I thank the witnesses. The meeting has been very helpful and interesting, and there is a great deal I could pick up on. As policymakers and people dealing with a system that exists, we have to look first at where we are on all the different schemes and the details of them because, after the budget this year, when the social welfare Bill has been passed, there will be practical changes to the system but there will not be a new one. Moreover, if we could get to one of these big objectives in one bang, we would probably find all sorts of unforeseen anomalies.
As a simple example, individualisation is an interesting concept, and the one area where we kind of have individualisation is the dependent adult allowance for the contributory pension. In that case, all that is assessed is the income of the spouse, but because of the way we assess capital, the people who have shared all their assets are penalised over those where the primary earner just holds on to it for themselves, so it solves one problem but creates another. We need to move forward in steps. The first step is individualisation. In the much more complex world in which we live, there is a huge attraction to that. The question is how we can get there and where we would start.
The second issue, which was well highlighted by reference to the poor law system, with the deserving poor and the undeserving poor, and all the other ideas that were there in the past, is that I always see means-testing as a negative tax. As people start going up the ladder and becoming better off, as in the case of the taxation system, some of it is taken back. If we accept it is a negative tax, however, there should never be a 100% tax. Nobody would accept that in the tax system, so why do we accept it in the social welfare system? I would be interested in hearing the witnesses' views on how capital should be assessed. Should it be assessed on the income from the capital, which is given as an option on the medical card system, or should it be a notional system that wants you to spend down the capital having saved it, where income is assessed over a certain level at an equivalent of 20% per annum to be written off over five years?
There was a reference to self-employed income but this goes across the system. We see it in the case of the non-contributory pension. A person could earn €200 if they are employed and it is not means tested, but €30 over that is means tested 100% if it is self-employment such as farming or small fishing, which is very common in my constituency. In principle, should employed and self-employed income be treated exactly the same, once the net income has been assessed? The argument in the old days was that you could get away with a little bit if you were self-employed, but that is a myth. It is the other way around.
What actually happens with the self-employed, particularly for people who are not great record keepers, is that the State knows what grants they get from the Department of agriculture because it asks for a grant statement, and it also knows how many cattle or sheep, if that is what the person is moving, from their sheep register or from the AIM statement, which is a Government-controlled system for moving cattle, exactly how many cattle there are, so the only argument relates to why they were sold and how much was got in return and, in most cases, they are sold at a mart and the Department insists on getting the mart receipts. It knows the income, therefore, but the problem is that a lot of people do not keep all the receipts, and many people do not realise that if you who have sheep, feeding the dogs is a legitimate cost. Many social welfare people do not realise that, but you cannot have a flock of sheep on a hill or even in a field without a good working dog. You are more likely to cheat yourself on the income side, therefore, than on the other side. Should self-employed income always be treated the same or is there any justification for what is done?
The idea of a universal basic income is very interesting, but we are a long way from it. I have argued with people who have proposed it that the first issue is to adjust means-testing in order that we will lose the cliff edge aspect of 50%, 60%, 80%, 90% and 100% depending on how the income has been derived. In fact, we should make it more like the tax system whereby nobody will be penalised at more than 50%, because if we then wanted to move to a universal basic income, we would be a bit nearer to where we would like to be. We know where we would like to go with individualisation, a universal basic income and so on.
Do we have to then say, keeping that in mind and the back of our heads, this is what we are going to do each year, and adjust as we go along?
On the point made about the 50% literacy, I often point out to people who might wonder why people come to a TD's office that the well-to-do will go to an accountant's office with their accounts, a solicitor's office with any legal question and to many other experts if they need them. They do not do it all themselves. Quite rightly, as was pointed out, we expect this of the most vulnerable in our society, the people with the least literary and bureaucratic skills. It is not necessarily that they cannot read and write but they do not have the same bureaucratic skills. That is not what they do in their day job. They do something more practical. We expect them to be able to navigate this rather complex system and to know all the schemes, whereas people at the top and the higher end do not know all the schemes but they know the person who knows all the schemes, and who has the speciality to know all the schemes. They pay them to get the information because it pays them to pay them.
I am very interested in the cliff edge, which is a huge issue we need to address. One idea that was kind of touched on and I picked up on it, which I have spoken on previously, is Intreo, and being available for work and actively seeking work when unemployed. There are two questions about that which always arise in my mind based on my life experience. I was a manager in a development co-op for a number of years before I came into this place. Most people want a commercial type of job; I know I did. They would never swap that for €232 a week. There are people who are unlikely to hold down a commercial job and they love being on a community employment scheme, rural social scheme, Tús scheme or whatever. They like to be active, the sociability of it and so on. My belief is that there are a number of people who - for all sorts of reasons, though they are very small - first, cannot engage. For some reason, they cannot engage with the workforce. Second, there are some people who, if they did engage with any organised workforce, they would cause more hassle than it would be worth and would disrupt everything that was being done. We are not going to increase that number by getting rid of the availablity for work. Very few people want to stay at home and do nothing.
The day of working and drawing is not the issue it used to be because the system has people wherever they are. I would be interested in the witnesses' views. Should we just drop what I would see as quite a Victorian attitude, or is there merit to all of this hassling of people? Some of them are not clinically eligible for disability allowance, DA, but have personality issues that makes it difficult for them to engage with the workforce.
If self-employed people make a tax return, they get the tax form and fill it up as honestly as they can, they submit it and keep all their records, and put them away for a possible one-in-1,000 audit but the same people applying for social welfare will have to produce every document down to the last. If their bank accounts are stable but they are still six months over, they will have to get another one, and getting bank accounts these days for people who are not online is a nightmare job. It would take three weeks, and they want them in two weeks. Do the witnesses not consider it amazing that we trust the taxpayer but will not trust the social welfare recipient to tell the truth at all? We trust the taxpayer, who will deal with way bigger sums, and that subject to a spot audit, give or take, they are doing the job right, and that wee do not go to this mega precision.
I get cases that are quite bizarre. Let us take a small farmer on ten acres or 10 ha of poor land. We know what he has from the Department of agriculture, it is awfully easy to figure out. In some of the means-testing, say, for a carer's allowance at €900 per week, if they have only got €2,000 in grants, they are unlikely to have €50,000 or €10,000 of cattle to sell. They are more likely to have €1,000 in cattle to sell. At €900 a week, it is unlikely. That is not feeding them, looking after them and dosing them or whatever.
The witnesses, between the whole lot of them, put so much emphasis on how much we come down on people on this one. Is there a need to take a more Revenue-like approach to being realistic about the means-testing? No more than the taxpayers, maybe some people get away with some things. That is part of the system. It is not that people set out to do that but there is no way. I would imagine if Revenue audited every last account, they would get a small return but their calculation is that it would cost them more to get it than it is worth. I would be very interested in that one but the means-testing is also a big issue. I am sorry for keeping the witnesses for so long.
