The Select Committee is considering the Estimates for the Department of Social Welfare. I am sure that all Members will wish to contribute and I look forward to a constructive and informative discussion.
Estimates for the Public services, 1995.
Vote 40 — Social Welfare (Revised Estimate).
I am pleased to present my first departmental Estimate to the Select Committee. The Estimates of expenditure for my Department for 1995 amount to £2,454.9 million. That figure takes account of the changes in overall public expenditure arising from this year's budget.
The amount of almost £2.5 billion is the sum provided by the Exchequer this year to fund social insurance and social assistance schemes and services and to fund the increases in weekly rates of payments, the increases in the monthly rates of child benefit from September next and the other social welfare improvements announced in the budget. This sum also includes the special provision of £200 million allocated by the Government for equal treatment payments.
The main constituent elements which go to make up the total Estimate for 1995 are social assistance payments, which are provided totally by the Exchequer and which comprise the single biggest item of expenditure in the Estimates. They comprise a comprehensive range of means tested payments, including unemployment assistance, payments to pensioners, widows, lone parents, carers and families at work on low pay, supplementary welfare, secondary benefits and, of course, child income support for all families. The total cost under this heading will be £2,155 million this year.
Social insurance benefits and pensions are paid out of the social insurance fund which in turn is funded by PRSI contributions from employers, employees and the self-employed. The Exchequer makes good the deficit which arises each year between income received by way of PRSI contributions and social insurance benefits and pensions paid out. That payment to the social insurance fund amounts to just over £25 million this year. Payment by the Exchequer to the social insurance fund to cover the costs of arrears to married women arising from the provisions of equal treatment legislation will amount to a further £200 million this year.
Administration costs for my Department's schemes and services as covered by the adminstrative budget agreement will amount to £135 million this year. Receipts into the Social Welfare Vote as appropriations-in-aid, which show up as a credit figure on the balance sheet, amount to over £60 million. Overall, the net figure comes to a total of £2,454.9 million, which is the amount of the Estimate before the committee today.
The amount of the Estimate for 1995 does not do justice to the overall level of social welfare spending in Ireland. Total social welfare spending this year is estimated at around £4 billion, exclusive of the £200 million being provided to cover the cost of the equal treatment payments. Of the £4 billion, the Exchequer will contribute almost £2.3 billion and the balance will be met mainly from employers, employees and the self-employed by way of PRSI contributions.
We now spend on social welfare almost £11 million each and every day of the year, that is £77 million for each week of the year. In doing so we provide a weekly payment to around 800,000 people, which in turn benefits almost 1.5 million people when adult and child dependants are taken into account. This includes £2.9 million a day in payments to elderly and retired people, £2.9 million a day in payments to unemployed people, £1.2 million a day to the sick and disabled and £3.4 million a day on family income support, including widows, widowers, lone parents, carers, child benefit and families at work on low pay and other miscellaneous allowances. The balance, amounting to around 5 per cent of total expenditure, goes to cover administrative costs.
I am already on record with my views on how this year's budget has adopted a fundamentally new approach in striking the correct balance between the social and economic objectives of this multiparty coalition Government. There must be a deliberate and planned shift of income and resources in our society to those who are less well off. The days of doing a bit here and a bit there are gone for good.
The social welfare system has a fundamental part to play in that shift. In the 1995 budget I adopted a twofold approach in addressing those issues, first, to increase social welfare payments in a focused way and, second, to tackle the gaps inherent in our system which act as obstacles to people taking up work or other opportunities. The cost of the social welfare improvements announced on budget day is £212 million in a full year, which is the largest single allocation of resources for budget improvements in the history of the State. Furthermore, it is 35 per cent higher than last year's allocation.
It is important to explain once again my thinking behind the unprecedented increase in child benefit given this year. Child benefit is one of the best ways of targeting poverty in Ireland because those most at risk tend to be large families. In the vast majority of cases, child benefit is paid to women and in many cases it is the woman's only independent source of income. Recent studies have shown that women tend to spend more of their income on children and on general household expenses than men. Therefore, directing payments to women is more likely to benefit children. We are talking here about children in mainly low and middle income families. Only 7 per cent of child benefit goes to families with incomes in excess of £25,000 per annum.
The substantial child benefit increase also serves to address the second fundamental objective in this year's social welfare budget, that is, facilitating employment. Since child benefit is a universal payment which is not taxed and is not withdrawn if employment is taken up, it does not act as a poverty or unemployment trap or as a disincentive to work. This is a further important rationale for channelling as much support as possible to families through that particular payment and is one of the reasons why the Government intends to proceed with the development of a child benefit supplement next year.
This new child benefit supplement is the foundation stone for meeting the Government's commitment to creating a form of basic income for children. It will involve a major restructuring of our present system of child income support. The child benefit supplement will be payable, in addition to child benefit, to all families whose income is below a certain level irrespective of whether that income stems from social welfare, employment or a combination of both. It will incorporate the child dependant allowances currently paid in respect of children to social welfare recipients and the family income supplement currently paid to people on low income from employment.
Deputies will already be aware of my conviction of the need for all citizens to have access to an independent citizens' information service which would operate separately from statutory or official information providers. It is clear that no matter how effective or comprehensive the statutory information services are — that is, those provided by Government Departments — there will always be a need for a service which would be independent, which would provide the equivalent of a "second opinion" and which would operate at local level. The experience in my own Department bears this out, where our own information services are complemented to a large degree by a range of non-governmental information providers such as the citizens' information centres operating under the auspices of the National Social Service Board and the unemployment centres run by organisations such as the Irish Congress of Trade Unions and the Irish National Organisation for the Unemployed.
The programme for A Government of Renewal contains an important commitment in relation to the development of information provision. Under the programme we will overhaul the facilities available for community information by building on the network already in place in both the voluntary and statutory sectors. This process will be undertaken in consultation with the National Social Service Board and the Director of Consumer Affairs.
My Department has a very close working relationship with the National Social Service Board, mainly through contact at local level in the dissemination of social welfare information. We have a highly developed information service which operates through 59 information officers attached to local social welfare offices around the country. The National Social Service Board operates through 83 citizens information centres. In addition, some 50 per cent of all inquiries to citizens information centres relate to social welfare matters.
Since taking office, therefore, I have been convinced that the commitment in the programme for A Government of Renewal would be best served by responsibility for the National Social Service Board being transferred to my Department from the Department of Health. That process has now been completed and I am pleased to announce that the National Social Service Board has come under the aegis of my Department since 1 June 1995.
I want to make it absolutely clear that the change of departmental responsibility will in no way affect the statutory role of the National Social Service Board which will continue to carry out its functions in accordance with its parent legislation. The board will operate at arms's length from my Department and will be able to develop its services through the provision of additional resources.
One aspect of particular concern to this Government is the whole question of poverty, particularly where it relates to families and children. Many people within our society are simply not in a position to benefit from the rapidly growing economy, and special measures are necessary to direct resources towards those. In this regard the provision of additional amounts to increase child supports is a first step towards a more equitable distribution of the available funds.
We must also, of course, continue to protect the value of social welfare for pensioners, lone parents, carers and the long term unemployed — in fact, for all of those who depend on the system for their livelihood. We must continue to develop and expand the system to cater for their needs. While the numbers out of work continue to fall, and live register figures are now at their lowest for four years, unemployed people — particularly those unemployed on a long term basis — know they can continue to rely on the system.
The Estimates for this year also face up to the fact that thousands of married women were unfairly treated in the past and, at last, funds will be provided to redress this situation.
Ireland's social welfare system is among the most modern and progressive in the world today. It has a wide range of income maintenance and support mechanisms to cover a variety of circumstances. Few will disagree that the system operates well for the benefit of the citizens of this country. However, the development of a social welfare system must always involve an ongoing review and evaluation of its effectiveness in meeting the challenges of our diverse society, particularly where financial constraints dictate that the limited resources must be targeted towards areas of greatest need.
Social welfare expenditure will be significantly increased this year and I believe that we have struck a fair and balanced approach to the distribution of these funds for 1995. I, therefore, commend this Estimate to the committee.
I call on Deputy Joe Walsh to make the opening statement for Fianna Fáil.
The social welfare system has improved considerably in recent years. I want to pay due and well deserved tribute to my colleague, Deputy Michael Woods, for his innovative and imaginative role in the many schemes introduced over the last few years. We now have a well developed social welfare system catering for quite a large section of our society which needs the support of social welfare payments. The weakest are deserving of that support.
It is a measure of the modernisation of this State that the Social Welfare Estimate targeting social welfare recipients totals £4 billion. Earlier today, in the House, we initiated a debate on the Social Welfare (No. 2) Bill which is designated to bring about changes that will be helpful to society in view of the changing situation relating to marriage and marriage breakdown. It is paving the way for the divorce referendum. That particular Bill will go some way towards ensuring that no spouses will be disadvantaged in terms of their entitlements or legal status.
Despite paying out this massive amount of money, I regret to say that the least well off have been let down this year. This year's Estimate gives only 2.5 per cent to the people who most need it and there is no getting away from that entirely inadequate amount. I am glad that the Minister, in reply to a Parliamentary Question yesterday, accepted the fact that this is a totally inadequate amount. We must prioritise where we will spend the amount of money available to a given Department.
