Vol. 902 No. 1
1. Deputy Willie O'Dea asked the Tánaiste and Minister for Social Protection if she will reverse the changes made to the one-parent family payment given the data in the Survey on Income and Living Conditions which show those living in households with one adult and one or more children had the highest deprivation rate, at 58.7%, in 2014; and if she will make a statement on the matter. [1190/16]
Before dealing with the question, I take the opportunity to extend my congratulations to the newly appointed Clerk of the Dáil, as announced by the Ceann Comhairle.
My question refers to a recent survey which shows poverty is endemic among single parents. In view of the startling figures set out in the report, particularly in respect of the deprivation rate, is the Tánaiste prepared to reverse the changes she made recently to the lone parent's allowance?
I extend my congratulations to the new Clerk of the Dáil, Mr. Peter Finnegan, and wish him well in the job.
In budget 2016, I introduced a number of measures that benefit lone parents. These include a 75% Christmas bonus, which equates to a payment of just over €163 for a lone parent with one child. Lone parents will benefit from the €5 increase in the monthly rate of child benefit and those in receipt of the family income supplement will also benefit from the increases to the thresholds for that scheme. Lone parents in receipt of fuel allowance gain an increase of €2.50 per week during the fuel season.
Lone parents on the jobseeker’s transitional payment also gained an increase in overall income from the closer alignment of this means test with the more generous one-parent family payment means test. An extra €3 million is also being provided for the school meals scheme. It is important to highlight that the social impact assessment of budget 2016 showed that budgetary policy would increase average household incomes for working lone parents by 2%. Non-earning lone parents also fared above average, gaining 1.8%.
The most recent survey on income and living conditions relates to 2014 and is based on income data from 2013 and 2014. In 2004, during the economic boom, lone parents were over four and a half times more at risk of poverty than the rest of the population. In 2014, they were two and a half times more at risk of poverty than the rest of the population.
Research shows that being at work reduces the at-risk-of-poverty rate for lone parents by three quarters, compared to lone parents not at work, highlighting that the best way to tackle poverty among lone parents is to assist them into employment. Access to the Department’s Intreo service is critical to achieve this outcome. Any reversal of these reforms would delay access to this essential service and would be a backward step in terms of tackling poverty among lone parents. The positive outcome of the reforms can be seen in the increase in the number of lone parents becoming new family income supplement recipients. Of the lone parents affected by the reforms in July 2015, more than 3,000 became new family income supplement recipients by the end of 2015.
Saying lone parents are now only two and a half times at greater risk of poverty, compared to four and a half times at some point in the past, is quite irrelevant. This report is bald and it is brutal. It states that of all groups in society, the group that suffered the highest consistent rate of poverty in 2014 was lone parents, at a rate of 22.1%. It found those living in households with one adult and one or more children, that is, lone parents, had the highest deprivation rate, at 58.7% in 2014. It found single parents had the highest at-risk-of-poverty rate, 32%, in 2014. There were a number of other interesting findings about their ownership of property, such as the fact that 42.1% of lone parent households are credit-constrained. As I understand it, the gist of the Minister's reply is that she is taking measures that will enable lone parents to improve their situation relative to the rest of society. I agree with the statement that the best way to assist somebody in poverty is to assist them into work, but they are all worse off now, so how do we encourage people to take up a job by ensuring they will be less well off than before by taking up that job? This is what we were warned about and what I have discussed with lone parents who have transferred over to the Minister's new system since,
Deputy O'Dea quoted the 58% deprivation rate for lone parents in 2014. That is down from 63% in the previous survey.
Is it acceptable?
The figure the Deputy quoted is a drop from what was there previously-----
Yes, before the change.
-----because in fact we are putting extra resources into lone parents and we are particularly providing for the family income supplement, which means that where a lone parent goes to work, they are getting a top-up in respect of each of their children.
Second, in 2015 I brought in the back to work family dividend, which means a lone parent holds on to their €29.80 per week in terms of the weekly social welfare payment for their child, 100% in the first year they go back to work and 50% in the second year they are back at work. I chose the year 2004 because Deputy O'Dea was in government then, as far as I remember, and his Government was in a boom period.
My point is that under Fianna Fáil lone parents were at a risk of poverty that was four and a half times greater than the rest of the population. In recent years this rate has fallen, and their risk of poverty is now two and a half times greater than the rest of the population, because we provided a wrap-around system of incentives for lone parents to go back to work. Also, this year, lone parents who are on the transitional payment and working on the minimum wage for only 15 hours a week will see an increase in their overall income of €28 per week, made up of the increase in the minimum wage plus the other supports.
