The next slot of 20 minutes is to be shared between Deputy Brendan Smith, Deputy Pat Casey and Deputy Pat the Cope Gallagher.
Social Welfare Bill 2016: Second Stage (Resumed)
I am glad to have the opportunity to make a short contribution on the Bill. I have listened to many of my Fianna Fáil colleagues outline the various deficiencies, the welcome improvements and the areas where there is an urgent need to improve schemes and rates of payment. My party spokesperson, Deputy Willie O'Dea, dealt in detail in his contribution with all facets of the legislation. I welcome his contribution, in which he has highlighted the great pressure on families, lone parents and pensioners living on their own.
I welcome the increase in the State pension. Naturally, we would all like to see a high rate of payment, if at all possible. We must have incremental increases over the coming years to try to restore or improve the previous rate. I also welcome the increase in the primary rates of other welfare payments plus the 85% increase in the Christmas bonus, which is so important to people at a time when there are extra demands on individuals and families.
I am very glad the Minister for Social Protection, Deputy Leo Varadkar, responded positively to an engagement my colleague Deputy Éamon Ó Cuív, other Deputies and I had with him in regard to the farm assist scheme. Like me, the Minister of State who is present, Deputy Joe McHugh, will have many constituents who are small-scale farmers earning a negligible income, if any at all, from their farm businesses. The farm assist scheme was introduced in the late 1990s through initiatives of the then Fianna Fáil Government. It was a very welcome scheme to try to deal with the unfortunate circumstances obtaining in many parts of the country. Very low incomes were being generated by so many farmers. Unfortunately, the changes and the abolition of the disregards in the 2013 and 2014 budgets had a considerable adverse impact on recipients of the farm assist scheme payment. In fairness to the Minister, Deputy Leo Varadkar, when Deputy Éamon Ó Cuív and I had a very good exchange with him during Question Time and in a Topical Issue debate, he was willing to listen to the arguments we put forward forcefully. These arguments were articulated by many other public representatives, Members of this House and the farming organisations. I welcome the improvements. There is room for further improvement to the farm assist scheme because, unfortunately, we are witnessing a decline in farm incomes and considerable challenges for farm families, be they in livestock, beef, suckler cows or the dairy or other sectors. Unfortunately, they are not deriving an income from their holdings.
The rural social scheme is very important to rural communities. It is so important to the many individuals who participate. I understand that, up until recently, there were approximately 2,600 participants. Provision was made in the budget for an increase of 500. My party and other organisations put forward the view that we should be trying to achieve 5,000 participants annually. We all know of people who participate in the schemes. We know of their value to the individual as they give one an opportunity to go out and do some work. They bring great benefits to local communities and voluntary organisations, which are assisted in their valuable work. We all know there are many services provided in rural areas that would not be possible to provide were it not for community employment schemes and the rural social schemes. In many instances, those services are being provided by local community and voluntary groups in the place of the State providing such services. We all know from our constituency work of services that the State should be providing but which it is not providing. They are being provided through local voluntary effort, supplemented by workers on community employment schemes and rural social schemes. One should consider that the cost to the State of a person on a rural social scheme or community employment scheme by comparison with the cost of that individual drawing down a weekly welfare payment is negligible. We cannot quantify the great benefits that accrue from the schemes. I refer to the benefit to the individual and the local community. I appeal to the Minister and his Department officials to examine this area further. It is an area that results in a great return on the small cost.
The Minister of State, Deputy Joe McHugh, and the Leas-Cheann Comhairle, both of whom are present, will be familiar with the disadvantage experienced by pensioners in the State who are drawing a pension from Britain in view of the weakness of sterling. County Donegal, County Cavan and County Monaghan have a considerable number of people who worked in Northern Ireland and Britain but who are now, thankfully, residing in this country. They are suffering as a result of the drop in the value of sterling. I acknowledge there is provision in the departmental scheme to have a compensatory payment if a pensioner's payment drops below the level of a comparable pension in this State but in many instances, it takes far too long to get the top-up. Unfortunately, there have been instances in which pensioners who were in receipt of a small top-up were punished very quickly if sterling improved in value against the euro. The same is not happening now in regard to trying to offset the decline in the value of sterling where an individual is in receipt of a UK pension. I appeal to the Minister and Department to consider compensating people quickly when the value of sterling falls to ensure they are not continually losing due to that drop in value.
I join the previous speakers who referred to the anomalies affecting the contributory pension, particularly the anomalies affecting women who were in the workplace and took time out to rear children or care for a family member but who were later denied the full pension because of the method of calculation of the yearly average contribution. All of us have constituents who are affected. It is predominantly and overwhelmingly women who are suffering as a result of the method of calculation of the pension. It is absolutely wrong that a person who was longer in insurable employment could get a smaller pension than a colleague who just completed ten years and alongside whom he or she worked. This absolute discrimination needs to be addressed. It would not impose a big burden on the State. It is a matter of trying to bring equity and equality into the system for pensioners.
Social protection is a massive part of Government expenditure, the second biggest after health. Welfare for citizens remains the biggest part of Government expenditure although we were supposed to be keeping the recovery going, according to Fine Gael.
In a brave move, Fianna Fáil fought this election on increased public services. We did not campaign for a selfish society based on tax cuts, privatisation and the rampant individualism endorsed by a liberalism that does not regard welfare as a means to help people in need but as a stick to keep them down. That is the fundamental difference between our parties. It has always been there and maybe it always will be, but that does not alter the fact that we need radical change so as to ensure that welfare becomes protection for the people who need it.
This is crucial in respect of two issues on which I will concentrate. The first relates to the labour market supports that the Department oversees. Job benefit and job assistance payments are a direct means of providing financial help to the unemployed. Thankfully, the unemployment figures are going in the right direction. I give credit to the Minister for his role in that achievement, but two traps will become embedded unless a radical change in thinking and action is undertaken.
Youth unemployment and long-term unemployment rates remain too high and supports for this sector are piecemeal, inadequate and, in certain areas, counterproductive. While I accept that youth unemployment supports involve much more than direct payments and the Government is moving towards labour activation models with training and further education, these moves are too incoherent and are not focused towards the needs of the individual who finds himself or herself unemployed.
Long-term unemployed people are also being treated as statistical numbers to be played around with by political spin doctors along with an inhumane, bureaucratic and computerised system that at times has lost all sense of the human suffering involved in long-term unemployment. People who are unemployed are our fellow citizens. They are human beings who require help and should not be trampled on by an uncaring system. Has the Minister of State ever spent a day in a social protection office? Has he seen the security windows, the stressed and overworked staff? The offices do not look like places that inspire hope. In too many instances, they are depressing, paper-pushing systems designed to produce data. They are not there to help people who need their services at a vulnerable time in their lives.
Good work is being done, however. There are some excellent people in the Department of Social Protection and on the ground who are a credit to the best of the public service, but speaking with them has proven to me that they are overworked and overburdened by a system that is beyond breaking point.
The community employment system is under significant strain and has been under sustained attack by Fine Gael since it entered office in 2011. Community employment schemes in mid-Leinster have the highest progression record in the country of all back to work schemes. Why is this not being celebrated and endorsed? Why are we pushing ahead with the privatisation of these schemes when the community employment and rural social scheme models are examples of empowerment and community involvement that should be supported, not consistently and relentlessly attacked by the Government?
I know of too many stories of long-term unemployed people who are depressed and flattened by their treatment at the hands of an uncaring system. The Government's privatisation efforts are wrong. The data for progression are still not available for this new departure, but I have evidence that too many people have had a negative experience with the service. It needs to be discontinued at the earliest opportunity.
The Minister for Social Protection is an ambitious man by all accounts. He is a follower of international political developments. He is well aware of the democratic rejection of establishment politics that is taking place across the world. One of the key reasons for this rejection in Ireland is that too many good people feel rejected by the Government and Government services. Rural areas and those in need of Government services are not being listened to. Their politicians are unable to change the situation even when they want to try.
Social protection must live up to its name, not be a centralised, bureaucratic and computerised Government system. Empower people. Give communities back the means to help all of their neighbours. Stop reinforcing a failed bureaucratic and uncaring system.
I am pleased to have the opportunity to contribute on the Social Welfare Bill. In the limited time available to me, I will focus on a few issues.
