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Dáil Éireann díospóireacht -
Tuesday, 24 Jan 2017

Vol. 935 No. 3

Other Questions

Unemployment Levels

Bernard Durkan

Ceist:

50. Deputy Bernard J. Durkan asked the Minister for Social Protection the extent to which he proposes to put in place incentives to reduce youth and long-term unemployment; the extent to which existing schemes require upgrading in line with requirements; and if he will make a statement on the matter. [2761/17]

The purpose of this question is to highlight the situation with long-term and youth unemployment, the extent to which progress has been made and the extent to which it is necessary to continue to ensure that the needs of the long-term and young unemployed are pursued.

The Government’s primary strategy to tackle unemployment, including long-term unemployment and youth unemployment, is twofold. The Action Plan for Jobs supports continuing strong economic recovery and employment growth.

Policies and actions to ensure unemployed people benefit from the increase in employment are set out in the strategy paper Pathways to Work 2016-2020. These policies have been effective in reducing both youth and long-term unemployment.

Youth unemployment is generally higher than adult unemployment in all EU member states because, at any time, a large number of young people are recent leavers from education and seeking a first job. However, the most recent data show Irish youth unemployment has fallen from a peak of 31.1% in 2012 to 14.5% in December 2016. Irish youth unemployment has thus fallen from well above the EU average in 2012 to below the current EU figure of 18.8%. Over the same period, the rate of long-term unemployment has fallen from a peak of 9.5% to 4.2%. Both figures can be expected to fall further this year in line with the forecast fall in overall unemployment.

Policy continues to focus on support for the long-term unemployed and young unemployed. For example, the Pathways to Work 2016-2020 strategy prioritises long-term unemployed people. It does this most notably through the roll-out of JobPath to engage more systematically with this group, targeted wage subsidies under JobsPlus and reserved places for long-term unemployed jobseekers on employment and training programmes. Under the Youth Guarantee there is monthly engagement by case officers with unemployed young people to assist them to prepare and implement personal progression plans for employment. Where young people do not find work quickly, additional supports are offered through places on employment and training schemes. I am confident these current and planned measures will support further reductions in long-term unemployment and youth unemployment.

I thank the Minister for his reply. To what degree has any examination been carried out as to the underlying causes of long-term youth unemployment? To what extent have the qualifications of the young people on the live register been examined with a view to ascertaining how best to ensure people in the category have the best possible chance of achieving employment at the earliest opportunity? To what degree are long-term unemployed people in the early 60s age bracket of particular concern?

In our employment activation services, we try as much as possible to treat people as individuals rather than as part of a demographic group, whether old or young. Everybody is assessed and a probability of exit from unemployment, PEX, score is calculated, which indicates the probability of their finding employment without assistance. The focus is put on those who would find it most difficult to find employment. While one can put people into demographic groups and make assumptions based on it, experience has shown the best way to assist people from welfare into employment is to assess them individually, regardless of their age, see what their needs and education levels are, and work with them from there.

I again thank the Minister for his reply. I welcome the individual, one-to-one assessment, which can personalise the attention given to the unemployed person, whether they are young or older. One of the experiences that has shown up over the years is that people in the early 60s age bracket seem to have different requirements from others in the sense that they may have been out of work for a long time and may have developed health issues in the interim. To what extent can their particular situation be catered for, given that they may have been out of work for a long time and may not be in the best of health?

We have a particular concern with people who are unemployed in their 60s. Again, everybody's individual story is different. Somebody may have been working for decades and may have been made redundant in his or her 60s. Another person may be in his or her 60s and may not have worked for decades. This is a very different person, and that is why it is important to assess people individually. In some cases, people are not able to work due to health issues and it is more appropriate for them to apply for an alternative payment such as an illness payment or a disability payment. The proportion of people in receipt of illness and disability payments rises through the 40s, 50s and 60s. If they are able to work and do not have a disability, they are considered to be jobseekers.

Family Income Supplement Eligibility

Richard Boyd Barrett

Ceist:

51. Deputy Richard Boyd Barrett asked the Minister for Social Protection if he will ensure people on zero-hour contracts who some weeks work the required 19 hours per week to qualify for family income supplement, FIS, are granted FIS for those weeks; and if he will make a statement on the matter. [2772/17]

We have an unacceptably high level of low-paid workers, the second highest in the OECD. That is bad enough. The Minister's failure to do anything about low-hour contracts compounds it. What makes it even worse is that people who are on low-hour contracts and might be entitled to FIS often cannot get it, given that employers will not fill out the Part 8 form. The lone parents group, Single Parents Acting for the Rights of Kids, SPARK, has asked the Minister to get rid of the form and allow for other ways for workers on low-hour contracts to prove they were working and fit the criteria for FIS payments. I am asking the Minister again.