I will come back to the Tánaiste. I must call Deputy O'Dea.
I really do not know what planet the Tánaiste is living on. I consulted the lone parents' organisations when I tabled this question, and I spoke to a number of lone parents in my constituency. I can send the details on to the Minister. Every one of them, without exception, is worse off. I refer to lone parents with children between the ages of seven and 14 who have moved on to the transitional jobseeker's allowance-----
No. They are better off.
-----whereas they were on lone parent allowance previously. They are not all imagining it. They are not all coming to me presenting false documentation. I can send the Tánaiste the details of various instances. I promise I will send them over to her. Lone parents are worse off. There is a different means test and it is less attractive to go out to work. That is the reality.
How is it making it more attractive for people to go out to work if they will be earning less than they were previously? How is the Tánaiste making it more attractive by bringing in a different means test that will ensure they earn less?
The Tánaiste can talk about the family dividend, the family income supplement and so on, but the figures, and the examples I can send her, take all those matters into account. One must remember - and the Tánaiste did not say this, of course - that the family dividend is only a temporary provision. One gets 100% the first year and 50% the second year.
The Tánaiste to conclude.
Let me repeat the official figures. A lone parent on the jobseeker's transitional payment working 15 hours at the national minimum wage will see an increase this month in his or her overall income of just over €28 per week. Deputy O'Dea is complaining that they will see an increase in their income of €1,450 per annum.
How much will the employer be paying?
This is as a result of the increase in the national minimum wage, which-----
Which the employer is paying?
The Tánaiste has the floor.
-----Fianna Fáil, in its wisdom, cut by €1 an hour and which I have been happy to raise by €1 an hour and, on 1 January, by a further 50 cent an hour.
When someone else is paying for it. By how much did the Tánaiste raise the other one?
Deputy O'Dea's record is, let us say, not the most shining given that 330,000 jobs were lost on his watch.
The Tánaiste will be judged on her record shortly.
The increases we are talking about are as a result of the increase in the minimum wage, the more generous means test on the jobseeker's transitional payment and the increase in fuel allowance of €2.50 a week.
The Tánaiste is kidding nobody.
But these are all facts.
The lone parents are not fooled.
We must go on to the next question.
They are not fooled, and I will send the Tánaiste their comments and a few of the examples.
Deputy Ó Snodaigh has the next Priority Question. I want order, please.
2. Deputy Aengus Ó Snodaigh asked the Tánaiste and Minister for Social Protection how she can reconcile her promise to increase the State pension by €25 over five years with the ever-growing numbers entitled to a reduced State pension as a result of the changes she made to the qualification criteria in budget 2012. [1250/16]
Cosúil leis na Teachtaí eile, déanaim comhghairdeachas le Peter Finnegan faoin ardú céime agus an jab nua atá aige. Jab deacair é d'aon duine, go háirithe sa tréimhse seo sa Teach.
I wish to ask the Tánaiste if there is a contradiction in electoral promises so far to increase the State pension at a time when, as a result of her actions, more pensioners, particularly women, will qualify only for a reduced State pension.
The State contributory pension is based on contributions paid and credited over the course of a working life and is not subject to means testing. I increased the maximum weekly personal rate in the recent budget to €233.30, with proportionate increases for qualified adults. There were more than 360,000 recipients of that pension at the end of last year, with expenditure in 2016 now estimated at just over €4.6 billion.
A number of changes were made to the State contributory pension in the past five years in the context of State pension reform and to provide for sustainable pensions in the future.
These included changes to the payment bands for those with a yearly average of between ten and 39 contributions per year. According to my Department's records, some 28,000 pensioners in this category may have been impacted by those changes, although this would be expected to change over time.
Reforms such as this and increases in the pension age have safeguarded the pension system and its core rates, despite very significant demographic pressures and the economic crisis. By achieving this, even in such difficult circumstances, the Government has shown its commitment to supporting older people, as evidenced by CSO figures for consistent poverty which are lowest among pensioners. Now, thanks to the economic policies we have pursued, we have been able to move into a real recovery. In the 2016 budget, this allowed us to increase the maximum personal rate of State pensions by €3 per week. This will benefit more than 676,000 pensioners and their dependants this year.