A number of Deputies referred to the social employment and community employment schemes, which provide excellent training opportunities and employment, particularly in rural areas. However, the rules make participation difficult. I will highlight examples, namely, the three-year rule and the requirement that a participant be over 25 years of age. One has the opportunity to participate on a scheme for three years, be they consecutive or not. If someone does so before the age of 30 years, though, he or she cannot participate again before reaching 55 years of age. This makes no sense at all. The rule that prohibits those aged under 25 years and the three-year rule should be reconsidered. There should be greater continuity. Will the Minister and his Department consider this matter?
The rules make it difficult, not just for participants, but also for the voluntary groups that administer the schemes. They do excellent work in our communities. All that we need to do is look around and see what they do in our areas - Tidy Towns, the GAA and other voluntary groups. Without them, the work might not get done. If it had to be done through State investment, it would cost multiples of what it does now. A large social dividend is to be derived for the participants and the communities. Many participants might be able to avail of other employment, which would free places on the schemes' waiting lists.
I wish to refer to seasonable and part-time workers and their social protection entitlements. My colleague, Deputy Pringle, who is present, would be well aware of the industry from his Killybegs base, as would the Minister of State. Something must be done. Seasonal and part-time workers play an essential role in the rural economy, be they working in the fishing, agriculture or hospitality sector. The current scheme works against them, though. The requirement to have made 17 contributions over a three-year period equates to 39 contributions per annum. Thirty-nine weeks' work is practically impossible for people in those sectors. It is tantamount to telling them that they are better off not working. There is no advantage. The subsidiary income threshold of €12.70 per day, or €63.50 per week, is unfair. If a seasonal worker earns that income from farming, he or she is not entitled to receive unemployment benefit. All of this defies logic. We should be trying to incentivise people to work, but this is a disincentive. An annual subsidiary income of €3,300 should not be sufficient to deny anyone of the right to obtain a social protection payment. One's social welfare ceases when one is immediately required to make 13 contributions in order to transfer to the next claim. No allowance is made for the seasonality or unique nature of work in fish factories or the hospitality and agriculture sectors. The various changes to social welfare eligibility rules have worked against seasonal and part-time workers.
I will deal with this, together with my party colleagues, on Committee Stage and hope there will be universal support for my proposals.
I wish to refer to those in receipt of social welfare payments who have inadvertently and unintentionally drawn down payments in addition to their statutory entitlements. This happens, but I do not believe the majority of social welfare recipients set out to defraud the Department. When it happens and the mistake is recognised, it normally seeks to claw back 15% of an individual's social welfare entitlement. A person in receipt of €200 per week is expected to pay back €30. That might not seem like a lot, but it is a considerable sum for an individual in receipt of only €200 per week. The Department should be more humane in such circumstances. I am not casting aspersions on the officials who deal with these issues because there seems to be a rule of thumb, but they should be given greater flexibility in this regard.
The restoration of the bereavement grant should be considered by the Government in the context of the next budget.
I cannot understand, nor can most Deputies, why it takes at least 18 weeks to process an application for the carer's allowance. Some applications may take longer to process if additional information is required, but if all of the boxes are ticked, applications should not take that long to process.
I hope my contribution will be heard and my concerns addressed by the Government. I will deal specifically with the treatment of seasonal and part-time workers during the debate on Committee Stage.
Táimid ag déileáil leis an mBille Leasa Shóisialaigh, 2016. Tá difríocht idir an méid atá á dhéanamh sa Bhille seo agus na ciorraithe a tháinig os comhair na Dála i mBillí den tsórt seo le tamall de bhlianta anuas, nuair a bhí orainn laghduithe ar an méid airgid a bhí á thabhairt do dhaoine faoi scéimeanna áirithe agus san iomlán a phlé. Is féidir a rá nár cheart "Bille Leasa Shóisialaigh" a thabhairt mar Theideal ar a leithéid de reachtaíocht seo muna bhfuil aon leas i gceist agus má tá gearradh siar á dhéanamh ar an méid airgid atá ar fáil. Cé gur mhaith an rud é go bhfuil ardú éigin ann sa chás seo, ní chreidim go bhfuil sé ard go leor sa chuid is mó de na scéimeanna. Ba chóir dúinn díriú ar arduithe suntasacha agus ba cheart dúinn déileáil leis an míchothromas atá laistigh den Bhille.
The social welfare system is supposed to be beneficial and enhance peoples' circumstances. That is why it was set up. For many years people have been dependent on it because there is no work available to them, but in the middle of that dependence the Government cut the amounts available to those in need of social welfare assistance. We are dealing with the legacy of five years of cuts by the Fine Gael Party, in particular, supported by the former Minister for Social Protection, Deputy Joan Burton. Prior to that, cuts were also introduced and implemented by the Fianna Fáil-led Government.
The idea behind the social welfare system is that it enables social transfers to be made. Social transfers are not designed only to ensure individuals will not become totally destitute; they are also advantageous to local businesses because virtually every cent given in social welfare payments is spent in local shops and businesses. This benefits the community at large. One of the side effects of the cuts in social welfare rates in recent years made by the Government and its predecessor which was propped up by the Labour Party was that small local shops and businesses suffered and many closed. With this Bill, I hope we will see the start of the reversal of the cuts, but the amounts involved are paltry and miserly. If one gives a social welfare recipient in Dublin living in social housing an additional €3 or €4 per week, I guarantee that, as happened in the past, the local authority will increase the rent payable by the same amount. In the past increases in benefits, even of paltry amounts, were eaten up straightaway by increases elsewhere with the result that there was no additional money in peoples' pockets. An increase of €3 to €5 in most payments, as suggested in the Bill, will not substantially alter the lives of those who are totally dependent on the social welfare system, including pensioners, those in receipt of disability allowance, jobseeker's allowance and so forth.
Many of the people who are totally dependent on social welfare benefits are not actively seeking work; they are not job seekers. Many of them will never be back in the workplace again and do not have the wherewithal to find work, even if it was available. They cannot enhance their lot and are dependent on whatever is handed out by us as a society through the Government. That is why Sinn Féin has consistently called on the Government to ensure social welfare payments will be index-linked. However, before they are index linked, we must first determine if they are adequate. That has not happened to date and the Bill does not take the opportunity to set that process in train.
In Dublin and most of the other large cities there is a huge housing crisis, as referred to by my party colleague, Deputy Eoin Ó Broin. Rent increases in this city have been enormous and this affects everyone, including those in receipt of rent allowance. There is an assumption that the latter group do not have to pay out any money, but they must contribute a small portion of their income which is worked out by the Department. However, everyone in this city knows - I presume it is the same in other cities - that in the vast majority of cases rent allowance recipients make under the counter payments to their landlords. Once landlords know that tenants have an extra €3 or €5 per week, they will come looking for their pound of flesh. The entire rent allowance system is fraught with danger, which is why I have always argued that rather than propping up private landlords, we should be investing in social housing.
One element that is missing from the Bill is a focus on a scheme which was introduced by the last Government and which I actually welcomed. I encouraged the Minister to put time and effort into the JobsPlus scheme, which encourages employers to take on employees in return for a State subsidy. Instead, the last Government spent all of its time propping up the JobBridge scheme which, thankfully, is now being scrapped. The Government must make a commitment to promote the JobsPlus scheme in the same way as it promoted the JobBridge scheme, with all of the razzamatazz that went with it. Under the JobsPlus scheme, an employee is paid at least the minimum wage, if not more, and works for at least 30 hours per week. That was not the case under JobBridge scheme, which was of no advantage to the vast majority of participants in it.
There are other missed opportunities in the Bill. A motion dealing with the situation in Calais was passed earlier in the House. The vast majority of Deputies have the interests of children at heart. One of the ways to tackle child poverty in this country is to address for social welfare recipients the qualified child allowance which currently stands at €29.80 per child.
A child who is dependent on a parent on social welfare gets €29.80. If we want to help those families with children in poverty, we increase that. It was not increased nor was the qualified adult allowance. Many people in or associated with the social welfare system do not get the same benefits as others. A qualified adult does not quality for community employment. I heard the last Deputy talk about how great community employment is. I am on a number of boards where community employment is important and I think it should be enhanced. However, if someone is a qualified adult, they are not in receipt of a social welfare payment in their own right and, therefore, will not qualify for a scheme. The same is true of many people whose husband or wife might be working but who do not get any social welfare payment and do not have any independent income. They want to get back into the workforce but have been out of it for a number of years and they think that community employment or one of those type of schemes might be a mechanism for doing so but because they are not in receipt of social welfare, they do not get that benefit.