FIS is an in-work support which provides an income top-up for employees on low earnings who have children. FIS is designed to prevent in-work poverty for low-paid workers with child dependants and to offer a financial incentive to take up employment. In excess of 57,000 families with more than 127,000 children are in receipt of FIS. The estimated spend on FIS this year is approximately €422 million. To qualify for FIS, a person must be engaged in insurable employment which is expected to last for at least three months and be working for a minimum of 38 hours per fortnight or 19 hours per week. Any combination that reaches 38 hours over a fortnight is acceptable. A couple may combine their hours of employment to meet the qualification criteria. The applicant must also have at least one qualified child who normally resides with or is supported by him or her. The average family income must be below a specified amount, which varies according to the number of qualified children in the family.

For low income workers with less than the minimum hours of employment for FIS and working on a casual basis up to and including three days per week, the jobseeker’s allowance scheme provides in-work income support through daily disregards and tapered withdrawal of payments. Individuals on jobseeker’s benefit can also work up to three days per week. For each day they work, there is a proportionate reduction in their jobseeker’s benefit payment.

If a person cannot meet the 19 hours FIS threshold or if his or her hours vary significantly from week to week, the Department offers a number of other schemes that can provide income support that can be combined with earnings from employment, subject to each individual’s circumstances. These can include disability allowance, carer’s allowance, the one-parent family payment, jobseeker’s transitional payment and the part-time job incentive scheme. Combined, the Department provides an extensive system of social welfare support which facilitates recipients taking up some employment while maintaining their social welfare payments.

The Minister's answer does not address the issue I raised. As SPARK made clear to the Minister at the meeting of the Oireachtas Joint Committee on Social Protection, many employers of employees on low-hour contracts will not sign these forms. People have come to my clinic to make the same point. The forms require employers to indicate that somebody works a minimum of 19 hours per week. Low-hour contract employers should be banned. However, given that the Minister will not ban them, they will not fill in a form in which they commit to employing people for 19 hours per week. Consequently, people who are entitled to FIS and who desperately need it given that they are on low-hour contracts and on low pay, cannot get FIS. The Minister needs to do away with the Part 8 form and allow for another mechanism by which these workers can demonstrate that they fit the criteria of working the hours required.

The three-month rule is a problem. Given the precarious nature of their employment, many of these workers will not necessarily fit into the rule. The jobseeker's allowance payment available to people who work three days does nothing for workers on low-hour contracts who work four or five days but might work only four hours per day. They cannot get jobseeker's allowance and, if their employers will not fill out the form, they cannot get FIS. The problem must be addressed for the sake of low-paid workers, many of them women, who need income support.

I was not aware the Deputy was going to raise a particular issue around the Part 8 form and it was not in his original question. Accordingly, I am not in a position to answer directly today. However, we are obviously going to need some sort of mechanism to find out how many hours somebody worked. That is the basis to the payment. The Deputy suggested we replace the Part 8 form. With what does he suggest we replace it? We need some mechanism to find out how many hours someone worked and what he or she earned.

I got agreement at Cabinet today on beginning the public consultation for the new working family payment. As the Deputy knows, the programme for Government commits to the introduction of a working family payment to reduce child poverty and ensure families are not better off on welfare than in work. There are several ways in which we support working families with the cost of living such as child benefit, the increase for the dependent child and, of course, family income supplement, FIS. There is also the development of this new payment, which could be an additional payment to these or one to replace all of these, and is an opportunity to reform the whole system.

We need to have that information, however. I do not believe getting rid of the form would assist us in getting the information we are not getting.

It would. If employers are not willing to fill it out, then people entitled to the payment are not able to get it. There are other ways in which employees could prove entitlement, such as the use of payslips and so on, which would allow them to demonstrate they have been working. There is a three-month or more requirement. The Minister could have the option for it to be weekly, fortnightly or monthly assessed, where employers might be more willing. For example, an employer could state the person worked for a week for the required 19 hours or for the required hours in a month, because they might be reluctant to commit themselves for the year. Of course, that is a separate issue as employers should not have people on these low-hour precarious contracts.

Given the Minister has not banned these practices, there should be some mechanism which allows employees to prove in another way that they fit the criteria. Alternatively, we could change the assessment to allow it to be done on a weekly, fortnightly or monthly basis, where the employer might be more willing to sign the form stating this person worked the required hours over a period.

I will certainly take that into consideration as part of any changes we are going to make. Like I said, however, I am not entirely clear as to why an employer would refuse to fill out this form. Expenditure on FIS in 2000 was €39 million. It went up to €186 million in 2010 and will probably hit €413 million in 2016. This has been a significant expansion in the number of families in receipt of FIS. My concern is the reverse, namely, that employers know FIS exists and believe they can get away with paying less than they should because the social protection system will top it up. It seems to be strange, therefore, that employers would refuse to sign this form.

That is a big issue and that abuse needs to be stamped out.

