6. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection her plans to deal with bogus self-employment practices; and when legislation will come before Dáil Éireann on the matter. [15656/19]
Vol. 981 No. 5
6. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection her plans to deal with bogus self-employment practices; and when legislation will come before Dáil Éireann on the matter. [15656/19]
10. Deputy Clare Daly asked the Minister for Employment Affairs and Social Protection if her plans to improve protections for persons trapped in bogus self-employment will include new legislation; and if she will make a statement on the matter. [15605/19]
14. Deputy Joan Collins asked the Minister for Employment Affairs and Social Protection her plans to introduce legislation on bogus self-employed contracts; if so, the parameters of the planned Bill; and if she will make a statement on the matter. [15510/19]
26. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection her plans to address issues in relation to bogus self-employment; and if she will make a statement on the matter. [15529/19]
39. Deputy John Brady asked the Minister for Employment Affairs and Social Protection the proposals she recently brought to Cabinet regarding bogus self-employment; her plans to progress these measures; and if she will make a statement on the matter. [15639/19]
This is about the Minister's plans to deal with bogus self-employment. I ask her to lay out her plans today because a number of Bills are before the Dáil, including legislation from my group, and we want to know what her intentions are. This situation resembles the Bill on banded hours, when robust legislation was brought in by the Opposition only for the Government to jump in and bring forward its own legislation. History is repeating itself but we believe the various legislation in the queue offers a more robust solution to the question of bogus self-employment.
I propose to take Questions Nos. 6, 10, 14, 26 and 39 together.
My job is to progress Government legislation and not to progress Opposition legislation. There is nothing stopping any Member of an Opposition party from progressing his or her own legislation and I certainly would not impede it.
Disguised employment, or bogus self-employment, occurs when businesses deliberately misclassify workers as self-employed when they work as de facto employees of the business concerned. This is done largely to avoid payment of the employer portion of social insurance contributions. The extent of disguised employment, together with potential measures to address this issue, was considered by an interdepartmental group in 2017. Having consulted widely with stakeholders and considered the available evidence, the group concluded that the use of disguised employment arrangements was not very prevalent in Ireland. The work by the interdepartmental group is reassuring in that it indicates that the overwhelming majority of employers are decent employers who are compliant with employment and social welfare law. The report stated that there was not a gross use of false arrangements but I slightly differ with it on that point. I am of the view that we have always had an issue with bogus self-employment. It has not grown but it is still very evident.
Given the concerns expressed in this House and elsewhere regarding a perceived increase in the incidence of self-employment, and to ensure that people are aware of their rights and the protections available, my Department conducted a survey and an advertising campaign earlier this year on the issue of false self-employment. We did not get an enormous response, which has led people to have certain opinions on it, but we will repeat it because we need to make sure it is consistent and that the people who did not hear what we said last time will hear it next time and the time thereafter, so that they will know what their rights are.
Bogus self-employment is already an offence. Any deliberate falsification of the employment status of a worker in order to avoid payment of social insurance contributions is an offence under section 252 of the Social Welfare Consolidation Act and is subject to prosecution with penalties, including imprisonment and fines. Nobody has ever been imprisoned for this, though there have been fines and significant penalties. Establishing guilt can be problematic as employers can claim genuine error. Employees have to be able to help us to take cases but we are all aware that, in many cases, employees feel lucky to have their job and are very reluctant to pursue it and that the security is not there in the legislation to enable them to establish their rights.
There are already significant legislative powers to investigate and sanction employers and employees who falsely declare their social insurance status as self-employed rather than employed. However, there are gaps and that is why I am proposing a number of new measures with a view to augmenting and building upon existing protection measures and legislation. Based on experience from these inspections and recognising that there is a particular challenge when dealing with large companies, I have tasked the Department with establishing a dedicated team to deal with the work involved in such employer inspections. I expect that this team will be established and functioning within the coming months.
In addition to more rigorous policing of existing law, I intend to implement a number of new legislative measures to further strengthen the powers in our appeals and inspection sections. First, I will seek to put the code of practice for determining employment status on a statutory basis. This code is being reviewed and updated by an interdepartmental group from the Departments of Employment Affairs and Social Protection and Finance, the Revenue Commissioners and the Workplace Relations Commission, in light of recent cases and to ensure the code is current and robust in its measures.