There is a range of issues here, the vast majority of which I do not oppose. We could have gone a lot further. The problem is that it is not an imaginative document. It is not far reaching because it is not making a difference in the lives of those dependent on social welfare. One area that is often raised is overpayments, about which the Comptroller and Auditor General speaks. I have argued over the years that the number of social welfare inspectors should be increased because they have shown that they can work. I pay tax, as does everybody here. If somebody in Revenue makes a mistake and charges me too much and I do not notice it for four years, it is hard luck. You have to claim it back within four years. In the case of a social welfare overpayment, the Department can go back 20 or 30 years because there is no Statute of Limitations in respect of claiming back. I understand the lack of a Statute of Limitations in the case of fraud because it is a crime but in the event of somebody making an error regardless of whether it is the official or the recipient, there should be some limit matching the limit that is put on what taxpayers can claim back where if the case is more than four years old, Revenue will say it is hard luck because the person should have claimed. There is a range of other issues. Hopefully, I will get the opportunity to raise some of them on Committee Stage because it is an opportunity.
The Opposition is restricted in what it can do in respect of social welfare and finance Bills. We cannot put down move amendments to this Bill on Committee Stage if it is a cost to the Exchequer or the people, regardless of whether it is a positive or a negative from the Government's point of view. I have argued continually that we should be given that opportunity to do this so that we can properly engage with legislation that would benefit the public.
I am the Sinn Féin spokesperson on children and youth affairs. In preparing for the budget and our alternative, the issue of child care, which has been discussed substantially since then, was a big focus. A substantial amount of children's interests and welfare issues come under the responsibility of the Department of Social Protection as well. The investment in subsidising child care in a universal and targeted way was welcome, albeit that we would have liked to have seen more for child care workers. This Government's efforts to tackle child poverty in this budget and Social Welfare Bill fall substantially short. A number of organisations, including Barnardos, Early Childhood Ireland and the ISPCC, would have lobbied on a number of issues that urgently need to be tackled to reduce child poverty. I will touch on them in the course of my contribution. The issues relate to child benefit, the one-parent family payment, some of the back to school costs and family income supplement.
There is a failure to recognise that a combination of interventions across all those various payments as well as interventions in child care would have made a very significant difference to child poverty. I was at a conference on Monday on the Young Knocknaheeny programme, which is an excellent area-based poverty project. It was said that Irish child poverty remains among the highest among the wealthier end of OECD countries. I want to touch first of all on single parents. Every measure or report always finds that single parent families, which, more often than not, are led by females, are among the most disadvantaged, poorest and marginalised in our society. It is well documented that the lone parent reforms, which are essentially cuts, by the previous Government had the perverse effect of reducing household income and were regressive. It has been borne out by a number of organisations. The Irish Human Rights and Equality Commission has recommended that the State reverse these cuts. At the time it took effect, a number of families were affected but a number of specific categories of recipients saw huge reductions in their payments. I back the campaign supported by Irish Single Parents Fight Back and others that argues that seven years of age is too low to be the cut-off age. It has been very difficult for many one-parent families to absorb that change. The cost of a child does not reduce after the age of seven. In many ways, it increases when it comes to things like education. The failure to revisit that is serious. The issue needs to be revisited next year because this is a very marginalised category of people and it would make a very substantial difference and help a lot of people out of very difficult situations and poverty.
A related issue that many single parents face is the issue of maintenance. It was reported recently that the Department has been issuing letters to the liable relative - the person who is supposed to making maintenance payments - informing them that they are no longer obliged to pay maintenance once the child reaches the age of seven. At the same time, the Department is telling lone parents that if they do not seek maintenance, they will receive financial sanctions and it will be taken into account in means testing and various others measures relating to the kind of benefits and entitlements they are entitled to. This was a very dangerous and regrettable action by the Department that is putting a lot of pressure on a category of people who are already under severe pressure and in very difficult situations. It is something the Department needs to resolve. Clearly, those liable relatives have responsibilities and the Department should be active in ensuring that they step up to those responsibilities, should not put all the obligation on the parent who is doing their best to raise their child and should not take a disadvantageous or prejudicial view or too harsh a view of parents who have liable relatives who have not been paying maintenance because, ultimately, that is not their fault and they cannot do anything to control it.
The issue of child care relates to the so-called reforms to the one-parent family payment. It was done in the context of the promise of Scandinavian-style child care. By the time we have a Scandinavian-style child care system, we will have had many years of very regressive cuts and it does not appear as if they are going to be reversed any time soon. In that context of the discussion around child care, and there were welcome moves in that regard, parents who stay at home raised concerns about the fact it was becoming substantially more difficult for them to raise their children, that they were not receiving any assistance and that it was becoming financially unsustainable for them.
In that context, far more should have been done on maternity benefit. The Bill has welcome steps on paternity benefit, but we need to go much further than that. While the €5 increase in maternity benefit is welcome, in my experience people are considerably short at that rate. Many parents find it very difficult to stay at home at that rate and feel obliged to work much sooner than they would otherwise. We would have advocated a much more substantial increase of about €40 and an extension of two weeks because we need to be bridging that gap. While paternity benefit and paternity leave are finally being addressed, which is positive, we need to work towards having a set amount for both parents with flexibility to allow parents to take it between them as and when it suits them.
I wish to speak about the under 26s. The Government has continued a discrimination that has been going on for six or seven years between jobseekers up to 25 and older than 25. It is questionable as to whether it is permissible under the Equal Status Act - I do not believe anyone has ever taken a case on it. Certainly, morally there is no justification for it. The €2.70 increase for the under 25s would scarcely buy a young person a cup of coffee a week.
The discrimination ultimately forces more and more young people back on their families. That has been a real feature of austerity. We see it with housing, social protection, fees and all sorts of educational costs. Parents have already absorbed a burden in their own way through cuts and increased taxes. The increased pressure on their children is being transferred to them, with children having to move home and rely on their parents for assistance. However, this is just not an option for many young people under 26, who may not have that relationship with their parents. They find it very difficult to try to manage their lives, and pay for their food, clothes and other bills out of a very modest - inadequate - jobseeker's allowance that is also based on a discriminatory principle.
Deputy Cahill is sharing his time with Deputies O'Keeffe and Calleary.
This has been a unique budget in that we, as an Opposition party, tried to influence the budget. With a minority Government, it was an unusual situation. Deputy Calleary, who is present in the House, and Deputy Michael McGrath tried to get parts of Fianna Fáil's manifesto enshrined into the social welfare aspect of the budget. The difference between last year's budget and this year's shows the influence of those gentlemen. Last year there was a 50:50 split between tax cuts and improvement to services. This time there is a 3:1 ratio, which shows the influence we had on it.
While the budget has welcome elements, with the limited fiscal space not enough has been done. The €5 increase in the State pension and the €5 increase across the board of most social welfare rates are welcome. We have gone a long way towards restoring the Christmas bonus, but it is a pity that it has not been fully restored this year.
This is a Fine Gael budget and certain items in our manifesto have failed to be addressed this time. The cuts to the one-parent family payment, which has suffered many harsh cuts in recent years, have not been reversed, which is a regrettable omission in the Social Welfare Bill. Disability payments and the recognition of people with disability, a key plank in our manifesto, have not been addressed this time around. With the reduction in the universal social charge and the increase in the national minimum wage, families will not see the benefits that they could have if there was an increase in the family income supplement threshold. There has been no increase in the back to school clothing and footwear allowance. There has been no increase in the qualified child payment to those in receipt of social welfare payment. Families on social welfare have not been well looked after in this Social Welfare Bill.
There should have been more focus on certain schemes in the Social Welfare Bill. I welcome the extra 500 places on the rural social scheme. I met representatives of Rural Link this morning. They have identified that the risk of poverty in rural areas is 19.1% compared with 14.6% in urban areas. We have to recognise that there is poverty in all communities across the country. There are 2,500 on a waiting list for rural social schemes, which will increase with the change in farm assist. It is necessary to be on those waiting lists to qualify for farm assist. While the extra 500 places are welcome, they will definitely not address the serious issues we have. While we welcome some of the changes in farm assist which reverse some of the changes in the detail to qualify that were implemented in recent years, only 8,500 people qualify for farm assist. The figure should be much closer to 20,000 with the drop in farm incomes. While some changes are welcome, we have not gone far enough in allowing people to qualify for this scheme. Compared with other social welfare means tests, the test for farm assist is definitely the most punitive test. Unfortunately, many people who would be deserving of it fall outside the remit of the scheme.