State Pension (Contributory)

Bernard Durkan

Ceist:

52. Deputy Bernard J. Durkan asked the Minister for Social Protection the extent to which progress has been made in addressing the issue whereby women, for one reason or another, are deprived of contributory pensions having retired from the workplace while raising their families or due to the marriage ban and who have made a major contribution to society in the course of their working lives; if their cases will be re-examined with a view to crediting them with sufficient contributions to enable them qualify for State or retirement pension; and if he will make a statement on the matter. [2763/17]

Martin Heydon

Ceist:

53. Deputy Martin Heydon asked the Minister for Social Protection his plans to address pension reform in 2017 and, specifically, the way this might impact on many women who having left the workforce to raise families only qualify for reduced State contributory pensions; and if he will make a statement on the matter. [2778/17]

My question, as does my colleague’s, relates to those women who, for one reason or other, had to leave the workforce either to raise a family or because of the marriage ban. As a result, they find themselves in a position of qualifying for a lower amount of a pension or, in some cases, no pension at all. It might be said their spouses might qualify but that is not the issue. There is also the other related issue whereby in the case of partners in a household, whether they be small shopkeepers, small business owners, small farmers or whatever, only one partner qualifies for a pension.

I have raised the issue with the Minister and his predecessor on several occasions in the past about contributions to the State contributory pension and how it has impacted out, particularly the whole area of averaging. I know the Department is undertaking a review of this. It has had an impact on women who worked in the home, were self-employed, were affected by the marriage ban or spent time raising families. I have some examples to give to the Minister after his initial response.

I propose to take Questions Nos. 52 and 53 together.

The State pension is a valuable benefit and is the bedrock of the pension system. There are two State pensions. First, the State pension non-contributory is a means-tested pension funded from taxation. Second, the State pension contributory, which is not means-tested, is paid from the Social Insurance Fund. Accordingly, it is important to ensure those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives. To ensure that the individual can maximise their entitlement to a State pension, all contributions, paid or credited, over their working life from when they first enter insurable employment until pension age are taken into account when assessing their entitlement and the level of that entitlement.

The homemaker's scheme makes qualification for a higher rate of State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme, which was introduced in and took effect for periods from 1994, allows up to 20 years spent caring for children under 12 years of age, or caring for incapacitated people over that age, to be disregarded when a person’s social insurance record is being averaged for pension purposes, subject to the standard qualifying conditions for State pension (contributory) also being satisfied. This has the effect of increasing the yearly average of the pensioner, which is used to set the rate of his or her pension.

The marriage bar describes a rule that existed in most of the public service, and some private sector employments, where women were required to leave their employment upon marriage. It never applied to self-employment and the practice was abolished in 1973 when Ireland joined the EEC. As it was a rule rather than law, married women could either return to work or take up other work, and many did. It is worth remembering that public servants recruited prior to 1995 paid and still pay a reduced PRSI rate of 0.9% with no contribution from the employer. Accordingly, they are not entitled to the State pension, regardless of gender and marital status. In these cases of public servants recruited prior to 1995, had they not got married, they still would not be entitled to a State pension. This also applies to men. In such cases, therefore, the marriage bar would not generally have impacted on State pension entitlement, as they would not have qualified for that payment had they remained in public sector employment. Instead, by impacting upon their continuing public service employment, the marriage bar’s pension implications, where they exist, more generally relate to a person’s eventual entitlement to a public service pension. Any questions regarding this issue are a matter for the Minister for Public Expenditure and Reform.

Where someone does not qualify for a full rate contributory pension, they may qualify for an alternative payment. If their spouse has a contributory pension, they may qualify for an increase for a qualified adult, amounting up to 90% of a full rate pension. Alternatively, they may qualify for a means-tested State pension non-contributory, which amounts up to 95% of the maximum contributory rate.

I have confirmed my intention to develop, publish and commence the implementation of an action plan for the reform of pensions. This action plan will include a roadmap for the reform of the State pension. It is planned that a total contributions approach will replace the yearly average approach from around 2020. The position of homemakers will be carefully considered in the context of that reform.

I thank the Minister for his reply. There are several issues which slipped through the net but which we have discussed in the past. There is a question about the methodology of the calculation of an entitlement to a contributory pension. It is meant to be over the years within which a person worked, starting from the beginning to the conclusion. Take the case of people who may have worked for five years at the beginning of their working life, took a gap of 15 years and went back to work afterwards. Often, they may have actually worked longer than some of those who qualify for a full pension. However, by virtue of the methodology in the calculation, they find themselves having a reduced pension or, in some cases, a very much reduced pension, depending on the extent to which they have had contributions.

Another issue relates to the business sector. Take the case of a shopkeeper. Under the 1998 Act, the shopkeeper would have been eligible to make contributions and entitlement would have followed to a contributory pension. However, the partner in the business, say the spouse, in many cases is refused on the basis that he or she could not prove a partnership.

There are two categories that need to be looked at very carefully.