As Fianna Fáil spokesman on Social Welfare I will continue to condemn the uncaring attitude towards those in receipt of social welfare, particularly the elderly. The excuse has been made a number of times that an effort has been made to get more people out to work this year and that the budget and the Social Welfare Estimate were in some way going to punish people on social welfare so that they would get out of bed in the morning. I do not accept that at all because you cannot force the old, the infirm and the disabled to find work. This Estimate should have prioritised those people in a more caring way.
In the Social Welfare Bill, which we discussed in the Dáil today, we should ensure that those who are left behind — including children in every corner of the country who will have to cope with the new situation — will not face financial trauma as well as every other kind of trauma resulting from the changes taking place in our marital set up.
It is alarming that these Estimates provide for a decline for a number of social welfare recipients, this year of all years, because this incoming Government inherited a balance of payments surplus, a good growth rate and a generally buoyant economy. Given that good economic situation, one would have expected that the old, the infirm and the disabled would have been brought along.
This year's mistakenly planned budget has made all citizens suffer and we now know that spending is out of control. The real difficulty about this economic mess is that the least well off — those who can least afford it — have to suffer the most.
I am concerned that this economic wreckage will inevitably affect social welfare recipients. Although it is not for me to make a political point, this was starkly indicated by the recent OECD survey which said that the present economic mismanagement would result in a disastrous decrease in the level of social welfare payments. I want to strike that note of warning for social welfare recipients. We must seek to ensure prudence and priorisation. We must also ensure that the underprivileged and disadvantaged are not made to suffer any more. Old theories such as punishing those who cannot get a job are of absolutely no benefit, nor are aspirations and sympathy.
The reality is that a section of this society, the recipients of social welfare, are this very week getting their payment increases. The non-contributory old age pension will be increased from £61 to £62.50 and the deserted wife's allowance from £61 to £62.50. It is not a pleasant solution to give people their increase and tell them to make do with £62.50 per week. It is not an easy matter. It is such a good year, it is no wonder that so many people on that level of payment found it mind boggling that they were expected to manage on such a small increase which is something in the order of 20p per day. They believed they could get out of the grasp of moneylenders and other people who make their life miserable. It is regrettable that only that amount is made available to them in this Estimate.
We are scheduled to have a divorce referendum later this year. The survivor's pension was only increased by £1.60 per week. We know from the last referendum that people need assurances and reassurances that they will not be financially less well off as a result of a change in the Constitution. This Estimate and the miserable increases have not given them any great confidence.
There was no increase in child dependant's allowance. A long term unemployed person with three dependent children is expected to live on £139.60 per week and that is not easy. They got an increase this year of 1.75 per cent. While this is a substantial Estimate and, as a nation, we can feel proud that we have, by and large, a comprehensive social welfare system, it still contains vulnerable sections. In going through the detail of the Estimate, I will seek to point out the anomalies and gaps. We should seek to do a little bit more for the least well off in society.
We will now have the opening statement from the Progressive Democrats spokesperson, Deputy Clohessy.
Once again, this gives public representatives an opportunity to look at the broad spectrum of the social welfare system. Everyone will agree that irrespective of how many jobs are created in the future, there will still be a huge number of people depending on social welfare payments. I sincerely recommend that in discussing this Estimate, we be conscious that nowhere near enough time is given in this House to debating the nature of our social welfare system or reforms and changes that could be made to it.
The social welfare system is so complicated that it sometimes defies logic. I firmly believe it is our responsibility as politicians to give people the best service we can afford. In order to do this we must first drag the entire system into the 1990s. It must be restructured in order to cope with people's changing needs, more disjointed employment patterns and the demographic changes in our population. We must be sure when making provision for social welfare payments that the payments and support coming from the Department are designed to give maximum support and empowerment to the recipients. At the moment, this is not the case.
Some 1.3 million people are wholly maintained on social welfare payments. Under the present system, this leads to marginalisation. Many of our people experience poverty and social exclusion on an ongoing basis. Social exclusion does not only mean insufficient income. It goes beyond participation in working life and manifests itself in areas such as housing, education, health and access to other services such as legal aid. The aim of social policy should be to assist individuals to take care of themselves as far as possible and to perform a useful role in society. Only new and innovative combinations of work and welfare are likely to achieve that goal for those most vulnerable.
There is nothing in this Estimate or in the Department's schedule of work for this year that indicates the Minister has a social welfare policy or philosophy. The central implication of both the rise in demand for social services in the market and the need to combat the exclusion of weaker groups is that income maintenance can no longer be the only objective of social policy. Social policies now have to take on the objective of helping people to find a place in society. The main route, but not the only one, is paid work and that is why employment policies and social policies should be more closely linked.
The greatest challenge to the social welfare system in the short run is the serious financial difficulties it has to face as a result of the demographic changes which will occur. It is well known that over the coming decades there will be a considerable shift in the demographic structure of our population and older people will have to rely on the support of a shrinking number of people in the working age groups. At the moment the social welfare system is in no fit condition to meet those challenges.
If the Minister does one useful thing as a result of this debate, it will be to reread the report of the Commission on Social Welfare published nine years ago. The key recommendation of that report was that the social welfare code be reformed and simplified as a matter of urgency, yet nothing has been done. The Social Welfare (Consolidation) Bill, 1993, could have made great strides forward but that opportunity was largely missed and, since then, the situation has remained as it was. The social welfare code is simply too inflexible to respond to the needs of a changed Irish society.
There is one area in particular where the existing code works as a destructive force. There is nothing in our social welfare code that makes the transition from unemployment to work any easier. Family income supplement is not enough to reassure people that they will not lose out by taking up work and thereby lose many of the ancillary supports including rent allowances, medical cards and so on. There is no evidence that this Government has any intention of changing that or of tackling the real problems that lie at the heart of our rickety social welfare structure. The recently published Social Welfare (No. 2) Bill will only add another layer of administrative complexity to the code.
The Social Welfare Estimate is one of the most important of the year. Directly or indirectly, the Department has an influence on everyone's life. If we are to strive to have a modern and efficient social welfare system which assists rather than entraps people, the date is long past when a thorough overhaul must begin. The Fianna Fáil-Labour coalition promise in its Programme for Government in 1993 that the administrative requirements of the social welfare system would be simplified and made more compatible with human dignity. This is not fully happened yet. This Government in its policy agreement promises further integration of the tax and social welfare systems, but when will that happen? We simply cannot go on voting the Social Welfare Estimate through on the nod without a comprehensive debate on how we can best assist people to make the most of their lives as we reach the twenty first century. I am calling on the Minister to initiate such a debate so that whatever structure might emerge would provide everyone with the best possible standard of living.
We now come to the general question and answer session on Vote 40. At this stage we will deal with subheads A1 to A8, Administration, I will take questions on those subheads. Please identify the subhead you are querying.
Will we take each subhead separately?
I am not inflexible about this, we will use the best system to facilitate the Members to deal with the Estimate.
The note you have given says we are discussing subheads A1 to A8. Are we to discuss them together or separately?
We can take them in sequence, which is suggested in the timetable but if Members think it would be more productive, we can take them together.
It would probably facilitate discussion to take them together, as some of the other committees have done.
We will take them together. Is that agreed? Agreed.
Will that be awkward for the Minister and his officials?
I have a number of questions. We are given a net figure, which is £2.454 million; I would like to have the gross figure there. In relation to administration, I wish to get some indication of how much overtime is paid to individual employees of the Department of Social Welfare. What was the top payment in overtime to any individual within the Department? The question of the managers of a branch office system is also dealt with under this subhead. I wish to know what progress is being made in relation to that programme in branches throughout the country. Under subhead A2, travel and subsistence, a figure of £6 million is given which includes travel and subsistence for civil servants, for the Minister and the Minister of State. I wish to know how many foreign trips were taken by civil servants and by the Minister and Minister of State, what the mode of travel was and what the cost was. I now come to subhead A5. A very substantial figure, in excess of £10 million, is given for computerisation. My understanding is that the cost of computers has come down very substantially in recent years. We still seem to be spending a very substantial amount of money, £10.398 million again this year, at a time when the price of this equipment is dropping very substantially. In subhead A7 a figure of £4.6 million is given for consultancy services, mainly computer-related. The combined total of those two figures is in excess of £15 million and, for computers, that is a very substantial amount of money. Quite a large amount of computerisation has taken place in the Department of Social Welfare in recent years and with the drop in cost I would like some elucidation on that matter. I would also like to know what safeguards are in place within the Department to ensure that these computers are actually procured, delivered and put in place.
I now come to the final subhead, subhead A8, payment to An Post for services provided. It is my understanding that a percentage of payments, particularly the old age pension and widow's pension, have in recent times been paid direct to the recipient, yet we still see an increase in payment here to An Post as an agent. I would like to know what percentage of payments is now paid directly to people. What progress is being made there?
On subhead A5, I wish to link Deputy Walsh's question to subhead A7. I am astounded by the huge cost in the purchase of computer equipment and so forth. Could the Minister break it down for us?
