Social Welfare Bill 2017: Second Stage

Minister for Employment Affairs and Social Protection (Deputy Regina Doherty)

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

The purpose of this Bill is to provide the legislative framework for the implementation of the social protection measures contained in budget 2018. It includes the provisions required to enable a €5 increase in the maximum rate of all weekly social welfare payments. It provides for a €2 increase for each qualified dependent child, the first such increase since 2010. It provides for a suite of measures which are targeted at ensuring that we make sure that work pays. It provides for the extension of entitlement to maternity leave and maternity benefit in cases of premature births.

The Bill is grounded in the values and principles which underpinned budget 2018. The budget reflects a commitment to supporting individuals and families who may rely to a greater or lesser extent on the State for their income needs, a commitment to making work pay and to supporting people into employment, and a commitment to enabling and facilitating the development of a sustainable and resilient economy in the interest of all of our citizens.

The Social Welfare Bill reinforces our commitment to building a fairer and more inclusive society, with a dual focus on incentivising and rewarding work on the one hand and, on the other, enhancing welfare supports for those who have attained pension age, who are carers or who, by virtue of illness, disability or unemployment, are not in a position to provide for themselves. I would like to briefly outline the provisions of the Bill.

Sections 1 and 2 are standard provisions setting out the Short Title of the Bill, its construction, citation, commencement provisions and definitions of terms used in the Bill. Section 3 provides for an amendment to the definition of the term “share-based remuneration” to cater for the introduction of a new tax relief being introduced by my colleague, the Minister for Finance and Public Expenditure and Reform, Deputy Paschal Donohoe. This tax relief is the key employee engagement programme for qualifying share options granted to employees of small to medium enterprises and is being provided for in the Finance Bill. The amendment in the Social Welfare Bill simply provides that any gains realised on the exercise of a share option by workers via the key employee engagement programme will not be subject to PRSI.

Sections 4, 5, and 6 provide for an increase of €5 per week in the rates of maternity benefit, adoptive benefit and paternity benefit respectively, with effect from 26 March 2018. Section 7 provides for the proportionate increases in the rates of jobseeker’s benefit which are payable where the average reckonable weekly earnings are less than a prescribed amount. Section 11, which I will come to shortly, provides for the increase in the maximum rate of jobseeker’s benefit.

Section 8, together with Schedule 1, provides for the re-designatIon of the family income supplement as the working family payment. The decision to do this follows a review by my Department of the effectiveness of the range of in-work supports we provide. The title of "working family payment" will explicitly reflect the nature of the payment and will facilitate further take-up of this payment which is aimed specifically at working families.

The Department’s approach, my approach and that of my predecessor to the working family payment is guided by two principles: first, that we have to ensure that work pays and it is worthwhile for people to go out to work; and, second, that it should have a positive impact on reducing child poverty in the country, which is still far too high. That is of particular importance to me. It is not as simple as changing the name from family income supplement, FIS, to working family payment. Under section 8, I am proposing to put FIS under the umbrella of working family payments and I plan to bring forward a number of progressive supports for working families with a view to assisting those who are transitioning from unemployment into employment, and in some cases from under-employment into full employment.

Section 9 provides for an increase of €10 in the weekly earnings thresholds for the working family payment for recipients who have up to three children, with effect from 29 March 2018. Section 10 provides for another positive measure to support the transition from unemployment into employment by enabling the continuation of the back-to-work family dividend. The existing legislation had the effect of closing the scheme to new claimants from the end of March 2018 and the closure of the scheme in its entirety from 2021. We will stop that. Section 11, together with Schedule 2, provides for new rates for the full range of social insurance benefits. All maximum weekly insurance-based pensions and benefits are being increased by €5, with effect from the week commencing 26 March 2018, with proportionate increases for those in receipt of reduced rate payments. This section also provides for proportionate increases in respect of qualified adults, together with the increase of €2 per week in the qualified child payment. Section 12 provides for an increase in the earnings disregard for one-parent family payments from €110 to €130 per week. This measure comes into effect from 29 March 2018.