Another speaker spoke earlier about JobPath, which has many drawbacks. The two organisations running this, Turas Nua and Seetec, are getting a fee for signing people up. However, they are signing up to a regime they cannot get out of and they are tied into the scheme for 12 months. It is not working in practice especially when another opportunity comes up for a person. This is another scheme like JobBridge which was designed to manipulate the figures and show that long-term unemployment was reducing. There has to be an opt-out clause for people who get employment nearer home and who can source more economically viable employment.
I have come across a number of cases in my constituency where people who have signed up to this scheme, or who have been forced into this scheme by the various organisations, and now have an opportunity to take up employment nearer home are deprived of that opportunity. The scheme needs to be tweaked to ensure that people, who get an opportunity, for example, in a rural social scheme or under community employment, can avail of it. While the objectives of the scheme are praiseworthy, in practice it is not working correctly.
People over 60 are suffering serious discrimination in getting work on community employment schemes. Unfortunately, when they are debarred from getting work on a community employment scheme at that age, they are in a cul-de-sac and no further employment avenues are open to them. We have had numerous examples in my constituency where people over 60 are excluded from community employment schemes and cannot get any further employment. I would like to see those addressed on Committee Stage.
I am delighted to be speaking today. We all know that Fianna Fáil had an input into the budget, but it is not our budget. When we put pressure on the Minister to give a €5 increase to senior citizens, he was quick to come back and cover himself by advocating a €5 increase to all social welfare recipients, including jobseekers, carers and others.
It has to be welcomed but it does not kick in until the second quarter of 2017. It is important to not lose sight of the taxpayer and the PAYE workers. They must be getting very worried as they do not see the benefit of this economic recovery. They see more benefits for others than are being accrued to them. They see themselves funding these social welfare schemes. The Minister of State must note there are still a lot of people who are still depending on schemes such as community employment, JobsPlus and SOLAS. If one looks at the numbers compared to five years ago there are still as many people who depend on these schemes. It is very worrying when the Government speaks about jobs being provided but there are no jobs for the general worker in the area.
I welcome many of the initiatives in the Minister's programme. The farm assist measure has to be welcomed with regard to the means testing. There is still a crisis in the farming community, especially for low income farmers.
I will now turn to the benefits proposed for the self-employed. Anything that is done for people who are self-employed and who lose their work or income must be pushed through more quickly so that they can avail of jobseeker's funding. While we welcome that the invalidity pension has been extended to the self-employed the treatment benefit package is also a major positive measure for the self-employed to the cost of €3.6 million. This scheme sees the introduction of dental care benefits and full restoration of optical benefits, such as free glasses or €42 towards upgraded glasses. This measure is to be welcomed.
With regard to the housing assistance payment, HAP and the increase in this rent allowance scheme for social housing applicants, there are fierce complications in applying for this allowance and it must be reviewed. There is an issue also when applicants feel that their landlord is not doing enough with regard to compliance to keep the property in good order. There is an issue there for grant aid towards upgrading of a property as there are landlords who do not have the money to upgrade their properties and they are being precluded from participating in the HAP scheme. While I welcome the increase in funding I ask that this situation could be reviewed. I believe that everybody was looked after in this budget, there was a piece for everybody and I hope, as we move forward, there will be a better outcome.
I welcome this opportunity to speak on the Social Welfare Bill. It is always good, and appropriate during the debate on the Social Welfare Bill, to acknowledge the huge work of the staff in the Department of Social Protection, especially those in local offices around the State. Staff in every part of the Department have been very much on the front line of the economic collapse. They have had to deal with people who are trying to manage the consequences of the economic collapse. It has certainly been my experience that the staff have handled cases professionally, and many in a caring way. So many staff give more than everything to the job, particularly those who staff the Oireachtas Members' information support line and who support all Members in their work. If there was a system where the bureaucracy that exists in so many Departments was ironed out, we may not need those support lines, but I acknowledge that the people who staff the support lines do a superb job.
There are increases in payments in this year's Social Welfare Bill and Fianna Fáil fought hard to achieve those. They are small increases but they are sustainable. We do not want to go back to a situation where, in a few years' time, we again might have to cut people's income, cut the social welfare protections, cut the Christmas bonus and many other payments. This year the increases are small, and ideally there would and should be more, but they are sustainable and they can be paid for in the long term. If we can continue on that basis to build up the payments to people who are in receipt of social welfare, then we would not have to go back to a situation where we are cutting incomes of the most vulnerable.
I join my colleagues in welcoming some specific changes such as those in farm assist and the increase in the rural social scheme. I am delighted to see an increase in the budget for the community services programme, which does unseen work across the State. It might be appropriate that the community work and the increase would be linked into the town and village renewal scheme. I believe there is an allocation in this regard under the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs for the scheme but in order to make it more effective and to give it a bigger bang it should link into the schemes and programmes that seek to improve services in small towns and communities around the State.
I welcome the increase in the back to education allowance. I know there has been a focus on people who are under the age of 25 but it seems to have been missed that there are substantial increases in the back to education allowance for those people and those who are involved in education or retraining can gain from that.
There are couple of areas on which we need to focus. The length of time that social welfare appeals currently take seems to be stretching out again, particularly for those who are on disability payments or carers. My constant refrain, and I do not mean so in a political way but in a Government way, is that we seem to place blockages in the way of those people who are most vulnerable and those who are on the most difficult journeys in their lives. Carers are a prime example. The appeals process for carer's allowance has gone to six months in some cases, with the constant feedback and looking for information. This puts people who do not have the time or the ability to deal with this under enormous pressure. I think it is time that we looked at the social welfare appeals mechanism to bring some sort of express mechanism into place for those people who are under particular pressure such as those who are carers, those who look domiciliary payments and those who depend on disability payments. I have often had to deal with a situation where an application for the carer's allowance is submitted and because it gets turned down we end up in the appeals process and because of the length of that process, in many cases the person who is being cared for has passed away. Given the urgency of these applications there does not seem to be any way within the system to address this type of urgent situation. With regard to trying to free up hospital beds and trying to free up a system that is clogged, this is another example of where the Department of Social protection could work in conjunction with the Department of Health and the HSE in dealing with those allowances in an express way. That, however, would require the silos of Government Departments to come down and there seems to be an abhorrence - at senior civil servants level - to demolishing those silos. God forbid that we might actually assist people and make their journeys a little bit easier. Silos are blocking and hampering people's experience, particularly at very difficult times, and those silos need to come down and this is just one particular example.
Many of my colleagues have spoken about the anomaly facing people, and women in particular, who have worked and who have maybe taken a number of years off from work to care for or raise a family. These women are now paying the consequence in their pensions which can sometimes be €10 or €15 per week lower. It is incredible that was one of the changes brought in by a Labour Party Minister for Social Protection. Fianna Fáil will make this issue a priority for next year's budget. Again, a little bit of smart thinking around this could bring a solution. It is not fair on the people, who have worked but have given time to raise their families or have taken time out to care, should be penalised for doing so. It is not a way to encourage people to come home to care or to come home to a family situation. Now that paternity leave has been introduced, which we welcome, the impact of that change will broaden.
As Deputy O'Keeffe has said, there have been some limited changes this year for those who are self-employed. For too long, those who are self-employed have been ignored by the social protection system. There have been some changes in the last two budgets but the changes need to go further. We need to say to people who go on the journey of establishing their own business and for whom it does not work out that the State would be there to protect them if it does not work out. The State will be there on the basis of contributions that the self-employed person has made in order to give them protection and to encourage them to actually go down the road again of creating another business. Many people fail in starting their first business but they succeed in the second or third business. In doing so, they provide employment opportunities for others and employ business opportunities in their communities.
The €5 increase in social welfare payments is welcome but it will be eaten away because every local authority in the State is going to send out increased rent bills. It is a crazy situation when people get an increase from one arm of Government and another arm of Government takes it from them. The speed with which local authorities send out rent increase bills is in complete contradiction to the delays that are actually put in place when tenants try to get council and house repairs done. I imagine that all tenants will now be getting correspondence from local authorities increasing their rent. If those tenants had a problem with their house or need to get repair done the same urgency would not be attached. That is something that needs to be looked at.
