SELECT COMMITTEE ON SOCIAL AND FAMILY AFFAIRS díospóireacht -
Thursday, 9 Dec 2004

Social Welfare Bill 2004: Committee Stage.

Chairman

I welcome the Minister for Social and Family Affairs and his officials. Although we have been in correspondence with the Minister since his appointment — we wish him well in the post — this is the first opportunity I have had to welcome him to a meeting of the select committee. I look forward to welcoming him to a meeting early in the new year. Today, however, we will confine ourselves to Committee Stage of the Social Welfare Bill 2004. I understand the Minister was late in arriving because he had to attend a funeral earlier today. We offer the sympathy of the committee to him and the bereaved family.

I propose that we consider the Bill until 6 p.m. If we do not conclude our discussions by then, there may be a difficulty in arranging a further meeting at short notice. However, we shall address that matter only if the need arises. I assume colleagues will be to the point in making their contributions. Is it agreed that the select committee will meet until 6 p.m. unless we conclude earlier? Agreed.

As the worst offender, I remind all members to turn off their mobile phones. Ringing telephones can disrupt the meeting and slow us down.

NEW SECTIONS.

Chairman

Amendments Nos. 1, 14 and 16 to 18, inclusive, are related and may be discussed together.

Mr. S. Ryan

I move amendment No. 1:

In page 3, before section 1, to insert the following new section:

1.—The Minister shall within 6 months from after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the operation of the rent supplement scheme.".

I, too, welcome the Minister and look forward to dealing with him in a proactive and positive manner to try to deal with the many anomalies in the social welfare code and with general policy matters in the social welfare area. I look forward to hearing his response to amendment No. 1.

Chairman

As the related amendments are being discussed together, it would be help the discussion if the proposers of the amendments spoke now in order that the Minister can make one overall response. Amendment No. 14 has been proposed by Deputy Stanton.

Mr. Stanton

I also welcome the Minister and wish him well. I hope we can work well together. I was taken with his response to the debate on Second Stage in the Dáil yesterday when he responded positively to many of the issues raised. That was welcome. It augurs well when we can have a constructive debate on many issues in the Chamber and at the select committee. That is what I want to see happen.

Like Deputy Ryan, I want to expedite proceedings this afternoon. The Minister knows the arguments made in support of these amendments which relate to the cut-backs made last year. We want to know what impact they had, how many were affected by them, what changes the Minister proposes to make to each one, how many would be affected by such changes and what longer term plans the Minister has in each of these areas.

Rather than speak at length on these issues, I give way to the Minister.

Chairman

Deputy Stantons's amendments are related and will be moved in due course. I am sure the Minister will refer to them.

Minister for Social and Family Affairs (Mr. Brennan)

I thank the Chairman for his kind words. I look forward to working with the committee in the future.

Amendments Nos. 1, 14, 16, 17 and 18 relate to rent supplements. I have no difficulty with the concept behind the amendment that the Minister report on a regular basis on how that scheme is working. However, I am not in a position to accept it from the point of view of writing such requirement into legislation. I do not believe that is necessary. This form of words is, very often, a device for good debate in the context of their inclusion in legislation. I do not have a problem with the spirit of the amendment but I would not be in favour of including such a provision in legislation.

The supplementary welfare allowance scheme, administered on behalf of the Department by the health boards, provides for the payment of a weekly or monthly supplement in respect of rent or mortgages to people in the State whose means are insufficient to meet their accommodation needs and who do not have accommodation available from other sources. The Estimates 2004 contained a number of policy measures. For example, they included a requirement that certain persons be in accommodation for six months prior to eligibility for rent supplement. To understand the objective of this measure, it is necessary to appreciate the purpose of that scheme is to provide short-term income support for people who experience a temporary shortfall in their income, for example, when a person becomes unemployed. It is not meant to be a long-term solution.

It is also necessary to understand that this requirement is linked to the assessment of housing needs by local authorities. It addresses a situation whereby it had been possible for people to refuse State support from the local housing authority in respect of their housing needs. Since January 2004, a rent supplement is no longer payable to a person who has refused a second offer of housing. That provision has since been amended to provide that the supplement is no longer payable to a person who has refused a third offer of housing. Claims for rent supplement are now referred to local authorities in a more systematic manner for the assessment of their housing needs. This systematic referral will provide authorities with a more accurate picture.

An increase of €1 was also provided in the minimum contribution payable for all rent and mortgage supplement recipients. A working group in conjunction with the social partners studied 498 randomly selected rent and mortgage interest supplement applications refused since the new provision came into effect in January 2004. Only 11% of the refusals were as a result of the new measure, of which 37 cases, 7%, were as a result of the six-month rule. The working group and social partners found that 7% of the 498 cases were affected by the six-month rule. They therefore concluded that the new measures were not adversely impacting and pointed out that more than 39,000 rent supplements have been awarded since the measure took effect at the end of January.

Mr. S. Ryan

How many were granted?

Mr. Brennan

Some 39,000 applications have been granted rent or mortgage interest supplement since the measure took effect at end January 2004.

I undertook to re-examine the situation. Following discussions with the social partners and welfare interest groups, many of whom I met, I have decided to remove the six-month rule to ensure those with short term income needs — people who become ill or unemployed or are assessed by a local authority as having a housing need — are not put at a disadvantage. I have also decided to amend the rule that excludes those who refuse two offers of housing. That rule will now apply to people who have refused a third offer of housing. The rule governing the referral of claimants for rent supplements to a local authority is also being amended subject to consultation with the Department of the Environment, Heritage and Local Government. This measure was required to ensure that rent supplements are paid in appropriate circumstances, in accordance with established policy and taking account of the objective of the social welfare allowance scheme which focuses on meeting immediate short-term needs rather than long-term housing needs. I am keen that particular care is taken to ensure that the interests of vulnerable groups, such as the homeless, the elderly, people with disabilities and those on unemployment benefit, are fully protected.

I have accepted the recommendations of the report of the social partners-working group that these measures should continue to be monitored and evaluated. I will be glad to bring any subsequent changes before the House. I can confirm that the six-month rule is being removed and that anyone in need of rent supplement will not be denied it as long as they are genuine and can demonstrate that need.

Mr. S. Ryan

I thank the Minister for his comprehensive and detailed reply. I welcome the removal of the six-month rule, a provision which, when introduced by the Minister's predecessor, was to provide for people not on local authority housing lists and which improved matters to some degree in my constituency. The removal of that rule will further improve matters.

The exclusion of the spouse of a person in full-time work from receipt of rent supplement is an issue which needs to be broadly debated. I acknowledge the issue of housing and accommodation should not, in all probability, come within the remit of the Department of Social and Family Affairs. However, as things stand, we must deal with it in that regard. I and many of my colleagues have encountered people who, because of that exclusion, have had to give up their employment. We want to keep people in employment. The cost of rented accommodation continues to spiral. Many people on modest incomes, one in employment and the other who remains at home, can make a case for rent supplement. The combination of one income plus rent supplement enables such people, who are not eligible for housing, to retain private rented accommodation.

We will have to put in place a scheme whereby those in private rented accommodation in receipt of a modest income, pending local authority housing to deal with the unprecedented number of people on the housing lists, are not excluded under that provision. We cannot have a system whereby such people are being reported although we want to discourage such practices. We are all aware that there are people in private rented accommodation who are not disclosing that their partner is in employment. I do not know to what extent such practices exist but there is a degree of it taking place. When discovered, such people change accommodation and continue as before. Alternatively, one of the couple must give up work. This leaves an anomaly that must be teased out and examined.

Another issue is the refusal of housing authority accommodation. I note the Minister has increased the number of refusals allowed from two to three. Colleagues from different constituencies or people in the market might ask how we have a situation where somebody in need of housing can refuse accommodation once, twice or three times. In my local authority area, which runs from Balbriggan in the north to Dublin 15, all applicants are encompassed in a general housing list. There has been a worthwhile tradition to try to keep families, particularly young couples or single parents starting off, as close as possible to their parents for family support. However, we could now have a situation where somebody in Balbriggan in need of housing is offered a house in Dublin 15. For obvious reasons that person will say they want to remain close to family support and refuse the accommodation offered. The authority will then count that as a refusal and a mark against them. They could be offered another house in another location miles away from their home and refuse again. The situation is then critical. Under duress they must accept the next offer and are left in a limbo situation with no family support.

Another issue, unfortunately, is that accommodation is offered in areas where there is anti-social behaviour. I do not know whether this pertains in other parts of the country. Some houses in these areas are boarded up and people who want to try to make a go of life and bring up their families are advised clearly that if they move in, they are moving into an area where there is a history of drug addiction and everything else in a particular estate. A young girl looking at that scenario might well say she is not prepared under any circumstances to accept the accommodation, which is another mark against her.

Previously, people could refuse twice, but now we have an improvement with a third refusal allowed. In the context of discussions the Department will have on an ongoing basis with the Department of the Environment, Heritage and Local Government and the local authorities, we must be conscious of these anomalies. I am not in favour of and will not support anybody who tries to abuse or use the system and refuse offers for reasons that are not above board. However, there are genuine anomalies in the system that must be examined.

The previous Minister stated another system was pending. She said that anyone who was receiving rent supplement for 18 months or more would have his or her case reviewed by a community welfare officer and, if deemed in need of long-term housing, the case would be passed on to the local authority. The local authority would do the assessment of housing need and take over the payment of rent supplement. Options available to tenants would include continuing to rent from the existing landlord, moving to accommodation provided under a public private partnership or moving to local authority accommodation. There were supposed to be a number of pilot schemes before the implementation of that scheme. What progress, if any, has been made in that regard?

Mr. Stanton

Did the figures the Minister gave on the number of cases awarded and refused relate to January 2004 to now? Has he the figures for the previous year before the measures came into operation so that we can compare them and see whether the measure had an impact? How many applications were made in each year? Is it the case that people decided not to apply because they knew there was a six-month rule? The figures the Minster has given us may not give the full picture if that is the case. People would have known there was no point in applying if they had not been in the accommodation for six months. If the Minister has those details, they might make it easier for us to understand the impact the measure had. I welcome that the measure has now been withdrawn.

Will the Minister inform the committee how he defines a housing need? Must people be registered in a bed and breakfast or hostel to be considered homeless? Must they be classified as homeless and registered in either of these to prove they are homeless?

Domestic violence and family rows are other issues that can cause homelessness. Unexpected pregnancies also can lead to tensions that cause people to have to leave the family home. How will these people fare under the new arrangements introduced by the Minister.