Looking ahead, the appropriate level of the State contributory pension is all about adequacy and affordability. I am confident that, as our economy continues to grow on a sustainable basis, it will allow us to continue to increase the level of support for people aged 66 and over and, in particular, to take account of inflation. In this regard, I am pleased that the Social Insurance Fund, which had a deficit of almost €2.8 billion in 2012, is expected to have a small surplus in 2016. This means contributory pensions are secure. When I became Minister, the Social Insurance Fund deficit meant contributory pensions, widow's and widower's pensions, maternity benefit and the future paternity benefit, which we will introduce in September, were at risk. I am happy to say we have secured the future of the State pension.
The context of the change must be taken into account. I would not begrudge any pensioner an increase and I firmly believe the pension should be increased and, thereafter, index linked. The Minister's changes over recent years have ensured that more of those who apply for the State pension will qualify for a reduced amount, given that she has increased the paid contributions required from 260 to 520. She has also changed the rate band, which will mean women will be affected more harshly, given that over recent decades more women are in precarious work and often take time out of paid employment to look after family.
I ask the Minister to address the problems her actions have caused in the changes she introduced in the 2012 budget and consider another type of homemaker's credit which would plug the gap that has been identified not only by me, but by the National Women's Council of Ireland, to address the gap in the paid contributions of women who have had to leave work to take care of people or who have had the misfortune to be in low-paid work or on short-term contracts so they can fully qualify for full pensions.
For people who have insufficient contributions to qualify for a full contributory State pension, there are supports available in the State pension system which assist qualification for a contributory payment based on factors such as the contributions made by their spouses and other factors likely to impact on their needs. One example is the homemaker's scheme.
I was one of the people in the Fianna Fáil-Labour Party Government of the early 1990s who introduced the homemaker's scheme that has been mentioned by the Deputy. Together with the then Minister, Michael Woods, I was responsible for bringing in the system of homemaker's credits to which the Deputy has referred. This system recognises the value of the contribution made by people when they take time out to care for children or elderly relatives. We have also provided for increases for qualified adults and for credits for periods of unemployment. As the Deputy knows, the credits system is now done automatically. In the era about which he spoke, in many cases people did not go for credits. A widow can qualify for the widow's contributory pension on the basis of her PRSI record. People with insufficient contributions may qualify for a non-contributory means-tested pension to ensure they have a pension of a sufficient level.
While I welcome the Tánaiste's statement, I do not think it is entirely accurate. The homemakers credit system gives grossly insufficient protections to women, in particular. It does not go back far enough. As far as I know, it allows for or takes account of just one break. The Tánaiste mentioned that the jobseeker's credit is available to those who are looking for work. As I have said on a number of occasions, a person not in employment who is a qualified adult does not get a credit for that. That person's partner gets the credit instead. A number of women, in particular, are the qualified adults in these cases. Even though they are in the system, there is no record or recognition of them. Will the Tánaiste address the shortfalls in the homemakers credit? Will she reconsider the changes she introduced supposedly to save money? It seems that rather than reversing those changes, the Tánaiste intends to throw this money at the pensions system. Will she ensure women, in particular, are not negatively affected by the changes that have been made in the State pension system over the term of this Government?
If we had taken the Deputy's advice, we would have followed the Greek path and we would have bankrupted our pensions system. When I came into office here, the deficit or hole in the Social Insurance Fund was going past €2 billion. It ultimately went to €2.8 billion, but we have now brought it almost completely back into balance.
The Government made the pensioners pay for that.
I will set out what we actually did for pensioners this year and last year. We brought back the Christmas bonus. This year, we have brought in a modest increase of €3 a week. That has assisted pensioners and pro rata their dependants.
Some pensioners are down €1,100 a year and the Government has not made that up.
Deputy, please. The Tánaiste has the floor.
The country lost 330,000 jobs.
Is the Tánaiste blaming the pensioners for that?
Sinn Féin's response was to suggest that we should go down the Greek path, follow Syriza and bankrupt the country.
Sinn Féin has not been in government. We are debating the response of the Government, which was to attack the pensioners.
We saw the pictures of the poor pensioners at the ATMs who were not able to-----
The Government made the poor pensioners poorer. We did not do that.
We have to go on to the next Deputy.
Sinn Féin's crazy economics would actually see our pensioners follow the Greek path.
We are talking about the crazy economics of those who are in government.
I want some order now, please.
That is what Sinn Féin suggested.