The final point relates to the marriage bar. We know the situation in respect of people affected by the latter. It should be noted that many of those public servants got refunds of contributions when they married and withdrew from the public service and that this ended their entitlement to anything.

I will give the example of a constituent who started working in 1966 and has an average of 25 contributions, which means she is on a reduced rate of €196 per week. She was self-employed for a number of years which means she does not have the maximum contributions and believes this is unfair in view of the fact that others who did not work for as long are in receipt of pensions at a higher rate. I will touch on a point that was made previously. One can argue that she was disadvantaged in a way that is true for many cases with which I deal. Somebody who worked for a couple of years early in life and then went on to raise a family would probably have ended up much better off if those first three or four years had not been worked because the average would have only been based on the time after the family was reared and the person went into employment. Those first few years, in the cases I have come across, tended to involve quite low-paying jobs but the person went out at 17, 18, 19 or 20 to get into the workforce and it ended up costing them a great deal in terms of their pensions. That makes averaging a particularly harsh and unfair mechanism.

I will look at some elements. Farming families are impacted upon here, as are small businesses. There are examples that show there is a need for change. We are mindful that whatever change is made, the knock-on impact on other pension holders has to be considered as well.

There are a couple of points. If someone was a partner in a business, it should be easy enough to establish whether that person paid PRSI. If an individual did not pay PRSI, he or she is not entitled to a contributory pension. People do not get contributory pensions unless they pay PRSI. That is how a contributory pension works. It should be easy enough to establish their record if they paid PRSI. We have very good records in that regard. Once one has been paying PRSI for ten years, one is entitled to a contributory pension. If one did not pay, one is not entitled.

On the issue of the marriage bar, any public servant, male or female, recruited before 1995 is not entitled to a contributory State pension. Whether they are male, female, married or single, they are not entitled to it. A person might be entitled to a pension from the Department of Education and Skills - if he or she was a teacher or - the HSE or the Civil Service. However, a public servant recruited before 1995 is not entitled to a contributory State pension, whether they are a man or woman, married or single. The system was totally different then. They did not pay PRSI at the full rate. Therefore, they are not entitled to a contributory State pension.

Most contributory pensions work over a period of 40 years. If one worked two years, one gets two fortieths; if one worked ten years, one gets ten fortieths; and if one worked 40 years, one gets the full pension. The contributory State pension is very odd. One can get a full State pension after ten years, if one worked the right ten years, which is too little time. That is one anomaly. Conversely, one can lose out very badly if one started working very young, worked for a number of years and then had a big gap before going back to work again for a number of years. One might, having worked 20 years, get a lower pension than somebody who worked ten. Those are two anomalies and we will have to address them at the same time. One group will lose and another will win. I need to present the detail of those proposals to the House before we agree to implement them.

The Minister clearly understands the implication of the situation and the complicated issues that are involved. We are trying to encourage him to change the system to accommodate the people to whom we refer. In the case of the employment, it is not as easy to establish the existence of a partnership as it was. At the beginning of the downturn in the economy, changes were made that mean it is virtually impossible to establish it even though both partners worked in the business. It should have been taken into account - and previously was taken into account - in the determination of an individual pension for each partner on the basis that there was a partnership. The problem was to prove that the partnership existed. With regard to those women who do not qualify for a pension at all, it can be said that the non-contributory pension is available. However, if the spouse qualifies for a pension, there is the old story that the household resources are not distributed evenly in every household. We need to keep account of that.

I thank the Minister for his detailed response. I will come back on one point. The current system of credits was not in place when decisions were being made. Some of these individuals did not have the option look after their pension entitlements in the same way people can do now. I am not sure if the Minister's Department has looked at costings around retrospectively giving back credits to deal with some of the people caught by this anomaly. Does he have any idea what the cost for such a move would be?

We have various possible costings and projections but I would have to know exactly which anomaly the Deputy is referring to because there are a number of things that people describe as anomalies in the pension system. With regard to partnerships, unless I misunderstand Deputy Durkan, it is not a case of proving whether a partnership existed, it is a question of proving that somebody made PRSI contributions. Since PRSI was introduced 30 or 40 years ago, people have had to make contributions in order to get contributory pensions. If one did not make PRSI contributions, one does not get a contributory pension. That is the way it has always worked. PRSI is paid into the social insurance fund and out of that comes the State contributory pension. The test is whether a person can establish that he or she made PRSI contributions. If a person was not making PRSI contributions and was not paying tax, it is difficult to see how that individual would be entitled to a contributory pension. Such a person might be entitled to apply for a non-contributory State pension but a means test would apply.

