The National Women's Council of Ireland is grateful for the opportunity to meet with the committee to discuss the critical issue of reform of the social welfare system and of child care, as we detailed in our pre-budget submission. Over many years the council has worked in collaboration with over 160 women's organisations nationwide to address various issues such as access to and the cost of child care, the need to recognise unpaid care work, problems in regard to poverty for older women, barriers to employment and the need to recognise women's work in family businesses.
Our reports, A Women's Model for Social Welfare Reform and An Accessible Childcare Model, examine the social welfare system and child care in Ireland and recommend structural changes to address our concerns. Both of the models proposed are grounded in the experience of our membership and if implemented together will address the structural barriers to women's equality.
The council hopes its attendance at this meeting will help it to play a part in encouraging the joint committee to adopt a long-term strategy which will lead to effective high quality child care that is accessible to all parents. It is necessary to recognise parenting in the social welfare system. A system of parental support payments should be introduced to allow parents to make real choices about care in the home and working in the paid labour force. The council encourages the joint committee to examine the financial dependency of women on men which is reinforced through the outdated social welfare system.
As the members of the joint committee are aware, the reform of the social welfare system and child care are not issues which lend themselves to quick-fix solutions, unfortunately. It is probable we would not choose to start from the existing low base. The level of support given to those who care for children has been minimal. It has predominantly been the case that women have had to stay at home to care for their children, or have had to juggle a career with a variety of child care arrangements. The social welfare system which was established in 1910 continues to be based on the male breadwinner model which is not appropriate to the Irish society of today.
I would like to outline the issues being prioritised by the council in advance of the forthcoming budget. The council is focusing on the modernisation of the social welfare system, the enablement of participation in employment, the recognition of parenting within the social welfare system and the development of a publicly funded child care infrastructure. While women comprise the majority of social welfare claimants, it is often the case that they do not have direct access to their benefits. The qualified adult payment, approximately 70% of the full adult allowance, is paid to the primary claimant. The welfare of women is primarily linked to this payment, due to the fact that women account for 95% of all qualified adults.
The reform of the qualified adult rate for pensions is particularly critical for women over the age of 65 years, some 41% of whom are below the 60% poverty line. When the qualified adult payment is made to a woman's husband, her economic independence is limited. If the relationship is troubled or violent, the woman's dependence on her husband can prevent her from choosing to leave. The State does not recognise such women as individuals in their own right, but instead considers that they exist only through their husbands. Many women who left work to assume caring responsibilities in the home when the marriage bar was in place are now qualified adults. They are facing old age with little access to State pensions.
Persons who spend time caring for their young children, or disabled and elderly relatives, do not earn pension credits because it is not recognised as paid work. The home-maker's scheme has helped to acknowledge care work, to some extent. It helps those who choose to work at home to qualify for an old age contributory pension. However, the income disregards under the scheme do not give any value for short-term payments and offer a lower level of contribution than would be the case if credits were awarded. The council is recommending that qualified adult payments be made at 100% of the full adult rate. The payments should be issued directly to the qualified adult. The council believes the home-makers' disregards should become home-makers' credits and that the credits should be made retrospective for all those engaged in unpaid care work from 1973.
I would like to speak about the need to enable employment in the social welfare system. The spouses of business owners who are working in family businesses are treated as "relatives assisting". Although they are working, the "relatives assisting" who are mainly women cannot make PRSI contributions which would entitle them to a pension and maternity benefits. The limitation rule which reduces by 15% the total amount of benefits received in a household where two adults are claiming social assistance is based on the assumption that two people can live more cheaply than one — that they can save up to 15% of costs between them. Recent research has highlighted the fact that economies of scale differ from household to household. There are practical difficulties in determining the extent to which there are such economies. It is not certain that there are such economies in some cases. In reality, the limitation rule stops women from accessing welfare payments in their own right. The two-year rule states a person with no social insurance record for more than two years must have 26 paid contributions before credits can be awarded. This prevents women who cared for their children in the home and who wish to access and return to employment now that their children have grown up from doing so. The council is recommending the introduction of specific reforms in respect of "relatives assisting", the abolition of the limitation rule and the reform of the two-year rule by providing for a re-entry credit for women who wish to return to the labour market.
