for sharing his time with me. I welcome the creation of the new scheme, Tús, which will be organised through the Leader partnership companies throughout the country. It is important that the good work started by FÁS over the years is continued, in particular much of the fine environmental work it supports. Previously such schemes operated on a week on, week off basis but it now seems the new scheme will operate on a 19.5 hour week. Perhaps the Minister will tell us later how that will be organised.

In his Budget Statement yesterday, the Minister for Finance said that everybody will pay, and that those who can pay most will pay most. He also stated, in a rather dismissive way, probably in order to lessen the impact of the cuts and justify them, that welfare rates are higher in Ireland than in Britain and remain above 2007 levels. He fails to realise, or simply will not admit, the cost of goods and services in Ireland relative to those in Britain. The statistics released last week by the CSO clearly indicated that for 2009 the levels of consistent poverty rose from 4.2% in 2008 to 5.5%, while the numbers of people unable to afford basic requirements rose to 25%. This was before the impact of the cuts in this budget are taken into account. The consumer index rose by 2% in 2010, which will lead to even greater poverty and hardship.

Minister Ó Cuív's selective use of figures from 2004 to date are a clear indication that he is trying to veil the reality of the crisis that exists in social welfare. How can he as Minister for Social Protection reconcile this situation with what he has allowed to happen to the most vulnerable people in our society? He has said repeatedly that we must all share the pain, but this has not happened. It was hard enough for people on carer's allowance, pensions for the blind, disability allowances, invalidity pensions, widows' pensions or unemployment benefit to get by before this budget, but now, faced with a cut of €8 per week for most of them, or €10 per month for child benefit, it will be even harder for them to survive. Some €873 million has been taken from the most vulnerable people in society. There is no fairness in that. Shame on the Minister.

Time and again before the budget announcement yesterday, we were told that all the details were well flagged. It was disgusting to see Government backbenchers, along with Deputies Lowry and Healy-Rae posturing in defence of no social welfare cuts for the most vulnerable. They were ignored by the Government and the cuts were introduced. In today's edition of The Irish Times, the editorial comments on that decision and states it “indicates either naked fear of our international rescuers or an indifference to poverty and hardship that is shameful.” The Minister for Social Protection has failed to protect the weakest in our society for whom he has responsibility and has callously stated that the adjustments — which most people would call cuts — were necessary and that pensioners, carers and unemployed people would face far greater cuts in the future if the cuts were not made now. He has repeated that tonight. He said he was aware that the changes made would affect the lives of many people. Not only do they affect the lives of people, they destroy the lives of many people.

The Minister says he will reduce his bill by €100 million by reducing the numbers of people on the dole. Where are the jobs for these people? He is hardly talking about the short-term jobs as ones that will provide 5,000 jobs. If he is, that is only more of the camouflage and deceit we have had from the Government over the past three or four years. It is important that the Minister outlines for once and for all where jobs will be created in his area.

I welcome the opportunity to contribute to the debate on the Social Welfare Bill. The disastrous economic situation in which we find ourselves is a result of the reckless policies of Fianna Fáil in government over the past ten years. We now have approximately 450,000 people out of work and approximately 100,000 people have emigrated. Now, in the budget the most vulnerable members of our society have been attacked.

I would like to draw the Minister's attention to the serious problems that are arising as a result of the recession. It has been recognised that one of the issues that arises as a result of recession is an increase in suicide. Last year there was an increase of 25% in the number of suicides here and an increase of 10% in the level of self-harm. When people suffer job losses and job insecurity, financial distress, the loss of their homes or the threat of the loss of their homes, this affects their self-esteem. People identify work with self-esteem and the lack of work creates relationship difficulties, leads to an increase in divorce and to increased substance abuse, particularly of alcohol and drugs. This creates a societal issue with which we must deal.

We now face a situation where the most vulnerable have been attacked. These are the people who must live on the lowest levels of income because of their disability, their life circumstances or the need to care for one of their loved ones. The reduction in carer's benefit, pensions for the blind and disability allowances will seriously impact on the quality of life of the people receiving those benefits, although they are already under significant pressure because of their circumstances. The 160,000 carers working in Ireland last year saved the country €2.5 billion. As Deputy Enda Kenny said this morning, there is no moral or social case for cutting the income of such vulnerable people. The Minister has informed us that the cuts will save €96 million, but we have put forward a clear alternative. Fine Gael proposes a single payment and entitlement service that would cut out the 20+ Government bodies that currently administer entitlements. This would bring about massive savings through reducing administration costs, reducing fraud and the reduction of errors. I will draw attention to some of these issues later.