The Tánaiste should stand up for the Government's decisions.
That is what Sinn Féin suggested.
3. Deputy Ruth Coppinger asked the Tánaiste and Minister for Social Protection the measures she has taken to assist persons presented with massive rent increases by landlords, particularly those in receipt of rent supplement; and if she will make a statement on the matter. [1248/16]
I ask the Tánaiste to tell me what she has done to deal with the major problem of rent increases, particularly as they affect people on rent supplement, for which the Tánaiste is directly responsible, but also more generally. The number of families that have fallen into poverty or homelessness is continuing to increase on the Tánaiste's watch. I would like to mention a number of rent increases that have taken place in the Tánaiste's constituency. Perhaps she can advise me of what can be done in these cases. A family in Mulhuddart Wood received a Christmas present from the landlord in the form of a rent increase from €850 to €1,400. Two other families had their rents increased from €900 to €1,300 and from €950 to €1,200, respectively. A family in the Gallery today had its rent increased from €900 to €1,300. Maybe the Tánaiste can tell us what she has done.
I congratulate Mr. Peter Finnegan on his appointment today.
Rent supplement plays a vital role in housing families and individuals, with the scheme supporting approximately 61,000 people for which the Government has provided approximately €267 million for 2016. Properties are being secured under the scheme with over 20,100 rent supplement tenancies awarded during 2015. In view of the reduction of supply in the private rented market and increasing rents at this time, the Department has implemented a policy approach that allows for flexibility where landlords seek rents in excess of the limits for both existing customers and new applicants to the rent supplement scheme. The circumstances of tenants are considered on a case-by-case basis and rents are being increased above prescribed limits, as appropriate. In addition, the Department, in conjunction with Threshold, operates a special protocol in the Dublin and Cork areas where supply issues are particularly acute, with plans under way to extend this to Galway City.
This flexible approach has assisted over 5,800 households nationwide to retain their rented accommodation through increased rent payments. Persons in receipt of rent supplement who may be at risk of losing their tenancy as a result of increases in rent are urged to contact their local welfare services or Threshold, which operates the sustainable services, without delay.
I believe that these measures and the reforms to the private rental sector as recently announced by Government will provide increased stability in what has become a highly volatile rental market. I am continuing to keep this matter under close review.
The Minister of State is saying that the family members who are here today, and who have an increase in their rent from €900 to €1,300, can go to the community welfare officer to get the increase. If they do not get that increase, will the Minister join me in advising these family members to break the law to keep a roof over their heads and to refuse to remain in that property? That is the only advice I can give them.
The Minister of State brought in the Residential Tenancies Act before Christmas. Not only has it proved to be ineffectual but I would argue that it has made the situation worse. Landlords are now bringing in double rent increases, knowing they cannot do it next year. All of the families who have contacted our office, and who I am sure have contacted the Tánaiste's office in the same constituency, are getting double rent increases rather than a single rent increase.
Another issue is discrimination against people on rent allowance. A law was passed on that with the support of the Labour Party but there are two advertisements on the Daft.ie website, which I can see before me, targeted at people in the local area who are looking for accommodation and which say, "Unfortunately, no rent allowance accepted". What is the Government going to do about that?
I hope the Deputy has advised that family not to wait a day to engage with the community welfare officer. Like the Deputy, I deal with this on a weekly, if not daily basis and there is a huge and severe problem relating to supply. This Government has provided over €900 million to be invested in the provision of social housing in 2016 and we will start seeing progress on that in the shape of new houses under construction towards the end of this year. There is a facility to deal with increases in rent on a case-by-case basis and we are actively engaged with the Department of Justice and Equality in connection with the advertisements referred to by the Deputy. I thank her for highlighting them for us.
I have two more, which I will send on to the Minister of State. Even if those advertisements did not exist people would be given a telephone interview and would be refused for having rent allowance on that basis.
I wish to return to the issue of rent, including those who are not on rent supplement. There is another property, an apartment block, in the Tánaiste's constituency where a letter was sent just before Christmas to the whole block saying the rent for the apartments would rise from €1,000 to €1,250 per month from a certain date. It said, "If you do not wish to renew your lease at this rent please inform us [before a certain date]". In other words what it effectively said was, "Accept the increase or get out". What are those people to do? What is the Labour Party or the Tánaiste and Minister of State going to offer to do for those people? Occupants of a whole apartment block are being told to put up or shut up and to pay this increase.