Section 13, together with Schedule 3, mirrors the provisions of section 11 with the increase in the rates payable to social assistance claimants, which will come into effect in the week commencing 26 March 2018. This section specifically also provides that jobseekers aged under 26 on a reduced rate payment will receive the full €5 increase per week. Sections 14 and 15 provide for extended periods of entitlement to maternity benefit and maternity leave, respectively, in cases of premature births on or after 1 October 2017. The extended period of entitlement will be equivalent to the duration between the actual date of birth of the premature baby and two weeks before the expected date of birth, which is the point at which the current entitlement to 26 weeks leave and benefit would normally begin. By way of illustration, where a baby is born in the 30th week of gestation, the child’s mother will have an additional entitlement of approximately seven weeks of maternity leave and benefit. This is equivalent to the period from the actual date of birth in the 30th week to the date two weeks before the expected date of birth. This additional period will be added to the mother’s normal entitlement to 26 weeks of maternity leave and benefit.

Section 14 introduces the necessary changes to the Social Welfare Acts to provide for the additional maternity benefit, whereas section 15 introduces the parallel provisions to the Maternity Protection Act 1994 with respect to maternity leave. Section 16 provides for an amendment to the National Training Fund Act 2000 to provide for a 0.1% increase, from 0.7% to 0.8%, in the national training fund levy payable by employers in respect of reckonable earnings of employees in class A and class H employments from 1 January 2018.

The House will be aware that the budget also provided for a number of other measures that do not require changes to the primary legislation. I signed the regulations earlier this week that allow for the payment of the Christmas bonus payment to persons in receipt of long-term social welfare payments. Other non-statutory measures in the budget included the extension of the free fuel allowance by one week and the introduction of the new telephone support allowance. This week, I also signed a commencement order relating to a measure in last year's budget extending the invalidity pension scheme to self-employed workers for the first time. This includes small business owners, farmers, tradespeople, freelancers, contractors and professionals.

The Bill before us today will serve to improve the living standards of all those who have recourse to the social protection system. It is the second budget in a row in which it has been possible to provide for an increase of €5 per week in social welfare rates, reflecting the Government’s commitment that the benefits of the continuing economic recovery should be shared by all of our citizens. The additional resources being applied to the qualified child payment, the first such increase to be introduced for seven years, reflects our commitment to supporting families. The Bill also ensures that the social protection system offers real incentives to take up employment opportunities, recognising that working families are the backbone of Irish society. I hope and trust the Bill will be supported by all sides of the House. I commend it to the House.

Deputy Willie O'Dea

I wish to share time with Deputy Curran.

An Ceann Comhairle

Is that agreed? Agreed.

Deputy Willie O'Dea

In the lead-up to the last general election, we had five regressive budgets. These are budgets where the main burden is shouldered by those who can least afford it. The configuration of this Dáil changed at the last general election and the Government has been dependent on us for support. We expected certain commitments arising from that support, and as a direct result, the past two budgets have been judged to be progressive, which I welcome. However, in welcoming the improvements both in the last Social Welfare Act and this current Bill, one must say we have a long way to go even to get back to where we were before 2010 if we consider the overall landscape.

For example, this Social Welfare Bill and the budget on which it is based did not address the question of the pension anomaly introduced as a result of changes in 2012. We had some discussion about this at the social welfare committee this morning and the Minister informed us that a report will be available shortly on this matter. Will she confirm that? The report will be referred to a Cabinet sub-committee, which will formulate a number of options for the Cabinet. As I understand it, this procedure is being undertaken because there is currently no money in the social welfare budget to effect changes. There is a design to get money from across Departments, I assume, in order to effect some changes in the area in 2018. There is no question of waiting until 2021, as that is completely out of the question. My understanding is that the Government could find the money from next year's budget but the sub-committee is being established in order to come up with the money before next year's budget, if possible. That is our policy objective and we will keep speaking to the Minister about it. The budget did not provide any top-up payment for people who cannot work due to illness or disability, and I will come back to that presently. The budget did not increase direct provision payments, which is a pity, as a small amount in this area would go a long way.