Many of my colleagues have spoken about the importance of the community employment and rural social schemes. I welcome the increase in the number of rural social scheme places, but we must examine the entire offering of community employment and rural social scheme places. Deputy Pat The Cope Gallagher spoke about the inability of people under 25 years of age to get on such schemes. In many rural communities community employment is the first chance many people have to get practical employment experience. In the absence and destruction of the apprenticeship programme over recent years, the community employment programme has been the area where many people could pick up a skill which they could go on to use in construction or social services. We must re-invest in the community employment schemes network and ensure that the materials grant is adequate for the projects the schemes are doing. With rising insurance costs many community employment schemes are finding that the grant to support a scheme is being eaten up by those rising costs, which are outside their control. Accordingly, the opportunities the schemes can give to participants and the opportunities to communities who benefit from the schemes are being eroded by things that are outside their control. We must examine the costs, particularly around insurance and materials, across all the schemes, be it community employment, rural social scheme, Tús and others, and examine how working together we can minimise them.
There is much work to be done in the social protection area, but it must be done on a sustainable basis and in a manner whereby we will not return to cutting. I reiterate the point that people on a difficult journey in life need assistance from the State, be it from the Department of Social Protection, the Department of Health or the Department of Housing, Planning, Community and Local Government. They do not need blocks to be put in their way in a difficult life. I welcome the change of giving medical cards to children in families in receipt of the domiciliary care allowance, but that change must be accompanied by a far more intensive process in terms of making that award in the first place. There are so many areas in the lives of children and older people whose lives are already difficult where Government forces combine, and I do not mean this in a political way, to make their journey even more difficult. Surely the Oireachtas can set the aim of trying to take down the walls and blockages for people who are on a difficult journey.
Despite the marginal increases in social welfare payments across the board, nobody feels any more secure about their situation. As far as the recipients are concerned, austerity has not gone away. We can safely say the budget was still an austerity budget because the cuts to social welfare payments made in previous budgets have not even started to be reversed despite the introduction of the €5 increase in payments. As a result income inequality persists, with little done in budget 2017 to tackle this growing problem. Fianna Fáil, Fine Gael and the Independent Alliance were too preoccupied with election rallying to go beyond the token increases to appease future voters in a future election. These directionless increases were introduced without any attempt to address the structural inequalities that contribute to rising income inequality in this country.
When we increase the State pension we should talk about the need for a universal pension, given the ageing population. When we increase jobseekers' and disability payments by €5 per week we should take account of the poverty threshold and the fact that these social groups are most at risk of poverty. We should also examine the situation of seasonal workers and how they are impacted. These are people who, through no fault of theirs, cannot avail of full-time employment and must rely on social transfers to keep them living in their communities throughout the year. This is something I have raised in the House over the last number of years. The cuts that were made have had a direct impact on seasonal workers. The availability of jobseeker's benefit was reduced from 12 and nine months down to nine and six months. That has had a huge impact. Deputy Pat The Cope Gallagher mentioned the impact in the fishing industry. It has had a huge impact on workers in that industry. It would cost approximately €39 million to reverse that cut nationally. Serious consideration should be given to doing that because it would make a huge difference for the workers who depend on the fishing industry for employment. In addition, in a perverse way it would ensure that workers are available for work in that industry because the workers would be able to sustain themselves during periods when there is no work.
With regard to the limit on subsidiary employment of €12.70 per day, that could be increased substantially without any significant cost to the Department. In fact, the Department could not tell me how much it would cost to increase it. We should consider increasing it to approximately €25 per day. That would make a significant difference to seasonal workers who have, perhaps, farm income from their subsidiary employment. The €12.70 per day amounts to approximately €4,600 per year in income from farming. If farmers are above that it excludes them entirely from jobseeker's benefit. Jobseeker's benefit is an important payment because it is taxable, not means tested and is significant for the recipients in terms of their families and their lives. Serious consideration should be given to that. I would like to table amendments on those matters on Committee Stage but they would be ruled out of order. We are not allowed to table amendments that would give rise to a potential cost on the Exchequer. Deputy Pat The Cope Gallagher mentioned earlier that he would deal with this on Committee Stage. Perhaps as part of the Government Fianna Fáil will be able to table amendments that could put a potential cost on the Exchequer, but I will be unable to do so.
In increasing the State pension we should also discuss a universal pension for everybody. Social Justice Ireland states that the biggest inequalities in Ireland are not those between the generations but those between people on higher and lower incomes. This could not be more true than in the case of the State pensions. Few people acknowledge the fact that income inequality also exists among people over 66 years of age. According to Social Justice Ireland, 20% of elderly citizens on lower incomes have seen a reduction of 11.5% in their average weekly equivalised income between 2009 and 2011. Another matter that should have been addressed in the budget is the cut in the telephone allowance for people on pensions. That hurt elderly people very badly not only in terms of the cost of it, which was significant, but also because many elderly people depend on alarm systems in their houses. The benefit of having the telephone allowance made them more secure in knowing they could have the panic and fall alarms available for use, as a land line is required to ensure the alarms will work.
Income inequality between State and private pension provision is due to the disproportionately generous tax relief the State provides to the private pension sector. Instead of increasing State pension by €5 we could have reduced the €2.2 billion taxes foregone on private pensions in the State. Nearly 82% of the tax relief for private pensions accrue to the top 20% of earners, with 56% accruing to the top 10% of earners. Pension tax reliefs mainly benefit older, male, well paid workers. If one adds how much we subsidise private health insurance, that number increases to €3.5 billion a year based on 2014 figures. This money could have been used to introduce a phasing-in of a universal pension, with expenditure coming from reduced tax relief. For example, if we reduce the marginal rate of tax relief on private pension contributions to the standard rate of 20% this could raise approximately €560 million for the State. This could be used immediately to raise the payments to those on the non-contributory State pension, two thirds of whom are women, by a minimum of €10 a week. That would make a significant difference to them. We subsidise every other sector in this country, yet we do not appear to be able to subsidise our people.
With regard to jobseekers and disability payments, we must consider risk of poverty for those groups. One in six people in Ireland are at risk of poverty. That is just over 750,000 people living on an income below the poverty line, of whom 230,000 are children. We are all too aware of the fact that child poverty has doubled since the Fine Gael and Labour Party Government took office in 2011. The CSO has identified the groups at highest risk of poverty as the unemployed, those on home duties, people with disabilities and children. Budget 2017 did nothing to mitigate the threat of poverty. According to TASC, the Think-tank for Action on Social Change, the basic rate of social welfare is €22 a week below the at risk of poverty line, so a €5 per week increase means people will still be €17 below the at risk of poverty line. When one takes account of inflation since the cuts were introduced in the headline social welfare payments, the €5 per week only equates to €1.72 per week in real terms. If we do not drastically reverse the accumulated cuts from past austerity budgets, poverty rates will continue to increase despite marginal increases to basic income supports.
We also need to make structural changes to the tax system as that is the only solution to address income inequality. Budget 2017 continued the transfer of wealth to higher earners and private sector interests by retaining the current corporation tax rate; failing to introduce a Robin Hood tax which could bring in more than €200 million a year, something this Government says it cannot do; enabling private developers to benefit from the first-time buyer scheme; and providing for upward changes to thresholds for inheritance tax. Furthermore, the proposed universal social charge, USC, cuts will bring far greater benefit to people earning higher incomes than to lower-income employees. Also, landlords will benefit from the increased tax free rental allowance under the rent a room scheme. The Government has not done anything to address the income inequalities in the State.
Some of the budgetary measures are welcome, especially the increase in the green, low-carbon, argi-environment scheme, GLAS, income disregards and the increase in farm assist and restoration of it back to the 2012 level. It is a pity the Minister did not go back to the jobseeker's benefit, jobseeker's allowance and look at the subsidiary payment. The fisherman's tax credit is welcome and it should be of help.