These headings cover general administration, including the Minister's administration, of the Department. In his speech the Minister said something extraordinary: "There must be a deliberate and planned shift of income and resources in our society to those who are less well off". Then he said: ". . . . .the days of doing a bit here and a bit there are gone for good." I find this quite extraordinary, given that some of the people on the lowest incomes have received the lowest increases on this occasion. That applies, whether we are talking about the unemployed, old age pensioners or invalidity pensioners, especially where there is no compensation by way of increases in child benefit.
In his decisions in relation to this Estimate, the Minister is saying that he has decided to make one change which is, in his view, of major importance, and to leave everything else as it is. The various groups of people dependent on social welfare are far too broad for that to be done. In doing this the Minister is at the very least saying to the old age pensioner, to the invalidity pensioner, to the widow or deserted wife, to people in all these categories who may have no children, that they should mark time for this year while the Department does something else. Can members imagine anybody asking any group of workers to mark time? Imagine telling such a group that, although their income is below the levels recommended by the Commission on Social Welfare, because of a new policy in the administration of the Department of Social Welfare which plans a deliberate shift in resources, there is nothing for them this year. Imagine telling them to hang on, that next year they might get something.
According to the figures given by the Minister earlier, 74 per cent of social welfare recipients do not have child dependants and, therefore cannot benefit from child benefit increases. Consequently the Minister is saying to 74 per cent of the people involved that 2.5 per cent is their lot for this year. There is a new administrative policy, which, I presume because of collective responsibility, is also the Minister's policy. It is a deliberate and planned shift in resources away from the 74 per cent. The Minister would probably claim that in taking that step he is providing 2.5 per cent and that, if we are lucky, inflation will not exceed that figure.
We already know that inflation is likely to be more. We knew that on budget day when even the Department of Finance gave indications that inflation was likely to be a little more. By now, it is clear that it will be. This new policy will reduce pensions in real terms this year instead of continuing with what the Minister describes as the policy of "a bit here and bit there". "A bit here" is important to the person on social welfare. It is better than getting nothing. As Deputy Walsh said, the effect of the 2.5 per cent increase is an increase of £1.50 per week in the personal rate for old age non-contributory or blind pensions. It has been made clear that this increase is certainly not adequate.
The hurtful part is the fact that it is a deliberate policy. The Minister has stated that it is the Government's deliberate policy. It was hard to believe this when it happened. I thought it was an accident or an oversight by a new Minister taking office shortly before the budget was introduced. Instead it is the Government's deliberate policy, as can be seen from the Minister's statement. This is the major issue in this Estimate.
I have seen pensions being collected for invalidity and old age pensioners under the system whereby an agent can act for them when they cannot collect the pension. The method used to advance the payment by six weeks is really a terrible sleight of hand because the rate does not increase and once the six weeks have passed one does not have the benefit of the extra percentage thereafter. Last week a person collecting invalidity pension as an agent was told that there was a lump sum to be paid this week. It consisted of the £1.60 for five weeks until the new books came into operation. The lump sum was £8. The poor agent nearly fell into the ground when she saw the lump sum. If it had been the old age non-contributory or blind pension the lump sum would have been £7.50. That sum is to cover the next five weeks until the increase of £1.50 or £1.60 is included in the new books. That is the effect of the hard decision taken by the Minister. It is taken on some kind of theoretical or ideological basis. It certainly is not taken on the basis of the needs of the people who are receiving these benefits. That is the kernel of the problem.
The Minister has said that he and his officials or he and the rest of the Government, who are collectively responsible, have decided that they will shift resources in a different direction and that the people I have mentioned are to be treated very badly. Of the 822,000 recipients only 212,000 have child dependant allowances. That demonstrates the enormity of the cutback that has been applied this year to people on social welfare, although the PR will keep distracting people to other issues.
The criticism of doing "a bit here and a bit there" is particularly offensive. The Commission on Social Welfare stated that progress had to be made in a regular and consistent way towards different levels of payment for the different categories of people. That meant, of course, that we should pay a bit above the normal inflation rate to the different groups. That is what "a bit here and a bit there" was about. That has not been done this year and no progress has been made in that direction.
I wish to say two things about administration. First, I severely criticise the Minister's administration of this Estimate and the way in which the increases were allocated. The responsibility lies with the Minister and collectively with his partners in Democratic Left, Fine Gael and the Labour Party. The second aspect of administration relates to the delivery of the service. Certain things have been said both on the Bill in the House and here by my colleague in the Progressive Democrats about the delivery of the service and the people who provide it. The service has improved far beyond all expectations in its quality, in the method of delivery, in the efficiency and effectiveness of that delivery and in the quality of the people who are delivering the service. That should be made clear. It is wrong to give any other impression.
It is not an easy service to deliver. It is a people oriented service. Many of the people are traumatised or not really in a position to make their own cases. The officials in the Department have been improving the way in which they deliver the service by leaps and bounds. That improvement is continuing and I hope it will do so under the present Administration. It is recognised not only here but throughout the world. People come from abroad to see how the Department is administered and how effective its systems and its computerisation have been. The Department is doing a good job and is trying to get to the root of the problems and give the best possible service to those whom it serves throughout the country through its extensive communications procedures and working arrangements.
Subhead A4 deals with postal and telecommunications, and subhead A8 deals with agencies' services, where an increasing working relationship with others, especially An Post, is evident. The Department of Social Welfare is working closely with An Post, which has modernised and is currently modernising many of its services to match any available elsewhere. Some detailed questions could arise with regard to the development of these services, such as the extent to which unemployment payments are now processed through An Post. Perhaps the Minister would provide an update on this. It must be quite extensive at this stage, as must the extent to which An Post and the social welfare offices throughout the country have computerised direct linkages between each other and the system of direct payments. With regard to the work and administration of the Department, there is much to be learned by other Departments from what is happening in the Department of Social Welfare.
The entire social welfare system has been steadily improved over the past number of years. I often gave credit in the Dáil to the many significant reforms implemented by the former Minister for Social Welfare, Deputy Woods. The Minister acknowledged today that the system is now one of the best in the world. This is not to say that there are not many gaps. Two of them, payments to women and the high priority given to families with children, are being actively met by the priorities identified in the budget and the Estimate.
Subhead A1 provides for salaries, wages and allowances. What is the current situation with regard to recruitment in the Department? Is it static, growing or reducing and is it affected by recent decisions? With regard to the changes that occurred in the last year or two, where so many payments were moved out of the newly created regional centres, a move with which we were delighted in Finglas. Unfortunately, the social welfare recipients could only avail of the services on a regular basis for a short time before they were removed to the local post office, which is a less glamorous setting, giving the pressure on post offices in areas such as Finglas.
When the regional centres were established we looked forward to them providing services and payments in a modern setting. They are now supposedly being given a new role. It was indicated that the officers previously involved in handling payments of one kind or another are being retrained for major new functions. What is happening in this regard?
I thank Deputy Woods for his kind words about the Department. They are well deserved. People undertake excellent work in the Department. A number of questions have been raised with regard to staffing, travel and so on.
On the issue of staff numbers, raised by Deputy Flaherty, the Estimate for 1995 provides for the remuneration of the Minister, the Minister of State, their respective advisers and personal staff, the staff attached to the Department, including managers of branch offices who are employed on a contract basis. The numbers set out in the Estimates volume represent the numbers being remunerated. These are 4,317 at 1 January 1995 and 4,212 at 1 January 1994. The increase of 105 as at January 1995 was largely due to the additional staff recruited for UB centralisation, control duties on the ISTS project, job facilitators, the back to work and student summer job schemes. Following on the decision to defer taxation of unemployment benefit, some of the additional staff provided for this purpose were diverted to the ISTS rollout work.
With regard to salaries, the increase of £6,160,000 in 1995 over 1994 is due mainly to additional funds for the staffing measures in respect of equal treatment, which accounts for £1.9 million, and the 1995 carryover cost of the Programme for Competitiveness and Workon 1 June 1994 and 1 June 1995, accounting for £1.6 million. The additional funds provided for the ISTS project is £1.1 million, of which £0.9 million was originally provided by the UB centralisation. The additional cost of job facilitators in 1995 is £0.6 million. Other additional costs of staffing — covering, for example, budget changes, PC support, the community enterprise programmes, the health and safety benefit, IT gratuities and the increase in the PRSI ceiling — account for £1.6 million. This is partially offset by the payment of Programme for Economic and Social Progress arrears in 1994 of £0.8 million.
On the question of the post office in Finglas, An Post have agreed to improve the provision of services to people in Finglas by opening an additional office in the Janelle centre and by improving the space available for the post office in Ballymun. I am not sure how far advanced the matter is but if the Deputy requires further information——
I understood the Minister opened it three months ago.
I did not.
The Minister stood on the site.
I did not stand on the site; I did not go near it. If the Deputy requires further information on this matter I will provide it for her.
What is ISTS?
It is the integrated short term scheme, dealing with the computerisation of unemployment benefit, disability benefit and so on. With regard to the question on staff overtime, a total of 3,055 staff worked overtime in the Department of Social Welfare in 1994 and 38 staff who worked overtime received payments in excess of £5,000. I have some details of the number of grades of staff who worked overtime, the numbers who received in excess of £5,000 and the breakdown of the overtime and expenditure by grade. Does the Deputy want that information?
Not really. The figure of 38 earning over £5,000 is adequate.