Community Employment Schemes Eligibility

Brendan Griffin

Ceist:

54. Deputy Brendan Griffin asked the Minister for Social Protection the position regarding reforming the community employment scheme qualification criteria; and if he will make a statement on the matter. [2579/17]

This question is about eligibility for community employment, CE, schemes. Something that has been brought to my attention in my constituency is that the eligibility criteria are far too restrictive for those who want to participate on such schemes. I have raised this matter with the Minister previously. He has been working on it, so I am seeking an update on the progress that has been made on broadening the criteria to allow more people to participate. This is a product of the good news that more people are returning to full-time employment. It is becoming more challenging to get people into schemes. CE schemes have a huge societal impact. They also have a very positive impact on the labour activation side. We would be very grateful if the Minister could update us on the position.

As the Deputy is aware, community employment, CE, aims to help long-term unemployed people to re-enter the workforce by breaking their cycle of unemployment through a return to a regular work routine. To this end, CE also provides training and development to participants. I am very conscious of the valuable role that CE schemes play in the provision of services to individuals and communities across the county. The current eligibility criteria for the programme have been expanded and changed over the years and are designed to ensure the maximum availability and utilisation of places. The basic eligibility requirement is that a person is currently in receipt of a CE-qualifying payment from my Department for the requisite period. Recent changes to the eligibility criteria for CE include the reduction in the entry age for participants working directly with service users in the child care and social health care sectors to 21 years of age. The standard minimum entry age for CE is 25. The eligibility criteria for participants aged 62 and over have been eased in terms of the maximum duration they can remain on the programme.

With the ongoing welcome reductions in the number of people unemployed, the Deputy will understand that issues such as the appropriate level of expenditure, the number of places and the criteria for participation on employment schemes all need to be considered and reviewed given the changes in the economy. I hope to bring a memorandum to Government on these matters in the coming weeks. If changes are agreed, consultations with stakeholders will be facilitated before their introduction.

I thank the Minister and welcome his work on this. I appreciate that he is trying to address the matter. I suggest that further to the changes that have already been made, which are welcome, we look at the 2,000 rule and change it to allow more people back in, such as those who have previously benefited from the CE scheme. It should not be held against them. If that could be changed, it would be a very progressive move.

Universal eligibility at 21 would be another progressive measure. It would help participants on the CE schemes and also the communities that benefit from the work of those participants.

The issue of having to be unemployed for 12 months is regrettable and six months or perhaps even three months is an appropriate amount of time for someone to gain eligibility. The issue of spousal swaps could also be looked at and there could be additional financial rewards for individuals for whom there is not enough financial incentive at present, for example, lone parents.

All of these issues could be looked at, given it would benefit everybody involved - the State, the communities which are served by the community employment schemes and, of course, the individuals who are participating. I have yet to meet a person who has participated in a scheme who has not benefitted from it. The benefits of community employment are very understated. I appreciate the work of the Minister to date. It would be very helpful if we could address those measures.

I thank Deputy Griffin for raising this question at what is a very timely moment. What we have seen in recent years is a big expansion in the number of schemes. In addition to the extra CE schemes, Tús was added, Gateway was added on to that, JobBridge was added on to that and we now have JobPath as well. At the same time, we have seen a massive reduction in unemployment, which means many schemes, programmes and services are having difficulty filling vacancies, largely because of the mismatch that now exists between the number of placements and the number of people who are unemployed.

My officials are looking at some of the rules to see which ones can be relaxed. I hope to be able to bring proposals in that regard to the Cabinet sub-committee in the next couple of weeks for approval by Cabinet. I believe we need to be dynamic and to react and respond to changing economic conditions, so the rules should change depending on the economic conditions we face.

I am glad to hear the Minister is reviewing this. Due to the welcome drop in unemployment, which was outlined earlier, the current eligibility criteria for participating in the schemes are overly restrictive and, indeed, threaten the future of many of those schemes across rural communities. Many schemes are wobbling all over the place. At one time, notices looking for people would go up and would be taken down within a week, but they are now up for over three or four months. Deputy Griffin is right that those who participate in a scheme, for the most part gain invaluable experience that allows many to transfer on to gainful employment. The schemes are also very important as a rehabilitative measure for many in the community.

Deputy Penrose is correct. I am particularly looking out for schemes that provide important services locally, for example, cutting the grass in clubs and meals on wheels and in other areas where I do not want to see service provision damaged. I encourage supervisors to consider people who are harder to reach or who find it hard to take part in these schemes. Very good and qualified people were often available during the recession but they are no longer available as they have gone back to work. It now falls on CE scheme supervisors and others to make a greater effort to encourage people who are very long-term unemployed, those with mental health issues and those with disabilities in order to try to get them on the schemes. I know they are harder to work with but they are the ones who need the help the most.

It was mentioned that the additional payment is very small, which I acknowledge. In addition, the cost of travelling to and from the scheme, particularly in rural areas, can be very significant. I am not in a position to increase that this year but it is something I will certainly consider for the next budget.