The Bill provides for a technical amendment relating to the secondment of gardaí to the Department of Social Protection. I saw a photograph in a Galway newspaper of gardaí and social welfare inspectors manning checkpoints in Galway chasing up suspected social welfare fraud. Is it a good use of Garda resources to have 20 gardaí seconded permanently to the Department? The Department's 2015 annual report indicates that 1.4 million people were in receipt of weekly payments. The Department carried out 1.1 million control reviews. That covers most of the people in receipt of payments. It saved, through that exercise, €69 million, which represents a saving on the total budget of 0.3%. We do not know from those control reviews how much of that is due to mistakes within the Department where recipients were overpaid and the amount involved was subsequently recovered and how much of it was due to potential fraud. That report indicates that 208 cases were referred to the Director of Public Prosecutions for prosecution. That number of cases detected out of 1.4 people in receipt of payments works out at such a small fraction that one would nearly not bother calculating it. The number of cases is minuscule. Much more is made of social welfare fraud than the incidence of it that is taking place. It is interesting that the amount attributed to it is always lumped in with administrative overpayments, which I believe is to boost the figures. Therefore, I would question if having 20 gardaí tied up with the Department is a good use of those resources.
I want to address a number of issues regarding the Bill. We as a party tried to play a positive role with respect to this Bill in ensuring there were aspects of our policies included in it while others sat on the sideline but if they wish to do so that is fine.
We called for restoration of benefits for those aged under 26-----
Did the Deputy contribute to the debate already? He did. Others sat on the sideline and we will see how that works out. For an Oireachtas and Government to function, the Finance Bill and the Social Welfare Bill need to be passed. We need to give some degree of stability also. The budget provided for a €5 increase in the State pension, an increase we stipulated was required; a €5 increase in primary social welfare benefits; a near full restitution of the Christmas bonus; and the increasing of the income disregard to €110. It also included some welcome initiatives for the self-employed to try to equalise the provision of social welfare benefits. That is crucially important. The Government has not gone the full way in that regard but this is a step in the direction. We are particularly disappointed that other elements were not included in the budget, such as provision in respect of the one-parent family payment, and there were no increases in the family income supplement and the back to school clothing and footwear allowance. Other areas like that should have been addressed. However, we live in the real world and we are acutely aware that a finite amount of money is available. We tried to base our financial and economic policies on reality.
We also made a submission-----
Did the Deputy make a contribution already? He did.
Allow Deputy O'Brien to continue without interruption.
Deputy Brady's contribution is on the record and I would appreciate if the Deputy would allow me to make mine.
The fundamental reality is that there is only a certain amount of money to spend and it is a matter of prioritising how that can best be used. This Bill goes some way in examining and reassessing the balance and trying to provide the moneys that are badly needed in certain areas. Much more could be done and I have highlighted some of those issues.
One area I wish to focus on is how little the Bill does to address the area of pensions, especially pension provision. I completely disagree with Deputy Pringle in his call for reducing pensions tax relief to the standard rate of 20%. Other parties agree with him and they fly the ridiculous kite in saying that pension tax relief is focused on the higher earner but it is not. It is focused on middle income earners. If the Government was to reduce the pension tax relief to the standard rate of 20% we would be effectively looking at a €560 million tax increase for middle income workers, both in the public and in the private sector. We as a party would not want to see that happen.
There is very little set out in the Bill on pensions. The 2013 Social Welfare and Pensions Act introduced by the previous Government brought in what are called single insolvencies, which means that a profitable private company can wind down its pension scheme and effectively unilaterally remove their pensions scheme members from the existing pension scheme arrangements. That is a dangerous precedent to set when a Government is trying to increase pension provision and pension coverage to get workers to make provision for their retirement. Why would they make provision for their retirement when certainty in regard to the pension benefits that may accrue to a worker on retirement are removed? The Government should seriously consider reversing the single insolvency arrangements on Committee Stage. If a company and its pension scheme are insolvent, we understand the scheme would have to be wound down.
I would cite the example of the Irish Aviation Superannuation Scheme, IASS, the airport pension scheme. For the first time in the history of the State a Government legislated to reduce benefits in a private pension scheme. That was done under the State Airports Act in the period 2014 to 2015. It had the effect of reducing pension benefits for long service deferred pensioners by up to 60% - people with long service approaching retirement. We spoke about giving €5 a week back to contributory and non-contributory pensioners, which is fine, but people who had contributed to this private pension scheme had their pension payments reduced by six weeks a year by way of legislation. Those were substantial changes.
Single insolvency arrangements should not be permitted. No pension scheme should be allowed to wind down unless it has reached a 90% funding standard, and I would ask the Government to examine that. The previous Government has given employers, particularly those who have defined benefit schemes, a clear roadmap as to how they can get out of contracted arrangements and wind down those schemes, and the people who suffer are the pension scheme members.
To return to the example of what happened in the case of the airport pensioners, when the previous Government passed the Social Welfare and Pensions Act 2013 and the State Airports Act and the President had signed them into law, a week later IAG made a revised bid to purchase the remaining 25% stake in Aer Lingus. It did that because the legislation that was passed by the previous Government effectively wrote off €800 million of a deficit in that pension fund, a fund that the trustees and the company had run up and doubled over two years because they knew what the previous Government was going to allow them to do so. There are two court cases pending. If it cannot be done in this Bill, the Government must seriously examine producing a separate pensions Bill.
This Bill is very light on pensions legislation, pension regulation and how we can improve pension coverage. The only way that can be done is to give legal certainty to people who have paid into a pension scheme and then saw up to 60% of their benefits removed.
People coming up to retirement with 35 or 40 years' service thought they had a pension entitlement of €30,000 to €40,000 and it was reduced to €12,000 to €14,000. It is absolutely outrageous. The Government should try to undo the damage it did with the legislation I have mentioned already. Will the Minister of State ask his colleague, the Minister for Social Protection, if the Government is planning to produce a separate pensions Bill to deal with the areas of single insolvencies that should not be permitted and the area of pension scheme funding? The OECD's report on it and the recommendations that have been given say that no scheme should be able to wind down unless it is 90% funded because at least then there would be a decent dispersal of the assets. What will happen now is that many of our commercial semi-State companies and many of the larger companies out there that have historical defined benefit pension schemes will wind those schemes down. Thousands more workers will go through what the airport pensioners and airport pension scheme members went through. There are 15,000 workers in that sector made up of 5,000 active members who were removed from the scheme without their permission, which was facilitated by legislation passed by the previous Fine Gael and Labour Government; 5,000 deferred pension scheme members who lost up to 60% of what they had been promised at retirement; and 5,000 retired members who have lost six weeks of their pension each year because of what was done. A pensions Bill would provide us with an opportunity. I have discussed bringing forward a pensions Bill with my colleague, Deputy Willie O'Dea, to right the wrongs that were done over the last few years. I will ask the Minister on Committee Stage to look at specific arrangements that can be put in place to ameliorate the decreases in the pension that the IAS scheme members suffered as a result of previous legislation. When I asked about this by way of parliamentary question, the Ministers, Deputy Noonan and Deputy Ross, said they could not just pick out one cohort of workers and look at giving them some degree of restitution. I asked the Minister at that stage why he picked out just one specific group of pension scheme members - the 15,000 I mentioned - by bringing in specific legislation to reduce their pension scheme benefits and move them out of their scheme without their permission. That is what happened with the State Airports Act. For the first time in the history of the State, legislation was brought in by a Government to reduce pension benefits in a private pension scheme, specifically that scheme. It was done to facilitate the sale of the State shareholding in Aer Lingus. The State got €342 million for that. It did not put any of that money back into the pension fund. It set up a connectivity fund. I would love to know what is happening with that. I will ask the Minister for Transport, Tourism and Sport, which I have done, about where that money is being used. My point is we have left people high and dry. We need a pensions Bill to address these issues not only for these 15,000 workers but for those who the same thing will happen to as a result of the Social Welfare and Pensions Acts of 2013 and 2014. Those Acts facilitate companies to backslide out of their responsibilities. It facilitates a situation where a company can run down its pension scheme. They have a roadmap now to run the scheme down, submit an application to the Pensions Authority to wind down their scheme and transfer into defined contribution arrangements. It is not something we should facilitate. I do not believe any Government should facilitate it. I ask the Minister of State to bring that back to his colleague, the Minister for Social Protection. I will raise it on Committee Stage through my party colleague, Willie O'Dea. Will the Government give a commitment to look at moving a separate pensions Bill so we could work across the House on issues like that?