There is a clear alternative for the Minister to make savings of €96 million and more. For example, many times over the years it has been pointed out in the House that various agencies carry out means tests.

Means tests are required for the medical card, unemployment assistance and many other benefits. Centralising these tests in one agency is an example of where efficiencies and savings can be achieved.

I am concerned that the dependent child allowance was not increased to compensate for the reduction in child benefit. Some local social welfare offices take up to three months to process applications for the jobseeker's allowance. Reference has already been made to the redeployment of staff. The carer's allowance and disability allowance sections in Longford should be investigated under the Croke Park agreement.

Irish people who worked in this country before going to Canada or Australia for a year or two are being required to complete habitual residence forms before they can claim jobseeker's allowance. This delays their applications and increases bureaucracy. Even if they leave for a year or two, people who were born and worked in Ireland should not be treated the same way as those who come to Ireland from another country and never worked a day here. In one case, a young man from Limerick who attended school and college in Ireland and worked here during his summer holidays was told to fill out a habitual residency form because he studied in Edinburgh for one year to qualify as an engineer.

The next speaker is Deputy Shortall, who I understand is sharing time with Deputy Upton.

The Social Welfare Bill 2010 is a blatant and unjustified attack on the weakest and the working poor. Cutting basic social welfare rates by €8 per week for the second year in a row will have a devastating impact on people who rely on the State for income support. The Government has lost all sense of the fact that carers, widows, people with disabilities, single parents and the unemployed depend on their weekly payments for their very survival. Last year, it sought to justify social welfare cuts on the basis of the falling cost of living in some areas. No such excuse can be made this year. The decision to cut these basic rates cannot be defended.

Under this budget, a married couple with three children will lose €22.50 per week, or €1,200 annually. Families who are already struggling to keep their heads above water will undoubtedly go under if the Minister persists with these measures. Fianna Fáil is once again making the poorest in our society pay for its disastrous mismanagement of the economy. It is difficult to fathom how these measures will help recovery. The cut in the basic rates will result in extreme hardship for families who depend on social welfare and put further pressure on the Society of St. Vincent de Paul and other organisations which are already finding it difficult to meet the huge demand for their services. By proceeding with these cuts, the Minister will drive people into the arms of money lenders.

The Government clearly places no value on the contribution carers make to this country. Without the 24-hour service they provide the State would incur far higher costs. It is incredible that their income is to be cut once again even though they save the State money. There is fear among carers that the cuts will be exacerbated by the removal of other key supports in the health sector.

The Government's priorities are clearly wrong. How can it justify targeting people with disabilities, those on the blind pension and other vulnerable groups? Its decision to hammer these people is reprehensible and unjustified given that alternative means of balancing the books were available to it.

The new universal social charge is little more than a working poor tax. Combined with the reduction in the minimum wage, it will significantly impact on low paid workers. The new charge disproportionately affects certain sections of Irish society. It hits low income workers by significantly shifting the tax burden away from high earners and on to those on lower pay. It is regressive in the extreme. It will substantially raise taxes on all workers with an annual salary of less than €26,000.

Did the Minister consider the cumulative impact of the budget measures? The pay for a worker earning the minimum wage will drop by €40 per week, bringing full-time earnings on the minimum wage to €306 per week. A further €8.42 will be deducted for the universal social charge, bringing the worker's earnings to €299.50 for a 40-hour week. Imagine the indignity of receiving less than €300 for a 40-hour week. As a result of the budget, this worker will lose €48 per week. This imposition should be contrasted with the single self-employed high roller on a salary of €1 million per year whose weekly take home pay will increase by €461 per week, or 5.2%, as a result of the budget. The Government will hand a millionaire an additional €461 per week while taking €48 from someone on the minimum wage.

The universal social charge is a tax by another name.

Does the Deputy really think——

Sorry Minister, allow Deputy Shortall to continue.