I welcome that people can now refuse three offers of accommodation. Must those offers be in different areas? The Minister and others have recognised that anti-social behaviour has an effect. Certain local authority estates have fallen into disrepair and have not been maintained over the years. We all know and understand why people with young children would be slow to move into those areas. The management of these estates leaves a great deal to be desired. This contrasts with some of the new housing agencies and how they manage their estates. I am aware of some fabulous estates that look well and are well managed and maintained. The Minister should have a word with his colleague in the Department of the Environment, Heritage and Local Government to see what can be done to upgrade many of these estates. There is also the issue of houses that are boarded up for months or longer in some local authority estates.

I draw the Minister's attention to another issue. Housing officers are few and far between in many counties and people must a long time to be assessed. How does this impact on the new proposal of the Minister to give local authorities more of a say. In Cork — I am open to correction on this — there are only two or three housing officers to cover the whole county. They must move from town to town and it can be anything from six months to two years before they reach a certain town to assess people. This is not right. People wait while houses lie empty. This must be addressed because this is not good enough.

The Minister referred to discussion with the social partners in his contribution. I am familiar with the work of the Simon Community which is involved in caring for the homeless. Is the Simon Community part of the social partnership? Was it asked to leave the partnership at some stage? What is the story with regard to other groups like the Simon Community? How many groups dealing with homelessness and other such issues are involved in partnership? What discretion will the community welfare officers have under the new regime being introduced by the Minister? Will it be reinstated as it was before? In amendment No. 14 the Minister proposes to increase the minimum accommodation contribution by €1 per week to €13 per week. What will be the impact of this proposal and why is it being proposed at all? We are dealing with people who are not well off and every euro counts. I suggest this proposal should be re-examined. I acknowledge there will be no further increase this year and it will be kept under review.

Mr. Ring

Last year when the committee discussed the Social Welfare Bill, we were disappointed with the changes made by the previous Minister, but this Minister has gone a long way to go back to the old system. Like the other speakers I make an appeal on behalf of those who, if they refuse three offers of housing, are refused a rent allowance.There is no point in pretence. Local authorities also have obligations. I know of cases where houses have been allocated and the local authority did not repair those houses as required under the law. These are people in terrible circumstances. This is how the State provides accommodation.

The Minister has reinstated the rent allowance almost to the way it was. Will he dispense with the guidelines referring to those cases where people refuse three houses? Those guidelines are wrong. In my town, property is very expensive. In one area at least 20 different people were offered houses in a certain area and every one of them refused. If a person is offered housing three times in difficult areas and refuses, he or she will find him or herself without rent allowance through no fault of his or her own.

I am aware of one situation concerning serious anti-social behaviour and difficulties in an area. A young mother with two young children cannot be expected to take a house in such an area where she knows there are serious problems. I have raised this issue on many occasions with the local authority and in the House. If a local authority offers a second-hand house for rent, that house should first be repaired. A tenant should not be expected to take a house that is not up to standard. I cannot fault the Minister regarding the rent allowance. The Department listened to the social partners and to the different groups. Will the Minister take the next step and take out that ruling about three offers of a house?

Mr. Brennan

Deputy Seán Ryan referred to the supplementary welfare allowance not being payable to those in full-time employment. He raised the issue of spouses. The situation has been the same since 1977 although only in recent times has it been the focus of attention by the system. The bottom line is that if either of the spouses in the relationship is in full-time employment, he or she is not eligible for the allowance. I have referred this matter to the social partners in recent weeks and asked for their thoughts on the matter. Like the Deputy I am anxious that it does not disadvantage people who genuinely need rent supplement but I am also keen that it is not abused, for instance, if one spouse has a good job and sends the other spouse to collect the rent supplement. I will await the response from the social partners.

Deputy Stanton raised a number of issues. I may have to refer back to the Deputy on the comparative figures. I can confirm that January to May 2004 was the period of the study conducted by the social partners. A total of 498 cases were examined and 57 cases or 11% were refused on account of the changes made last year. The changes introduced in 2004 affected 11% of the applicants.

Mr. Stanton

Others may not have applied because of the rules.

Mr. Brennan

This study covered the period from January to May. The Deputy is suggesting it may have scared off some people but one cannot quantify those who do not apply.

Mr. Stanton

It surely did scare them off.

Mr. Brennan

Some of the percentages are of interest. Of these 498 cases which I am informed were very representative, the 2004 changes affected 11%. A total of 1% were refused the allowance on the basis of what Deputy Ryan referred to, namely, the exclusion of the spouse if in full-time employment. The requirement of the infamous six-month rule, affected 7.4%of applicants. A total of 2.8% of applicants, 14 cases, were referred to local authorities. A total of 39,000 rent supplement payments have been awarded since the measures were introduced. The 2003 figures will show up the effect more clearly.

Mr. Stanton

That would be interesting.

Mr. Brennan

I did not have a difficulty about removing the six-month rule because it only affected 7% of the people involved but it could have scared off many people who genuinely needed to be supported and believed they were not eligible up to six months. For instance, a person could lose his or her job after four months. The measure is not that difficult for me to address because of the small number in the survey it seems to affect. I do not have a figure on the number of people who might have been put off by the rule but I suspect it might not be many. I believe they would still make the application but the Department has no definite figures.

Deputy Stanton asked about the assessment of housing need. This will be undertaken by the local authority. I will communicate with my colleague, the Minister for the Environment, Heritage and Local Government to ensure there is no delay in carrying out those assessments.

The Deputy raised the issue of domestic violence. There should not be any difficulty in the case of domestic violence of a community welfare officer awarding the supplementary rent allowance. They have that discretion. Both Deputies Stanton and Ring raised the issue of the three offers of housing. It was two offers and I decided to make it three on the basis of reasonableness. The wording states that they must be three reasonable offers and not concocted or designed simply to meet the rule and get the applicant off the local authority's back. I will monitor the scheme to see if it affects anyone unduly and if they can show they had sensible reasons for refusing a house on three occasions, the situation can be examined more closely.

Deputy Stanton asked a question about the Simon Community. The voluntary pillar consists of CORI and the Society of St. Vincent de Paul and others, but the Simon Community is not a part. If the structure allows for the Society of St. Vincent de Paul, then I imagine Simon could also be part of the voluntary pillar but Simon would require to discuss this with the membership of the voluntary pillar. I am not sure how bodies are selected but I believe it is agreed between them and the Department of the Taoiseach works it out. I am not aware that the Simon Community feels excluded. Each of the pillars has its representatives. I assume that the members of the voluntary pillar have worked it out between themselves.

Deputy Stanton asked about the discretion allowed to the community welfare officers. I am keen that such discretion will remain. As I stated yesterday in the Dáil, welfare is about individuals and not about arbitrary rules, although some rules must apply. He asked about the contribution to rent made by the tenant. Tenants have always been required to make a contribution of approximately 10% towards their accommodation costs from within their own resources, which means from their basic social welfare payment. It increased from €7.60 to €12 in 2003. It increased by €1 in 2004. I am not making a political point by saying that I would not call it savage. I am proposing not to increase it in 2005 to slow down the clock, which I believe to be legitimate. Apart from the financial aspect of this matter, the basic rate increased by €10 in 2004. We will increase it by €14 in 2005. The rent supplement basic rate through that mechanism has increased consistently. A €1 increase is a gesture so that the person receiving valuable taxpayers' funds and support appreciates that it must be paid for and makes a very modest contribution.

In deference to the debate that took place I decided not to increase it for 2005 and it will remain at €13. When it increased from €7.60 to €12 in 2003 it was hardly even mentioned in the House because it was seen as sensible. While there was no furore over that increase the extra €1 caused considerable controversy, so I have hauled it back. That matter is still under review, but I do not see any huge demand to go hauling that back just for the sake of making a political point.

Deputy Ring asked me about the three offers, with which I believe I have dealt.

Mr. S. Ryan

The Minister has made a commitment that the community welfare officers will always have discretion. Last year a circular was issued stating that while discretion exists, "it is expected that these cases should by their nature be exceptional and consequently that the number should be minimal". It is my understanding that a community welfare officer is required to sign off on any such exceptional case. This should be removed from the document that was circulated.

I hope what the Minister is saying about the three reasonable offers will filter down to the local authorities. I ask him to bring this to the attention of the Minister with responsibility for this area.

While it does not apply in my constituency, groups dealing with the homeless may have a problem. A person in an emergency situation probably does not have the expertise or knowledge and no application is likely to have been submitted. The application needs to be expedited to identify the need for help.

Mr. Stanton

I did not get a response to my question as to how we determine what is a housing need and when a person has such a need. Must people prove they are homeless? Are they required to register in a hostel or a bed and breakfast? Some people do not want to do that.

How is the scheme for local authorities to support tenants after 18 months working? How is the recently established Private Residential Tenancies Board impacting on rent allowance and supplementary rent allowance? Is it having any impact on homelessness and the operation of the scheme?

Chairman

Those are the last questions on this issue.

Mr. Stanton

I may need to come in again. This is Committee Stage.

Mr. Brennan

That discretion must remain with community welfare officers. Having listened to the debate in the Dáil yesterday and again today, it is clear we need to monitor this all the time to ensure the intention of the Legislature and Government is implemented on the ground. Nowhere is that more important than in this area. It may be that nowhere is it more difficult either. With so many hundreds of thousands of people involved every week in many different systems, we need to continually monitor them to ensure the spirit of what we intended comes through.

At the same time we must have sympathy for the officials who administer these systems. On the one hand they want to be open, helpful, generous and supportive and on the other hand many of them have considerable experience and want to save taxpayers' money by ensuring no abuse takes place. They want to tackle abuse and end it where they find it. They want to report it to us so that we can end such abuse at a national level. I need to continue to encourage them to do that. I cannot send out a signal that the floodgates are open and they have a blank cheque to pay on demand, which would be unfair on genuine claimants. While on the one hand we are making changes I must also remind those officials that they will always be responsible for looking out for abuse and reporting it. We will try to develop a policy around the avoidance of abuse.

The discretion will remain. A new circular will need to issue detailing what I have said to Deputies here. Officials may still need to report some exceptions to us purely for policy reasons. We will get that done as soon as we can.

Deputy Stanton asked how we define a housing need. The local authorities will apply the usual rules to the homeless, elderly and people on the housing list. Those on the housing list will automatically get rent supplement. That is not an issue. Equally there is no issue with members of one of the vulnerable groups I mentioned, for example the homeless. In the case of rent supplement, applicants must demonstrate they could afford the rent when they took up tenancy, had a reasonable expectation of being able to afford the rent into the future and have experienced a substantial change in circumstances such as illness or loss of employment. Within these kinds of criteria it should not be that difficult to establish an immediate housing need, which is what we will seek to do.