Deputy Pringle talked earlier about reducing pension tax relief to the standard rate. It is a joke. It is all very well to go out and say to people that higher earners benefit most. The vast majority of people who claim pension tax relief are in the middle ground; they are normal workers, men and women, who are out there making provision for their retirement. If we did what Deputy Pringle and others on the left want and reduce the pension tax relief to 20%, it will effectively increase tax on those people by nearly €600 million a year. If one looks at the issue of Garda and teacher pay and all areas in the public and private sector, by changing the pension tax relief from a marginal rate to a standard rate it would wipe out any increases that have been given and more - it would reduce take home pay substantially. That needs to be called out very clearly with the hard left, the PBP-AAA, and all these people who say that pension tax relief is for wealthy people. It is absolute nonsense. In a pensions Bill, the Government could re-state a commitment to retaining pension tax relief as it is. It could go further and change the way pensions are structured. They could be changed from just being an annuity scheme or saving scheme to a lifelong savings scheme. People could access elements of their proposed tax free cash into the future to pay down debt in certain instances or to take some moneys out, perhaps to put a deposit down on a house. Our legislation and regulations are far too rigid at the moment in that regard. There could be a penalty for people to do that which the Exchequer could benefit from. At least it would mean that people have flexibility with their fund. I have met a number of people who, through the very difficult years and before that, had actually made provision and had sizeable amounts of money in pension funds. They were broke but could not reinvest in their business because the money was sitting under trust. There could be a situation in certain instances where people could access an element of their tax free cash. They could not access their annuitable amount but an element of their tax free cash in certain instances. Government needs to look at changing the way pensions are structured by changing them to lifelong savings plan. If a life event happened, they could access some of those funds with the permission of the Revenue. That would make it much more attractive for people to pay into pension funds and join pension schemes. They will only do that if they are certain this Government, like the last one, will not take the legs from under them and pull the rug from under them when they have been paying in for years as in the example of the IAS scheme members who had up to 60% of their benefits taken. Imagine if that happened to anyone in any other sector.
I ask the Minister of State to bring those comments back to the Minister for Social Protection. We need a separate pensions Bill to right the wrongs of the previous Government and to improve pension coverage across the country. The future pension liability to the State is multiples of what the banking debt was. There is an issue and a pensions time bomb. People are sick of hearing about it but the reality of it is that one way or another, one Government or another will have to tackle this at some stage. From 2025 to 2035, there will be a situation where it will be very difficult, if not impossible, for the State to pay its State pensions and the pensions for its public and civil sector workers. A worse situation is that of the people in the private sector who have not made provision for pension benefits. They will fall within the State remit. We need to get serious about this issue. I ask the Minister of State to bring those comments back to the Minister.
Deputy Richard Boyd Barrett has offered. We have to give the Minister of State responding 15 minutes so the Deputy will have about six minutes.
That will do me. I apologise that I have not had a lot of time to listen to the discussion because I have been tied up at the finance committee. I will raise a number of issues which may or may not have been raised already. Some of them will certainly have been raised but two of them may not have been.
On an issue that probably has been raised, I want to add my voice to the chorus of objection and protest on the discriminatory jobseeker's' payments for the under-26s. I cannot overstate my anger and frustration at the discriminatory jobseeker's allowance rate applying to young people. It is absolutely retrograde in the extreme when the number of young unemployed people is disproportionate to the overall employment level. It is still extremely high notwithstanding some improvement in the overall unemployment situation. The number of young people unemployed is still very high and we continue to have very significant emigration of young people. I do not have the figures in front of me. The CSO's report on emigration from the country shows we have a very high proportion of graduates leaving this country for a combination of reasons, including low pay and the apartheid system of two tier pay rates for teachers and nurses.
This is another example of discrimination against young people. We said at the time that the recession had been used as an excuse to do things the Government might not otherwise have got away with during a normal period to try to ratchet down wages for young people and, as a consequence, wages overall and social welfare payments. Essentially, it exploited a dire crisis to ratchet down wages and social welfare entitlements.
The budget is now famously known as the €5 budget, a pathetic amount for ordinary jobseekers and pensioners who, I would like to remind the House, the Minister of State and the public, are still worse off than they were back in 2008. If that was not unfair and bad enough, young people are considerably worse off, on a half rate or a two thirds jobseeker's payment rate, depending on their age and whether they are under 26 years. This discriminatory and unacceptably low level of jobseeker's support for unemployed young people is one of the many contributory factors to youth homelessness. Social welfare payment levels being as low as they are in general contribute to homelessness because rents are absolutely out of control. As we know, even if people receive rent allowance, many of them must make under the table payments out of their main social welfare payments to sustain a roof over their head, leaving them in an impossible position. In many cases, this ultimately drives them into homelessness. If all of this is true of the general cohort of people on jobseeker's payments, it is doubly true of those on a half rate or a two thirds jobseeker's payment rate, as young people are. It is utterly disgraceful discrimination, against which I wish to protest.
The budget is a complete missed opportunity in terms of the restoration of the transitionary pension for persons who retire at the age of 65 years. Because of the doing away with the transitionary pension they receive a jobseeker's payment after retiring. It is ridiculous. At the very least, the transitionary pension needs to be put back in place in order that we will not have the crazy situation where people who are retiring after a lifetime of work are put through the ringer of being categorised as jobseekers and receive a payment which is considerably lower than the pension to which they should be entitled because they will not receive the State pension until a year later. In the future, it will be paid two or three years later, unless we do something about it because the age at which a person becomes entitled to the pension has increased, another legacy of the austerity assault in recent years.
The Department of Social Protection could have paid for these and other measures and did not have to go begging to the Minister for Finance. It cannot use the excuse that Department of Finance would not give it the money because it could have raised it in doing something about the abysmally low level of employers' PRSI paid in this country, a matter which is within the Minister's remit. Employers pay at the rate of 42% of the average level of employers' PRSI in the European Union. This is abysmally low and a major reason the State does not have the money for social protection payments and public services and to pay for the welfare state. We charge employers an abysmally low level of PRSI, one of the many subsidies to the rich in this country in terms of tax breaks. It was not even proposed to bring up the rate to the EU average. In our alternative budget we very simply proposed that there be a new rate of employers' PRSI of 19.75% for those earning in excess of €100,000 year. This measure would raise €596 million, as costed by the Department. There would be an extra €596 million if the Department had created an extra band of PRSI for those earning more than €100,000. It would cover all of the issues I have mentioned and there would be a lot of money left over to protect the vulnerable in our society.
The Deputy has exceeded his time by one and a half minutes.
I am done.
Gabhaim mo bhuíochas le hachan Teachta fá choinne na moltaí sa díopóireacht anseo inniu. In opening the debate on the Bill on Tuesday the Minister for Social Protection, Deputy Leo Varadkar, characterised the thinking and policies underlying the Bill and budget 2017 as prudent, with modest increases for all those who looked to the social welfare system for income support; inclusive, with no one being left behind and a clear commitment to ensuring everyone shared in the positive effects of economic recovery; progressive, with particular attention being given to a critically important sector of the economy - the self-employed; and targeted, with key measures aimed at lone parents, farmers and schoolchildren.
In listening to the debate one thing that was striking was the positive response to the extension of benefits to the self-employed. There is a deal of work to be done to ensure the systems in place in the Department will be in a position to deal with the applications for treatment benefit from March and for invalidity pension from December next year. That is the reason for the deferred implementation dates, rather than being a cost saving measure in this case. As the Minister said previously, he plans to continue with the reforms in this area and work towards the extension of other benefits to the self-employed. Deputy Willie O’Dea asked about the full year cost associated with the extension of invalidity pension to the self-employed. It is estimated that the cost in 2018 will be in the order of €23 million, but as the scheme matures over a number of years, the full year cost of the measure could be in excess of €80 million.
Many of those contributing to the debate queried the reason there were no increases in budget 2017 in payments such as the back to school clothing and footwear allowance, family income supplement, the free fuel allowance and qualified child payments. Deputies know that there was a limited amount available to the Government to enhance the social protection system. When it comes to children, we decided to focus on improving funding for services such as child care, school breakfasts and meals, SNAs and medical cards for children with disabilities.