Second, I intend to bring forward measures to address the victimisation, and potential victimisation, of workers who seek a determination of their employment status, including the hundreds and possibly thousands who are afraid to do so.
Third, I am exploring the possibility of providing for deciding officers in the scope section in my Department to make determinations on the employment status of groups or classes of workers who are engaged, and operate, on the same terms and conditions, without having to have a specific complaint or having to investigate each individual worker separately. This would go a long way to ensuring consistency of status decisions and their timely determination, particularly in some of our larger organisations where the vast majority of employees are self-employed.
Together, these measures are expected to strengthen the framework of protections for workers, while speeding up the dispute resolution process. While the drafting of this legislation is complex, I hope to be in a position to introduce these provisions to the Oireachtas in the spring social welfare Bill in the next number of weeks.
I ask the Deputies to abide by the one-minute rule.
Listening to the Minister is somewhat similar to listening to the presentations by IBEC and the Construction Industry Federation, CIF, at the committee's meeting last week. It is a case of see no evil, hear no evil and speak no evil and "There is nothing going on here, move along". The Minister indicated there is no evidence that bogus self-employment is rampant. However, it is rampant in one industry that is growing and currently important, namely, construction. Finding evidence for it and addressing it has proved difficult. Thousands of workers have been exploited by developers and builders who make vast profits under these terms. The Minister may claim the figures show that the incidence of bogus self-employment is decreasing. On further inspection, however, one will see that the numbers of those who are self-employed but who do not employ others are rising at an acute angle. This means that individuals are being taken on as self-employed contractors. If they do not employ others, these individuals are not genuine contractors within the industry. That matter must be investigated thoroughly and more robust legislation needs to be put in place. The Minister is trying to jump ahead of other items of legislation which are more robust.
Again, the Deputy-----
The Minister has had six minutes, which, presumably, was her extra time to respond. Is that not the case?
The Minister was allowed six minutes but she did not have six minutes.
It is a simple rule. If three or more Deputies table a question, the Minister will have six minutes to reply.
I have no problem with that but she has used the six minutes.
The Minister will answer the Deputy's question next. We would not deprive Deputy Clare Daly.
I am happy to take the questions together.
If the Deputy poses her question, we will allow the Minister some extra minutes to answer.
I welcome the announcement of legislation but it is beyond urgent. I do not accept IBEC's contention that the issue can be addressed by increasing the number of inspections or better enforcement alone. This is a significant problem. On Monday last, I attended a hearing of a case at the Workplace Relations Commission, WRC. While I will not mention the company's name, it is obvious that it will lose badly, which I think it realises. When it loses, it will appeal to the Labour Court, and when it loses that, the case will be heard by the High Court. The vulnerable, non-national worker who had the courage to take the case previously approached the Department of Employment Affairs and Social Protection and the Revenue Commissioners but was informed by the latter that there was nothing wrong with his status or social protection. Eventually, approximately 18 months later, by the time the court sides with him, he will probably be long outside the country.
The current structure is inadequate. There are problems with the WRC and I draw the Minister's attention to the article in Village magazine by George McLoughlin, who worked for the WRC previously and who made a protected disclosure about the problems there and the systemic favouritism towards employers, which is a problem. A stand-alone investigations unit is necessary, as is beefed-up legislation to allow the implications of one case to be expanded to other cases. Will the Minister clarify whether the legislation will be brought on board in a couple of months or weeks?
I attended the meeting last week with IBEC, whose attitude is quite astounding. It is the case that while we have not seen definite figures for people who came forward in the requested survey, we know that bogus self-employment occurs in various sectors, including those relating to journalism, English language teaching, to pilots, construction and couriers. I received an email from a young woman who has been caught up in bogus contracts in the tourism industry as a tour director since 2005. She has had to take a case to the court and the scope section. It is on the record that on 7 March 2019, the Department of Employment Affairs and Social Protection decided, on foot of a scope section investigation, that an employee of CIE Tours was insurable under the Social Welfare Acts at PRSI class A. CIE Tours is going to appeal that decision.
Bogus self-employment is rampant and cuts across industries. There is an urgent need for legislation to address the matter. I welcome the fact that the Minister is discussing legislation but four Bills have been published and we believe they could be used as comprehensive legislation to allow the Minister to bring forward robust legislation.