I do not have much information on the Private Residential Tenancies Board, which operates under the auspices of the Department of the Environment, Heritage and Local Government. It has responsibility for registering landlords. I can come back to the Deputy later.

Amendment, by leave, withdrawn.

Mr. S. Ryan

I move amendment No. 2:

In page 3, before section 1, to insert the following new section:

1.—The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of abolishing the means test for carer's allowance.".

Every year since 1997, the Labour Party has proposed the abolition of the means test for carer's allowance. Under the chairmanship of Deputy Penrose, this committee unanimously issued a report outlining what we believe should be the approach of the Department of Social and Family Affairs to carers. Like the Minister, the committee has met the various groups. Some of the figures relating to carers are stark. This country's 150,000 carers, who comprise a significant percentage of the population, seek substantial recognition of the work they do, which saves us many millions of euro each year. It is considered that such recognition should involve the elimination of the means test for carer's allowance.

The Minister might argue that he cannot do everything in a single year. We hoped that his predecessor would give a commitment or an understanding that we would go in that direction. Will the Minister, Deputy Brennan, who has recently been appointed to this portfolio, outline his plans, if any, for the elimination of the means test for carer's allowance? What are his priorities in that regard? I do not doubt that many carers are disappointed because they feel that little was offered to them in the budget or the Social Welfare Bill. The Minister and his officials are familiar with the views of members of the committee on this issue, which we will pursue vigorously with him until it is given the priority it requires.

Mr. Stanton

I welcome some of the Minister's decisions in respect of carers, such as the changes in the respite grant eligibility provisions. When I asked the Minister in the Dáil yesterday to clarify the position in respect of the respite grant, he implied that all carers will get it. Perhaps he will give the committee some more information in that regard. What are the relevant numbers? The Minister is aware that those who are in receipt of the old age pension suffer as a result of an anomaly. If they find themselves having to take on a caring role, which may involve extra work 24 hours a day, they do not get extra money for it. They could end up losing either the old age pension or the carer's allowance. It was expected that——

Chairman

We will suspend the meeting because a vote has been called in the Dáil.

Sitting suspended at 3.05 p.m. and resumed at 3.20 p.m.

Mr. Stanton

As I understand it, a person cannot receive two payments from the Department. Where a carer becomes eligible for the old age pension, he or she must make a choice, even though he or she must do a great deal of extra work and saves the State a significant amount of money. There was an expectation someone in receipt of the old age pension would be provided with half the carer's allowance. Has the Department carried out research and produced figures for how much it would cost to provide, for example, 50% of the carer's allowance for persons already in receipt of another payment? It is to move in the opposite direction to propose the abolition of the means test. I have an issue with this in the context of people who are extremely wealthy. We must consider the resources available to us and channel them towards where they are most needed.

The Minister referred to the respite care grant. There is confusion as to whether all carers will benefit, regardless of means. What are the employment conditions to be considered in this context?

Chairman

This is something about which I have spoken ad nauseam, as have many of the families affected. While carers see the provision of 24 hour care, seven days per week, as almost being part of their job, recognition is still important. While the Government has made improvements which we must not be so ostrich like as to ignore, I share the concerns of Deputy Moynihan who is a sage having spent many years in the Oireachtas. He gave the committee an example which would move the hardest of hearts. He spoke of a husband who earned less than the €500 income threshold under the old means-test system. It meant his wife could receive carer’s allowance for looking after her mother within the home. Unfortunately, the man died. As she had a couple of children, his wife then received survivor’s pension. At the same time she lost her husband’s income, she also lost carer’s allowance. When she was most vulnerable, she was reduced to a social welfare payment. This is something the Minister will understand more than most. Having sustained a significant loss, her crutch was also taken. Perhaps Deputy Moynihan will elaborate.

Mr. D. Moynihan

She still has a retarded child for whom she receives no payment.

Chairman

This is a real life example. I accept that we are throwing the Minister in at the deep end given that he has only been in the job for five or six weeks, although it is not fair to place everything in his lap, but the problem must be considered from an interdepartmental perspective. I hope the Mercer and O'Shea reports as well as the report of the Joint Committee on Social and Family Affairs have all contributed to an ultimate solution. Perhaps I am different from everyone else in that I would not mind paying a little extra but we may all have to contribute to solve the problem.

A solution must be found, given the saving to the State carers represent as can be seen from a cost-benefit analysis. We should not divorce ourselves from the reality that carers are saving the State many millions of euro. The Carers' Association has recommended that the Minister increase carer's allowance up to the level of the nursing home subvention payment. Deputy Callanan was a proponent of this approach before anybody else. The effect would be to keep people at home where they are happier. It is in all our natures to feel this way. In a recent survey only 10% of respondents said they would rather die in hospital or outside the home. It is in this context that we have suggested the reasonable 50% figure.

There is a need to formulate a national carers strategy to cover the Departments of Social and Family Affairs, Health and Children and others. It is in such a strategy that the ultimate solution may well be found. If we, as a committee, can contribute to the solution, we will certainly be positive and constructive in helping the Minister.

Mr. Callanan

I have spoken about this issue time and again, including to the Minister. While the €1,000 respite care provision represents a way forward, there is still inequity in the system. A couple in which the husband earns up to €540 can receive carer's allowance whereas a widow may only receive her widow's pension. The committee believes such a widow should receive 50% of the allowance. While I understand the Minister can only do so much in any budget and that he has done a great deal for the elderly and carers, I ask him to consider our proposal. While we especially welcome the respite care grant, members feel very strongly about the need to provide 50% of the carer's allowance for those in receipt of other social welfare payments. Even if he were only to extend the provision to widows, it would be appreciated if the Minister could revise the proposal. I understand that when a provision of this sort is made, it tends to have wider application and cost more than initially thought.

Mr. Brennan

Deputy Stanton asked about carer's allowance generally. There are 23,700 carers in receipt of carer's allowance and carer's benefit. The figure has increased by approximately150%, while the level of expenditure has increased by approximately 300%, from €46 million to €190 million, in the last couple of years.

Members will be aware that I announced a number of carer's support measures on foot of the budget additional to a rate increase of €14 per week for those in receipt of carer's allowance and carer's benefit. Last night in the Dáil I referred to eight separate increases or improvements affecting carers, including the respite care grant to which the Chairman referred. I will extend the annual grant to all carers providing full-time care for a person who requires it. I have been asked about the criteria which I will outline later.

The Department is conducting a review of caring and has taken on board the comments of the Joint Committee on Social and Family Affairs which made a number of recommendations, by one of which I was particularly influenced. The greatest need of family carers identified by the committee was the need for a break from caring in the home and respite care for the dependent person. I had to consider if it was possible to add on for carers a 50% allowance to widow's and old age pension or to spend similar funds on respite care. On this occasion I opted for the respite care option to address the urgent need identified. The improvements in the conditions applying to respite care will result in an additional 9,200 full-time carers receiving the grant for the first time. Almost 33,000 full-time carers will receive the respite care grant of €1,000 next week.

A number of other changes have also been introduced. For example, a grant will be paid in respect of each person for whom a carer is caring. The criteria to be fulfilled to qualify for a respite care grant are as follows: carers must provide full-time care; carers must not be engaged in employment or self-employment for more than ten hours per week; the care recipient must require full-time care and attention as defined in the Social Welfare Acts — this is not a new criterion; and where the carer receives invalidity pension, disability benefit or disability allowance, he or she must show that he or she is capable of providing full-time care. It is logical that the person receiving care must require full-time care and attention and that the care provider must be able to provide it.

Deputy Stanton asked about employment conditions. Persons in receipt of unemployment benefit and unemployment assistance will not be eligible for the respite care grant. This criterion is also logical because such persons are required to be available for work and actively seeking work full-time. One cannot be in receipt of a full-time carer's allowance if one is engaged full-time in caring, while at the same time legally required to be available for work. That is the main exception.

I admire the Carers' Association, the representatives of which I recently met. While I do not propose to criticise it, I am aware that, following the Minister for Finance's Budget Statement and before I had an opportunity to complete my presentation during a press conference and in a speech before the Dáil in which I laid out the eight changes in full, the association issued a statement in which it responded to my inability to meet the figure of 50% on this occasion. We will keep this in mind for the future.

When the association studies the eight separate changes amounting to more than €40 million, it will realise and probably has already done so that this is a strong package for carers who will receive an additional €14 per week. The respite care grant will increase to €1,000 which a further 9,200 carers will receive. It will also be paid in respect of each person receiving care. The means test threshold will increase from €12,000 to €20,000 which will result in many more passing the means test. I introduced this measure specifically to ensure a person with an SSIA and no other income would not fail a means test.

Mr. S. Ryan

To what schemes will the means test apply?

Mr. Brennan

This threshold will apply to the general means test for all schemes.

Mr. S. Ryan

What is the current threshold?

Mr. Brennan

The threshold has been increased from approximately €12,600 to €20,000. The means test will apply to the amount of capital a person holds.

Mr. S. Ryan

Will it also apply to persons being considered for nursing home subventions and so forth?

Mr. Brennan

It applies only to social welfare payments.

Mr. S. Ryan

Does it apply only to those administered by the Department?

Mr. Brennan

Yes. I am advised that other bodies often follow my Department's lead in this area.

Chairman

Deputy Moynihan-Cronin raised a matter yesterday about which the Minister, as a former accountant, will be aware. I refer to the assessment of capital applied in the Department. The imputation of income arising from capital reminds me of the old tax regime. In trying to minimise their tax payments people who owed £20,000, for example, should have paid much more because a figure of 12% was imputed which would have been 50% on a cumulative basis. The Department, when calculating capital, imputes a figure of approximately 8% on capital. However, a person with €30,000 saved in a bank account would be lucky to get an interest rate of 2.5%. While I am aware the Department is in an invidious position and must impute a figure slightly higher than the interest rate, if it were to halve the figure of 8% to 4%, it would reflect current market conditions which would make more sense. One could determine the correct financial position of applicants by compelling them to produce an interest certificate from the institution in question. The means used to arrive at the income derived from capital have always bugged me. I note the Minister's officials are searching furiously but I would be surprised if they did not know what I am talking about.

Mr. Brennan

We have found the answer.

Chairman

The important part of any examination is to get the answer, regardless of one's source, although the Christian Brothers would not allow one to take that approach. As Deputy Moynihan-Cronin's late father used to raise this issue, she is continuing in his footsteps. I have also noticed this problem. Years ago the best approach to paying tax was to pay additional money because one received a better return from the Revenue than anywhere else. The Revenue Commissioners then copped on to this. In the light of the Minister's background in business, I ask him to examine the approach to assessing income from capital.