I am trying to help her.

It was originally supposed to be a social contribution but as the Government decided that it would have to give something back to people if it called it a contribution, it changed the name to "universal social charge". It can be more accurately described as a universal anti-social charge because it will work against social cohesion. It will be socially divisive because it is utterly unfair in its operation. Annex C to the summary of 2011 budget measures states: "The Universal Social Charge merges the existing Health Levy and Income Levy. It is a tax and does not confer a benefit to those paying the charge". In his Budget Statement, the Minister for Finance stated: "Those on the new reduced minimum wage will not be brought into the tax net". It is quite clear that is a lie. It is a lie to say people on the minimum wage will not be brought into the tax net.

Deputy Shortall, I would appreciate it if you could use a different word.

I am sorry. There is no other way of describing that.

The Chair is obliged to bring that to your attention.

This is part of what has been going on in recent weeks. There has been spinning about the budget.

That is right.

There was widespread leaking of the budget provisions yesterday to all media outlets. The Minister for Finance benignly read out details of a budget that did not seem to be doing any harm to anyone in particular. He made a statement that was blatantly untrue. That is why I am calling it a lie. He said people on the minimum wage will not be brought into the tax net, when it is clear that they will be. Not only will they lose €40 per week in their pay packet but they will be taxed to the tune of €8 per week, bringing the total deduction to €48 per week. That is wrong. It is part of the deceit the Minister for Finance and his colleagues have engaged in over recent times and continue to engage in. People do not realise just how vicious this budget is for a number of categories of people. It is about time we had some honesty about what the Government is engaged in.

The universal social charge dramatically increases the marginal rate of tax. A single person currently has a marginal tax rate of 26%. This is being raised to 31%. In the case of a married couple with two children on family income supplement, the new levy means an effective marginal rate of tax of 64.4%. That goes up to a marginal tax rate of 90% if the couple are also in receipt of rent supplement. There is hardly any point in such workers taking a promotion, increasing their hours or in any way increasing their income.

The new charge disproportionately affects working widows and widowers, working lone parents, the over 70s and people with a medical card. Each of these groups has been exempt in one way or another from the income levy and/or the health levy. The Minister for Finance did not explain, yesterday, just how the new universal social charge is to impact on all of those groups. We did not hear anything about that from Fianna Fáil backbenchers yesterday. We still have not got the views of the Independent Deputies who are planning on supporting this budget about the impact of the universal social charge on their constituents. People in those circumstances will now have to pay the universal social charge. This represents a very significant and sudden jump in their tax bill.

All of those vulnerable categories of people who are trying to supplement their incomes through working as well as having a social welfare payment will be hit. Apparently, no thought has been given to the cumulative effect of the charge on a number of different groups. For instance, a widow or widower who has a job that pays, for example, €600 per week stands to lose €8 from the widow's pension. They will be paying an extra €17 per week as a result of this new universal social charge. Their tax credits have been reduced by 10% and they have to endure all the other budget cuts, such as the general reduction in tax credits, child benefit and so on. In total, a widow or widower in these circumstances will lose approximately €50 per week. It is completely unfair to burden one group — and especially this group — with such a major adjustment in their financial circumstances in one year.

Similarly, combined with other measures, the charge also imposes a very significant burden on pensioners. Again, I want to break the Fianna Fáil myth that the budget protects pensioners. The Government may have left the State pension alone, but it is hammering pensioners in so many other ways. The example of the retired couple, Áine and Vincent, given on page C25 of the budget document, shows that a couple with an income of just under €40,000 in total, will now be paying income tax and the new social charge. Previously, this couple would have been exempt from income tax and the income levy. Now, they are paying both, resulting in a 5% cut in their net income. Such a couple are not only hit by extra income taxes but, in addition to that, they will now have to pay DIRT tax and in many local authorities they will be caught for bin charges as well. It is nonsense for Fianna Fáil to claim they have protected pensioners. Pensioners are going to be hit in so many different ways under these proposals and people are really only copping on to that today.

Earlier today, I understand, Deputy Thomas Byrne made a statement that the universal social charge would be phased in for previously exempt groups, such as the ones I have mentioned. I ask the Minister for Social Protection to clarify that point. Is that the case?