I would like to speak about the need to make parenting a contingency within the social welfare system. If parents are to have real choice in the care of their children, the social welfare system and paid employment need to accommodate parenting. If the State can provide for paid parental leave, it will enable employees on lower incomes to avail of such leave and support parents in their dual role as employees and parents. A means-tested parental allowance would help low-income families to care for their children, regardless of the parents' marital status. It would make parenting a contingency within the system and offer low-income parents a continuum of support, through caring for children to paid employment and back again, depending on their circumstances. This would offer parents the flexibility to move in and out of the labour force. It would give them an opportunity to avail of training and labour market activation programmes, or to be in part-time or full-time employment as the children get older. The council recommends the provision of a full-time means-tested parental allowance for the parents of children under the age of five years. A part-time means-tested parental allowance should be offered to the parents of children aged between five and 14 years. The Government should introduce paid parental leave for the parents of children under the age of five years and part-time paid parental leave for the parents of children aged between five and 14 years. Such recommendations would offer parents the flexibility they need.
The council favours the development of publicly funded child care infrastructure. The case for such a child care model which can be made from a children's and women's rights perspective is based on strong international evidence outlined in a report recently launched by the council. The council advocates this model because it would increase and promote women's economic independence by leading to a greater sharing of care responsibilities between women and men. It would allow women, particularly those who depend on low incomes, to choose how and when they wish to participate in employment, education and training.
When the OECD reviewed child care costs in Ireland in 2004, it found that such costs were unsustainable because they accounted for a high proportion of parents' incomes. Ireland has the second highest rate of relative child poverty of 20 EU countries. Some 23% of Irish women are at risk of poverty, a figure that increases to 42.3% for lone parents. Such levels of poverty are linked to the child care options available to parents. The high cost of child care has negative implications for equality among children. It is often the case that children from the most vulnerable households who have been proven to benefit from early intervention are excluded from child care options. It is time for Ireland to put children's development and education at the heart of society by creating a sustainable, affordable and high quality child care infrastructure.
The council recommends that paid parental leave, currently available during the first 18 weeks of a child's life, be extended to cover 26 weeks. It advocates the introduction of a period of five days paternity leave. In the long term it recommends that parents be allowed to avail of 26 weeks paid parental leave. It proposes that this subsidised model of child care should be implemented over ten years and based on a mixed delivery of provision. The subsidy would be paid directly to the provider, as long as he or she met a series of quality standards. The council's preferred model of subsidised child care involves the introduction of universal early childhood care and education for all three and four year olds and the extension of other forms of care such as out-of-school care for three and four year olds and subsidised care for one and two year olds. The council would like the Government to establish a universal pre-school year and a subsidised extended care programme in the context of the forthcoming budget. The clear benefits of the subsidised model are listed in the documentation the council has supplied to the committee.
Like many non-governmental organisations involved in women's and children's rights, the council welcomes the fact that child care issues are now a priority on the political agenda. The council believes the key issue is ensuring the appropriate decisions are taken leading to a long-term sustainable solution for all children and their parents. Since the council published A Woman's Model for Social Welfare Reform, it has worked with groups from all parts of the country as part of a campaign to change the system. Over 12,000 individuals signed and sent letters to the Minister for Finance, Deputy Cowen, last May as part of an attempt to highlight this issue and encourage him to implement the necessary changes in the forthcoming budget.
If the Government adopts the council's proposed social welfare and child care models, it will be able to address the issues of poverty, balancing paid and care work and recognising care work, in order that women's financial security and economic independence in their old age can be secured. It can show that society values care work and parenting by placing them at the heart of society. The National Women's Council strongly advocates that the Government takes a holistic and long-term view of the issues and provides sufficient investment. It must introduce these models simultaneously in order that all parents can have access to real choices in respect of care and paid employment.