Mr. Brennan

The assessment of capital chart indicates that on capital up to €12,697 — the current threshold which will increase to €20,000 from January — the weekly means imputed are nil. Between €12,697 and €25,000, the weekly means imputed are €1.27 per €1,260, or 1%. If one has capital of between €25,000 and €38,000, the weekly means imputed are €2.50 per €1,260 or approximately 2.5%. Capital of more than €38,000 is imputed at a figure of €5 per €1,260, or approximately 4.5% to 5%. The effective rate is, therefore, lower than the figure referred to in the Dáil yesterday by Deputy Moynihan-Cronin. I checked with my officials afterwards and while I cannot be definitive, the effective rate is approximately €3%.

Chairman

The Minister has answered my question.

Mr. Brennan

These figures will change because the threshold will increase from €12,000 to €20,000.

Chairman

The effective rate will decrease.

Mr. Brennan

The change in threshold from €12,000 to €20,000 will make a substantial difference to many. I wanted an opportunity to highlight this development because it is important that those with extra capital understand they will not necessarily fail a means test they may have failed in the past.

Mr. Stanton

If somebody does not receive a carer's allowance or carer's benefit but is a full-time carer, will he or she be eligible for the respite care grant?

Mr. Brennan

Yes.

Mr. Stanton

Are such persons included in the figure of 9,200 to which the Minister referred?

Mr. Brennan

Yes. The new beneficiaries will include widows, widowers, pensioners and those not in receipt of any social welfare payment.

Mr. Stanton

A further 9,200 will benefit.

Mr. Brennan

Yes.

Mr. S. Ryan

Will the new threshold of €20,000 double for a couple?

Mr. Brennan

Yes.

Chairman

It is a welcome change.

Mr. S. Ryan

Apart from those paying PRSI, many others will also benefit. I welcome the Minister's contribution and look forward to further consultation and debate on the issue. I hope we will have more to report next year.

Amendment, by leave, withdrawn.

Mr. S. Ryan

I move amendment No. 3:

In page 3, before section 1, to insert the following new section:

1.—The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of extending the social welfare free schemes to widows and widowers who do not currently qualify in that regard.".

Mr. Brennan

The household benefits package, which comprises electricity, gas and telephone allowances and free television licence schemes, are generally available to people living in the State aged 66 years or over who are in receipt of a social welfare-type payment or who fulfil a means test.

As Deputies are aware, the package is also available to carers and people with disabilities under the age of 66 who are in receipt of certain welfare-type payments. Persons aged over 70 years of age can qualify regardless of their income or household composition. The free travel scheme is available to all people living in the State aged 66 years or over, to all carers in receipt of carer's allowance and to carers of people in receipt of constant attendance or prescribed relative's allowance. It is also available to certain people with disabilities. Widows and widowers aged from 60 to 65, whose late spouses had been in receipt of the household benefits package or free travel, retain that entitlement so as to ensure that households do not suffer a loss of entitlement following the death of a spouse.

The free schemes share a common set of objectives in the area of social inclusion. For example, they are there to provide assistance to those living alone by targeting them with specific benefits providing both income and social inclusion grants and gains, to support older people and people with disabilities in their wish to remain in the community as opposed to being in institutional care, for example, and there are also wider issues involved. A range of proposals have been made to extend the free scheme to other groups, including widows and widowers and other social welfare recipients. This has been examined from time to time from a social inclusion perspective.

The estimated cost of extending the household benefit package to those widows and widowers who are in receipt of widow's or widower's pension or a one-parent family payment and who are not currently receiving the household benefits package is in the region of €35 million annually. This cost, however, only applies to widows and widowers who are in receipt of a widow's or widower's pension from the Department. It does not take account of widows or widowers who may be in receipt of other social welfare payments.

Mr. S. Ryan

In recent years there has been some movement in this regard, which the Minister outlined in the context of the benefits to widows and widowers, but they are the one group of constituents among social welfare recipients who feel very much aggrieved. I refer in particular to widows or widowers under the age of 60 who are still rearing a family. These people cannot go out to work because they feel it is a priority to be at home to give the required support to their families following the death of their spouses. Other groups are receiving support. The purpose of the amendment is to try and harmonise benefits across the board. I support the claim of widows and widowers in this regard and I hope that some change will be introduced next year.

The Minister said the position is reviewed on an ongoing basis but that does not lead me to believe it is a priority issue. This matter needs to be addressed.

Mr. Stanton

How many widows and widowers do not qualify under the current scheme but do avail of other payments? The Minister referred to the sum of €35 million. Does that figure relate to widows, or does it include one-parent family payments and others?

Chairman

The Minister referred to the household benefits package, which is useful. The one we constantly give out about, which he will understand as he comes from a rural area, is the free travel scheme. It is great if one has public transport close at hand but very often the travel pass is put up behind a picture and gets covered in dust or smoke. The Department examined alternatives such as voucher systems and the Minister said he examines the matter on an ongoing basis.

Like many other Deputies I know people who live across the pond in the UK and other places. The Taoiseach referred to an EU-wide transnational free travel scheme the other day. I accept the Minister cannot discriminate and must comply with EU law but I urge him to seek some way to assist some of the Irish people on whom we have focused for the past year or so, in terms of a travel pass. As the Minister stated, some of them may have been beneficiaries of the pre-1953 scheme, on which the Department now spends €72 million. Will he examine the possibility of extending the travel pass to Irish people living in the UK? I accept it is not easy to do but it should be possible to find some mechanism that would provide recognition for many people who found themselves in difficult circumstances over the years. We all have some experience of this matter.

Mr. Brennan

As Deputy Seán Ryan is aware, free schemes by and large are for people over 66 years of age. There are substantial financial implications in changing the system but a Minister of any colour has never ruled that out. The matter is kept under constant review but it is a case of competing priorities.

In this budget, widows get an extra €14 per week which is substantial given other demands. It is €12 in some cases. Widows also get the respite care grant if they are carers. Young widows with children will avail of increased child benefit. There is a number of improvements for widows in the Bill and the budget.

The issue of younger widows getting free schemes is regularly examined but other priorities have taken precedence. We examine if younger widows require free travel, fuel or electricity. It is not as easy to come to that conclusion as it is in the case of older widows. I accept there are valid issues surrounding the matter, but this area is a Pandora's box.

Deputy Stanton inquired about the number of widows under 66. The number of widows and widowers availing of the contributory pension is some 80% of pensioners, of which 34,500 are under 66. On the non-contributory side, there are some 2,500 under 66, giving a total of 37,000 widows aged under 66. The Deputy may not consider that it would take a great deal of money to do it but the bottom line is whether it is a priority. It might be useful to carry out a study of the circumstances in which those 37,000 live, and perhaps I will do that.

Like others, I am determined that every euro of the €12 billion spent by the Department goes to where it is most needed, as opposed to where it would be nice to send it. I try to make that distinction as best I can.

The Chairman raised an issue which was also raised by his party leader in the House on a number of occasions. I will examine the matter. Some implications would arise from this but I am not sure what they would be. We could perhaps ring-fence the travel pass to pre-1953 pensioners in the UK because we are already involved with this category of person. The issue then is whether that is the beginning of a string that will include other pensioners not just in the United Kingdom but throughout the European Union. Before I pull the string, I want to know what is at the other end, especially the position on new member states. I do not have a problem with the issue in itself but am worried about the length of the string.

Chairman

It is a question of where it will end up.

Mr. Brennan

I will have to keep an eye on that.

Mr. S. Ryan

Yesterday in my Second Stage speech, I raised the issue of public transport for older people, particularly in the Dublin, Cork and Limerick regions. Unfortunately, I was not in attendance to hear the Minister's response. I ask him to consider this matter to assist older people who have appointments in hospitals before 10 a.m. I know CIE has a problem regarding peak hours.

Mr. Brennan

Okay.

Amendment, by leave, withdrawn.

Mr. S. Ryan

I move amendment No. 4:

In page 3, before section 1, to insert the following new section:

"1.—The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of increasing the payments in respect of qualified adult dependants to not less than 80 per cent of the payments in respect of individuals.".

There are many groups representing those on welfare who have raised with Opposition spokespersons the need to increase the qualified adult dependant allowance for the spouse or partner of someone on social welfare. My amendment requires the laying before the Houses of the Oireachtas a report on the implications of increasing the payments in respect of qualified adult dependants to not less than 80% of the payments in respect of individuals. However, if we increased the figure to 70% initially and then worked towards 80%, it would be helpful. It would be desirable to have equality such that the spouse and recipient would be on the same level. This may be expensive but we should work towards it. What is the Minister's view on this?

Mr. Brennan

An increase in respect of a spouse or partner is paid in addition to the personal social welfare rate where the spouse is deemed to be mainly dependent on the social welfare recipient. The amount of the increase payable is reduced on a tapered basis according to the spouse's or partner's earnings. I remain fully committed to the target of increasing the qualified adult dependant's allowance for pensioner spouses to the non-contributory pension personal rate and the budget 2000 commitment to move the remaining qualified adult allowances to 70% of the relevant personal rate. By 2004, the majority of qualified adult allowance rates increased to approximately 66% of the applicable personal rate. This is an increase of 6% over the rates that obtained in 2000. Increases announced in budget 2005 will maintain the level at 66%.

Mr. S. Ryan

Is it the same percentage as last year?

Mr. Brennan

Yes. The commitment is to maintain the rate at the same percentage of the relevant personal allowance. To maintain it at 66% of a higher figure is very expensive. We are committed to increasing the remaining qualified adult dependant allowances to 70% of the relevant personal rate and are working towards that end.

It struck me when examining sums in the Department of Social and Family Affairs that an increase of just €1 across all schemes would cost €50 million per annum. Therefore, those arguing for an increase of €10 should realise that it would cost €500 million. I am amazed at how quickly the costs mount. One would not be thanked if one gave somebody €1. The least one could give is €10 but, as I stated, this would cost €500 million.

Amendment, by leave, withdrawn.

Mr. S. Ryan

I move amendment No. 5:

In page 3, before section 1, to insert the following new section:

"1.—The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of increasing the fuel allowance and living alone allowance to take into account the increase in the cost of living since those allowances were last increased.".

Chairman

Having heard what the Minister just stated, I realise the implications of increasing the fuel and living alone allowances, to which amendment No. 5 relates.

Mr. S. Ryan

The fuel allowance is a significant tool to deal with poverty, particularly the poverty of those who are living alone. Various statistics indicate that single women are most at risk in this regard. Given the increases in fuel costs, we are disappointed that there has been no significant increase in the fuel allowance in recent years. This should have been dealt with more positively.