On the families who have received letters, one is from Fisher Property Management in Cherryfield in Hartstown, which the Tánaiste will know well.
They are very modest houses but the rent is increasing from €900 to €1,300 per month. Yes, I did think of advising them to go to the community welfare officer, CWO, but why has the Minister not introduced rent controls to stop this type of rack-renting occurring? That family will not be housed by Fingal County Council by the eviction date, as is the case in many councils around the country. Will the Minister of State join me in advising families who are receiving such letters to stay in their homes and to refuse to vacate those houses until they have alternative accommodation, which, unfortunately, due to the way the Government has mismanaged the housing crisis by not acknowledging it as an emergency, will not happen any time soon? People should not make themselves homeless.
I repeat that through active engagement with the community welfare officer we have dealt with numerous cases. There have been over 6,000 cases and they have been dealt with on a case-by-case basis and in a very successful manner. There have been reforms in the private rental sector. Rent review notices have been introduced. Period of rent reviews, a temporary provision which applies for four years, and notice of termination have all been changed.
None of it is working.
If we had followed the Deputy's advice, in many ways we would have been in a far worse position.
On rent controls-----
Now, there is hope. We now have money to invest in social housing, and that is being done. As I outlined, the total fund is over €900 million. A sum of €923 million is being invested in 2016 for the provision of social housing. There is €3.8 billion for the programme to supply social housing in the coming years. As the recovery is ongoing the discussion we should have is about dealing with that. If the Deputy had wished to have a proper and positive reaction, she could have forwarded those cases to me before raising them in the House so I could have had time to research them and provide her with a fuller response.
They have been raised with the Minister but they were fobbed off to her local councillor.
4. Deputy Willie O'Dea asked the Tánaiste and Minister for Social Protection why she has not increased the contribution to the community services programme in line with the increase in the national minimum wage, given that this increase will put community groups under considerable financial strain; and if she will make a statement on the matter. [1253/16]
This relates to not-for-profit groups who will have to meet increased wage bills as a result of the increase in the minimum wage. What provision has been made to enable them to absorb the extra expense?
I thank the Deputy for raising this. I have visited a number of community services programme, CSP, schemes over the last number of years and I have seen the positive impact of the programme on local communities. We have worked very closely with the community groups that operate it.
The community services programme is one of a number of programmes and schemes operated by the Department. It provides financial support to community companies that provide revenue generating services of a social inclusion nature. Many of these companies are also funded from other sources and generate revenue from the public use of their facilities and services. The CSP provides a contribution to the wage costs of the companies on the basis that the services are not fully self-financing or the cost of provision would be prohibitive on users. The Department does not set the wage rate but requires the payment of appropriate wage rates, consistent with local norms.
At December 2015, some 398 companies employing some 2,800 employees were directly supported by the CSP. The Department estimates that, at the end of 2015, some 60% of these employees were being paid above the level of the minimum wage, in keeping with the social inclusion and social benefit objectives of the programme. The Department is committed to working with the remaining companies to achieve the objective of paying a reasonable wage. The Deputy should note that the CSP accounts for less than a third of the resources generated by these companies.
Contracts of up to three years duration are provided for under the CSP. Arrangements whereby individual companies will be able to access additional financial resources to compensate for the welcome increase in the minimum wage are being put in place, and notices were issued last week. Submissions will be assessed on a case-by-case basis with the annual funding commitment being adjusted accordingly, where it is found to be warranted. An advance of 25% of the contract value for 2016 has been, or is in the course of being, paid to companies currently in the programme. This ensures that immediate cash flow requirements are supported.
Overall, I am satisfied at the level of resources available to the CSP in 2016 of just over €45 million, which will be adequate to meet the ongoing funding required for these programmes.
I thank the Minister of State for his reply. The position is that those are not-for-profit companies. The Minister of State is correct that only 40% of their employees are on the minimum wage while the other 60% receive wages above that level. If one increases the minimum wage, that increases a company's costs. If the company is not-for-profit, one is not talking about reducing its profits but about a reduction in services due to less money being available. I would be grateful if the Minister of State could clarify it, but I understood him to say that he will look at the different organisations one by one to study the impact on each and make the appropriate adjustment. In the interests of fairness, I note that this matter has been brought to our attention. We have been contacted by a number of the groups involved and raised their concerns with the Minister of State. I am very glad that he has listened to us. How long does he think the process will take?