The reduced rate of jobseeker’s allowance paid to young people was referred to by a number of contributors. This approach seeks to discourage young people from entering long-term welfare dependency by incentivising them to avail of education and training opportunities. Long-term welfare dependency carries severe consequences for those affected, their families and communities and the economy as a whole. Budget 2017 further enhances this incentive by providing that where a young jobseeker returns to education or training, his or her allowance will be increased to match the maximum rate of jobseeker's allowance of €193 per week from next September, an increase of €33 per week. This is the largest single weekly increase provided for in the social welfare package. Young carers, young people with disabilities, lone parents and young people participating in community employment, Tús and other schemes will receive the full €5 increase. We want to encourage, support and reward young people who seek to enhance their skills. It is important to also note that the levels of youth unemployment have been falling, from 20.9% in October 2015 to 15.1% in October 2016.
Some Deputies raised concerns about JobPath, a new approach to resourcing the delivery of employment services to those who are long-term unemployed. Two service providers, Turas Nua and Seetec, are contracted to work with persons who are long-term unemployed. These contractors supplement the work of the Department's case officers and local employment services. JobPath provides additional capacity for the Department in order that it can extend the case management approach in delivering employment services to those who are long-term unemployed.
Participants on JobPath are provided with a range of training and development supports which can include career advice, CV preparation interview skills, specific skills training and funding for items such as tools and work clothing where appropriate. These supports are designed to help the jobseeker compete for and secure appropriate employment. Some 54,000 people have started on JobPath to date and very few complaints about the service have been recorded by the Department. There has now been a sustained reduction in the numbers signing on the live register. In October 2016, the live register stood at just over 277,000, a reduction of more than 43,500 on the October 2015 figure.
Deputy O'Dea raised some issues in regard to pensions. Other than some technical changes to the welfare code, this Bill is now designed solely to give effect to the measures announced in budget 2017 and, beyond the increases in the rates of pensions payments, no other legislative change involving pensions is addressed in the Bill. The pensions area, however, is hugely important and challenging. Expenditure on pensions, at approximately €7 billion, is the largest block of expenditure by the Department of Social Protection, representing some 35% of its expenditure. Demographic change alone increases this by €200 million each year. Maintaining the value of the State pension is critical to protecting older people from poverty. Other pension-related issues were raised and the Minister and his officials will no doubt be looking at them. The issues associated with pension entitlement are constantly being reviewed. Entitlement levels are currently calculated by means of a yearly average calculation, where the total contributions paid or credited are divided by the number of years of the person's working life. As the Deputy said, this can give rise to situations which are anomalous. Work is under way to replace the yearly average system with a new system termed the "total contributions approach". Under this approach, the number of contributions recorded over a working life will be more closely reflected in the rate of pension payment received. The position of women and men who were home-makers will be considered in developing these proposals.
It is expected that the total contributions approach to pension qualification will replace the current average contributions test for State pension contributory for new pensioners from around 2020. This is a very significant reform with considerable legal, administrative, and technical components to be put in place prior to its implementation and it is an area to which the Minister, Deputy Varadkar, will be paying close attention over the coming months. Deputies also raised concerns about the position of those who retire from the workforce before the age of 66, when they would become entitled to claim the State pension contributory. The background to this issue is that the Social Welfare and Pensions Act 2011 provided that the State pension age will be increased gradually to 68 years. This is being done to make the pension system sustainable in the context of increasing life expectancy. Each year more people are living to pension age and living longer in retirement. As a result of this demographic change, the number receiving the State pension is increasing by approximately 17,000 annually. This has obvious implications for the future costs of State pension provision which are currently increasing by close to €1 billion every five years.
The change to pension age began in January 2014 with the abolition of the State Pension transition which was available from age 65 for those who satisfied the qualifying conditions. This had the effect of standardising State pension age for all at 66 years. This will increase to 67 in 2021 and 68 in 2028. There is no general statutory or compulsory retirement age in the State. The age at which employees must leave their particular job is a matter for the contract of employment between them and their employers and there have always been people who have retired before State pension age. This does not prevent them from taking up a new job. In terms of financial supports, social welfare benefits will continue to be available to the age of 66 for those who are required to leave employment. Jobseekers whose benefit expires in their 65th year will continue to be paid benefit up until the age of 66. Where a jobseeker's benefit claim spans two benefit years, a new governing contribution year requirement is not applied to the second benefit year of a claimant aged 65. Effectively, this means that they may receive payment in both years based upon eligibility in the first year.
Deputy Broughan asked about the current standing of the social insurance fund. The Revised Estimates for 2016 provided for a surplus of €217 million. It is envisaged that the surplus at the end of the year will be in the order of €300 million after the payment of the Christmas bonus.
There were a number of contributions concerning the impact of reforms to the one-parent family payment in recent years, issues that were raised also at the most recent session of the Joint Oireachtas Committee on Social Protection, when the findings of a recent report by Dr. Michelle Millar from NUIG, commissioned by the Irish Research Council, were considered. The rationale for reducing the age thresholds of the one-parent family payment is sound. Again, it is designed to discourage long-term welfare dependency by enabling the Department to engage with lone parents in order that they have enhanced access to the wide range of education, training and employment supports that are available. The increase in the earnings disregard for one-parent family payment from €90 to €110 per week, which is provided for in this Bill, is evidence of the commitment of the Government to offer greater encouragement to lone parents to avail of employment opportunities and to increase their income from employment. This is the right direction to take and future reforms affecting lone parents will continue to concentrate on making child care more affordable and work more attractive, as well as reducing barriers to education.
Issues relating to liable relative and maintenance provisions as they affect lone parents, and in particular those lone parents who moved from one-parent family payment to the jobseeker's transition payment, were also raised by Deputy O'Dea. The most recent data indicate that some 40% of one-parent family payment recipients and 36% of JST recipients are in receipt of maintenance. There is no evidence that the difference between these numbers, of just 4%, is a result of the recent reforms. However, the Department is now reviewing the legislation governing liable relatives and maintenance.
Deputy Penrose inquired about what will be done with the increased funding being made available for the school meals programme. The €5.7 million of additional funding, which will bring the total allocation in 2017 to €47.7 million, will be directed to increasing funding for existing DEIS schools, both those which are already in the scheme and those which are not yet participating. It will provide funding for newly designated DEIS schools following a review of DEIS by the Department of Education and Skills and will increase funding for breakfast clubs in non-DEIS schools, feeding 35,000 more children. Most disadvantaged children are not in DEIS schools. It is the Minister's vision to extend school breakfasts to all primary schools over the next five to ten years.
A number of Deputies raised concerns about the time it takes for the Department to process applications for the carer's allowance. Deputy Barry suggested that the average processing time for carer's allowance was 40 weeks but the most recent data indicate that the average processing time is now 14 weeks. Another Deputy raised the time it was taking to deal with appeals and I appreciate that this is still a long time but efforts are continuing to reduce it further against a background of an increased number of applications. Additional resources have been and will be applied to improve the average processing time. As with a number of other schemes operated by the Department, and particularly those where a medical assessment is involved, processing times generally will be reduced if applicants provide full and complete information and evidence when the initial application is being made and attach all of the required supporting documentation.
I appreciate that Deputies raised a range of other issues during the course of the Second Stage debate. I and the Minister welcome the generally positive response to the Bill from the House and the acknowledgement that everything we would like to do cannot be done in one budget. Deputy Brendan Smith acknowledged the work on farm assist, an issue which was also raised by Deputy Calleary. It is important that the collective work of this House continues to ensure that what was a very difficult situation for a number of farmers was addressed in this year's budget.
My two county colleagues raised the issue of seasonal employment and I will continue my conversation with the Minister on that issue. It is particularly acute in respect of the Killybegs area and for part-time fishermen in the processing sector. It also affects farmers.
I congratulate Deputy Moynihan for introducing a new history curriculum to the House whereby the history of the State just goes back to 2011, the State was formed in 2011 and nothing happened before then.
I also congratulate Sinn Féin, in particular Deputy Aengus Ó Snodaigh, for setting an extended continuum prior to 2011 by going back a few years.
In a financial context, just under €30 billion has been taken out of the economy since 2008. We now have an additional €1.3 billion with which to play in the total budget for next year. That puts in context how far we have come and where we need to go. As our resources are finite, it is important that we continue to work together to ensure we will make life easier for the many people who are still struggling.
I acknowledge Deputy Dara Calleary's comment that he is already working hard on the next budget, which is a good sign for the future. Perhaps he might spare a thought for the budget for the year after that also.
We will expect to receive the full support of the Government for it.