Mr. Brennan

I sympathise with the Deputy's point but I decided that the focus of the budget would be on the increase in the basic social welfare rate. Ultimately, increasing the basic rates represents the best assault on disadvantage and financial pressure. This gives people options regarding how they should spend the increases. If the increases are linked to particular allowances, such as the fuel allowance, they may be less useful. I did not tackle this issue this year because I wanted to assemble the funds to grant the €14 increase in the basic social welfare rates. We made a commitment to the social partners and most of the other groups that we would do this. That does not mean I will not return to the fuel allowance on another occasion.

The living alone allowance is paid to 140,000 pensioners and people under 66 in receipt of certain invalidity and disability payments. The cost of the fuel allowance and the living alone allowance is €140 million per annum and therefore it must be noted that changes to the rates incur significant costs. I opted to devote this year's fund to increasing the basic rate. I made one change, however. I extended the entitlement to the smokeless fuel allowance to persons in receipt of occupational injury benefit for a period of 13 weeks or more. This measure will come into effect next October. It is not a considerable change but needed to be made.

Mr. Stanton

The fuel allowance, in particular, is crucial, especially for older people because they feel the cold more than people as young as the Minister. Even in those times of the year when they do not receive the fuel allowance, they can still feel quite cold. We know the allowance is granted for the winter period but very often the recipients cannot understand why it is not granted all year around. We need to consider this matter. If people do not have enough money, they cannot buy fuel, which can lead to health complications. In next year's budget, perhaps the Minister will consider not only an increase in the allowance but also an extension of the period over which it is paid.

Mr. Brennan

I considered making the payments all year around and the idea of making a statement regarding real funding in this area. The sums involved totalled many tens of millions of euro. I opted instead to devote the moneys available to increasing the basic social welfare rate by €14 on the basis that it would be extended to all groups across the board and to increasing the rate payable to all pensioners by €12.

Some 270,000 people benefit from the fuel allowance, of which over 118,000, or 44%, receive the additional smokeless fuel allowance, at an annual cost of approximately €84 million. I am aware that the smokeless fuel allowance is very important to people and it is an issue to which I hope to return. However, given the choice, I opted for a substantial increase in the basic rate because it gets the money to people directly and provides them with an element of choice as to its disposal.

Mr. S. Ryan

I thank the Minister for his contribution on the issue. The matter is one on which choices must be made, dependent on the money which is available to the Minister. The issue needs to be addressed because it is an important one which, I hope, we can examine again next year.

Amendment, by leave, withdrawn.

Section 1 agreed to.

NEW SECTIONS.

Mr. Stanton

I move amendment No. 6:

In page 3, before section 2, to insert the following new section:

"2.—The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on pro rata contributory pensions for those with less than 10 years contributions.".

This issue arises time and again. A number of years ago, people made contributions to their pensions from their pay and they were required to have done so for ten years before they were eligible for any payment. There was a great deal of agitation about the matter because many people were of an age that they did not have ten years' worth of contributions but perhaps nine, seven, six or three years' worth. A change was made a number of years ago, whereby if people had made five years' contributions, they could receive half the pension regardless.

An elderly gentlemen brought this issue to my attention recently which is why I tabled this amendment. There is a feeling that these people were wronged. In this day and age of computers, databases and so on, it should be possible to give a proper pro rata pension to people. For example, if a person had paid nine tenths of their contributions, he or she would receive nine tenths of the pension or if he or she had paid three tenths, he or she would receive three tenths of the pension and so on. The number of pensioners involved is relatively small. They entered the system in good faith and it was not their fault they were not of the age to make the full ten years’ worth of contributions. Will the Minister examine this issue in his own time as I would like to hear his response?

Chairman

The more one looks at this Bill the more anomalies are unearthed and the more difficulties are created. For example, self-employed people and farmers only became eligible for this system in 1988. In that context I was approached by a farmer in his late 50s who had been in the scheme for three or four years and retired from farming. When the retirement scheme ended after ten years, he had made only four contributions. He is now in a position in which his 50 acres is his sole source of income. Why, as Deputy Stanton suggested, could he not be entitled to three tenths or even half of three tenths? The man is now 71 or 72 and feeling the pinch because issues move on. This man only approached me in the past week, which demonstrates that issues are being unearthed. This man was probably a voluntary contributor. Could he have been a voluntary contributor during the seven or ten years of his farm retirement? When he received the farm retirement, he was not allowed to draw the pension from the Department or, if he did so, it would be deducted as one cannot draw both pensions. This is the type of anomaly which has been thrown up and will become more prevalent as farm retirement issues unfold. I have tabled a parliamentary question to the Minister on the matter but perhaps I might get an answer on the cheap this evening.

Mr. S. Ryan

The Department's regulations are full of anomalies. The more one tries to improve the system, the more other anomalies are opened up. The Irish Senior Citizens Parliament appeared before the committee on the issue of stamp contributions. While we all recognise that the pre-1952 contributions remove one of the anomalies, another exists in respect of class D stamps, which the Senior Citizens Parliament believes should be redressed. Many people employed in semi-State bodies were removed from class A and placed in class D. No recognition is given to class D for pension calculation purposes when a certain income level during employment is reached.

The query is whether a similar system to that involving pre-1953 contributions should now be introduced for class A stamps, whereby every fourth class D stamp should be calculated as one class A stamp and used when calculating a State contributory pension. This issue had the full support of the committee and was raised with the Minister's predecessor. It is appropriate to raise the issue again this afternoon.

Chairman

Deputy Ryan is correct. The committee held a full debate on the issue. The Minister will be aware that this applies to people working in RTE, CIE and other State companies, for whom it created a problem. The Senior Citizens Parliament indicated that four class D stamps would be equivalent to one class A stamp. The more we speak about these matters, the more we alert the Minister to issues which will cost the Minister for Finance more. I will have to curtail my colleagues before we spend much more here.

Mr. Brennan

I thought the Department of Transport was difficult.

Mr. S. Ryan

We might be looking for a Supplementary Estimate.

Mr. Brennan

The qualifying conditions for pensions require persons to have paid a minimum number of contributions at an appropriate rate, to have entered insurance ten years before a pension, which is the purpose of the amendment, and to achieve a yearly average of between ten and 48 contributions over his or her working life. These conditions are designed to ensure that those qualifying have demonstrated a strong involvement with the social insurance system and that the payment they receive reflects their contribution.

The Chairman referred to a number of pro rata and special pensions which are available to cater for cases in which people have paid insurance at different rates and special pensions have been introduced to deal with perceived anomalies, for example, in the case of pre-1953 insurance and certain self-employed people, and those changes have been made. The view is that the pre-1953 and special self-employed pensions represent reasonably good value for the level of contributions made when they are compared to insurance records and payments received by other contributors.

This whole area is being developed and reviewed. Further developments and qualifying conditions are being considered in the light of the phase 2 report on qualifying conditions which is due in the new year. I will take on board the committee's comments in that review. Among other issues, the review will examine the possibility of replacing the system of averages with one based on total contributions paid, which might go some way to addressing the issue.

Most pension schemes, including our own, have trigger points. In other words, one must have made contributions for a certain number of years to receive a certain level of payment. If one misses a threshold by a couple of days or weeks, one will find a Deputy or Senator wandering around the House looking for a Minister to whom to tell the story. Whether they are our own schemes, private, public or social insurance schemes, when they have a cut-off line, people will get trapped on the far side of it. In that context, I take Deputy Stanton's point about ten years.

However, I do not know that many schemes have moved to a totally pro rata system from the ground up. Nonetheless, we will examine the issue. We are examining the possibility of having more flexibility in the fund in respect of people over 66 years of age. For example, as I discussed with my officials recently, officials in the UK are looking at trying to encourage people to leave their contributions in the fund after they reach 65 or 66 years up to, for example, 70 years of age and not draw on them on the basis that they will receive a better contribution and perhaps a specific state top-up once they reach the age of 70. I do not know how far the UK authorities have reached on the matter but, given the demographics, they are examining such solutions. The review we undertake will take on board what has been said here today.

Mr. Stanton

That is fine. I welcome the Minister's decision to examine this issue, particularly in regard to pro rata payments. I would appreciate if the Minister reverted to us on the matter at some stage as it would be a major change. The number of people in involved is not huge.

Amendment, by leave, withdrawn.

Mr. Stanton

I move amendment No. 7:

In page 3, before section 2, to insert the following new section:

"2.—The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the rate of relative income poverty in the State.".

The issue of relative income poverty has arisen from time to time. It is the measure adopted across Europe while we seem to be stuck with the consistent poverty measure. A number of reports have stated that relative income poverty in the State has increased dramatically in recent years and it would be useful if the Minister prepared a report that indicated the impact of relative income poverty from sociological and economic points of view. I do not accept the assertion that relative income poverty does not count and is a figment of people's imaginations. It is real and has a major impact. We do not have the facts, however, in this regard and it would be interesting to hear what the Minister has to say. Could he return to us with a report on this?

Chairman

I support that idea. I abhor the consistent poverty measure. It is outdated and outmoded. It was developed by the ESRI in the 1980s. Few other countries in Europe use this index to measure poverty. Relative income poverty is the appropriate index to measure poverty. Some people have dismissed this but we must move with the times. The organisations dealing with the consistent poverty index would like to see it changed.

Mr. Brennan

The recent ESRI report on relative income poverty emphasises that not all those below relative income thresholds are poor but, instead, are defined by the EU as "at risk of poverty". In calculating this income threshold, account is not taken of the other resources people might have, particularly factors relevant in Ireland such as home ownership of 86%, with especially high rates among the elderly. That is unprecedentedly high when compared with our colleagues in the European Union. Account is not taken either of the value of benefit in kind under schemes such as the free electricity, fuel and television licence schemes, which are particularly important in Ireland.

The European Union's social protection committee recognises that actual experience of poverty is not fully captured by the use of the relative income poverty indicator. The European Commission has taken the view that the relative measure is not a good measure and is developing an additional indicator for capturing deprivation. We must be more precise. The Chairman's reservations about relative income as a measure are shared by the European Commission. For those who cannot work, especially the elderly, the answer lies in our ongoing commitment to increasing benefits. I have been through this in my earlier comments.