It is not good practice simply to allocate funds without an underlying rationale. Hence, the facility is being provided for those companies which need to make a case for additional supports. That process is being put in place. The schemes operating under that are being identified. The level of grant is not related to the value of the minimum wage. I have visited and spoken to those involved in CSP schemes and I am anxious that they should not always look at paying the minimum wage. We want to see fair wages paid in regard to the grant. The managers in most schemes are currently earning approximately €32,000. That is funded there. Most of the schemes I have visited generate additional income. Unfortunately, a lot of them have split positions. They have split whole-time equivalents. As I have met them I have said that we want to assist them and co-operate in lifting the salary base of their employees where that has not been done. However, 60% of the schemes are paying more, some of them substantially more, than the minimum wage. In some instances well over €11 per hour is being paid.
I fully understand what the Minister of State is saying but some are paying the minimum wage and if one increases costs by way of wage costs or otherwise, one will reduce the capacity of the companies to provide the same level of service. One of the companies sent me a communication in the last week it had received from the Department. It stated that the Department had requested Pobal to develop a mechanism and process to enable companies to apply for additional funding on the one-to-one basis to which the Minister of State referred. Has the process been put in place? This is an ongoing situation. How long is the process likely to take?
The Tánaiste has already announced that when she is returned as Tánaiste next year, she will increase the minimum wage again. Good luck to her. How will this be dealt with? Will an advance be provided? Now that the problem that can arise has been identified will it be dealt with before it arises in the event of another increase in the minimum wage next year?
I hope to have the mechanism in place by the end of the month. That is what we are working towards and that is why we have been communicating with groups on the putting in place of the process. I want to return to the key point. The grant will be paid by the Department, regardless of whether I am here after the election. It is not related to the minimum wage.
We want a social enterprise mechanism that pays a good salary to people so they can have a strong role in society.
If I am returned, I will work with these groups to help put a business plan in place whereby they can pay all of their employees a reasonable wage while meeting local criteria. This may not necessarily involve an increase in the grant, but an examination of what the groups are doing and how we can assist them and build on their strengths. This work has been carried out over the past year and I have had positive interactions with many community services programme, CSP, schemes that have considered how to enhance their employees' salary rates.
5. Deputy Aengus Ó Snodaigh asked the Tánaiste and Minister for Social Protection if she will increase funding to CSP schemes to take account of the increase in the minimum wage by 50 cent per hour from 1 January 2016. [1251/16]
This question relates to the same issue, namely, the problem that has arisen because of the increase in the minimum wage without a tandem increase in the grant to CSP schemes. Will the Minister of State address this issue?
I thank the Deputy for his question, which is on a matter we have already addressed. More than €1 billion was spent on a wide range of employment supports by the Department in 2015. This expenditure is being fully maintained in 2016. The CSP is one of these supports and provides financial support to community companies that supply revenue-generating services of a socially inclusive nature. Many of these companies are also funded from other sources and generate revenue from the public use of their facilities and services.
The CSP provides a contribution to the wage costs of the companies on the basis that the services are not fully self-financing or the cost of provision would be prohibitive on users. The Department does not set the wage rate, but requires the payment of wage rates consistent with local norms. As of December 2015, 398 companies employing 2,800 employees were directly supported by the CSP. The Department estimates that, at the end of last year, some 60% of those employees were being paid above the level of the minimum wage, which is in keeping with the social inclusion and social benefit objectives of the programme. The Department is committed to working with the remaining companies to achieve the objective of paying a reasonable wage. The Deputy should note that the CSP accounts for less than one third of the resources generated by these companies.
Contracts of up to three years' duration are provided for under the CSP. Arrangements whereby individual companies will be able to access additional financial resources to compensate for the welcome increase in the minimum wage - it is the second such increase under this Government - are being put in place. Submissions will be assessed on a case-by-case basis, with the annual funding commitment being adjusted accordingly where that is found to be warranted. An advance of 25% of the contract value for 2016 has been, or is in the course of being, paid to companies currently in the programme. This ensures that immediate cashflow requirements are supported. Overall, I am satisfied that the level of resources available to the CSP in 2016 at just over €45 million will be adequate to meet its ongoing funding needs.
I heard the Minister of State's preceding answer and am not asking him to go over all of that ground again, but he mentioned that there were 398 CSP schemes throughout the country. They have been told that, as of last December, the 2016 financial plan will need to incorporate any additional cost necessary to implement the minimum wage requirement. That is why we are discussing the issue. It means the extra amount required to pay employees the increased minimum wage will not be covered by the Department. That is basically what the Minister of State is saying.
