I welcome the Minister of State to debate my question relating to the public service. Many of us have been out meeting people and it is an issue I have been coming across on the doorsteps. While €12 was very welcome for pensioners in the budget, retired public servants have €12 deducted from their public service pension so that they do not get a €12 increase. I have come across many people who are affected by this and I understand up to 30,000 people are being affected by this change. There is an old system and a new system. I do not know what year it started. While it sounds great that people have got €12 they are not getting it because they are losing it on the other hand. Is there any way to resolve this? There are older people on a pension and the cost of everything is going up, including groceries, heating, but nothing is coming down. That €12 would make a great difference to many of these people.
Nithe i dtosach suíonna - Commencement Matters
Public Sector Pensions
I thank Senator Byrne for raising this important matter. I am taking this on behalf of the Minister, Deputy Donohoe who has responsibility for public expenditure and I will bring back the Senator’s concerns.
Defined-benefit public service pension schemes for fully-insured employees paying class A PRSI are integrated with their social welfare entitlements which means that the overall pension package within these schemes has both an occupational pension benefit and a social welfare benefit component. On retirement, the combination of occupational pension and social welfare benefit equate to the total package payable under the design of the integrated scheme.
Pensioners who were members of integrated pension schemes will receive a benefit from any increases in State pension rates that may occur post-retirement, since they then receive the higher rate of social welfare in addition to their occupational pension. As well as benefiting from social welfare increases, public service pensioners also benefit from wage-indexation of their occupational pensions under the current public service pay deal, whereby increases in public service wages are passed on to public service pensions.
Non-integrated public service pension scheme members are generally those employed before 1995 who paid modified PRSI rate contributions that are not reckonable for a full standard contributory State pension, so changes to social welfare rates do not affect their pensions in the same way.
I understand the Minister of State is here to represent the Minister for public expenditure. I understand what the answer is saying but it does not answer how or why these people are affected. I am asking if any changes can be made so that these people will benefit from any increases. It sounds good but people who worked in the HSE, councils, hospitals or in local authorities and many different public service areas are all affected. Can anything be done to address this? They should be entitled to the increase. I understand that some were not paying the full rate of PRSI, they are retired and they are pensioners and many are in their 70s and 80s. The cost of everything has gone up, as I have said. I would ask that the Minister of State take this back to the Minister for public expenditure.
The Senator’s arguments which she presented here are fully valid about those who feel less well-off about any budgetary measures around the State pension. It is not directly linked to their level of income after retirement and they do feel aggrieved about that. However, as part of the public service wage indexation, they do benefit from any additional public pay sector deals which may have a positive impact on their pensions.
The integration of defined-benefit public service pension schemes with social welfare entitlements plays a crucial role in safeguarding the financial well-being of retired public servants. We cannot take away from the enormous service many have given to this State and they should be supported. The approach we take ensures that pensions that are fully insured under class A PRSI can benefit both from their occupational pensions and State pension enhancing their overall retirement income.
The system is designed to provide a fair and equitable framework. I will bring the matter back to the Minister. It is important that it is raised again in terms of fairness where pension adjustments reflect changes in the State pension rate and provide stability for retirees.
Even in the past two budgets, this Government has increased the pension by €24, with an increase of €12 in each budget cycle. That has been of enormous benefit to those who are still being challenged with the cost-of-living measures. As increases are made in social welfare provisions, it is vital those increases flow to the public service pension in order that retired public servants enjoy the benefits of their service without the fear of a reduction in their overall income. As I said, the wage indexation of occupation and pensions under the current pay deal reinforces that commitment.
I thank the Minister of State.
Housing Schemes
I thank the Minister of State for taking my Commencement matter, which relates to funding for Longford County Council under the Housing for All voids programme, which has been ongoing for a number of years. I was at a meeting of the housing committee last January at which executive members from Longford County Council were in attendance. The council was challenged to decrease the number of voids in the local authority housing stock, which stood at 7.2% in 2021. It was brought down to 3.5% by the end of 2023 and will be further reduced by the end of this year. This comes at a cost, however. To get to that level, there has been an increase in the amount of work done to reduce the number of voids. There is a large number of houses on which works are taking place to get to that figure.