This is an evolving area. There is a great management saying that I will share with the committee, although I am reluctant to do so, which states that if you cannot measure it, you cannot manage it. This is very appropriate in this area. We must be able to acquire accurate statistics and know exactly at what stage poverty is at so that resources can be targeted effectively. I am not greatly taken with the debate regarding the differences between consistent and relative poverty. There are 66,000 children living in poverty and I intend to focus on identifying them and targeting the resources accordingly. This is the area in which I intend to put my energy. However, we must acquire acceptable and consistent measurements, which will find agreement throughout the EU, so that resources can be allocated according to need. I hope to see an end to the debate regarding measurement and agreement on a form of measurement that allows us to act on the statistics rather than arguing about how they are compiled.

Mr. Stanton

It would be useful if the Minister could come forward with a measure with which we could all agree. There is now an agreement that the measure of consistent poverty is outmoded and irrelevant, as the Chairman observed. There is a certain level of consistent poverty and it must be addressed but there are other ways of measuring poverty. The Minister said that 66,000 children live in poverty. What measure has he used to attain that figure?

There are a number of issues to consider in regard to relative poverty. It is a question of people's perception that their neighbour is much better off. A person who has one old banger while his or her neighbour has four good cars may not be living in consistent poverty but may feel relatively poor. We are in a situation where such a perception can have an impact. We need a new poverty measurement and I am interested to hear the Minister's view on what such a measurement is likely to be and the measurement he has used to obtain the figures he has quoted.

Mr. Brennan

The practical approach to take in this regard is to follow the EU situation. I will monitor closely the process whereby the Commission is developing a deprivation measure. Any measurement must be applicable throughout the EU so that we can have debates at EU level about the allocation of resources.

The figure of 66,000 children living in consistent poverty is taken from research undertaken by the ESRI, arising through the national anti-poverty strategy. This research includes information on those children living in households in which an adult is in employment. Poverty does not affect only those who are not in jobs.

Amendment, by leave, withdrawn.

Chairman

Amendments Nos. 8 to 10, inclusive, and amendment No. 12 are related and may be taken together. Is that agreed? Agreed.

Mr. Stanton

I move amendment No. 8:

In page 3, before section 2, to insert the following new section:

"2.—The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the impact of increasing, under the Act of 2003, the period where claims for Unemployment Benefit and Disability Benefit are linked with a previous claim from 13 weeks to 26 weeks.".

My amendments Nos. 8 to 10, inclusive, and amendment No. 12 arise from the changes made to a number of social welfare schemes last year and for which, with one exception, the Minister has not made appropriate adjustments this year. Amendment No. 8 relates to the impact of the increase from 13 to 26 weeks in the period for which claims are linked. It would be useful if the Minister could provide figures to indicate the difference this provision has made to the relevant benefit recipients.

Amendment No. 9 relates to the increase in the number of insurance contributions from 39 to 52 that is required for entitlement to disability, unemployment and health and safety benefit. My colleague, Deputy Paul McGrath, made the point yesterday that the insurance fund is very healthy. How much has been saved through this provision and does the Minister feel its implementation was worthwhile? How many people have been affected by the change?

Amendment No. 10 relates to the maximum duration for which a person who has paid less than 260 PRSI contributions since first entering employment can claim unemployment benefit. The last time it was reduced from a maximum duration of 390 to 312 days. Will the Minister say what impact this had, how much was saved, how many were affected and if he has any plans to change it?

Amendment No. 12 deals with the discontinuation of half rate child dependant allowance. This allowance was not touched, although many commentators had sought a change. Section 10 of the 2003 Act discontinued the entitlement to the allowance in respect of unemployment and disability benefits where the claimants and their partners had gross weekly income in excess of €300. Will the Minister say how many were involved, what impact it had and how much was saved?

Mr. Brennan

Amendment No. 8 refers to the measure introduced in the 2004 Estimates. Two claims are linked where a claim is considered to be a continuation of a previous one. Where a person makes an unemployment or disability benefit claim within 13 weeks of the end of a previous claim, both claims can be linked. The recipient benefits by linking claims. In particular, he or she can retain some or all of the entitlements established during the course of the first claim. For example, retention of previous entitlements may result in payment of unemployment benefit at a higher rate than would have applied to a new claim. This is one of the measures in the continuing review to which I am committed and intend to conclude soon. It is not included in the nine on which I have made some progress but in the remaining seven. The person concerned can apply for unemployment assistance.

In regard to amendment No. 9, to qualify for a social insurance payment a person must fulfil all relevant conditions, including the social insurance contribution conditions attached to the benefit being claimed. There are two underlying principles in the setting of equitable contribution conditions, the first being that the claimant's record of contributions should be enough in terms of initial establishment of the scheme and consistency over a period. The second is that there should be a difference according to whether a person is claiming a short or long-term benefit. In the latter, where a person would draw heavily on the resources of the social insurance fund, it is considered right that the tests should be more stringent. Therefore short-term benefits such as disability, unemployment and health and safety benefits require the claimant to have paid a minimum number of contributions since first starting work. This number was 39 but is now 52. This is one of the measures on which I have not reached a conclusion but I will listen carefully to what is said in the debate today as an input into the review.

In response to the Deputy's questions, this change will result in a saving of €2 million per annum in 2004, 2005 and 2006, respectively. The average weekly number of persons affected is approximately 275.

Mr. Stanton

Very few are affected and it does not make a great difference to the social welfare fund, although to the individuals involved it is significant. On a pro rata basis they must be employed and paying contributions for 52 weeks before qualifying.

Mr. Brennan

In regard to amendment No. 9, the estimated gross saving was €2.5 million in 2004 and will be €4 million in 2005 and €4.1 million in 2006. The average weekly number of recipients affected was 400 in 2004 and will be 640 in 2005 and 2006.

Mr. Stanton

That is a small number.

Mr. Brennan

While the number of individuals is small, the amount of money involved is substantial. One must take this into account also. The view was expressed last year that no hardship had been caused in this area but it is an item I continue to review.

Mr. Stanton

What is the Minister's response to amendments Nos. 10 and 12?

Mr. Brennan

In regard to amendment No. 10, where a person has paid fewer than 260 PRSI contributions since first entering employment, the period for which he or she would receive unemployment benefit was reduced from 15 months to one year. Before this change, unemployment benefit was payable at the full rate for a maximum of 15 months. Effectively, the unemployment benefit scheme provided the same level of cover for periods of short-term unemployment, regardless of the number of paid contributions. For example, the same rate and duration of payment applied whether a person had been in the workforce for one year or 20. This was not the case in respect of disability benefit where the maximum duration of payment for persons with fewer than 260 contributions was one year. Last year's measure brought the treatment of unemployment benefit closer to that of disability benefit.

For short-term social insurance cover the provision recognised a longer sustained employment record by giving it more favourable treatment in terms of extended entitlements and in that way supported the contributory principle of social insurance. This is another of the items that I continue to review. The measure was estimated to affect, on average, approximately 700 recipients every week in 2004 and will affect 2,500 in 2005 and 2006. The estimated net savings were approximately €5.2 million in 2004 and will be €14.8 million in 2005 and 2006, respectively.

Amendment No. 12 refers to child dependant allowance, an additional payment made to social welfare recipients. The full rate of €16.80 is payable where a person's spouse or partner's gross weekly income does not exceed €203.16. The half-rate child dependant allowance is payable where income exceeds this sum. Prior to the change made last year to which the Deputy referred, there was no upper limit on the spouse's earnings for receipt of half-rate child dependant's allowance. The measure introduced a limit of €300 per week on a spouse's or partner's earnings. Where there is a non-earning or lower earning spouse or partner, the child dependant allowance entitlements remain unchanged.

In the context of the 2005 budget, I have raised the threshold for the spouse's or partner's earnings to €350 per week. This extension will help because it will ensure persons with a family income of almost €26,000 when earnings and the social welfare personal rate of €148.80 are combined can retain entitlement to half-rate child dependant allowance. Where there is a non-earning or lower earning spouse or partner, full or half-rate child dependant allowance, as appropriate, continues to be paid. Estimates show that most of those affected by the threshold will be those with spouses or partners in full-time employment with earnings considerably in excess of the €350 threshold. The threshold ensures available resources are directed towards lower income families. I have made an amendment which will help considerably but we will keep this and all other changes under review and if further changes are needed, I will not be slow to make them.

Mr. Stanton

The first three amendments are connected with the social insurance fund into which people pay. There is no saving to the Exchequer. It is like someone paying car or any other type of insurance. In regard to the last amendment, I accept the Minister's explanation but it is important to keep the matter under review. On that basis I withdraw the amendments and thank the Minister for his response.

Amendment, by leave, withdrawn.

Amendments Nos. 9 and 10 not moved.

Chairman

Amendments Nos. 11, 13 and 19 are related and will be discussed together.

Mr. Stanton

I move amendment No. 11:

In page 3, before section 2, to insert the following new section:

"2.—The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the impact of the discontinuation of the crèche supplement.".

This amendment seeks to discover the impact of the discontinuation of crèche supplement while amendment No. 13 seeks a report on the impact of the discontinuation of diet supplement. I know the Minister has made changes in this regard. Amendment No. 19 seeks a report on the impact of the discontinuation of the supplement given to recipients of supplementary welfare allowance who have been supported by the MABS in brokering a deal with creditors.

Mr. Brennan

For 2005 I have provided €2.3 million towards the provision of increased crèche support. It covers the continued support in 2005 of existing recipients, the support of new cases referred by health sector personnel and social service professionals and the support of community crèche facilities, subject to discussions with the Ministers for Health and Children and Justice, Equality and Law Reform to see what network can be put together. My objective is to ensure families can continue to have access to crèche supports, for example, in cases where a social worker or public health nurse deems it necessary as part of the work of the family.

Crèche supplements were paid under the supplementary welfare allowance scheme. The 2004 Estimates contained policy measures under which these payments were discontinued. I have made the changes referred to at the same costs as heretofore. The supplement was intended to provide short-term assistance arising from social or medical reasons, to provide for social interaction for disadvantaged children and to allow a parent to avail of counselling services. The level and duration of many the payments indicated that the supplement was being used to provide for long-term child care services.

As Deputy Stanton is aware, the issue of long-term child care services is a major one, involving the Departments of Health and Children, Education and Science, Social and Family Affairs and Justice, Equality and Law Reform. It also involves the taxation system. It was never intended that the Department of Social and Family Affairs would become involved in establishing a national network of funded community crèches in this way. In restoring the crèche supplement I have returned to the original intention of the scheme. Anyone who needs the support of a community crèche will receive a crèche supplement.

Sitting suspended at 4.35 p.m. and resumed at 4.50 p.m.

Chairman

The Minister was dealing with amendment No. 11.

Mr. Stanton

The Minister said it was never intended that the Department of Social and Family Affairs would fund crèches and I accept that point. Will the Minister accept that over the past few years, this scheme has developed a life of its own, has grown and has provided an important and essential service in many places? Does he accept that by pulling the rug from under it, much hardship has been caused?