I can explain why that is the case. The maximum individual payment to an officer in 1994 was £11,000. This officer is one of two who were among the highest earners in 1994. They are employed in the computer operations area and are highly skilled. The computer operations area has a limited number of staff. Those with most experience tend to be called upon more frequently to deal with specialist jobs, thus giving rise to the higher overtime earnings. The recent introduction of a 24 hour shift in this area is expected to reduce the need for overtime in the future on weekdays. Due to work on the integrated short term scheme — the ISTS project — weekend overtime will be needed for the remainder of the year. Four of the highest earners are working on the ISTS project on which critical deadlines must be met. They were selected to work overtime because of their particular expertise and skills.
The remaining four high earners are employed as service officers or messengers in the Department. Service officers are responsible for opening and closing buildings and providing security while staff are at work in them. This gives rise to the need for overtime in that particular grade. If specifics are required, I have the number of officers who worked overtime and the number who earned in excess of £5,000.
A question was raised in relation to branch managers. The position there is that the Department is in touch with the branch offices representative group with regard to opening negotiations about the future of branch offices. There is nothing to report on that at present.
Subhead A.2 provides for the payment of travel and subsistence allowances to the Department's staff. It also provides for payments to members of the public when they are required to travel to a medical examination or an appeals hearing. The expenses covered by the 1995 Estimates, together with the corresponding outturn figures for 1994, are as follows. The amount provided for home travel in 1995 is £2.383 million and the amount provided for foreign travel is divided into EU travel, £22,000, and other foreign travel, £195,000. The total provided for foreign travel is £217,000. The total amount provided for the subhead, including home travel, is £2.6 million. A figure of 70 per cent of home travel costs are incurred by staff working in the regional structure — for example, investigation staff, local office staff and staff engaged in control and anti-fraud activities. The balance of the costs arise mainly from medical referee examinations and appeal hearings.
The 1995 Estimate includes £60,000 to cover the costs and increases in the rates of subsistence. When this is excluded the Estimate shows an increase of £323,000 on the amount spent in 1994. This increase is mainly due to the need to send all local office staff, approximately 1,500, on training courses in connection with the implementation stage of the integrated short term scheme system. The staff have to receive comprehensive training on ISTS computer procedures. This requires attendance at special courses in regional centres around the country.
The costs for foreign travel arise from the need for the Department to be represented at European Union and other meetings abroad — for example, meetings of the EU Council of Ministers, Council working groups on social questions in the European Commission and working groups on the co-ordination and implementation of EU regulations on social security for migrant workers. Other foreign travel is undertaken arising from Ireland's obligations as a member of the Council of Europe and of other social security bodies, such as the International Social Security Association, and in negotiating bilateral agreements with other countries. Some of the costs incurred in attending EU and Council of Europe meetings are refunded by those bodies.
The decrease in the EU travel provision in 1995 is due to a change in the way that refunds from the EU are being brought to account. From the beginning of this year the refunds are being netted off against the cost of the journeys to which they refer. Up to the end of 1994 the refunds were credited to the appropriations-in-aid subhead. The change was introduced across the Civil Service by the Department of Finance with effect from January of this year.
The increase in the provision for other foreign travel is mainly due to the United Nations Summit for Social Development, held in Copenhagen in March 1995, which I attended with officials; the Council of Europe Sixth European Conference of Social Security Ministers, held in Lisbon in May 1995, which the Minister of State attended with officials; the Council of Europe Conference for Ministers responsible for Family Affairs, held in Helsinki in June, which is a biennial conference and will be attended by the Minister of State and officials; an invitation from the Chinese Government for the Minister for Social Welfare to visit China, no date has been fixed for this visit, and the need for the IT division to attend demonstrations, workshops, conferences, etc., to keep in touch with changes in information technology.
The expenditure on computers, computer systems and computer training for our staff ensures that we deliver the best service to people who are dependent on receiving social welfare payments regularly and on time. The investment in that area is being repaid by the quality of the service that is being provided to the people who depend on our Department.
Subhead A.5 deals with Office Machinery and Other Office Supplies. Computer equipment will account for £7.958 million this year. The subdivision caters for the purchase of computer hardware, software, visual display units, printers, PABX switchboards, telecommunications equipment, all computer ancillaries such as paper, tapes, disks, etc., and the ongoing maintenance of all existing hardware and software. It is not simply a question of purchase. The capital purchase in 1995 will consist of computer hardware upgrades, equipment for the expansion of the Department's countrywide telecommunications network — to local offices, branch offices and other planned locations — and further expansion of the Departnment's installed base of personal computers.
The increase of £2.598 million in the subdivision is due to major purchases of processing and storage capacity which are required to enable the Department to provide fallback capacity in the event of a serious system failure on key critical systems. This requires duplicating the existing site configurations relating to the major payment systems in an alternative secure site. Additional capacity is required to support the Department's new integrated short term scheme system. This system is designed to replace the existing UA/UB and DB systems which are approaching the end of their usable lives. Phase one of ISTS, which is now in its roll-out phase, will replace the existing UA/UB system. Phase two is currently under drvelopment. It will replace the existing sickness benefit systems, support computerisation and improve control of SWA payments
The new system provides for improved scheme control and will allow for taxation of benefits at source, when and if a decision is made in that regard. It also provides for replacement of obsolete equipment and upgrading of certain other equipment to support general expansion in user numbers and systems arising from the take-on of new schemes — disabled persons maintenance allowance, equal treatment arrears, etc. — essential upgrades to the Department's communications network to support the increased traffic on the network, installation of additional terminals to support expansion of network access to local offices, branch offices and outside agencies, including health boards and local authority offices. This improves the quality of services to people who avail of them. The new system also provides for expansion in the installed PC base to support management development staff and other functions, to allow for implementation of client/server applications in the Department's central records area and improved access to the Department's central information systems to community welfare officers who administer the SWA scheme on behalf of the Department of Social Welfare.
Subhead A.7, Consultancy Services, provides for fees and expenses in respect of consultancy assignments and other commissioned surveys and studies. The expenses with regard to the computer consultancies relate to the development of the integrated short term payment system, which is probably the biggest single item of expenditure. It requires assistance with the development of computer systems to register, process, maintain and pay for all short term payment schemes. The system includes the capability to identify and process tax payments due on short term benefits and computerisation of the Supplementary Welfare Allowance Scheme.
On subhead A7, the total allocation for consultancy services is comprised of a base allocation of £810,000 to cover projects and policy studies which arise each year as a matter of routine, and a special allocation of £3.81 million to cover certain special projects of a once-off nature. The special projects identified by the Department have been agreed with the Department of Finance and funding has been provided in ring-fenced budgets. As such, these resources do not form part of the general administrative budget and cannot be offset against routine expenditure. Three million pounds, or 65 per cent of the allocation, has been assigned to the ISTS project, which is to integrate all short term social welfare schemes. The major projects contributing to the level of consultancy are the ISTS work, the network review and CMS.
I think I have dealt with all the issues that arose in relation to the actual Estimate. There were a number of political points raised in relation to policy, on which I might make some short comments. I do not propose getting involved in a debate on the Social Welfare (No. 2) Bill here today. Second Stage is being dealt with on the floor of the Dáil and Committee Stage will be dealt with next week, I presume, and we will have ample opportunity to discuss it.
With regard to general policy, I remind the committee that I said in my opening statement that I am already on record with my views on how this year's budget has adopted a fundamentally new approach in striking the correct balance between the social and economic objectives of this multi-party coalition Government. "There must be a deliberate and planned shift in income and resources in our society to those who are less well off. The days of doing a bit here and a bit there are gone"— for any Deputy to read that as meaning a shift of resources from the less well off is, to say the least, a gross distortion of the reality. I already pointed out that we have the biggest increase ever on an annual basis this year. It is the biggest increase ever —£212 million in a full year — in the social welfare budget. I stand over the decision to allocate more than half of that to child benefit. It is a policy decision — not an administrative, a political, an ideological, or a theoretical one — to direct the resources to where poverty is at its worst.
Referring to the point about not doing a bit here and a bit there, simply taking what money is available each year in terms of increases and spreading it thinly across every single category may keep most people's heads above water in terms of inflation, but it does nothing to tackle the fundamental issue of poverty in our society. The whole underlying principle in directing most of our resources toward child benefit is to tackle poverty at its root. It should be taken in the context of the Government's programme and, in addition, of the fact that we have taken a decision to develop a national anti-poverty strategy in line with our commitment at the UN summit at Copenhagen. We are actively pursuing that. The people who are affected by poverty and marginalisation will be involved in the preparation of that strategy and, indeed, in its implementation. We are going about this task seriously.
A lot of other nonsense has been spoken by the Fianna Fáil spokesperson but the other serious point, which was made by Deputy Clohessy on the need for a fundamental review of the social welfare system as a whole, is one I agree with. The system is far too complex and, in many respects, it is overly rigid. We are trying to loosen it out in so far as we can. A number of changes have been made and will continue to be made to do that. There is a difficulty, however, in relation to social welfare in that in order for it to be flexible, I am afraid it also must have some complexity. The important thing is to have it operate in a way which is easily understood by those who need it. I have also mentioned the fact that we are attempting to do that in two ways: by improving even further the information provision by my Department; and also seeking to help develop an independent information provider or providers.