I cannot find a mention in the Bill as to whether the charge will be taken into consideration in the calculation of family income supplement. I would have thought that would form part of the legislation.

The universal social charge is not subject to this Bill.

The abolition of the health levy is part of the Bill. The health levy is being abolished to bring in the universal social charge.

I am asking the Minister to clarify those points.

The universal social charge also impacts significantly on the attractiveness of work for people on welfare. For most people on jobseeker's payment, the effect of the universal social charge is to worsen replacement ratios and increase poverty traps when they are taking up low-paid work. The situation is made noticeably worse for people taking up employment that pays less than €26,000 per annum. The drop in the rate of supplementary welfare allowance also reduces the amount of rent supplement a person can claim when moving into employment. Add to this the proposed cut in the minimum wage and the budget is a cocktail of measures that impinge significantly on work incentives for people who are on welfare and considering moving. The Minister talks about encouraging people to move off welfare and into work, but the cocktail of measures contained in the budget will discourage people from doing that.

The abolition of the long-standing poverty trap associated with the health levy threshold of €500 per week is to be welcomed. However, the universal charge has created another poverty trap at €4,004. Part-time workers on low wages, such as cleaners or security workers, will face a very high marginal rate of tax once their income rises above this level. This does not make any sense.

Of course, the biggest poverty trap is caused by the requirement that those in receipt of rent and mortgage interest supplement not work more than 29 hours per week. This remains untouched. I cannot understand the sheer lack of will to tackle this issue.

The actions of Deputy Jackie Healy-Rae are particularly appalling. As Chairman of the Joint Committee on Social Protection, one would expect his role to be predominantly about protecting the poor in the budget.

Once more, he has proved that he is only interested in protecting his own political dynasty in Kerry South. At almost every meeting of the joint committee we hear examples of how budget cuts impact severely on some of the most vulnerable in our society. We have heard from the Society of St. Vincent de Paul, the Carers Association, One Family and various others. One after another, those groups have explained to us the kind of impact last year's budget cuts have had on the people they serve. Of course, Deputy Healy-Rae rarely stays long enough to hear the presentations. If he stuck around long enough to listen to their concerns he would know the devastation that recent Government cutbacks have caused.

There is something grotesque about our political system when a man who cares so little for the poor occupies such a prominent political position and gets paid €10,000 a year for doing very little. The truth is that Deputy Jackie Healy-Rae is really only concerned about his own survival. He and Deputies Lowry and Behan, have taken the 30 pieces of silver. They have pledged their support for cutting child benefit, the blind pension, carer's allowance, disability allowance, supposedly in the national interest. This is just political prostitution dressed up as fake patriotism. If Deputy Jackie Healy-Rae had any shame, he would give up his position on that committee and hand back the €10,000 he has received in the past year. What must the bond markets make of the fact that Deputy Jackie Healy-Rae, along with the other two amigos, has such control over Irish domestic policy?

I am also disappointed at the position Fine Gael has taken on welfare cuts. It is proposing a cut of €6 per week in the welfare rate for people of working age and this to be multiplied by three over the next three years. Like the Government, Fine Gael had choices in terms of the budget. It is bitterly disappointing that the decision was taken to hit those people who are most vulnerable in our society when there were choices. There are plenty of other people who are very wealthy who could have made a contribution and were not asked to do so.

I refer to section 5 which proposes to cut child benefit by €10 per week for each of the first two children and by €20 per week for the third child. This impacts disproportionately on low-income families because the cut represents a far greater proportion of their income. The Minister is proposing to cut income support for children, for people at the very lowest levels, at the same rate as he is cutting it for millionaires. This is the reality of this proposal.

The Minister is making no allowance for the fact that the children of people dependent on welfare or on a minimum income from a minimum wage job, should somehow be able to survive when they are put to the pin of their collar just to get by, to eat, to be able to participate in school. The Minister seems to think it is acceptable to hammer those children, the poorest children in the country, by cutting their income by €10 a week. Unlike previous Social Welfare Bills, there is no compensating payment for the poorest children or under the back to school clothing and footwear allowance. The Government has effectively abandoned its national anti-poverty strategy. A total of 92,000 children are already living in poverty. Of all groups in society they are by far the most prone to poverty. The Government has put their welfare seriously at risk. The Minister should remember that once a childhood is blighted, it cannot be reversed. This is one of the most shameful measures announced in yesterday's budget.