Can the Minister tell us the number of children being looked after or cared for under the crèche supplement scheme prior to the imposition of the cut and what he expects the new figure to be? It seems to me that with the new situation we will still have quite a number of restrictions in the operation of the emergency crèche supplement, especially when dealing with children of many low-income families.

The Minister was at one time the Minister for Education. Studies have shown that early education is most important. If there is a void or a need in that area, it is wrong to remove all the supports and put nothing in their place. It may be that the Minister's predecessor was trying to force the hand of other Departments whose remit it should have been to provide the supports, but to remove all the supports and put nothing back denies children of low-income families the chance of early educational opportunities which are crucial to them. Doing so also prevents parents from taking up opportunities for work or training.

Some crèches are under pressure and I understand that some may have closed down as a result of the changed situation. I have no figures in this area but perhaps the Minister can supply them. There are other community-based services established or operating on the basis of crèches running as an essential service for children and parents. We must be very flexible in this area and not push people over a cliff, so to speak, but ease them into the situation and remove a service only when it is being supplied by some other agency, which should have provided it in the first place. This is one of the issues which has caused most hardship in this area and led to most representations.

Chairman

I agree with Deputy Stanton. I was assured that the Department of Justice, Equality and Law Reform would fill the void. I am on the sub-committee of the National Economic and Social Forum which deals with the pre-school area. The Minister or his officials, or some representatives, should make submissions to that forum. We have already had representations from the Departments of Justice, Equality and Law Reform, and Education and Science, and obviously the over-reaching arm of the Department of Finance will be stuck in there somewhere.

All these matters should be looked after by one agency. The issue is falling between two stools and the Minister is left at the "pick me up" stage, so to speak. The Minister's Department is the first port of call as it has responsibility for the community welfare system. With regard to community crèches in particular, the depth of knowledge which the Department has makes it the agency most suitable to administer the scheme. The Department already has a great deal of expertise in the area, along with evaluation procedures for those applying. That is why last year we were kicking up a shindig, as Deputy Stanton says. The Minister is trying to ameliorate the situation as best he can, or "ease" people into the new system, as he says. That is one good thing about him. We will not tire of him because he seems to have a different word every day, with good adjectival descriptions.

We are all trying to move to the headland, so to speak, though we may take different routes. It is important that matters should not fall between two stools, particularly when they relate to people in need. As a teacher, Deputy Stanton has a particular interest in ensuring the earliest intervention. The benefit comes later, though not in the Minister's Department. Indeed it may add costs to that Department because children will stay in school longer. It is a noble aspiration of all of us that people should not drop out of school. The earlier the intervention, the less likelihood there is of dropping out. That is why we have been concerned about this matter and have kicked up a row. I know the Minister has tried to ameliorate the situation but it may be that the best way forward is to send a submission to the sub-committee of the National Economic and Social Forum and see how matters might evolve.

Mr. Brennan

I thank the chairman for the suggestion and I will consider it. He has hit the nail on the head in his analysis of the different Departments involved. The Department of Education and Science runs an early-start pre-school programme while the Department of Justice, Equality and Law Reform runs an equal opportunities child care programme. My own Department is involved too in a sort of "pick me up" role as it has been described. The health boards are also involved. The area needs a joined-up government approach in order to find a solution.

Deputy Stanton asked me for some numbers. The number of crèche supplement payments at the end of 2003 was 1,793. At April 2004 the number stood at 1,679 and the current number stands at 202. The amount of money I have restored is approximately the same as the original cost of the scheme. I am putting €2.3 million into it in 2005, and I believe that was the approximate cost of the scheme in 2004.

Mr. Stanton

Approximately 1,400 children were able to avail of the service prior to the cut and cannot now do so.

Mr. Brennan

It is worth pointing out that most of the problems in the area arose not so much from this particular crèche supplement but from the shortfall in the health board funding which was an important factor in this area too. It is difficult to ascribe the change solely to these numbers since the shortfall referred to was a second contributing factor.

It is not possible to supply the numbers which will be there for 2005 but I expect them to increase substantially.

Mr. S. Ryan

Does the Minister feel that in the context of the amendments the Minister has made, the figure will increase from 202 to 1,200 or whatever?

Mr. Brennan

I am not sure. It is a demand-led situation.

Mr. S. Ryan

What were the numbers for previous years?

Mr. Brennan

Some of the individuals involved will have moved on and made other arrangements so the same people may not be around. The figure of 202 will certainly grow because we have provided €2.3 million and laid down some criteria. I am anxious to ensure we stick with the original objective which was to ensure that vulnerable families will continue to have access to crèche supports, for example, in cases where parents have appointments or other commitments. That is the objective from my Department's point of view. I have to work with the Departments of Health and Children, Justice, Equality and Law Reform and Education and Science in order to consider the broader picture regarding the funding of community crèches in general. In a sense I am trying to keep the areas somewhat separate because I am responsible for income supplement, as it were, where necessary. My involvement in this area relates to income support rather the funding of community crèches. I know the difference is lost on individuals and that they do not care where the supplement comes from as long as it turns up, but I have to be conscious of the distinction.

I am satisfied that the changes I have made, at a cost almost identical to what was there before, will restore the situation in an arguably more structured way. It can grow, but in a steady fashion under the original objective of it being necessary for vulnerable families, as opposed to taking legs as the commencement of a nationwide system of community crèches, which is altogether a separate issue.

Mr. S. Ryan

Is that vulnerable families in specific locations?

Mr. Brennan

No.

Mr. S. Ryan

Is it right across the country?

Mr. Brennan

It refers to anywhere. I am advised that three health boards never had schemes.

Mr. Stanton

It would still be more restrictive than the original scheme before the imposition of the cutback. I infer from what the Minister says that it will be administered more or less by the book, whereas the scheme developed to meet existing needs in the community. Very vulnerable families were able to get this supplement, not simply for the dire emergencies that the Minister mentions but because the need existed. A small child cannot now avail of the crèche because of a restriction imposed regarding the need. The need existed and was being met, and until that need was being met by another agency, it was not right for the Department to pull away from it.

Mr. Brennan

I am satisfied the changes I have made will ensure that vulnerable families can continue to access crèche supports. No one would wish us to get into something much larger in this Department so that, after a few years, we ended up running hundreds of community crèches around the country. That is not a policy that I wish to pursue. I want to ensure that vulnerable families continue to have access to crèche support. I am satisfied that funding will be approximately the same in 2005. I have restored it to the previous level.

Amendment, by leave, withdrawn.

Amendment No. 12 not moved.

Mr. Stanton

I move amendment No. 13:

In page 3, before section 2, to insert the following new section:

"2.—The Minister shall, as soon as may be after the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on the impact of the discontinuation of the diet supplement.".

Mr. Brennan

As the Deputy knows, diet supplements are provided through the SWA scheme. I provided €2 million towards improvements in the scheme in 2005. That is a larger figure than in 2004. Improvements in the diet supplement scheme will be introduced at the earliest possible date following the consideration of a report from the Irish Nutrition and Dietetic Institute.

I understand that in the scheme, with which Deputies may in some ways be more familiar than I, having dealt with it on behalf of constituents, a formula is applied that decides what the diet supplement should be. It is fairly complicated, concerning one's dietary needs, with ratios and percentages applied. The Irish Nutrition and Dietetic Institute has now examined the situation and is coming up with a more modern definition of dietary needs. I have increased funding above the level before the 2004 changes to ensure the diet supplement is in place and that people can get it, but with a more modern definition than the older, formalistic one, which was ultimately not fair to anyone. That is the current position.

We have put back more funding than was there. The diet supplement will continue to be paid, under a new formula supplied by the Irish Nutrition and Dietetic Institute, which is to establish what constitutes a standard, healthy, nutritious diet and how the cost of such a diet relates to the current rate of social welfare payments. That study has examined the special diets currently prescribed in legislation which attract assistance in the form of a diet supplement. I am fully satisfied that we have made a real change, with more funds and a more modern formula under the auspices of the institute.

Mr. Stanton

I thank the Minister and welcome the movement on this. My only question is whether the Minister has any idea when the new diet supplement scheme will come into force. What is the earliest possible date? Did the Minister say the institute had completed its studies, or is it about to start? May people currently on the existing diet supplement have to reapply for the new one?

Mr. Brennan

The draft report of the study was received by the Department recently, and we continue to study it and use it as a basis for the scheme. A person in receipt of a diet supplement before the introduction of the new regulations will continue to receive the current rate of supplement until such time as there is a change in his or her circumstances that would warrant a review. Those on the supplement currently will not be disturbed, but new applicants will come under the new scheme.

Amendment, by leave, withdrawn.

Section 2 agreed to.

NEW SECTIONS.

Chairman

Amendment No. 19 is the last in this area. Amendments Nos. 11, 13 and 19 were grouped together.

Mr. Stanton

The Minister has explained that fairly well in the House already, so I need not return to it.

Amendments Nos. 14 to 19, inclusive, not moved.

Section 3 agreed to.

NEW SECTIONS.

Mr. Stanton

I move amendment No. 20:

In page 4, before section 4, to insert the following new section:

"4.—The Minister shall, as soon as may be, after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the operation of the Family Income Supplement.".

This was discussed at Question Time and yesterday. There is an issue with the operation of family income supplement. The Minister came forward yesterday with a very interesting proposal, when he said he was considering amalgamating several schemes, including clothing and footwear, income supplement and some others. Currently, if one receives FIS, one has it for 12 months. The important thing is that we ensure that, whatever changes the Minister might consider introducing, people do not end up in a worse position.

The big issue that many Deputies have with this scheme is that many people simply do not know about it. The take-up appears to be far below what it should be. Recently a man in dire straits came to my office. He was really under serious financial pressure, with four small children at home and very low wages. He did not know that he was entitled to this or that it existed. Other colleagues can quote similar examples of people simply not knowing it exists. There must be some way of ensuring a clear method of informing people regularly that this exists and that, if one's income is below a certain level, one may apply for it. People simply do not seem to know about it. We are looking at the operation of family income supplement. Yesterday the Minister said he would at some stage bring forward proposals to amalgamate the number of schemes etc. I know he does not want to include it in the legislation, but family income supplement is important as it makes a big difference.

Will the Minister explain the figure of 60%? If one has a certain number of children there is a specific level of payment, but if the income is below that the Department gives 60% of the difference. It seems a cumbersome method and I do not know where it came from originally or from when it dates. That perhaps is one of the reasons people do not apply for it because it is difficult to get one's head around it. I welcome the increase provided for by the Minister. Perhaps he can explain, however, where the 60% came from, why it is there and whether he has any plans to simplify it.