Currently, the Department pays a grant under the voids programme up to a maximum of €11,000 per house. I will give the Minister of State figures come from the Society of Chartered Surveyors of Ireland with regard to the average costs of a house upgrade. When upgrading a house, it must be brought up to a higher standard of retrofitting. Those costs averaged €20,865 in 2020 and €46,913 in 2023. Using the expenditure expended so far this year in the voids programme, those costs are now averaging more than €51,000 per house to bring it up to the new standards. While it is only right that retrofitting works are done to the highest standard in order that they will last longer, the increases in cost have meant that Longford County Council has been running shortfalls every year since the programme has come in. I point out that we approached the Department in 2023 and received €1.54 million in extra funding to help with that deficit. The shortfall for the local authority for the work that has been done since 2021, however, currently stands at €3.4 million.
That is not sustainable for a small county with a small rate base. We actually increased our rates for 2024. We were the first local authority to increase our local property tax. I was on the corporate policy group which proposed a 15% increase in 2019. We have done it every year since to ensure there is funding for projects in the districts and to match funding for various projects throughout the county under the various schemes, such as the town and village renewal scheme, etc. We cannot sustain that cumulative debt building up if we want to hit the targets we have been challenged to meet by the housing committee. I am looking for an increase in funding. The grant of €11,000 per house should be increased and revised because the reality is that no one is able to bring a house back into stock with figures like that. I am seeking increased funding for our local authority to get our figures down to where they should be and where the housing committee and the Department of housing want them to be.
I thank Senator Carrigy for raising this important matter. He has been to the forefront in bringing this to my attention on numerous occasions in the context of his local area of Longford and Westmeath. I am aware he is determined to see the allocation for the voids programme increased. Certainly, it is a very worthy call in the context of how we manage vacancies and how they arise on a daily basis throughout the 150,000 social housing stock that is in the ownership of local authorities across the country. It is crucial and critical that the Government - I know Members of this House need to respond to that - looks at how we refurbish and re-let these properties as quickly as possible to families and individuals who are on the waiting list. They have been left without any urgency for far too long. We need an accelerator programme, but also the money and the funds to follow suit. I absolutely agree in that regard.
Notwithstanding that, there is a legal obligation on local authorities, under the relevant housing Act, to both manage and maintain housing stock on which the Department provides annual funding. We need to support local authorities in the preparation of vacant units for re-let under the voids programme. The voids funding is intended to supplement the legal requirement for funds to be provided from local authorities’ own resources. It is not a substitute for our resources or for inadequate budgetary provision for management and maintenance of the social housing stock by local authorities. The emphasis of the programme is on the works necessary to comply with the rental standard regulations supporting quick turn-around and re-letting times, with all major works deferred and carried out under planned maintenance over the life cycle of the asset.
On average, under the terms of the scheme, funding of €11,000 per dwelling is available. Where a local authority chooses to do work above this where necessary to comply with the rental standards, it can impact re-letting times and result in additional costs for local authorities. Where turn-around times are not impacted, however, local authorities can complete the suite of works applicable to the energy efficient retrofit programme on a vacant unit, meaning it can access both programmes, namely, the voids programme and the energy efficiency retrofit programme. Almost €60,000 is available in that regard.
Longford County Council indicated to our Department last year that, in some cases, additional works were necessary and it was not possible to complete energy upgrades under the retrofit programme. Officials from our Department were in contact with Longford County Council in 2023 in an effort to identify those additional requirements to support the local authority to year end. To that end, our Department approved additional funding of almost €1.5 million on the original allocation of €460,000, which included a contribution towards planned maintenance on tenanted properties. This additional funding allowed for the remediation of 54 dwellings at an average cost of €35,000 per dwelling, which equates to more than three times what was originally available. This uplift in funding was made available to ensure Longford County Council was in a strong position to reduce the levels of legacy vacancy, complete stock condition surveys this year and further support the move to planned maintenance. Longford County Council acknowledged confirmation of this and committed to implementing a properly functioning planned maintenance programme for the year. Furthermore, it was also acknowledged that Longford County Council has reduced vacancy from 6% to 3% as per NOAC performance indicators. I am aware it has been to the forefront in trying to get more stock back into use for families and individuals. Senator Carrigy has championed this on many occasions.