From a social policy point of view, the cuts in the basic rate of supplementary welfare allowance is another very retrograde step. I cannot see any justification for it. The fact is the Minister cannot get his act together in terms of his Department processing claims in a timely manner. Not only will people have to endure those delays of six to nine months but they will also be financially penalised because of the cut in the supplementary welfare allowance.

There are many other parts of the Bill which I could highlight and I will do so tomorrow. Overall, this Bill, like the budget, is about attacking the weakest. It is wrong, unfair and without doubt it should be voted down.

The most striking aspect of this Bill and the budget is how much effort has been put into politically proofing it and how little attention has been given to considering the true effects of its proposals on the daily lives of ordinary people. Families, the unemployed, low and middle income earners, carers, the less well-off, the self-employed and those struggling just to get by, were all targeted by a budget obsessed with the €6 billion adjustment figure but lacking any understanding of the effect of the budget cuts on the lives of ordinary people already suffering because of the recession.

The Government, afraid of a backlash similar to its mishandling of the medical card scandal, has learned to avoid headline figures but to be discreet about all other cuts. We have had cuts in the widow's pension, disablement pension and blind pension, among others. According to the Minister's budget factsheet issued by his Department yesterday, "Older people are fully protected". Have blind pensioners and pensioners with disabilities been protected?

The Government has shown total disregard for certain categories of pensioners in sneaking through these cuts while propagating nonsense such as the statement on the Minister's budget factsheet. Older people who are dependent on the fuel allowance will hardly be jumping for joy with the additional €40. It will, at best, provide for a couple of days heating in this current cold snap. We know what will happen for the rest of the winter. These people will either go to the Society of St. Vincent de Paul, if they are lucky and able to access such assistance, or else they will be freezing in their homes, afraid to turn on the heating.

Child benefit was cut by €10 for the first and second children and €20 for the third child. There is no rationale for the additional cut for the third child and the attempts that have been made to justify it ring hollow. Child benefit, as my constituents constantly attest to me, is being relied upon more and more to cover the basics and to keep bread on the table, as this recession takes an ever greater toll on families across the country.

These crude cuts show just how little this Government understands the plight of families in the current economic climate. The poorest are hit with the same child benefit cuts as the very wealthiest. This flat cut is completely discriminatory against the very poorest. Those without a voice were again hit the hardest.

There is to be another €8 cut in jobseeker's benefit and allowance as well as a further €2 costs in rent allowance. This is conveniently described as a reform, not a cut. A further €6 cut is imposed on those jobseekers aged between 22 and 24 who will now receive only €144 a week. They had €50 a week taken last year. These measures are also proposed, to use the phrase, "make work pay", but when there is no work these people must simply take the hit.

Much has been made of returning these payment rates to 2006 levels for child benefit and to 2008 levels for social welfare payments, on the basis that costs are at levels last seen in these years. The Minister has clearly not checked the rise in the price of electricity, home heating oil, petrol, gas, bin charges, hospital charges, health insurance, car insurance, house insurance or any of the other myriad of charges faced by the average citizen.

The carer's allowance was cut, again taking money from those who save the State so much and provide vital care to the elderly or to those with disabilities, in their homes, where they want to be located. It is simply another instance of carers being taken for granted.

The Government promised much in yesterday's budget but delivered an array of cuts and penalties without any hope for the future. There was no pretence of fairness in yesterday's budget and no pretence of fairness in this Bill. The figures are clear. They are an attack on the low to middle income earners; an attack on those dependent on social welfare.

Apart from the impact of the drop in living standards that will result from these cuts, what is more galling for those affected by them was to listen to the Government stress how hard it has been for it to make these decisions. Is this the Government's idea of an expression of solidarity? Given the Government's responsibility for causing this mess, does it feel the need to show that times are tough for it too? The decisions taken in yesterday's budget were shameful, but the pretence of fairness was worse. The people know this and the more this Government talks, the less people listen and certainly, the less they believe.

Debate adjourned.
The Dáil adjourned at 8.30 p.m. until 10.30 a.m. on Thursday, 9 December 2010.