Two issues have been raised, the first of which is how significant a problem this is and whether the numbers are increasing, stable or decreasing. I could argue with the Minister's contention in respect of the numbers but Deputy Bríd Smith has done that. It is currently a significant problem and it is growing. If anything, the evolution of the gig economy will only facilitate the problem becoming greater unless we tackle it now.
The Minister also referred to legislation. She announced, as she also did in the Seanad, that she will introduce her own legislation. We have spent much time in the House being told by the Minister and other members of the Government that legislation is not necessary in the area and that the existing system would work. By offering to introduce legislation, however, she is acknowledging that the system currently in place is not sufficient. The question arises as to when there will be new legislation to tackle a problem which the Minister now acknowledges exists. A number of Bills have been prepared, one of which was sponsored by me while the others were sponsored by the Labour Party, Deputy Bríd Smith's party and so on. We can co-ordinate our approach and decide among ourselves to put forward one of the Bills with the appropriate amendments. It would be far better if the Government accepted that now rather than assembling another team to investigate the matter further, expressing the hope that at some time in the ill-defined future, it may be able to introduce its own legislation. If the Government is seriously committed to resolving the problem, it would be a better approach. As Deputy Clare Daly noted, and I agree, it is beyond time for a solution.
To hear the Minister put forward arguments from employers that there have been genuine errors in classifying people as self-employed reminds me of when IBEC appeared before the committee last week and stated that it does not believe legislation is necessary. That the Minister is considering bringing forward legislation must be welcomed, and it also shows that she and her Department acknowledge the massive scale of bogus self-employment that exists and is growing. Some of the evidence that was presented to us, such as that given by ICTU, shows that in the construction sector alone, there is an estimated loss of €240 million per year through employer PRSI and tax, but that does not even touch on the loss of employment rights.
I reiterate that bogus self-employment exists even in the House. The camera operators filming proceedings are engaged in a number of scope section discussions with the Department. Bogus self-employment, therefore, exists in the House among camera operators. It is a massive problem. A number of Bills have been published, one of which was brought forward by my party. I welcome the fact that the Minister has brought forward legislation because it is evidence that something needs to be done about the matter. I encourage her to meet the Deputies present, consider all the Bills and bring forward the most robust legislation.
When I remind Deputies of the one-minute rule, everybody agrees but nobody abides by it. I will allow a short supplementary question from Deputy Niall Collins.
I raise the case of a person I have encountered who is trying to gain direct or indirect employment. It is an Irish person with an Irish birth certificate and Irish passport who has returned home from the United States, having lived there for 46 years, but who has been denied a PPS number. The person cannot find any form of employment, therefore, and needs a PPS number to apply for a driving licence, housing, a passport-----
The Deputy is asking a different question.
-----and it has been presented to me that a person must have a valid reason for obtaining a PPS number. This individual is being denied a PPS number by the Department.
That is a different question.
I wished to make the Minister aware of the matter. It is in the context of employment, for which the person may wish to apply. If I convey the details to the Minister, will she consider the case post haste?
The Minister to answer the substantive questions.
I ask Deputy Niall Collins to supply the details of the case to me before he leaves the Chamber. Nobody should be denied a PPS number. I will address the matter today.
I am glad that we all can agree but I do not subscribe to the view of certain Deputies that I favour one set of organisations over another. I sit at monthly meetings with both our social partners who represent our union colleagues and our social partners who represent our business colleagues. On most occasions, they have diametrically opposed views, and my job is to sift through the views and decide where the reality lands. While one half of the social partners would tell me the problem is enormous and cite hundreds of millions of euro being lost, which Deputy Brady noted, the other half would tell me there is no problem and that we should carry on as we have always done.
Deputy O'Dea just made a statement that I have finally come around to the view that there is a problem here but for as long as I have sat in this chair, almost two years, I have always acknowledged that there is a problem. I have always prefaced my remarks by saying that I do not know the size of the problem-----
I have the floor. I have always said that I do not know the size of the problem but whether it is ten people or 10,000 people, the legislation must be robust enough to protect them. We have a requirement to put legislation on our Statute Book to protect even one person and that is why I am bringing forward Government legislation. That is my job. I am quite happy to look at legislation from the Opposition but it is not my job to progress legislation prepared by Solidarity, People Before Profit or by Fianna Fáil. If anybody wants to bring forward legislation and to sit around the table with the Department to discuss it and see how we can progress and solve this problem, I am very happy to do so. As I said in my statement last week, I have done a considerable amount of work on this, arising from the amendment that Deputy O'Dea tabled to the Social Welfare Bill last year which he subsequently withdrew, thankfully, and have now produced what I presented in the last week. I am going to keep moving forward. I am going to change the practices and increase the training within my own Department.