Before I bring Senator Carrigy back in - I will give him another moment to gather his thoughts - I welcome a group to the Public Gallery in the Seanad today. It is great to have them with us to see how our questioning and democracy works in the Seanad. What is ongoing here is called a Commencement matter. Senator Carrigy is passionate about funding for local authorities, including his home local authority, namely, Longford County Council. He is advocating for increased funding with the Minister of State at the Department of housing and local government, who has responsibility in this area, and the Minister of State is replying to him. Senator Carrigy will now respond to what the Minister of State has said and the Minister of State will get the last word. It is great to have the group here.
I note that we do not have copies of the Minister of State's speech, which is highly unusual for the Minister of State, Deputy Dillion, to be fair. The Seanad Office needs a copy, if he does not mind ensuring one is provided.
I welcome all the students and I hope they enjoy their day in Leinster House.
I acknowledge that Longford County Council was allocated funding of nearly €1.5 million in 2023. However, I want to highlight that in 2023 we upped the number of houses that we retrofitted to 79. The Department mentioned in its statement that this work was done to a reletting standard. Should houses not be retrofitted to a housing standard, which we now have, when retrofitting? Many of these houses are between 30 and 50 years old and have no proper insulation. Bringing them up to standard involves the installation of proper insulation and new heating systems. There is no way such work can be done for €11,000, which means that funding is being taken out of already tight budgets. We, as a local authority, have a low rates base. Not every local authority should receive the same level of funding because different local authorities have different rate bases and different amounts of funding coming in. We have a stock of over 2,000 social houses to maintain so a significant proportion of our annual budget is used to maintain them. We do not have significant funds to reduce the number of voids at the rate that we have been asked to do, but we have done it by using resources that we do not have. We have already upped the rates and increased the local property tax so we are doing our bit. It is not a case of us going the other way and then looking for money. We are funding significant projects in the county with Government funding and putting up our share to get projects done in our county. We are doing what we have been asked to do by the housing committee. We need to be financially compensated for doing it and for doing an excellent job. On top of that, a significant amount of the human resources within the local authority are part of that as well. I ask that similar funding is put in place as was put in place in 2023 for 2024. In the short term, as everyone will know, November is budget month for local authorities. As budgets are being put together for 2025, I ask that a similar amount of money, or more, is put in place to allow us to continue with the projects we have in place.
I thank Senator Carrigy. I recognise and acknowledge the tremendous work undertaken by Longford County Council in respect of its reletting and voids programme. It is crucially important that the Department supports that.
I will certainly take back the issue that the Senator has raised here today about the current scheme and the allocation of €11,000 per home. I think the matter needs to be revisited on the basis of the information he has presented this morning.
We also need to look at a long-term sustainable plan. Rather than being reactive, we need to be proactive in how we consider the voids programme and put vacant properties back into use. Certainly this is an extremely important area. We have scaled up our ambition to embark on one of the largest voids programmes over the last four and half years. This year, we have provided up to €31 million for a target of 2,300 properties. Last year, it was €46 million for 2,481 voids. This funding tackles a large number of long-term vacant properties and brings them back into use.
I will ask my officials in the Department to further engage with Longford County Council on the matters raised by the Senator. I know that he wants to raise the level of ambition to put more stock back into use. I also know that the local authority has undertaken a number of processes such as funding stock condition surveys and examining ways to get better value for money when it comes to tackling a large number of homes. Maybe they could be put back into use under a single framework or single contract. I have no issue working with the Senator on that.