I mentioned the National Social Services Board and the fact that the Department is now responsible for that agency. We are funding them to develop their information systems. Deputies will note in the Estimates — and we will perhaps come to it later on — that we are providing a substantial amount of money to the NSSB this year to develop a computerised integrated information system for their centres and for other independent information providers. This will not only provide social welfare information, but housing information, health information and so forth. That is all I have to say in relation to those areas unless there are further questions.
What progress has been made on the Estimate up to the end of May? In other words, how are projections? Is this expenditure for the year on target? Will it be in surplus or will it be in deficit? I know the Minister will have a very good projection at the beginning of July, in a few weeks' time, but what is the position, on the monthly projections, as indicated at the end of May? What is the Minister's contribution to the Government's £77 million overall cutback? Is the Minister making any contribution or has he been requested to make any contribution? If so, what is the amount of that contribution?
In replying to what I said about the deliberate policy and new approach the Minister is adopting, I only referred to what is in his speech. The problem is that he has taken from the old age pensioners, the widows and the others and he has not maintained their position. The Minister has definitely not improved their position this year, which is the first year for a long time that it did not improve.
The Minister likes to talk about poverty and say that it globally covers everything. He says that The Democratic Left will look after poverty and whatever else. The Minister knows that is a lot of hogwash. Each Government has tried to tackle the problem of poverty and advances have been made in dealing with it to the extent of what is happening in relation to the Commission on Social Welfare. The Minister is on very slippery ground now when he talks along those lines at this stage because he made no attempt this time to make any advance under the Commission on Social Welfare's recommended rates. While he was in Opposition, he spent a great deal of time pressing everybody to get on with the improvements which were recommended under the Commission on Social Welfare.
In 1995 the payment to long term unemployed has reached 93.8 per cent of the main rate recommended by the Commission on Social Welfare; the old age non-contributory pension and the widows' non-contributory pension are also at 93.8 per cent. The short term unemployment assistance and the supplementary welfare allowance are at 90.7 per cent. All of the recipients are, by definition, the poorest people. They are getting nothing extra this year and that is offensive. Nothing is going to them. Yet we are told that a marvellous job is being done overall and not to mind that it is being shared among people with incomes and that only 7 per cent of child benefit goes to families with incomes of £25,000.
We all know that child benefit was low relative to other countries and the needs of children generally. That was one issue to be tackled. A committee carried out a study on it and highlighted for the Government where the money should be spent. That was all done before this Government came to power. However, one cannot make those advances on the backs of the old age pensioners. That is not acceptable.
One cannot say there is no poverty with the rates as they stand at present. The payments I mentioned — supplementary welfare allowance, short term unemployment assistance and the old age non-contributory pension — are all means tested and they need to increase. We need to continue to close the gap with the main rates recommended by the Commission on Social Welfare. The Minister has done nothing in this regard.
It is a useless argument now in many respects because the Government has set its face hard against these people this year. They know the Government has decided not to give them anything but the 2.5 per cent increase, which may or may not meet the rate of inflation. It will not, however, improve their position as it had been improved over the years in line with the recommendations of the Commission on Social Welfare.
It is publicly offensive to see press releases designed to distract from the reality of what is happening with these Estimates. If Parliament means anything, the truth must out here. The truth is clear in these Estimates. Will the Minister let us know what the progress is on the Estimate?
I invite the Minister to avoid the invitation to go into all that again. The Minister referred to the job facilitators. Is that the new role for the officers in the regional centres who are less occupied? Can we have more information on where they are training, what is happening and how that will impact? Will they systematically go through people on the list and bring them in? How will they operate in practice and how will that change from their traditional role of handling payments and the day to day queries on the scheme?
I asked a couple of questions which were not answered. We had a fair amount of claptrap and the usual scattering of nasty comments, but I asked specifically what percentage of the old age pensions and widows' pension amounts are paid directly. That related to subhead A8. In his reply under subhead A2, the Minister said that some of the cost to EU meetings is refunded. What travel is not refunded? Some Government transport is available and in cases where Government transport is used is a transfer made to the Department of Defence? I specifically asked what mode of transport was used by the Minister and the Minister of State in going to official meetings in Brussels.
The Estimates are broadly on target overall in relation to the Vote but it is too early to indicate what the final outcome will be. The job facilitators are appointed in a phased manner at many of the Department's local offices. By August 1994, 30 were in place, so that the employment support service was based in the Department's local offices in 22 of the larger cities and towns. Facilitators were based at and working closely with staff in most of the main local offices.
It is planned to provide basic coverage nationally. They will encourage people to take up the back to work allowance scheme, which allows long term unemployed people to retain a proportion of their primary benefit payments and most of their secondary benefits for two years if they undertook employment in small indigenous enterprises or self-employment of any kind. While there was an initial target of 3,000 places it was increased progressively to 4,000, 5,000 and, more rcently, 6,000 as the scheme gathered momentum. To date nearly 9,000 jobs have been identified and over 7,000 allownces are now being paid at an average rate of around £69.
The short answer to Deputy Flaherty's question is that they are staff who are not being redeployed but whose tasks are being redesigned and redefined in order to be more proactive in talking to people who are unemployed and identifying people whom it might be possible to help, particularly the long term unemployed, in finding out their skills and trying to direct them as to training and employment that might be available in the area. In addition, the job facilitators keep in touch with employers in the area for which they are responsible and try to match people from the live register with available jobs.
They are very proactive. I have spoken to a number of them in the past few months and they are getting a great degree of satisfaction from their job. They are helping people to come off the live register, some of whom thought themselves to be unemployable. It is a support which is much appreciated by the people who are being helped and also by the staff, who find themselves in a more fulfilling role in terms of their relationship with people on the live register.
Deputy Joe Walsh raised the question of travel. The cost of EU travel is refunded and other travel, such as that to the Council of Europe, is not. The transport used by the Minister of State and I has been scheduled airline flights on all occasions. The only time I have used the Government jet since becoming a Minister had nothing to do with the Department of Social Welfare; it was to travel to Belfast and back for the launch of the Framework Document negotiated between the Government and the British Government.
There is no point in responding to the other comments. We will stick to the Estimates today.
Deputy Walsh asked about the percentage of pensions paid directly into bank or post office accounts.
My officials are looking for that. While we are waiting, there is one other question I will answer in relation to the manner in which we are using An Post. The following are the numbers of payments by each system for unemployment assistance. Roughly 162,000 claims are being paid by post drafts. The post draft is sent to a nominated post office each week where the claimant collects it and receives payment for it, 35,300 claims are paid by way of cheque posted to the clients' home addresses each week. In addition to that, 800 claims are paid by electronic fund transfer, which is the system whereby payment is made directly into a person's bank account. Further, 13,400 are paid by personal payable order — PPO — which is similar to a pension book payment and is cashable at post offices. There is also the postal voucher, by which 29,600 claims are paid. These are manually prepared vouchers which are posted to the claimants each week and cashed at post offices. The branch employment office pay out something like 28,200 claims in cash each week. Members can see that the number of cash payments have been reduced dramatically over the years to the point where they are now down to about 28,000, which results in a major saving in security costs and greater security for staff in relation to the Department's operations. Is Deputy Walsh asking about pensions paid directly?
Yes.
Is the Deputy referring to the EFT payments? We do not have an exact number, but it is quite small and growing. I can arrange for the Department to send the information to the Deputy.
I am wondering about the rate of growth in its use.
From recollection, the figure is quite small and the growth is quite small, particularly in relation to old age pensioners, who tend to be reluctant to change methods of payment and change their weekly practice. For a lot of old age pensioners, going to the post office on a weekly basis is somewhat of a social contact as much as anything else, so there is that resistance to changing to a more impersonal system where the payments are made directly into their accounts. There is also the fact that many old age pensioners — I honestly do not know how many — would not have bank accounts. There is that kind of difference of approach, but there is a range of payment systems from which people can choose. EFT is a good one and is a relatively cheaper form of transfer of money for the Department. We would like to see a lot more use of it but it will take time for people to get used to it.
What I really wanted to know was the uptake of this particular system of payment. Especially over the last few years, elderly people are being beaten up, robbed and sometimes murdered for small amounts of money. In the nature of things, some elderly people tend to put a few pounds aside for their funeral and burial arrangements and they literally keep it under the mattress. It is not a wise thing to do. There should be a publicity campaign to encourage people not to deal so much in cash, if that is possible. It was the uptake in the use of EFT that I wanted to know about.
As I say, I do not have that specific information but it is quite small so far and it will take time for it to develop. I will follow up on the Deputy's point about publicity to encourage people to use it. There is the other side of the story in that a significant number of old age pensioners would have little human contact unless they were obliged to go out on a weekly basis to the local post office.
The uptake on the job facilitators scheme and the back to work allowance is encouraging. It is good to see the scheme working well. The Minister described it well where he said that it puts participants into a proactive position and that it is also fulfilling. It had been quite successful from the start but is becoming particularly successful, from what the Minister is saying, with some 9,000 jobs identified and some 7,000 people participating in them. There was great reluctance, fear and worry about that when it was starting off. It has proved itself to be worthwhile and that is satisfactory. Some of the public servants can take credit for that.