Potentially, I may consider a stand-alone issue because I have the same reservations as Deputy Clare Daly. I do not have authority over the WRC and I cannot subscribe to her views on it. When people bring complaints to us, and they are not anything like the numbers reflected by Deputies in this House which genuinely worries me because it suggests a divergence from reality, they are entitled to due process. Both sides are entitled to make a claim as to whether an individual is self-employed or otherwise. The adjudication process is robust. People are entitled to a decision and are entitled to appeal that decision, whatever it may be. If neither side likes the decision that comes from my Department, they are entitled to bring a case to the Labour Court, the High Court or the Supreme Court. That is the law of this land.
On the gaps in the legislation that currently exist, the legislation that I will bring to the House in the next couple of weeks will make the inspections more robust and the decisions that are made more consistent across both geography and industry. It should not make any difference whether an individual works on a construction site or in a hairdresser's: the decision should be the same. The determining factor is whether the definition of employment or self-employment applies to an individual. It is as simple as that and we do not make that any more robust. We do, however, need to ensure that when we do catch people, they are fined and that the penalties are sufficient.
7. Deputy Richard Boyd Barrett asked the Minister for Employment Affairs and Social Protection if her attention has been drawn to the potential for blacklisting in industries in which there is widespread use of fixed-term contracts; and if she will make a statement on the matter. [15660/19]
Another important area of abuse of worker rights is the abuse of fixed-term workers. Legislation governing fixed-term workers should demand that these workers are treated no less favourably than full-time workers. However, I have seen evidence and have received testimony from workers in the Irish film industry which shows that the provisions of the fixed-term work legislation is not being applied. Indeed, film producers who are receiving almost €100 million per year in public funding are essentially saying that the legislation does not apply to their industry. I ask the Minister to confirm that the fixed-term work legislation applies to every single worker, including workers in the film industry. I also ask her to look into very serious and credible allegations of blacklisting of certain fixed-term workers by film producers in receipt of public money.
I am aware that Deputy Boyd Barrett knows this but I will read my Department's reply for the benefit of those who do not. A fixed-term employee means a person who has entered into a contract of employment where the end of the contract is determined by an objective condition such as arriving at a specific date, completing a specific task or the occurrence of a specific event. An employee continuously employed on fixed-term contracts for a period in excess of four years can claim a contract of indefinite duration. However, the Act does not apply in circumstances where an employee is not re-employed by an employer following completion of a fixed-term contract.
In the formulation and development of labour law, there was a clear focus on finding the appropriate balance between the security which employees require on the one hand and the flexibility required by employers on the other, in terms of organisation of work, particularly in situations where that work may be of a short or fixed duration.
The Protection of Employees (Fixed-Term Workers) Act 2003 is not discriminatory. It does not apply only to certain industries. It applies to every single industry in this country that uses fixed-term contracts. That legislation provides for the improvement of the quality of fixed-term work by ensuring the application of the principle of non-discrimination, that is, that fixed-term workers cannot and will not be treated less favourably than comparable permanent workers. The Act also provides for the removal of discrimination against fixed-term workers where such exists and the establishment of a framework to prevent abuse arising from the use of successive fixed-term employment contracts in order to suit employers. Deputy Boyd Barrett obviously has a specific case in mind, the details of which I am very keen to hear. He should note that where individuals believe they are being deprived of employment rights they may refer a complaint to the WRC where the matter can be dealt with by way of mediation or adjudication leading to a decision that is enforceable through the District Court. WRC inspectors can also be asked to investigate breaches of the legislation or complaints arising. Individuals can submit complaints online. The Deputy can submit complaints to me, with which I will be very happy to help. The Deputy suggested that he has examples of blacklisting which is absolutely against the law. It is not and will not be tolerated and I am happy to help the Deputy to deal with that.
