I thank all of the delegations for coming in and thank them for their presentations. I listened to the presentations in my office and we also have written copies of them.
One of the big shocks in my life was as a 23-year-old. I was given a job as a small farmers' co-operative manager back in the Joyce Country of Connemara. I had no dealings ever with social welfare until then and I was extremely shocked, and I am still shocked, at the penal process involved. The situation has improved but very marginally. In those days 100% of the income was taken off. So if a person earned £3,000, and in those days the currency was in pounds, then when that sum was subtracted it left people with no farm assist. The payment was called farmer's dole at that time. The Department even went as far, in those days, as penalising people for consuming their own produce. If it found you had a garraí of fataí, which is a small garden of potatoes, or cut a little bit of turf, it reduced your social welfare accordingly. Then the Government wondered why there was no incentive to small farmers who absolutely required this to survive and better themselves.
I always see social welfare means testing as negative tax. A person in the tax system who earns a lot of money hands a certain amount up to the State. If a person is in the social welfare system and starts earning money then the Government starts deducting money and it goes to the State or it saves money to the State but I do not see an awful difference in the principle. When I say I do not see a difference in principle, the most a person will pay in income tax and the universal social charge, USC, is 50%. I do not count PRSI because that is paying for one's future. I always say to farmers that 4% for PRSI is their best investment ever. There is no insurance policy in the world that will give a person the equivalent for that amount of money. On the other hand, we shrug our shoulders at 70% of a cutback on the income earned by the poorest of farmers on farm assist. I am trying to explain where I come from on this. I represent an area that has many small farmers. I have read the papers and I think we are all going in the same direction of travel, but one thing that our guests have emphasised is simplicity, with which I agree. There are different versions of the exemption for farm grants. Why make it complicated? I am interested in hearing the response of our guests to the following. Why not make it uncomplicated? Farmers will have received a sheet from the Department of Agriculture, Food and the Marine at the end of the year or the beginning of the following year for the previous year, so why not say that the first €5,000 is exempt? Let us forget about the complex philosophical reasons put into schemes just to drive people mad. The argument might be made that we want to encourage people into ecology but the BISS or the ANC scheme do not really count. That is not fair either, however. I say that because I have farmers on Inis Meáin and Inis Oírr. Inis Oírr has the smallest farms, with farms of fewer than 5 ha. Those farms are in the highest nature bracket because, as everyone will know, the land there, like that found in the Burren, is limestone pavement and the farmers farm in a very traditional manner with very little mechanisation. As the farms are under 5 ha, and more than half of the farms on Inis Oírr are under 5 ha, very few of them have joined ACRES. That scheme is done field by field and the island farmers might have ten or even up to 20 fields in their 5 ha, but these farmers still need the grants. They should not be penalised when it comes to approving grants. Our guests, on reflection, can always make a further submission to the committee. Should we just say X amount of money, and I am not going to put a figure on it, should be exempt from the assessment for these grants? As I have said, the highest taxpayer in the country does not pay more than 50%. I believe in step changes. Some farming organisation previously put forward that, as a first step in the process, 50% of the residual income would be disregarded. What is our guests' view on that?
Many of our guests mentioned spouse's income. The problem with spouse's income is that it is not just a concern for farm assist. It is jobseeker's allowance, disability allowance and so on. Spouse's income concerns a lot of schemes so if we changed one then we would have to change them all. At the moment €20 a day is disregarded for three days of the week, rather than five days, and after that the income is assessed at 60%. That is a step in the right direction but this goes wider across all the schemes that take account of a spouse's income. One could argue in favour of individualisation but that is a big jump and a debate we will to have to have in the longer term. In the short term, the way to get there is to start disregarding more and more of the spouse's income. Let us say we bring in next year a disregard of €100 per week, with 50%.
Some of our guests have mentioned depreciation. I am always shocked at wear and tear. If a farmer has a little commercially registered van, a tractor or machinery or builds a shed or whatever, for most of them the disregard rate is 15% for the first six years and 10% in the last year. Sauce for the goose is sauce for the gander between the tax and social welfare system. I would be interested in hearing the views of our guests on that situation because it has a huge effect and kills any incentive.
Several of our guests raised the issue of PRSI. Basically what actually happened was farmers paid PRSI but they were on farm assist. In other words, their income was over the PRSI threshold, they paid the PRSI and then found that they did not get any contribution record because they were not allowed to pay PRSI, and they did not get their money back either. With the current regime, if a farmer goes over €5,000 of an income, then it is mandatory to pay PRSI. The problem is that if a farmer earns between zero and €5,000 no credit is given but a credit is given if one is in receipt of jobseeker's allowance. Those in receipt of farm assist, for any year in the past, should be given credits. I also believe that farmers who earn under €5,000 should get credits now, as if they were in receipt of jobseeker's allowance. The Department of Social Protection officials will always say that farm assist is only a form of jobseeker's allowance so I believe we should deal with that. It would at least assist us. In other words, if a farmer had ten years of work done in paid employment, any time they were on farm assist they would get a credit.
Again, I would be interested in hearing the views of our guests on the issue of capital.
I keep coming across farmers in bad houses, particularly single people living alone. They are living in very poor houses but have been saving assiduously because they think they will have to pay for a nursing home. They will be able to do so because they have the money saved, but if they had not saved it, they would not have to pay it to the nursing home. I do not know if any of our witnesses have ever met people like that, who have a lot of money saved. It is very interesting how that is means-assessed under the farm assist scheme. The first €20,000 is disregarded. The next €20,000 is counted as €30 per week, so farmers are not too bad up to €40,000 in that the Department only takes €30 per week off them, even though that is a lot of money. I often ask the Department to show me the bank that pays €30 per week on a deposit of €40,000. After that, however, they really hit the wall. Effectively, there is a rate of €4 per €1,000 which, when translated into percentages, is 20%. Our guests can do the sums fairly fast. On a sum of €100,000, if six multiplied by four is 24, that is €240, plus €30, which is €270 per week. That is the income imputed by the Department from €100,000 in the bank. Some of our guests must have come across this. Either that or my farmers are very different. They do not look any better off than theirs; they look a lot worse off.
Another problem we keep coming up against involves couples. Let us say a couple settles down and builds a house on the family land, adjacent to the parents' house. When the parents die, they leave the old house, that might not be in great condition, to their son or daughter. If the family member is on the farm assist scheme, the Department of Social Protection comes after him or her. It assesses the house on its capital value. We should be encouraging people to do up these houses and rent them out. I accept that the rental income should be assessable but we need to look at the capital value being assessable.
On the rural social scheme, RSS, there was some reference to 75% and 80%. The original arrangement for the RSS was that once a person qualified for farm assist, even if only for €1 under that scheme, he or she was eligible for the RSS. What changed was that if a person had €100 of assessed farm assist income, applied for the RSS and had a dependent adult or child, the Department then took the €100 back and only gave the person the top-up as an extra payment against the farm assist. In the early years, there was no justification for staying on farm assist, in most cases, because if people had a farm income, they got to keep it for their effort and in return they gave 19.5 hours to the community for the most top-class services I have ever seen. If the RSS were taken away, a lot of the community spaces, sports facilities, halls and all of the rest of the places that are well maintained by farmers, who are a really highly skilled and motivated workforce, would be a lot worse for wear.
I am interested in hearing our guests' views on my response to their submissions. Can we reach common ground here, today or in the future?