I am intrigued by the position on the working family payment. We were all given to understand this was the Government's big idea. We were told much research, study, analysis and reports were being done on it; the working family payment would be the panacea that would practically remove poverty traps once and for all, ensuring it paid people to work rather than staying on social welfare. We asked on a number of occasions if the family income supplement, which is designed to do something similar - imperfect as it may be - would be continued and we were told no decision had been made. However, two weeks ago during Question Time the Minister told me the family income supplement would be retained but as part of the overall working family payment. Strictly speaking, that is not correct. What we have is simply a renaming of the family income supplement as the working family payment.

I note that in the Fine Gael election manifesto there was some discussion on the family income supplement and the view was taken that it was not fit for purpose. Although it had many good features, it did not necessarily achieve what the Government wanted. We are now in a position where we are simply retaining it under another name, albeit with a few increases for different categories where there are one, two or three children. Strangely, whoever wrote that section of the Fine Gael election manifesto was partly right as there are difficulties with the family income supplement because it creates poverty traps that are easy enough to enumerate.

They would be easy enough to get rid of too if the will was there. I, therefore, want the Minister, in her reply, to refer to the changes the Government envisages in the future in the family income supplement to remove those obvious poverty traps.

We will have to concentrate on the living alone allowance in future budgets. It is not true to say that it costs two people twice as much to live as one person. All Members know what happens when there are two old age pensioners in a house. They get used to a certain standard of living that is not exorbitant by any means, but when one of them dies, the household income immediately drops by 50%. It falls off a cliff and the few paltry euros in the living alone allowance are not nearly sufficient to make up the difference. I know many pensioners, as I am sure the Minister does, who have fallen into poverty as a direct result of that situation. If the objective of the social welfare system is to combat poverty, a focus on the living alone allowance would be a good way to do it.

At a time when there is a lot of fuel poverty in the country and the cost of fuel has been increasing steadily, the fuel allowance is being increased by a grand total of €22.50 for the year. That €22.50 is one week's extra allowance for the year.

The bereavement grant has not been restored. I have come across problems in practice, as I am sure others have too. When someone cannot afford the cost of a funeral, they have to access the community welfare officer, who is now an employee of the Department of Social Protection. We in the mid-west find that the budget to help those people seems to exhaust itself after approximately three or four months. All those who are unlucky enough to have a bereavement in the latter part of the year can depend on is a pittance, if anything at all.

I note also that the pension increases which came into effect from around the 7th and various social welfare increases which came into effect from early March last year are now deferred, most to the very end of March. That is a very retrograde step. That is the danger when the date is moved. The practice used to be to have social welfare increases from 1 January and I hope that system can be reverted to.

I welcome the provision of invalidity pensions for the first time for the self-employed but several things remain to be done. The question of jobseeker's benefit for the self-employed needs to be addressed. The Minister suggested some time ago to a committee of which I am a member that this should come, like invalidity pensions for the self-employed, out of general taxation. However, several reports and studies indicate that the self-employed would be delighted to fund that measure. If they wish to fund it, they should be given the opportunity to do so. As regards self-employed people who fall out of work due to illness, not all of them will be out of work for life and the question of short-term illness benefit for the self-employed will have to be attended to in the not too distant future.

The general statistics on poverty are still quite striking. The Minister may say that the survey on income and living conditions, SILC, figures are not up to date and none are available for the past couple of years when the economy has been growing. However, the worrying thing about the poverty statistics is that the economy began to grow again towards the end of 2013 and continued to grow during 2014 and 2015. However, the impact of that economic growth on the poverty statistics was very marginal. For example, consistent poverty dropped from 8.8% to 8.7% between 2014 and 2015. The deprivation rate in 2015 was 25% and the at-risk poverty rate was 16.9% compared to 17.2% in 2014, which is a very marginal reduction. The figures for those classified as children are even more striking. The Government has a target of lifting 102,000 children out of consistent poverty by 2020 but at the current rate of progress, it does not have a hope of achieving that. We must not forget the 3,000 children who will be sleeping in emergency accommodation tonight. It is no exaggeration to say that they and their families have been failed by the State.