I remember the day when Mr. Brian Flynn and the programme manager at the time, Ms Catherine Hazlett, sat down with me to work out how to make this area more proactive. There were many hurdles which had to be overcome before the scheme got under way. It did and it is encouraging to see it going so well now. I wish the job facilitators every success with it. They took to it readily. Comments were made about the scheme when it began. Maybe those who made the comments and had not the courage or patience to wait and let the facilitators have a go at it might look at the situation again and realise that the facilitators really can make a contribution. I asked the Minister about the proposed £77 million cutback in next year's budget. Has the Minister been allocated a share of that to meet and, if he has, what is the share?
Before I deal with that, I will give some figures on the back to work allowance. On 9 June, 1995, the number of back to work allowances in payment was 7,141. The number of jobs that people are in as a result of the back to work allowance, which would obviously include people who have come off the payment as well as those currently on it, is now 10,485.
Are they being paid up to date?
Yes, but all of those are not still on it; only 7,141 are.
I understand that.
There has been a rapid growth in it since the beginning of the year.
That was predicted by the Department at the end of last year. In other words, it was taking off and growing well.
To our credit.
As well as that, we are currently undertaking an evaluation of the scheme in tandem with the Department of Finance. If Members look at the Estimate they will find that £100,000 has been provided to carry out an evaluation of the scheme to identify its strengths and weaknesses. As regards the £77 million, I will meet the Minister for Finance in the near future to see how it may or may not affect my Department. I am not in a position to give any details about how it might or might not affect it.
Is the Minister saying he does not know what the figure is?
I will meet the Minister for Finance shortly to discuss how it may or may not affect my Department. I am not in a position to give any details at present. I am sure if the Deputy tables a question in a week or two I will be able to give him an answer.
I thought openness meant that as soon as the Minister knew, we would be the first people to know.
I will tell the Deputy as soon as I know.
Perhaps the Minister would oblige this committee by sending us the figure as soon as he knows it. The Government announced the cuts last week, but it seems it had not worked out its intentions. That is not encouraging. Perhaps the Minister will send us the figure as soon as he gets it.
This shows anxiety to get information as quickly as possible.
I understand that. The Minister's statement about the Department of Finance evaluating the scheme bears out what I said about it earlier. It is nonsense to spend £100,000 to evaluate the scheme when it is working successfully and when there is co-operation between everyone. It is part of the rearguard——
The Deputy has talked a lot of claptrap since this debate started. He should listen to what I said.
This is our committee.
I said that the Department of Social Welfare has set aside £100,000 to carry out an evaluation of the back-to-work allowance scheme which was started as a pilot scheme and which has been in operation for some time. As regards prudent management of the resources, we are obliged to ensure they are properly used. We are doing what is proper and right. If I did not carry out such an evaluation, next year the Deputy would demand to know why we did not look at this expenditure.
I would not because I know it is an excellent scheme. This is typical of what we do. The civil servants who were directly involved knew this was an excellent scheme when I introduced it. It is a carry over from the resistance used to prevent it from taking off the ground. Can the Minister not be honest and say this is the position? We are always told we should be forthright, honest and open. It is a nice thing to do, but the Minister——
The right thing to do.
The Administration knows what it is doing. The Minister could probably find people who could use the £100,000 far better than using it for another study which will not come up with anything. There must be cooperation in this regard. I am not blaming the Minister because it is a carryover from the time it was set up. I think the Minister misinterpreted what I was saying.
I did not misinterpret what the Deputy said. I know exactly what he is doing today.
I am a Member of the committee, although the Minister may not like that.
I know the Deputy is and he can bring in his parliamentary party, if he so wishes.
I attend and participate in any committee of which I am a Member. Deputy Flaherty is on a number of them as well.
It is silly to spend £100,000 on an evaluation study. The Department of Finance was dragged into the scheme when it did not want to become involved. I tried for three years to get a similar scheme. The Department said it would only become involved if a study was carried out to see what was happening because it did not want anyone to get away with anything. It is a small cost for such a valuable scheme which I am glad is working well. I wish the Minister luck with it and I fully support him in this regard. If the study comes up with findings which knock it, he should return to this committee and we will strengthen his elbow because he will need that from time to time when dealing with the Department of Finance.
The Department of Finance is not carrying out the evaluation; it is being done by an independent body.
I said the Department of Finance insisted that such a study should be carried out by an independent body. That is how the system works.
We appreciate the Deputy's advice.
Does that conclude our consideration of the Social Welfare Estimates?
We only discussed Al to A8.
I thought Members had discussed them all. Do Members have questions on the other subheads?
Subhead B1 relates to the payment to the social insurance fund following the changes made in the budget this year. The payment of £25 million, which the Exchequer must make, is a small contribution. The fund, therefore, is still quite efficient. Perhaps the Minister could tell us what the percentage is in this regard because I am sure that figure is available.
Subhead B2 covers the payment of the £200 million for the equal treatment payments as a result of the High Court judgment in February 1995. The Government has decided to include this in the Estimate and to make an allocation under subhead B2 through the social insurance fund to cover that cost. That has the effect of increasing the Estimate this year and reducing it next year. This false high figure will affect the percentage next year. I always regarded this as a charge on the Government because, initially, it was a Government decision. The money should be provided by the Government, but it is being allocated through the social insurance fund.
How will the repayments of the £200 million be made? Will they be made by a shortfall in the income to the Exchequer? Is this a once-off payment of £200 million? I presume it is paid back by the Exchequer and that it will show as a deficit in Appropriations-in-aid for the Minister for Finance or the Exchequer through the local loans fund or whatever fund is being used. Perhaps the Minister could explain the mechanism in this regard.
As regards the expenditure in the social insurance fund, old age contributory pensions amounted to £315 million in 1994 and £317.7 million in 1995, an increase of £2.7 million. How much of the cost in 1995 is attributable to the carryover of the increases in 1994?
As the last speaker said, the fund is essentially strong and liquid. Last week the Minister said there would be a huge increase in the number of elderly. We are all aware of this fact but how can we arrange that the fund remains as it stands in the future? What type of approach is being considered? If there is a gradual return to full employment, will that in itself mean the current contributions to the fund will continue to be close to adequate for what is drawn from it?
Apart from encouraging people to get involved in private schemes, will adjustments be necessary? The former Minister made a number of changes to ensure that many of these schemes could not be cashed in and there is a better regulatory system in relation to private pensions in recent years. What is the thinking in this area? On what number of unemployed is the insurance fund figure based? What was it based on at the beginning of last year and what was the outturn? What are the figures regarding the unemployed in terms of that benefit?
Regarding subhead B2, will the Minister spend all the £200 million this year? Will it all be paid out by the end of this year? The only person I know who showed me one of their cheques——
If I have to, I will deliver them myself.
I will assist the Minister, particularly in the Dublin 9 or Dublin 11 areas if An Post lets him down. One person showed me a repayment for £9, which was for two weeks disability benefit in the past when she had no children. That is the only cheque I have seen to date. She was only out for two weeks and fortunately the system was not as careful as it is these days in relation to disability.
What is the point of the Deputy's question?
The point is the position of the payments at present. How many cases have received their first interim payments or will it all be paid next month?
The Deputy means the ET payments.
Yes.
That question is being asked by 72,000 women around the country. We are all anxiously waiting to know when exactly the payments will start arriving so that bookings for the holidays in Spain can be confirmed. Deputy Woods is as anxious as I that the money will be spent in Spain rather than Ireland. On a more serious note, I assume the £200 million will be distributed between August and the end of the year. Without giving specific dates, could the Minister tell us how advanced the arrangements are in relation to the payments?
A reference was made to computerisation. With specific regard to the equal treatment arrears payments, how advanced is the special unit? Will we be ahead of schedule or slightly behind it? I assume any matter can be discussed under the Estimates but I will not ask who exactly in my constituency will benefit, even if that information is available. The High Court case was the fourth judgment on this issue; the other three were totally ignored by previous Governments. What was the Minister's legal advice in relation to these payments before the High Court judgment emerged on 3 February?
In relation to the payments, some people are being paid on foot of the court cases. These were adjudged and they would be treated differently from the other cases. Perhaps the Minister could refer to these cases and how many have now been paid. Perhaps he could also tell us the numbers involved in that category rather than the general category.
Deputy Woods asked the first question and the particular contribution in respect of 1995, disregarding the £200 million for equality treatment, is 2.4 per cent. The £200 million is a once-off payment from the social insurance fund. The funding will be provided by the disposal of assets of the local loans fund itself and the details are being worked out by the Department of Finance at present. That matter is the direct responsibility of the Department of Finance but it will not not have any bearing on the resources of that Department in terms of future years.
The carryover of costs for the old age contributory pension is dealt with on page 51. The cost of the 1995 budget improvements were £4.7 million. The additional cost in 1995 of the 1994 budget improvements was £5.2 million. The provision for an increase in section 135 recoupment is £1.7 million. This is partially offset by the payment in 1994 of a bonus equalling 70 per cent of a week's payment, which is not being provided for in the 1995 Estimate, of £4 million. The figure of £4.2 million relates to an increase of 1,000 in the average number of pensioners.
Could the Minister repeat those figures? He glossed over them a little.