I thank the Minister and Deputy Penrose for their comments. Every Deputy will be aware of the positives and the huge benefits in this regard. I appreciate the Minister's acknowledgement of the changes that have taken place in the economy. Thankfully, it has changed for the good but the schemes need to adapt and change as well. It would be an awful shame if the very positive work that has been done in recent years in building up schemes throughout the country that have given service and help to so many people was to falter due to a lack of supply of personnel. It is a challenge to strike a balance between having enough people to participate in the schemes and having an effective labour activation measure in place through the schemes. I welcome the Minister's work to date and, hopefully, we will see progress.

Social Welfare Benefits Eligibility

Willie Penrose

Ceist:

55. Deputy Willie Penrose asked the Minister for Social Protection his proposals to extend more social insurance cover to self-employed persons including a form of jobseeker's benefit where a person's business fails or they can no longer continue working in their profession or trade; and when it will be implemented. [2756/17]

Tony McLoughlin

Ceist:

62. Deputy Tony McLoughlin asked the Minister for Social Protection the action he has taken to date to support self-employed persons here; the plans in place to extend benefits to this sector; and if he will make a statement on the matter. [2738/17]

I ask the Minister to outline his objectives and the policy he will pursue to try to achieve a just and equitable resolution for the self-employed in the application of the social welfare system, given the fact there are over 300,000 self-employed people across the country. They act as employers as well as employees at various times and provide vital employment but they have been omitted from the benefits of social welfare provision up to this point in time.

I propose to take Questions Nos. 55 and 62 together.

The Government is committed to encouraging self-employment and entrepreneurship. This includes enhancing the position of the self-employed through a supportive tax regime and, very importantly, improving the level of PRSI-based benefits available to self-employed people. This has been one of my key priorities since becoming Minister in this Department.

On budget day I was pleased to announce important measures which will directly benefit the self-employed. From March 2017, the self-employed will have access to the treatment benefit scheme, which includes free eye and dental examinations, and contributions towards the cost of hearing aids. Treatment benefit entitlements will also be extended from October 2017 to provide further dental and optical benefits. More significantly, self-employed contributors will be eligible to apply for the invalidity pension from December 2017. For the first time, this will give the self-employed access to the safety net of State income supports if they become permanently incapable of work as a result of an illness or disability, without having to go through a means test. This is a real advance in the level of cover available to the self-employed.

I plan to continue extending cover for the self-employed to other benefits on a phased basis in future budgets. Throughout 2017 my Department will examine the extension of social insurance to cover other risks and contingencies, including, crucially, developing proposals on a form of jobseeker's benefit where a person's business fails or where they can no longer continue working in their profession or trade. I look forward to making further improvements in the years ahead.

Self-employed people have acknowledged that the Minister is making inroads and some significant improvements, which are very welcome. To have invalidity pension coming in from December and the extension of ancillary benefits, such as dental and optical benefits, coming in from March is very welcome. However, the two big bugbears for the self-employed are in regard to illness benefit and jobseeker's benefit. Basically, the social welfare system tells them to pay their class S contributions but they must never get ill or become unemployed, which is incongruous to say the least.

The self-employed are working from when they get out of bed until they go to bed at night. They are great people who keep this country going. They are also tax collectors but they get no benefit from that, although they have to pay accountants and everybody else. Nobody does more, and nobody did more during the recession, to keep this country going than the self-employed. However, nobody was more disdainfully treated within the social welfare system than the self-employed. They were treated like beggars in their first encounter with the social welfare system, when they were asked to account for their income for the last year. It was like being asked where was the snow that came last January. It was a nonsense. The former Minister, Deputy Burton, eventually changed that. I was very angry about it as I come from a self-employed background myself. There is nothing in it for people except to keep paying and keep complying, but get nothing.

Illness benefit and jobseeker's benefit are critical in order to deal with the issue of the self-employed. These people actually get ill more often than anybody else because of the nature of the work they are exposed to.

I want to support my colleague and I am sure every Member of the House is concerned in respect of the self-employed. I have many in my constituency who are very concerned and I have highlighted this issue to the Minister previously. It is important people are recognised for the work they are doing on the ground. These people tell me they are paying a stamp but they are getting no benefits as a result.

I know the Minister is in the process of reviewing this to make it acceptable to self-employed people. I think that-----

I thank the Deputy. I am trying to accommodate all Deputies because others may ask supplementary questions. I call Deputies Brady and Willie O'Dea.

I have a supplementary question. When the Minister came before the Committee on Social Protection last December, I asked whether discussions had started with the opticians and dentists. He said he was starting that process. Perhaps he will take this opportunity to outline how these discussions are going, whether he thinks the deadline of March is achievable and whether there are any foreseen difficulties with either sector. I imagine discussions are well advanced with both sectors at this stage.

I ask the Minister for clarification. I know the advisory committee on extending benefits to the self-employed recommended that they be extended in cases of illness but not where the business simply fails and that a self-employed person should be entitled to jobseeker's benefit. Did I hear the Minister say he intends to extend benefits in both directions? Businesses can fail because somebody gets ill but they can also fail because they can fail. We are trying to encourage people to go into business. This means there should be some sort of a social protection underpinning guaranteed income for them if the business fails. Does he intend to extend this beyond illness benefit to jobseeker's benefit?