We cannot ignore the findings of a recently-published independent report about the impact of changes made to the one-parent family scheme by one of the Minister's predecessors, Deputy Joan Burton. The report states that the balance of evidence indicates that there is an increased probability of lone parents being at risk of poverty as a direct result of those changes. That echoes the findings of the Crosse Walsh Millar report. There have been a number of improvements for lone parents in this budget and the previous one, but it all seems to be an attempt to mitigate the consequences of what happened under Deputy Burton's regime and the changes she made. Surely it would be simpler to reverse the change until we have what Deputy Burton described as a Scandinavian-type child care system or something approximating to it. I say that because the all-party committee on social protection did a lot of work on this issue and issued a very detailed report that called for a more flexible and responsive system and got rid of many anomalies such as whether a person was entitled to something depending on what sort of tenure he or she held in his or her house. That report was all but ignored. The figures for poverty among lone parents are particularly stark. For example, the most recent figure for lone parents in consistent poverty is 26.2% or more than one in four. Some 32.2% were at risk of poverty and a staggering 57.9% experienced deprivation.

I referred previously to the question of people on disability allowance. People such as Senator John Dolan and his organisation have campaigned long and hard for a top-up payment for those on disability allowance. That is against a background of statistics that show that consistent poverty among the disabled rose starkly from 14.4% to 22.4 % between 2014 and 2015. The at-risk rate rose from 25.2% to 38.4% over the same period and the deprivation rate reached a staggering 53.2%, up from 51.3%. The argument will be made that the disabled is not a homogenous group and there are different categories of disabled people, all of whom have different needs, etc., and, therefore, rather than having one solution for everybody, we should target the individual provisions that exist to help the disabled. However, provision for the disabled has fallen by approximately 10% over the past five years and, therefore, that argument does not hold up. I do not know anybody who is disabled and is too ill or incapacitated to work who would not welcome or benefit from a top-up payment. That needs to be looked at carefully.

As regards pensions, I urge the Minister to get on with the auto-enrolment system. Pension coverage in the private sector is down to just over 40%. There is a two-tier pension system. The public sector has a funded, gold-plated defined benefit pension scheme, and good luck to it. However, the coverage rate for those employed in the private sector is down to 42% according to the figures I have. As the Minister is aware, auto-enrolment has been operating in the United Kingdom since 2012 and has resulted in a significant increase in coverage among private sector workers. We have been talking about this for ten years. The Taoiseach recently said it will take several years to introduce it. It is extremely urgent that we get on with it. It was adverted to in a report issued by the Department of Social Protection eight years ago, in 2009 or 2010.

It is extremely urgent we get on with that. We will not be opposing the Social Welfare Bill 2017 on Second Stage but we will submit amendments on Committee Stage, some of which will cost the Exchequer nothing, some of which will cost a very small amount but will bring about very significant improvements for the people at whom they are directed. We will discuss all that next week, hopefully, if we are still around, on Committee Stage.

Deputy John Curran

I welcome the opportunity to contribute to this debate. The main purpose of this Bill is to give legislative effect to the budget day announcements which primarily see increases of €5 across a range of social welfare payments and the extension of maternity benefit and leave for premature births.

As I said last year, in a society where we try to treat people equally I find it somewhat unfair and unacceptable that those working people who will benefit as a result of changes in taxation will see their benefit accrue from 1 January, but those dependent on social welfare must wait another three months. That has not been the case traditionally and it is noticeable that this period is extending. Every effort should be made in future budgets to align those two, not just from the point of view of the payments but that where there are benefits people are treated equally.

Shortly before the budget the Minister for Employment Affairs and Social Protection appeared before the Oireachtas Joint Committee on Employment Affairs and Social Protection and asked the committee if there was anything it would recommend. We emphasised two issues: lone parents and the contributory State pension. I acknowledge some changes that are aimed at lone parents. Deputy O'Dea referred to the challenges facing those, particularly children, in lone parent households: 26.2% of lone parent households were in consistent poverty in 2015; 36.2% are at risk of poverty and 57.9% of them experience deprivation. I acknowledge some progress has been made in that regard in this budget but the Department commissioned reports on it and the committee investigated this area and there are huge challenges. The risk of poverty and deprivation in that group of people is very significant and further work needs to be done.