Regarding the old age contributory pension, the increase of £2.7 million in 1995 over 1994 is due mainly to the cost of the 1995 budget improvements of £4.7 million. The additional cost in 1995 of the 1994 budget improvements is £5.2 million. The provision for an increase in the section 135 recoupment is £0.7 million. This is partially offset by the payment in 1994 of a bonus equal to 70 per cent of a week's payment, which is not being provided for in the 1995 Estimate, of £4 million, and a decrease of 1,000 — I may previously have said "increase"— in the average number of pensioners, leading to a saving of £4.2 million. Those are the figures in relation to old age contributory pensions.
In relation to the social insurance fund, the point was made that when one excludes the allocation of £200 million to cover the equality payments, one is left with a contribution of £25 million from the Exchequer. This essentially means that a shortfall of £25 million is expected this year between the income from PRSI and the payments which must be made to people who claim benefit. A number of factors come into play in relation to reducing the difference between the income and the out-goings. The most significant factor is the income from self employed people who contributed £90 million in 1994.
There is also some increase in the income by way of a greater number of people at work, increased rates and changes in the ceiling, etc. However, that is offset to some extent this year by the disregard of the first £50 of income, which is assisting people on low pay in particular. The point needs to be made that while there is a significant income from the self employed at present, there will be a growing demand over the next few years for pensions arising from those contributions by the self employed. While it is a significant income at the moment, the payout from those contributions will only start to be felt in a few year's time.
I have already made the point about the money going into the fund to pay the equality arrears. It will not have any effect on our future in terms of resources. The Department of Social Welfare will not be carrying this cost in any way. That derives from the fact that the Government has accepted that it is general Government responsibility, rather than simply the responsibility of the Department of Social Welfare, to see that this money is paid.
In the Dáil during the week I answered a number of questions on the issue of the greying of our population. As far as I recollect, the projection is that by the year 2035, there will be a requirement to increase our pension payments by about 100 per cent. That is based on projections made by the Pensions Board in advising the Government as to what way we needed to provide for pensions. A more recent CSO report has indicated that the numbers will be slightly greater than that.
However, there is some good news. While the fertility rate will also be lower than predicted by the Pensions Board, the ratio of people in the active labour force to those who are dependants will not be as low as expected — for two reasons. The fertility rate will go down much faster, but because of the growth in the economy it is also expected that the numbers of people migrating back into the economy from other countries, effectively the numbers in the active labour force, will be greater. The numbers of people to support those who are dependent — young, old or sick — will be greater than previously anticipated.
The good news is only marginally so in that we will still have to plan for a significant increase in pensions over the next 30 to 40 years. I have drawn attention to this matter a number of times since I came into office. I have spoken about it to the executives on the Pensions Board. We are currently undertaking, in tandem with the Pensions Board, a review of occupation pensions to try to identify the gaps in occupational pension coverage. We are also examining the report of the Pensions Board with a view to identifying other steps that we need to take to meet the issue of increased pension provision as identified by the board. We are taking steps to deal with the issue. As soon as a review of the recommendations of the board is complete, we will be coming back to the House with our proposals and be seeking support for them.
I emphasise here, as I have done in the Dáil during the week, that pensioners and people who are coming close to pension age should not worry. The Government is guaranteeing that their pension entitlements will be met. All that we are currently doing is pointing out that we need to start planning now for the next 40 years so that the population at that time will not suffer as a result of not having laid down a plan at this stage.
The current position on equality payments is as I outlined some months ago. We had agreed at Government level to seek to pay as quickly as possible the money that was owed to married women as a result of the determination of the court case. The original intention in the Programme for Government was to pay this out over a four year period. We decided for a variety of reasons to do so more quickly than that. Apart from anything else, this matter needs to be dealt with as quickly as possible because people have been waiting for their entitlements for a long time. The delay has cost the State far more than it would have cost had the entitlements been met in the first place. In addition to that, delaying these payments further would have involved the State in even greater cost, certainly in more legal costs, and greater levels of compensation would have been due.
The overall cost of giving full effect to the decision of the High Court is estimated at £260 million, of which £200 million will be paid out by the end of this year. All married women will receive a payment on account in August 1995. That is on target — we will not be earlier or later than that time. I cannot guarantee that every claimant will get their cheque by 1 September, but it is a huge task for the Department to take on when one considers that there is in excess of 70,000 claimants to be dealt with and that additional staff have had to be taken on and trained.
These payments will consist of the adult dependants allowance for the period December 1984 to May 1986, payments in respect of child dependants allowance for the period December 1984 to November 1986 and compensation based on inflation on the payment on account and on amounts already paid under the 1992 retrospective legislation. Any remaining entitlements in respect of the adult dependant allowance, child dependant allowance or employment assistance will be paid from September 1995 to September 1996. Entitlement in respect of transitional payments will be processed immediately threafter.
In accordance with the arrangements which I have outlined, payments will be made directly to the married women who have not taken proceedings. At the same time they will be provided with details of the make up of the payments on account and any additional information they may require will be provided by my Department.
Determining the entitlements of married women affected by the delay involves complex and detailed calculations in almost 70,000 cases. Consequently, it will not be possible, when the initial payment on account is made, to supply details of any additional amounts which may be outstanding or to advise the precise time as to when such payments will be made. The intention is that 75 per cent of the money due to women will be paid to them by the end of this year.
We have had discussions with the legal representatives of those women who have taken proceedings and have sought to put in place a procedure where they would be paid, as we are obliged to do, through their solicitors. Any woman who is working through a solicitor will get whatever information this Department has in about her claim if she looks for it. There are no confidentiality clauses involved in any of the payouts or arrangements we are making with solicitors.
I want to put the record straight on this last point. Deputy Lynch has been talking about the High Court ignoring previous findings on equal treatment payments. Previous references were made by the High Court to the European Courts because of the complexity of the situation. The European Courts then made various findings. Last year the Government decided on my advice that two cases should be allowed to run in the courts as test cases to finalise the position. That was done before last summer and, in fact, the High Court judgment was expected just before the summer recess but it did not come at that time. It was then confidentially expected in October. It did not come then either but eventually came in February.
Those were the test cases which the Government, including the Labour Party, participated in. Their purpose was to apply the same standards and agreed solutions to everybody, thus resolving the situation once and for all. That is what happened and anything that was done over that period was done strictly on the advice of the Attorney General. Indeed, the Minister has had to work on the advice of the Attorney General and he has made various statements after going into Government to the effect that he had to wait for the findings of the High Court. The resolution which we have now seen is based on the findings of the High Court test cases. From the cost you can see that it was obviously a major case and a major issue.
I agree with the Minister when he says the problem was caused by not making the payments in the first instance way back at the end of 1984 when they should have been paid. That would have avoided all the problems that arose afterwards. It is a particularly expensive lesson for Governments and Departments in relation to EU directives and their interpretation.
I compliment the unit, which had already identified some 72,000 women who benefited earlier from advertising and direct mail. Many of them were identified through computers, but it was a huge undertaking. That unit had made various payments and was, therefore, in need of being built up again as soon as the decision came so that it could deliver speedily the payments to all those involved. That is what is happening at this stage. There has been a great deal of misrepresentation of that and I want to keep the record straight on it.
I trust there has been no great increase in the numbers. The Minister is still talking of 72,000 which is more or less the number identified for the payments earlier given the people who received the earlier retrospective payments. Is it the case, Minister, that not many other cases have come out of the woodwork to date, although I know that you may find some?
I am not going to cross swords with you about your self-justification of the decisions you made in the past. I am told that the numbers are increasing slightly, by about 5,000. Of the 80,000 women who applied in the first place, it is possible that some, who were earlier refused payment when you were in office, may now qualify as a result of the court case. In terms of the money provided, the figures are more or less as estimated by the Department.
The Department also has to meet the legal costs of solicitors representing the women who have taken proceedings. A number of women may have signed agreements with various solicitors guaranteeing them a portion of whatever settlement would be received as a result of a decision by Government in this matter. Bearing in mind that the Department is likely to be paying costs to solicitors on the basis of the taxing master, it is important women know that those costs are being paid by the Department.
To clarify things entirely, I never said that there were four High Court judgments. I said that this had been the fourth judgment in the women's favour. It was the the first Irish judgment because up to that point every group of women that took legal action was paid off at the first crossroads.
Despite what Deputy Woods says, before the judgment was brought in around January 1995, I phoned the Attorney General's Office and was told by — I do not know who it was at the time and I did not ask who it was — a solicitor there that they had instructions on file to appeal the case when the judgment came in. Can the Minister say whether those instructions were left by the previous administration?
I do not know if it would be advisable for me to go into instructions that were left by the previous administration. Suffice it to say that I received very good advice from the Attorney General whom this Government appointed when we came to office. The issue, as everybody knows, is an extraordinarly complex one. The original decision not to pay people's entitlements was subsequently compounded by decisions made by Governments later on which made the situation even more complex. There seems little point in going into the particular complexities at this stage, apart from saying that this Government made a decision which has brought this mess to an end. It will ensure that the women concerned will receive their social welfare entitlements with compensation for the delay. As Deputy Woods says, it is a lesson for any future administration. We must not try to cut corners, but must be careful to comply both with the spirit and the letter of European Union directives.