I thank the Deputies for raising the important issue of the self-employed. This is a real priority for me, having been self-employed myself. My dad and my grandad were too. I always said if I was ever in this position, I would try to do something about it. Sometimes, though, self-employed people are unaware of what they are entitled to. I hear self-employed people all the time saying they pay class S PRSI and get nothing. To put on the record what self-employed people do get, they get the contributory State pension, in addition to any other pensions they may have, with no means test. If one had to raise that money oneself, one would need a pension fund of €350,000. They also get maternity benefit and, since last September, paternity benefit. If they die before they retire, the widow, widower or survivor gets a non-means-tested pension too. Therefore, they already get quite a lot. I am adding to this the treatment benefits and long-term illness benefits, which is the invalidity pension this year. That only leaves two payments, namely, short-term illness benefit and jobseeker's benefit, and we need to do a bit of work on them, quite frankly. It is very straightforward when an employee loses his or her job, he or she gets a P45. It is less clear when this happens in the case of somebody who is self-employed. Similarly, when it comes to illness, when one is paid on an hourly basis, it is pretty easy to work out these things. If one is a barrister, or a doctor for that matter, and gets paid in lumps, questions arise as to which lump he or she was sick for and how much must be paid.

Barristers do not get paid at all.

Many of these different matters must be figured out. It is not straightforward. We must also take into account that at the moment we give the self-employed all these benefits for a contribution of 4%. An employee pays 4% and his or her employer pays 10.75% on his or her behalf for these benefits. Therefore, for every self-employed person earning €100, the Social Insurance Fund gets €4; for every employee earning €100, the Social Insurance Fund gets €14. This needs to be borne in mind as well.

Regarding Deputy O'Dea's question, I do not agree with the findings of the report. We should put something in place regarding jobseeker's benefit. It may well be on the basis he himself proposed, that is, that it be on a voluntary basis with an additional contribution to do so. That might be the way to do it. I am meeting the dentists again on Saturday. I have scheduled another meeting with the opticians. Negotiations are going well. I still hope and expect to meet the deadline.

The Minister has exceeded his time.

Farm Assist Scheme Administration

Charlie McConalogue

Ceist:

56. Deputy Charlie McConalogue asked the Minister for Social Protection the date the 15% income disregard announced in budget 2017 will apply to all current farm assist recipients; and if he will make a statement on the matter. [2580/17]

I ask the Minister when the 15% income disregard introduced in the budget for 2017 will be applied to all existing farm assist recipients. Can he clarify that it will apply to all existing farm assist recipients and if their payments will go up this year as a result?

I am happy to confirm that, following the Government agreement on budget 2017, the total reversal of cuts to farm assist is now underway. Deputies will be aware that the programme helps more than 8,000 farm families across the country. The commitment given in A Programme for a Partnership Government, as part of the Government's commitment to rural Ireland, was to complete a review of the farm assist scheme, recognising the challenges facing farmers on low incomes. The review was completed by my Department in advance of discussions for budget 2017. Budget 2017 fully reverses the previous cuts to the farm assist means test. The changes mean that 70% of farm income will now be assessed as means, down from 100%, which is equivalent to a 30% income disregard, and an additional annual means disregard will be applied at €254 for each of the first two children and €381 for the third and subsequent children.

The introduction of additional income disregards for farmers with children further ensures that farm families with children will benefit. I also announced the provision of 500 more places on rural social schemes, bringing the total number of places from 2,600 to 3,100. At a time of falling farm incomes, it is essential we strengthen the safety net for farmers who are on the margin.

The farm assist scheme supplements mostly small farms on poor land, mainly in the west. Recipients retain the advantages of the jobseeker's allowance scheme, such as the retention of secondary benefits and access to activation programmes. In 2017, Revised Estimates for my Department provide for expenditure of almost €83 million on farm assist.

I am happy to confirm to the Deputy that all existing farm assist recipients currently assessed with means will have their payments adjusted to take account of the changes in budget 2017. This will come into effect from the 8 March implementation date, with the relevant payments changing on 15 March as farm assist is paid weekly in arrears.

Farm assist recipients will also benefit from other measures in the budget, including the €5 per week increase in the weekly rates of payment and the 85% Christmas bonus. Farm assist recipients will also be eligible to avail of the 500 additional places on the rural social scheme.

All of this answer applies to fish assist as well.

I thank the Minister for his response. As he will be well aware, because it has been raised with him on a number of occasions, the consecutive 15% cuts regarding the means disregard in assessing a farmer's eligibility for farm assist had a very real impact on the family income of those who depend on farm assist. I very much welcome this move in the budget and the confirmation from the Minister that it will apply to all existing farm assist recipients. The Minister might clarify further how this will be applied. Will he confirm that it will be a desktop exercise whereby the Department will go through all existing recipients of farm assist? I know they were all asked at the start of this year to confirm that their circumstances had not changed. I am pretty clear that this is what the Minister is saying, but if it is the case that the circumstances of each of these recipients have not changed from last year, will they see increases in their payments from the end of March as a result of the reintroduction of the 30% income disregard?