I appreciate the Minister's response and will take her up on her offer of help for a particular group of workers. We have engaged with the Department of Finance which is, in fairness, responding with regard to certain issues including the question of public funding and linking that to the vindication of rights. This issue actually cuts across several Departments, including the Department of Employment Affairs and Social Protection. Essentially, film producers who are in receipt of a lot of public money are saying that the fixed-term work legislation does not apply to the film industry. They are saying that the film industry is exceptional.
I was in Ardmore Studios last week in the company of around 50 film workers. Some of them have had 50 fixed-term contracts with the same producer or with a series of producers but they have no rights. Some of them appeared before an Oireachtas committee in January of last year and said that there were abuses of their rights and of the conditions attached to public funding in the film industry and not one of them has worked since then. This is absolutely outrageous. There is a notion abroad that the film industry is exceptional and that the normal rules do not apply to it. This needs to be investigated in a serious way.
I am quite sure that lots of industries and companies in this country believe they are exceptional but none of them is above the law.
I very much appreciate that response and will contact the Minister to arrange a meeting. Many of the people to whom I refer have been working in the industry for ten, 15 or 20 years. Obviously, film work is episodic at some level but if workers point out that they are not receiving their rights and entitlements or if their employer simply does not like them, they stop getting work. I have met film industry workers including carpenters, painters, stage hands and so on who have worked in the industry for many years. Their work has just dried up. They have been displaced and have no rights. Their former employers are rejecting any claim that they have rights but these same employers are in receipt of significant public funding on an annual basis. This has to stop.
Again, nobody is above the law. I ask the Deputy to call me later and we will progress this. I am not happy to hear the Deputy's allegation that people have been blacklisted following an appearance before a joint Oireachtas committee and have not worked since then. We will take care of it.
9. Deputy Denis Naughten asked the Minister for Employment Affairs and Social Protection the steps she is taking to implement the Programme for Partnership Government commitment on the monitoring of child benefit payments; and if she will make a statement on the matter. [15364/19]
It is estimated that one in every ten children leaves primary school with serious literacy difficulties. Such children are more likely to leave school early and it is estimated that early school leavers cost the State €33,000 every year in welfare supports and lost taxes alone. Over half of the prison population left school early and prison places cost €100,000 per annum, on average. In that context, it is about time that we started to do things differently. We must act in the interests of our people by engaging in joined-up Government.
I thank the Deputy for his question. Child benefit is the main policy instrument for assisting families with the costs of raising children.
It is a universal payment, which I very much support. It is paid in respect of all qualified children up to the age of 16, or to the age of 18 if they are in full-time education or have a disability. It is paid monthly to more than 630,000 families in respect of more than 1.2 million children at an annual cost of €2.1 billion of taxpayers' money. Safeguarding the child benefit budget is a priority and in this regard the Department takes a proactive approach to ensuring it is only paid to eligible families.
The scheme operates a control programme aimed at ensuring that payment of child benefit is made where there is an ongoing entitlement and payment stops once this entitlement ceases. Some 300,000 eligibility reviews are undertaken annually for this purpose.
The Deputy refers to a commitment in the programme for Government to reform the monitoring of child benefit payments by amalgamating the two existing school attendance monitoring systems, currently run by the Department of Education and Skills and Tusla, in order to address poor school attendance within some families. Considerable legal, technical and data protection issues are presented by the exchange of information between schools and my Department. There are particular issues concerning the disclosure of sensitive personal information regarding a child's circumstances which may not be relevant to the parent's entitlement to child benefit. In the meantime, I am satisfied with the existing control and review policy pertaining to the child benefit scheme. I believe it ensures payment is only made to families with an ongoing entitlement.
I thank the Minister for her response. Every year, 900 children disappear from primary schools and the Department of Education and Skills does not have a clue where they have gone. The Department of Employment Affairs and Social Protection pays €1.5 million to the parents of those children and the State does not know where they are. As the Minister knows, this country's law on school attendance states that children have to attend school up to the age of 16. In order to be eligible for child benefit up to that age, children must attend school. The Minister has said that this money is only paid to eligible families. If children are not attending school, claimants are not complying with the law as it stands. We need to link up the systems within the Department of Education and Skills, Tusla and the Department of Employment Affairs and Social Protection to ensure that we identify these families and children and provide the proper supports to ensure they get a chance in life.