I have to respond to Deputy Lynch because it is a classical Democratic Left slur to say: "I rang someone in the Attorney General's Office, I do not know who it was, and an official told me that they had an instruction to appeal". Then the Minister refuses to answer the question. The purpose of committees is to be open, transparent and honest, not devious in the way in which questions like that are handled.
I can tell you that there was no instruction from the Minister's predecessor to appeal anything. In fact, it is the Minister's immediate predecessor who forced the test cases to a finality. That brought about the situation that I explained earlier. I was not prepared to go on any further without having the matter resolved in everyone's interest so that each individual would get the same fair treatment and there would be no need for solicitors. The solicitors became involved from 1984. In any event, that is the situation. It is important that both the Minister and anyone else on this committee be factual, forthright and straightforward about it. I do not disagree with the rest of what the Minister has to say but the fact that the Minister was silent in the area speaks volumes in political terms and that is dangerous in itself. I can confirm to the committee that the Minister's predecessor had already taken the decision and announced, prior to the Cork by-election in which it became a big issue, that the Government would act on the High Court's finding. That was in agreement with the Labour Party in Government. Let us be clear about that and not have it run about the country as it has been. If these committees are of value, they are at least of value in getting the factual position on the record.
Can we return to the Estimate?
I need to say briefly that not everything Deputy Woods says is necessarily factual simply because he says it.
Are we concluding the Estimate?
I have some queries in regard to assistance. We have the figures on the back-to-work allowance under subhead F. We have the amount of the pre-retirement allowance but I would like to know the numbers involved. When can we expect the lone parents measure to be introduced in the House?
There have been welcome improvements in the carer's allowance both last year and this year in terms of an earnings or means disregard. I discovered a case today where both the carer and the person being cared for are recipients of the invalidity pension. The woman is the carer and the man is totally immobile. He would qualify for a mobility allowance but cannot because he is on an invalidity pension. They qualify under all the criteria for a carer's allowance but cannot receive both. There seems to be an anomaly. If they had earnings of up to £150 from a private source, they could still receive the carer's allowance but, because the income is from social welfare, they are not assessed in the same way.
I have not looked at it in detail; they might not qualify anyway. I thought the gross income of £150 was that of the carer. They seem to be excluded, yet she has substantial additional costs such as heating. As he is totally immobile, the only way she can get him around in her condition is if they can maintain a car. There is no way one can maintain a car for very long on two invalidity pensions. Is it anomalous?
Subhead C deals with the old age and blind non-contributory pensions. The provisional outturn for 1994 is £319,100,000 and the Estimate for 1995 is £319 million. It is a more or less static situation and does not show much increase. Can the Minister give us the carryover from 1994? The 1994 increases, according to information he gave us previously, were £21.9 million and the 1995 cost was £49.5 million. They are figures the Minister gave in a reply to a Parliamentary Question from Deputy Walsh. Obviously there is also an element of a carryover in that. I ask the Minister to tell us the make-up of the £319 million.
The pre-retirement scheme was introduced in March 1990 to provide a flexible range for older unemployed people. Initially the scheme applied to people aged 60 and over but was extended to persons aged 58 and 59 in 1991 and further extended to persons aged 55 to 57 in 1992. The single woman's allowance scheme was integrated with PRETA in November 1992. The 1995 Estimate assumes that there will be an average of 15,400 allowances and payments throughout the year, that is, 300 less than 1994 at an average weekly value of £72.30 at July 1994 rates.
The number of PRETA cases has been falling in the last year, for example, from 16,000 at the end of April 1994 to 14,500 at the end of May 1995. The local offices have been advised to ensure that all potentially eligible long term unemployed assistance claimants are made aware of the pre-retirement allowance option. I do not have the precise figures for the moment.
It is only the end of May.
There are 15,400 currently in receipt.
At the end of May there were 14,500. We estimated that we would have 15,400 over the year.
Over the year 1995?
That is the estimate. In relation to the carer's allowance, I ask Deputy Flaherty to pass on the details of that inquiry to me and I will have it investigated. There have been some improvements in the carer's allowance this year and I hope to improve it further next year. The carer's allowance was an important initiative and needs to be improved. It has not yet reached the target figure which, when it was introduced, was that there would be about 10,000 people on it. Up to the time the changes were made, there were only around 5,000 or fewer on it. We are expecting that the changes made this year will bring in a further 1,000 or so.
Is the new means disregard in place now?
As far as I know it is.
Is it in July?
June. The changes consist of increasing the income disregard and also providing a companion pass which, hopefully, will assist people who cannot travel on their own. What is useful about the travel pass is that the carer does not have to travel with the person being cared for. That will hopefully give some respite or relief to the carer who, in many cases, is working far too long and is spending far too much time with the person for whom they are caring. It can be a 24-hour a day job for seven days a week.
We need to look seriously at how both my Department and the Department of Health can combine to improve the lot of carers. In the vast majority of cases women are doing the caring, and in many cases give up jobs to do so. We need to seriously look at how the carer's allowance can be improved but also how the health services can be improved to give back-up.
If Deputies would bring to my attention any anomalies they find, I would be more than happy to see what can be done about improving the situation. On the question of the old age non-contributory pension, the decrease of £100,000 in 1994-95 over 1995 is due mainly to an expected decrease of about 2,300 pensioners. The payment in 1994 of a bonus equal to 70 per cent of a weekly payment has not been provided for in the Estimate and is partially offset by the cost of the 1995 budget improvements of £4.9 million and the additional cost in 1995 of the 1994 budget improvements of £6.2 million.
I wish to make a point in relation to this. I have given similar figures in relation to other subheads. The figures I am giving in relation to 1995 only relate to part of the year whereas the figure for 1994 is the full year cost. It would be a mistake to assume that less is being provided in this year's budget in these subheads than in 1994. We are not comparing like with like.
I wish to make a brief comment on that. The Minister has said that the 1995 increase represents £4.9 million.
The cost of the 1995 increase is £4.9 million.
The carryover from 1994 is £6.2 million.
Yes.
That is not the cost of a whole year for 1994; that is only the cost of the first half of the year, because last year paid the second half. The two amounts are fairly equal. I know it does not come out right from the Minister's point of view in that even the carryover from last year is higher. It is higher because the rate was higher. That is the difference between the £6.2 million and the £4.9 million.
I have to get my pen out to work that out.
It is simple, actually. That is the factual position.
You have been playing around with these figures for the best part of a decade.
Yes, that is what the figure is.
I am not certain whether the Minister has these figures, but how many women in receipt of deserted wives allowance who are under 40 but whose child, in some cases their only child, has reached 18 years will not be getting deserted wives' allowance?
You want the number of women who will not receive deserted wives' allowance because they have no children?
Yes.
These are all the subject matter of parliamentary questions. I am told we would have to do a survey of the case load to find that out. If you put down a parliamentary question we will investigate.
Have you had your first claimants under the health and safety benefit? Have people begun to claim? It is a little-known benefit.
Did the Minister explain it?
We went through it earlier. It is part of the European directive to improve the treatment of workers on maternity leave.
The 1995 Estimate provides £500,000 for health and safety benefit. This is primarily a contingency provision in respect of a new scheme. The allocation would cover an average of about 150 cases for each week of the year. As of the end of May there are 13 people in receipt of the benefit. It derives from a European Union directive which has been fully implemented and which affords protection to pregnant workers, workers who have recently given birth and workers who are breastfeeding. This protection involves an obligation on member states to ensure that such workers are not exposed to health and safety risks at the work place or must not be obliged to perform night work where this presents a risk to the workers' health and or safety.
Where an employer cannot remove an identified risk or assign the worker new duties, the worker must be granted leave, called health and safety leave, with payment of an adequate allowance. In an Irish context this ensures that recipients receive at least their disability benefit entitlement. The Department of Equality and Law Reform has implemented the employment rights aspect of the directive by way of the Maternity Protection Act, 1994. The rate of payment is the same as for disability benefit and unemployment benefit, which consists of a weekly personal rate with adult and child dependant allowances. As in the case of disability and unemployment benefit, lower graduated rates are payable when the claimants' average earnings in the governing contribution year are below £70 per week.
Do you think it is reasonably well known about? It is very new, is it not?
It is very new.
They have produced a lot of literature on it. The committee is a very active one and with the unions they have produced very detailed information. I saw some of the very detailed information that was made available.
This information should be sent around to small businesses. Many small employers would not know about this and some effort should be made towards informing them.
Report of Select Committee.
That concludes our consideration of the Social Welfare Estimates. I thank the Minister, his officials and members of the committee for their valuable and constructive contributions. I proposed the following draft report:
The Select Committee has considered the Estimates for the Public Service, 1995, for the following Departments: Arts, Culture and the Gaeltacht, Health, and Social Welfare, and all other Estimates relevant to those Departments. The Estimates are hereby reported to the Dáil.
Is that agreed? Agreed.
Ordered to Report to the Dáil accordingly.
The next meeting of the committee will take place on Thursday, 22 June 1995 at 2.30 p.m. when the Minister for Social Welfare will present a brief on the World Summit on Social Development which took place in Copenhagen from 6 to 12 March 1995. This will be a joint meeting with the sub-committee on Development Co-Operation which is a subcommittee of the Joint Committee on Foreign Affairs.
The Select Committee adjourned at 5.10 p.m. until 2.30 p.m. on Thursday, 22 June 1995.