The second issue is the State contributory pension, and I was disappointed on budget day not to hear any mention of the anomaly arising from the 2012 changes. The Minister's appearance before the committee today was very helpful. She clarified the situation. For the first time many realised that the cohort of people directly affected by the 2012 changes will be addressed as a stand alone issue, separate from the future total contributions system. I look forward to the Minister's report to the Cabinet sub-committee and advancing that. It is important that those people who were disproportionately affected in 2014 are dealt with fairly. The Minister has acknowledged this because for too long it had been indicated that the only solution for them was as a result of a change to a brand new pension system. Dealing with these people as a group that has been adversely affected is important.

I have a slight concern about mortgage interest supplement despite raising this with the Minister at the committee meeting this morning. It is not mentioned in the budget or the Bill. The Minister answered me but it was very specifically due to expire at the end of this year and there have been no new entrants for several years. The Minister said there will be solutions. She needs to bear in mind the people in receipt of this. I ask her to make a commitment that they will continue to receive that payment and that whatever administrative changes the Minister or Department need to make will be seamless for those people. The last thing we need is for somebody in receipt of this payment to be at risk of losing their own home as a result. It is a relatively small sum of money - approximately €4 million was spent this year - and it is a declining number of people but they have not found solutions to their housing problem. It is a real issue and the concern is that the Minister's predecessor had indicated that this was due to expire and I would like a clear comment on how it will be dealt with.

Deputy John Brady

I thank the Ceann Comhairle for the opportunity to speak in this debate. The way things are going today it could possibly be the last debate of this Dáil term.

An Ceann Comhairle

The Deputy should not be so pessimistic.

Deputy John Brady

We just do not know.

Over 42,000 older people who have been robbed of their State pension because of the 2012 changes to pension bands and rates made by the Minister's party would see absolutely nothing in this Bill, despite total consensus in the House here that these changes were wrong and that they disproportionately affected women, discriminating against them either for starting to work at an early age or for taking time out to look after and help raise their families. A motion passed only a few weeks ago in this House calling for the total reversal of the 2012 changes gave these people hope that these changes would be forthcoming. I put these points to the Minister at the committee meeting this morning. How much longer do these people have to wait? There have been mixed messages from the Government on this, from the Minister and the Taoiseach. When will these older people receive the State pension they deserve? When it comes to righting wrongs money is an easy excuse. It is always peddled but it certainly does not wash with people when billions of euro can be found to bail out the banks and millions can be wasted in setting up Irish Water and bringing in water charges until the Government is forced into a U-turn which wastes millions of euro in taxpayers' money. The Government can spend €5 million on a public relations spin operation yet we cannot get a straight message about the changes to and reversal of the 2012 pension cuts. The Minister cannot suggest that money is not available to right this wrong which has affected over 42,000 people.

Where is Fianna Fáil in all of this? Why did it not push for this issue to be included in this Bill? It should be in it. Last year when I brought a motion to the House, Fianna Fáil unfortunately opposed it by abstaining. Now, after intensive lobbying by older people it has introduced a motion. It had an ideal opportunity to right the wrongs and get it included in the Social Welfare Bill and get the changes reversed but it did not take it.

Most of this Bill has to be welcomed, the increases in social welfare payments, the continuation of the back to work dividend, which was due to close to new entrants from next March and the extension of maternity benefit for mothers of premature babies among others. Questions have to asked, however, about other elements of the Bill. The renaming of the family income supplement as the working family payment beggars belief. The working family payment that was a cornerstone of Fine Gael's general election campaign last year turns out to be little more than a name change. The Department can promote work all it wants but if affordable child care is not available lone parents cannot return to work. If zero hour contracts, low pay and precarious working times and conditions are the only option for lone parents they are better off on social welfare. That is not good. It is not promoting welfare over work but it is the stark reality. Until a mandatory living wage is introduced, family income supplement, or the working family payment as it will be named, given to low paid workers is essentially a State subsidy for employers. If those workers were paid a living wage they would not need so much assistance from the State and the money could be put to better use in other areas.

We are still waiting on the Government Bill that will half-ban zero hour contracts and there is nothing on the subject in this Bill either.