I have already outlined the legal and data protection issues with regard to sharing data that prohibit doing what the Deputy has suggested, which was originally suggested in the programme for Government. I can absolutely assure the Deputy that we take a proactive approach to ensuring that child benefit is paid only to people who are entitled to it. The fraud and error surveys the Department carries out are an integral part of its overall approach to controlling and tackling welfare fraud. The latest survey results confirm the Department's view that child benefit is an exceptionally low-risk scheme. We conduct some 300 inspections every single year, a regime which genuinely results in some payments being stopped. However, the reason for most of those stoppages is not that children are not attending school. Rather, the mother in the house does not see the letter or it goes in a drawer. Parents do not realise the payment has been stopped until it does not arrive in the post office or the bank. They then call the Department and assure it that their children are still going to school. It is a very robust control system and there is an exceptionally low level of fraud. From my own discussions on non-attendance with the department within Tusla that used to be the National Education and Welfare Board, NEWB, I can confirm that we do have a problem. The number of children not attending school is growing. These are the very families that need more supports from us, not just educational supports but mental health and social inclusion supports also. We need to provide robust support to Tusla in identifying those kids and ensuring their families get holistic supports.
I thank the Minister. She makes the point that most payments are stopped because parents have put the letter in a drawer and fail to respond to the Department. Have there been any cases where child benefit has been suspended because parents are in breach of the law on school attendance? Is the most appropriate way to deal with this situation to use tools from 140 years ago and to drag vulnerable parents and families through the courts in order to ensure children access education? Is the Minister aware that one primary school child in eight misses more than 20 days in school? The number is increasing rather than decreasing. In many cases this leads to disruption for the whole class, not just for the child concerned. This has a knock-on impact on adult literacy. One in six adults in this country is unable to determine the correct amount of medicine to give a child from the information printed on the package. How can those adults actively engage with employment or with society if they do not have basic literacy skills? Is it not the case that tackling this must start in primary school?
I totally appreciate the result the Deputy is trying to achieve, I just do not think this is the right method to do so. He is right; a phenomenal number of children, especially young boys, are absent from school for more than 20 days, particularly recently. However, it is certainly not their parents' fault and penalising them through child benefit will not fix the problem. We have a real difficulty with young adults growing up in this country facing a substantial amount of social difficulties that we did not face when we were in school. We need to support Tusla so that it has the capacity and resources to work with those families so that we can put other schooling offerings in place to prevent the literacy problems the Deputy describes.
The answer to the Deputy's original question of whether child benefit has ever been stopped because of non-attendance at school is "Yes". The forms that are issued as a control measure must be brought to the school for signature to ensure that little Johnny or Mary is still in school. If he or she is not, the school does not sign the forms, they cannot be returned to my Department and the payments are stopped. We must recognise that there are problems beyond the normal attendance issues the Deputy describes. Putting resources in place to help the families is the proper way forward.
11. Deputy John Brady asked the Minister for Employment Affairs and Social Protection the status of her plans to introduce auto-enrolment; the stage plans are at; the next steps; and if she will make a statement on the matter. [15638/19]
I wish to ask the Minister about the status of her plans to introduce auto-enrolment. The consultation period ended last November. What are the next steps? I call on the Minister to make a statement on the matter.
As stated in the roadmap for pensions reform, the Government proposes to implement a supplementary retirement savings system known as automatic enrolment, AE, by 2022. This will see employees without personal retirement savings automatically enrolled into a quality-assured retirement savings system with freedom of choice to opt out.
I launched a straw man public consultation process for an automatic enrolment retirement savings system in Ireland, which is a bit of a mouthful, last August as the basis for a national public consultation. I have said that the straw man should not in any way be construed as a confirmation of the form this system will ultimately take. Thankfully, it has not been. The straw man is a high-level draft document intended to generate and prompt discussion and improve our ideas. Thankfully, that is exactly what it has done.
In excess of 100 written submissions were received in response to the straw man from employer and employee representatives, pensions industry bodies, advocacy groups and genuinely interested individuals from whom I was very keen to hear. My officials have met with many of these groups. I chaired several public consultation seminars held in Dublin, Galway and Cork. Most recently, a series of focus groups was held in March to garner the views and ideas of the target population for automatic enrolment.