No, it is not.
The problem with this is that, because CSP schemes must find funds at short notice to meet the additional cost imposed by the increase in the minimum wage, it threatens the viability of many such programmes. Previously, the contribution to CSP schemes was reduced by €1 per hour when the minimum wage was cut, but the Minister of State and his Department suggest that the grant is only a contribution to payroll costs and is not intended to meet the costs itself.
The Minister of State also mentioned that CSP schemes should not constantly focus on the minimum wage. The proof in the pudding is that only 40% of their employees are on the minimum wage, which means that they already understand and have gone beyond this.
The Minister of State might not be aware that there are 53 payroll weeks in 2016, not 52. Therefore, there is an extra cost to be met in any case that would not normally be incurred.
The Deputy came just short of trying to put words into my mouth. Had he been listening, he would have noted I told Deputy O'Dea that mechanisms are being put in place within the programme to provide additional resources to any company with a short-term financial difficulty. Deputy O'Dea actually welcomed that. We hope a mechanism to deal with this matter on a case-by-case basis will be put in place by the end of the month. The mechanisms will be notified to all companies to allow access, on the basis of a justifiable case, to additional funding. Deputy O'Dea read earlier a letter that was sent out regarding the funds.
The fact of the matter is that we want people involved in the CSP to be paid a good wage. However, our funding is approximately one third of the requirement. What I want to do, and what I have done, with groups since coming into my Department is work with them to try to ensure people with a career in this area have a reasonable wage. I repeat that mechanisms are being put in place within the programme to provide additional resources to any company with a short-term financial difficulty. We will have the mechanism in place and we will proceed on a case-by-case basis. There are no proposals to provide an across-the-board adjustment. Some are paid well over the minimum wage, which is quite welcome. In this regard, the CSP is being used as we wish it to be used.
I heard the earlier statement. I welcome the fact that there is a stopgap measure. That is all it should be in order to buy the Minister of State and the Department time until after the election. It does not address the fact that many of the companies are dangerously near financial breaking point. I realise the Minister of State knows about the equine project in Cherry Orchard. There was an audit for two years and a financial plan was put together on the basis of predictions about where funding would go in the future. Those concerned were not aware at that stage that they had to come up with another €11,000 in 2016 to pay the minimum wage. That means they will have to increase the cost or let people go. This defeats the purpose. The Minister of State made the point earlier that the services provided must be accessible to the users, which means keeping costs low. Especially with the likes of the equine centre, it means one cannot have extra hours for the horses, as it is already working at full tilt. One cannot squash more horses into the stables because there are none. Therefore, no more can be charged to raise funds. There is no other stream of income. While the centre might be able to apply for the stopgap measure announced, that defeats the purpose. The Minister of State already knows 40% of the workers in the CSP are on the minimum wage. We are not asking the Government to fund an increase for everyone on the CSP, just those on the minimum wage. We are asking it to plan for the future.
On the Deputy's comment that this year is a 53-week social welfare week, we actually made provision-----
Last year.
-----last year for that. The provision has already been made.
There are 52 weeks this year.
This is a 52-week social welfare year.
I am not talking about social welfare.
No, but the Deputy made a comment earlier about 53 payroll weeks.
It was in the Estimate.
It was in the Estimate to make provision-----
Regarding wages on the CSP, the companies have to pay wages for 53 weeks.
The Minister of State has the floor.
Provision was made in relation to that.
It is not good practice simply to allocate public funds without an underlying rationale. It is not a stopgap measure. We are putting a process in place.
It is a stopgap.
That process will be in place, I hope, by the end of the month. Certainly, the target is the end of the month. The objective of the programme is to have companies operating on a financially sustainable basis. Transitional financial supports will ensure this objective is pursued. We will work with the centres. With regard to the one the Deputy just mentioned, the Tánaiste herself was actually involved in setting it up. Not only am I aware of it; so, too, is she.
Recently, as Deputy Ó Snodaigh will recall, people in his constituency incorrectly claimed that funding was being cut and community centres would close. When people decided to protest the Deputy was among those who pointed out that these claims were factually incorrect. We are putting in place a process to resolve this issue. We will work through a structure and provide a rationale for ensuring the community services programme continues. The CSP works very well, not only in urban areas but nationwide, from Donegal to Cork and from Kerry to Galway.