Time and again, the Minister has committed to reducing child poverty. She has said it is her main priority as Minister but what is she doing to achieve this? Increases in qualified child payment is a specific measure which directly targets children in low-income households, in poverty or at significant risk of poverty. Despite knowing this, the Minister has increased the qualified child payment by a miserable €2, which is nowhere near enough.

We need to see specific key actions to take children out of poverty, including consistent poverty. An increase of €2 will not do that. While the Government talks about a growing economy and releases statement after statement welcoming falling live register figures, what happens to the 140,000 living in consistent poverty in this State? What about the majority of lone parents who are living in deprivation, who cannot afford a warm coat for their children or to heat their own homes? What about the young people on reduced rates of jobseeker's payment because of their age? What is a growing economy doing for these people?

In March this year the UN recommended that Ireland establish a child maintenance service. Did the Minister read this recommendation? Is she ignoring it? Why is she leaving lone parents at the mercy of a court system that is stressful, costly, and time consuming to seek child maintenance to which they are entitled? We need a structured and proper child maintenance service that assists and supports lone parents and their children that is in line with the UN recommendations.

There are more than 150,000 people registered as self-employed in this State. Bogus self-employment is a threat to all workers. It undermines pay and conditions, workers rights and security. It gives the whip hand to the most unscrupulous employers, undermines union organisation and negotiating power, takes all the risks that are common in construction and other industries and offloads them on the shoulders of the workers themselves. It smears the many genuinely self-employed people. Bogus self-employment leads to tax and PRSI losses that harm all workers. A conservative figure of €750,000 in employer PRSI is lost annually along with considerable reductions in workers' entitlements. I urge the Minister to address it immediately.

There are more than 5,000 men and women aged 65 in receipt of jobseeker's payments, not because they are jobseekers but because they have been robbed of their State pension for a year. This rule does not apply to all workers because the discrimination goes beyond that. Those in the public service are given a special supplementary pension but other workers are not entitled to this accommodation and are left without any income for the year unless they sign on to jobseeker's payment, receiving a weekly payment that is almost €50 less than they would have received in their State pension. For those who have worked their whole lives and paid their taxes and pension contributions, the result is that they must sign on to jobseeker's payment at 65 years. In 2021, the pension age will increase to 67 years and in 2028 it will increase further to 68 years. Does that mean that those who are forced to retire at 65 years will remain on jobseeker's payment for two or three years? What plans are in place to address this serious problem? We are waiting on a money message from the Government to bring forward legislation that I brought forward to abolish the mandatory retirement age, which would resolve this issue. If the Government is not forthcoming with the money message, I want to hear the Minister's plan.

There was no consultation on the increase in the pension age, it was not discussed, and there was no debate or vote. It was just a decision made without a thought as to the consequences. The Minister has reminded us on many occasions that social protection is about protecting the most vulnerable, unless one is a lone parent, a child living in consistent poverty, a pensioner on a reduced State pension, punished for raising her family, a 65 year old forced onto the dole, a young jobseeker, a young person or a person stuck in low-paid, precarious employment. Sinn Féin will allow this Bill go forward to Committee Stage. There are positive elements to it but there are other elements that require serious change and we will put forward many amendments to do that. Unfortunately, the Opposition cannot table amendments that have a financial cost on the State, which represents a serious problem. We must work with what we have. I will bring forward amendments and I look forward to the debate then.

An Ceann Comhairle

As we have now reached 11.30 p.m., I ask Deputy Brady to-----

Deputy Regina Doherty

I am sorry to interrupt but will Deputy Brady correct the record? He has misled the House in his opening statement. He referred to the fact that this budget contains absolutely nothing for the 42,000 people who are suffering from a pension anomaly based on rate band changes in 2012. That is incorrect and I want him to withdraw it. They will benefit from the €5 increase in their pension payments, as will everyone else. Where applicable, they will also benefit from the extra week's fuel allowance and the telephone support allowance. I want him to correct the record.

The Dáil adjourned at 11.30 p.m. until 2 p.m. on Tuesday, 28 November 2017.

Dáil Éireann díospóireacht - Thursday, 23 Nov 2017

Social Welfare Bill 2017: Second Stage

Dáil Éireann díospóireacht -
Thursday, 23 Nov 2017