Overall, the responses to the straw man have been very positive and constructive. In the vast majority of cases, our proposals were welcomed and nearly every stakeholder agreed with most of the design features. As is human nature, we all have different views on how to improve things. There were diverging and conflicting views from stakeholders on specific aspects. These diverging views depended on which body they represented.
My Department is continuing to analyse the substantial material collated from the consultation process in order to determine how the feedback received can assist with the design process. Furthermore, my Department is continuing its research and consultation with experts from around the world who have already implemented improvements to their own systems. My Department has also commissioned the Economic and Social Research Institute, ESRI, to examine the potential macroeconomic and microeconomic impacts of automatic enrolment. It is anticipated that reports of findings from the consultation process and the research currently being undertaken will be brought to Government in the coming months. These reports will assist the Government in making decisions on the next steps for implementation to enable the scheme to commence in the first quarter of 2022.
We welcome any provision that will mean additional financial security for workers when they reach old age. That said, we have some concerns in regard to the Strawman that was published and we made a submission on that. To come to the crux of the issue, there is poor coverage and only one out of three employees have a private pension in the private sector. When we take into account the public service, it pushes that up to 47% but it is still very low. We know there are serious concerns in terms of pension charges and uncertainty around defined contribution and defined benefit schemes, all of which needs to be addressed. Auto-enrolment gives us an opportunity to address all of these issues but there are still key questions to be answered, which is why I asked for a timeframe. While there were over 100 written submissions and that is welcome, it is a low number, although I presume many of those were from organisations. When can we expect to see the next stage of the process?
The Deputy's submission is very welcome. The views he expressed in the submission were not unique and there are others who share his views, which will not surprise him. We both agree that 35% coverage is too low. Some 65% of people are not saving a single euro for when they get to 66 and we need to help them to make sure they have a better quality of life when they get to 66.
My ambition is to have a document brought to Cabinet before the July recess and, as it is April now, it is not that far away. I will try to do it as early as I possibly can so we can have considerable time to discuss the proposal. The Deputy might like 80% of it and not like 20%. However, I need to ensure we can all agree on the proposed system. As soon as the memo goes to Cabinet, I will bring it to the joint committee and we can have a conversation about it.
Hopefully, the Minister will publish that document and she has said she will furnish it to the joint committee. I look forward to seeing it and scrutinising it. The crucial elements are the contributions from the three sides - the employer, the employee and the State - and how this will be teased out and expanded upon. Obviously, from the perspective of my party, fund management is one of the key components. We have put forward proposals around the NTMA and the State playing a leading role in the management and investment of that money. It could be put to fantastic use within the State, whether in regard to housing or the green economy. I look forward to the document being brought forward. Is that a definite timeframe and is the Minister committed to bringing it to Cabinet before the summer recess?
That is my plan. Once the scheme is finalised, arising from the changes we will potentially make following the consultation process, I have no choice but to bring the memo to Cabinet as I do not have the authority to do these things off my own bat. We will bring the memo to Cabinet and I will get approval. If I get approval on the scheme as it is presented, that is when I will bring it to the joint committee. At the end of the day, this has to go through as legislation so it will have to go through pre-legislative scrutiny. It will obviously go through that robust analysis and people will either agree or not agree.
To touch on some of the specifics raised by the Deputy, I would like to see some of the ideas he has. Unfortunately, it may not be easy to design and direct money specifically to a particular area. As I said, I am not finished the deliberations yet and I will come back to the Deputy when it is ready.
The Minister said the Strawman proposals are not conclusive, which I accept. However, I notice Strawman does not advert at all to the possibility that the pension will be delivered other than by one of a small group of companies in the private sector. Strawman does not accept the possibility that it will be delivered through a public body.
I think I understand the question. The Strawman was designed to elicit conversation and discussion and it certainly has done that. There are a number of suggestions from the 100 written submissions that this should be entirely Government-run and that a Government agency be established. However, as I said, we will establish a preferred method based on all of the views that have been put to us with regard to what is the best and the most sustainable way of providing the assistance we want to provide.