That is certainly the intention. It will vary from one case to another. In some cases the uplift people see could be very modest; it could be as little as €5 or €10 per week. In other cases it will be as much as €40 per week. In any case, that is what we have in train to do over the next couple of weeks, and all the different offices are gearing up to do this. Anyone can request a review if his or her circumstances have changed.

Pensions Reform

Thomas P. Broughan

Ceist:

57. Deputy Thomas P. Broughan asked the Minister for Social Protection the expected timeframe for his upcoming action plan for pension reform, as outlined in his 2017 priorities for his Department earlier in January 2017; and if he will make a statement on the matter. [2728/17]

Pensions are on the Minister's list of priorities that he published a few weeks ago for his action plan for pension reform. I think matters of concern include the transposition of the EU directive on institutions for occupational retirement provision, IORP; the revision of the directive, IORP II; and auto-enrolment in defined contribution pensions. I know we had a lengthy discussion about pensions earlier but I ask the Minister his progress in this regard. I think he mentioned he might bring forward legislation on at least one element of this in the near future. Pensions across both sides of the Irish Sea are of particular interest. I think the Minister has had some discussions with British Ministers on the impacts of Brexit on social protection in both countries. What has been achieved in this regard?

Our pension system was set up over a century ago to provide an adequate and sustainable standard of living, and to prevent an unwanted reduction in living standards when people retire. As the Deputy will be aware, there are a number of challenges currently facing the Irish pensions system, including the sustainability of the system over the longer term in light of demographic change, rising life expectancy and the adequacy of contribution levels and benefits. While the State pension was intended to guard against extreme poverty, our expectations have risen since then and rightly so. People now expect and should expect a decent life and comfort in retirement.

Without change, a majority of our citizens will rely largely on the State pension in retirement unless the overall pension system is reformed. The cost of maintaining our current standards must be funded and increased longevity has huge implications for spending on State pensions.

I have highlighted previously that pension reform will be a priority of my Department and, earlier this year, I confirmed an intention to develop, publish and commence the implementation of an action plan for the reform of pensions. It is my intention that this action plan will be published this year upon completion of the required developmental work. This action plan will include a roadmap for the reform of the State pension, rationalisation and reform of the defined benefit pension landscape, transposition of the Institutions for Occupational Retirement Provision, IORP2, Directive and the introduction of auto-enrolment defined contribution pensions for all working people which I discussed earlier.

In respect of interactions with my British counterparts, I had one bilateral meeting in Brussels some weeks ago with one of my counterparts and will travel to London in the first week of February to meet the Secretary of State for Work and Pensions, Damian Green. Among the issues being discussed are pension rights as there are 35,000 people in this country and 135,000 people in the other jurisdictions who receive part of their pension from the United Kingdom. I am determined to ensure those pensions rights are protected.

That is good to hear. Will the Minister and his Department have any input into negotiations between the EU and the UK to ensure a robust position is taken in respect of the protection of pensioners' rights between the two jurisdictions?

Has the Minister given any thought to reform of the homemaker scheme which came up in the discussion on Deputy Durkan's question about the kind of discrimination that these workers, who are mostly women, feel as they retire? They receive approximately €196 per week or that type of award as their State pension. They feel very hard done by. Has the Minister estimated the cost of reforming the homemaker's scheme to give those workers on home duties or caring a better pension?

Yes, I have, and as I committed to Deputy Curran and others, we will bring forward detailed options and proposals for change with the associated costings to the Oireachtas Joint Committee on Social Protection. If we move from the averaging approach to the total contributions approach, the homemaker credit scheme has to change because the basis on which it exists changes. The intention would be to have those changes in place but not to recalculate the pensions of everyone who is retired. It would cost hundreds of millions of euro which would be prohibitive. The new rules would apply to future pensions. If we were to apply the new rules to people already retired, we would be cutting some pensions too. That is not something I want to do to anyone. I have ruled it out. Under no circumstances will anyone who is already retired have their pension reduced.

Brexit is still a developing picture as Deputy Broughan knows. I want to maintain the arrangement between Britain and Ireland which has been in place for a very long time, that people in Britain are free to work in Ireland and vice versa, that people in Britain are free to claim welfare in Ireland and vice versa and that we recognise each other's social insurance contributions as being the same. Someone who paid ten years' national insurance in Britain and ten years' pay related social insurance, PRSI, in Ireland is paid for 20 years, wherever he or she is. It is possible for us to maintain those arrangements. I am more optimistic about what can be done in respect of people than I am about trade and goods. My focus will be on people.

Written Answers are published on the Oireachtas website.
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