12. Deputy Aindrias Moynihan asked the Minister for Employment Affairs and Social Protection the timeframe for completion of the reviews being carried out into persons affected by the changes to the State pension (contributory) in 2012; and if she will make a statement on the matter. [15653/19]
16. Deputy Aindrias Moynihan asked the Minister for Employment Affairs and Social Protection if extra staff will be hired to ensure completion of the reviews of the cases of persons affected by the changes to the State pension (contributory) in 2012; and if she will make a statement on the matter. [15654/19]
21. Deputy Éamon Ó Cuív asked the Minister for Employment Affairs and Social Protection when all the cases will be examined under the review of pensioners entitlements which follows the introduction of a total contributions approach method for assessing pensioners that became eligible for the State pension after September 2012; and if she will make a statement on the matter. [15508/19]
The 2012 pension cut hit very hard because it reduced the weekly pension for many people. Six years on, the correction was very much needed. However, time is not on the side of the people who are losing out. Having their weekly payment corrected as soon as possible must be a priority, given there are 90,000 people losing out each week. How soon will those reviews be concluded so people can see that correction reflected in their weekly pension?
I propose to take Questions Nos. 12, 16 and 21 together.
Since late September 2018, my Department has been planning and developing processes to review the social insurance records of approximately 90,000 pensioners born on or after 1 September 1946, who had a reduced rate State pension contributory entitlement based on post-budget 2012 rate bands. These payments are being reviewed under the new total contributions 2012 model of pension calculation, which includes provision for home caring periods.
Reviews commenced on 13 February 2019, the day after I signed the necessary regulations, which together with provisions in the Social Welfare, Pensions and Civil Registrations Act 2018 allow the increased payments to be made. As of 2 April 2019, 13,915 or 15% of reviews have been completed. Of these, 10,398 or 75% have resulted in an increase in payment for the pensioners concerned. The pensioners who did not qualify for an increase in payments will continue to receive exactly the same payment as heretofore.
As I stated at the outset, it will take a number of months to complete all the reviews due to the numbers involved and the individual nature of social insurance records. In some cases, it is necessary to engage in correspondence with the pensioner in order to clarify periods of caring, work and contribution histories. To date, over 36,900 requests for information have been sent out to pensioners. In order to process these reviews, 121 temporary staff have been recruited and trained and are now in our sections in Sligo and Donegal and it is planned to recruit a further eight staff this month. Based on experience to date, it is anticipated that it could take up to the end of September to complete all reviews.
What I have said previously and will repeat is that if we send out information requests to people and they do not reply to us, I have no intention of closing off the reviews. We will keep going and keep sending out reminders until every single one of the 90,000 people who were adversely affected by the rate band changes from 2012 have an opportunity to go through their file with one of our 121 staff to make sure they get what they are entitled to and any back payment they are due.
The figures suggest there are 90,000 people affected and there has been a staff increase of 120. Given some 1,200 to 1,300 cases are being processed per week, this suggests the 90,000 could take a year or a year and a half to process. Time is not on the side of these people. Is the Minister satisfied the Department has enough staff on that force to deal with this? It initially started off with 60 staff, increased to 70 last year, then to 100 and the Minister is now talking about 120. Has she underestimated the workload involved? Is she satisfied there are enough staff?
Is the 90,000 figure only for people on the contributory pension? There is also a cohort of people who chose to take the non-contributory pension because it paid them better than the contributory. Are they included in the 90,000 or is that figure an underestimation? Is the Minister's target realistic?
In selecting the people for early examination, was priority given to those cases where there was likely to be an increase in the pension following the review?
Nobody was prioritised. Letters were sent out randomly and nobody was particularly selected because of their age, the length of time or anything like that.
The ambition is for us to ensure that we carry out reviews of all 90,000 cases as quickly as we can.
In response to Deputy Aindreas Moynihan regarding the staging of the recruitment, that is how long it took us to find staff. It certainly was not our ambition to start off with 60 staff, before increasing the number to 80 and then 120. I am completely satisfied that the staffing levels are sufficient to ensure this process will be completed in a couple of months. It will certainly not take anywhere near as long as the Deputy suggested. I am also adamant that I will not tell the Deputy or anybody else that we are finishing on 1 June when people still not have given us the information required to allow their cases to be reviewed. In many cases, we can probably do reviews based on the information we have. Those cases are easier to review but there are many gaps where we do not have the information and that requires co-operation and information flow back and forth. To be fair and truthful, we had anticipated being able to do the vast majority of these reviews online, meaning we expected that if I emailed the Deputy today, he would email me back tomorrow. However, this approach does not quite work with some members of our older population and there is a delay in receiving responses when we send out requests for information.