Mr. S. Ryan

In the context of this amendment on family income supplement, there is a category of people which is currently being caught. For example, I raised with the previous Minister for Social and Family Affairs, Deputy Coughlan, the position of women on deserted wife's benefit who were moved onto a one-parent family payment. At this stage they should have been in receipt of deserted wife's benefit, which was not means tested at the time. Once a woman was on deserted wife's benefit she continued to get the payment, irrespective of her income. They were taken off that and moved on to the one-parent family payment. There was a considerable amount of back-money due to the women who were affected, which they secured. Then an evaluation took place within the Department and it was established that people on one-parent family payments who were being paid accordingly, were over the limit because they were working and should not have been paid in the first instance.

It has come to my attention than many of these people were removed from the one-parent family scheme under the last legislation to be introduced, because they were over the limit. However, many of them are entitled to family income supplement. Perhaps when this is being reviewed as regards a category of people found to be over the limit, when the Department is informing them they are no longer eligible for the one-parent family payment, it should examine the possibility of paying them family income supplement.

I welcome the increase that was included in the Bill and I believe, as Deputy Stanton said, it is a question of getting the message across to people. There may be a number of people who should be included in this scheme who are losing out. I realise that over the years the Department has done much to highlight this matter, but it is something that may have to be re-examined.

Mr. Stanton

I raised the point before that people on community employment schemes are on very low incomes. Technically they are working, but they are not eligible for family income supplement. Will the Minister examine this area? A small number of people are in this category who are vulnerable and who could do with the help. I cannot understand why this cannot be dealt with.

Mr. S. Ryan

The figure is about 20,000.

Mr. Brennan

On the last point raised by Deputy Stanton, the CES is obviously State-funded.

Mr. Stanton

Yes, but there are still people who find themselves in this situation. Many of them would qualify for FIS if they were allowed——

Mr. Brennan

If they were doing other work.

Mr. Stanton

That is correct. There is an anomaly in this area, which might be looked at, because a need exists.

Mr. Brennan

The issue is whether one State payment should effectively be topping up another, but I see the point the Deputy is making.

Mr. Stanton

Some of these families with children are in great need.

Mr. Brennan

I recognise the point the Deputy is making. The number of families in receipt of family income supplement up to last week was 14,600 and there are approximately 1,500 further applications in hand. That figure was 12,377 the year before. The Deputy will know that I increased the threshold by €39 in the budget, which is quite significant in a full year. This benefits individual families to the tune of approximately €23.40 per week. That brings in an additional 2,600 families who now become eligible for family income supplement because of these changes. That change alone will cost €15.53 million in 2005. On Deputy Stanton's point about communicating with people, the Department has undertaken a number of proactive measures from time to time, as he knows. This includes advising all newly awarded one-parent family payment recipients, as well as all employers annually in PRSI mail shots and examining entitlements in all back-to-work allowance cases. Information on FIS is contained in all child benefit books and may be accessed on the Department's website. However, I will take the Deputy's advice and we will keep up the pressure as regards informing people of their rights. I am conscious of this within the Department. I realise the Deputy referred amusingly to one of my advertisements yesterday, but we are trying through advertising, mailshots etc. to target people in this way.

Chairman

The minister is lucky he was not here when Deputy Ring was in full flow on this issue.

Mr. Brennan

We have a proactive system in place for trying to inform people of their rights. The 60% referred to is a straight percentage of the difference between the income and the threshold. The short answer is that it is a formula to ensure we do not end up subsidising employers. If the percentage was 100%, that would be to effectively subsidise employers, so it is pitched at a level that avoids moving into an area which would cast it in the role of such a subsidy, while being of help to the recipient. I do not believe anyone is wedded to the figure, as such, but it strives to be a balance between the two requirements. That is where it came from.

I can confirm for Deputy Seán Ryan that every effort is being made to bring people's rights to their attention. As regards the situation he described about deserted wives moving onto one-parent family allowances, I am assured nobody has lost out in this transition and that his suggestion about bringing it more to people's attention through mailshots and so on is something we are actively doing. FIS is payable as an employment support, as the Deputy knows. As such I am unclear how it fits in with the deserted wife's payment, unless the single parents concerned are employed.

Mr. S. Ryan

They were in employment.

Mr. Brennan

Were they working?

Mr. S. Ryan

They were working. That is the issue.

Mr. Brennan

I am assured that no one has lost out.

Mr. Callanan

I have always considered family income supplement to be a good idea, for people to go to work rather than remain on social welfare. It meant that if one was working in a low-paid job, family income supplement would help to boost one's income. It is a good scheme.

Mr. Stanton

Will the minister clarify how many families will become eligible as a result of the changes he as made?

Mr. Brennan

Some 2,600.

Mr. Stanton

I did not get the figure exactly. He estimated that 2,600 extra families will become eligible as a result of the changes he has made. How did the Minister estimate that figure? What statistics did he use?

Mr. Brennan

The figure is based on income figures that we get from the Revenue Commissioners.

Amendment, by leave, withdrawn.

Mr. Stanton

I move amendment No. 21:

In page 4, before section 4, to insert the following new section:

"The Minister shall, as soon as may be, after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the impact of the increasing of the Back to Education Allowance qualifying period from 6 months to 15 months.".

Judging by what the Minister said yesterday in the Dáil, even he is not happy with the current situation. Deputy Wall made a strong case for this allowance to be brought back to six months. I have come across a number of cases where people genuinely wanted to benefit from this in order to better themselves by going back to college. They were hoping to avail of this allowance but they could not do so.

Fifteen months is a very long time, as is 12 months. The third level cycle is six to eight months, depending on where one attends. I understand that this cannot change until September because that is when the education cycle starts. Someone will have to be unemployed for 12 months before last September. Anyone who loses a job now and is still out of work next September will still not be able to avail of this provision. That person will then have to wait until the following year. That is why the six-month stipulation is important. One can only start many of these third level courses in September. The six-month period of unemployment made it that much easier for people, but the 15-month period is ridiculous. The Minister may have some figures which show the impact the change has had, but I ask him to have a look at this again and bring it back to six months. It would make a big difference to people. The number of people involved is small.

Chairman

I agree with what the Deputy has said. Deputy Wall specifically asked me to make sure that the issue was raised. This is something about which I argued myself, but Deputy Wall has a particular interest in it. We understand the position the Minister is in for many of the issues here today. He has put forward very cogent arguments on why he has gone down different routes on different issues. While we may not like them, we have to understand them and know from where he is coming. However, I appeal to him on this issue.

The word "abuse" was used to describe this scheme. I could not see how it could be abused. If there were a few individuals who abused the scheme, they deserved to be rooted out, rather than have the scheme swept away. It had a very effective focus and was useful. There is nothing better than the Minister's own Department for ensuring that abuses do not take place.

The example of a hard case always makes the point. I know of a girl who had completed the first year of a degree, she met up with a boy and when a baby arrived, she had 11 months of the qualifying period completed. There are always hard cases. If the Minister brought the period down to six months, I would not be surprised if next time around, someone looked for four months. Sometimes I go into a spin about things but there are substantial benefits to be reaped from this. It would facilitate the flow into education, which feeds into economic activity at the output level.

Mr. S. Ryan

I would like the Minister to outline the justification for the case that was made for removing this provision last year. His predecessor spoke about abuse of the system. No facts have been given to me to show how the degree of abuse would necessitate removing the scheme. I met people in my clinic who have a child and who were trying to make a break and improve their position in life. They broke down as they were so distressed. The opportunity available for them and the objective that they had for themselves and their child was taken away from them. I do not know how amendments have fared on this committee in the past. Can the Minister put forward an amendment to the Bill to bring this on board? What would be the cost of reducing that qualifying period to what it was? It has worked well and that is what we should be talking about.

Chairman

We want to change the period from 12 months back to six months.

Mr. S. Ryan

Even in the context of cost, I am sure there will be sufficient buoyancy within the Minister's Department to cover this measure.

Mr. Stanton

As the Chairman pointed out, I am a former teacher and worked as a career guidance counsellor. At certain periods in the 1980s and 1990s, youngsters left school and did not go on to third level. People quite often go into jobs and when they become a bit more mature, they feel that they should have gone to college. This scheme provided the vehicle whereby they could do that, especially if they lost their job. It was an incentive and an encouragement for them.

We often speak of upskilling the labour force and giving people more qualifications, which we need. It would be far better to spend a few bob on this scheme to encourage people back into college to better themselves. They could then become productive members of society, rather than staying on benefit or in low jobs, especially since they often have the ability. I know of a person who wants to go back to study engineering. He was depending on this scheme to do so. He sent me an e-mail the other day asking if he could go back in September. As the Minister has kept the period at 12 months, he probably will not be able to start next September. This is why 12 months is too long and the period has to be shorter.

The Minister may be able to tell us how many people are involved. We need to be able to encourage people and this was a great vehicle for doing that.

Chairman

This is the first time we have had a real strop with the Minister.

Mr. S. Ryan

He could really make a name for himself.

Mr. Brennan

I heard that at Dublin Airport too.

There are 7,650 participants in the scheme for the 2003-04 academic year. The number of participants availing of the back to education allowance has grown since the scheme was first introduced in September 1990, when just 67 students availed of it. The change from 15 months to 12 months is at a cost of €2.4 million in a full year. As Deputies know, unemployment is currently relatively low at just over 4%, which must be taken into account in considering this scheme. Persons availing of the second level option can continue to do so after six months in receipt of a social welfare payment. Apart from coming back from 15 months to 12, I also tried to address this issue by increasing the education allowance from €254 to €400, although this is now targeting a slightly different area.

The original policy reason for the change was that there was evidence a significant number of applicants were claiming unemployment benefit or unemployment assistance for just over six months prior to the commencement of the academic year. This indicated to the Department that the scheme was being used by some, including some from abroad, as a source of funding for third level education which they had always intended to undertake in any case. This conflicted with the primary purpose of the back to education allowance which is to promote the employability of persons at risk of long-term unemployment.

This brings us back to another theme to which reference was made earlier, namely, when one picks a figure such as 60%, or any deadline, it is an attempt to strike a balance between the original purpose of the scheme and the use of the scheme by participants. We could call this "use" abuse but, if people are entitled to act in this way under the regulations, it is more a form of use. However, the evidence that significant numbers were spending just over six months on unemployment benefit or unemployment assistance led to the conclusion that the scheme was being used as a means of funding education instead of helping the long-term unemployed get back to education.

I understand the point made by Deputy Stanton in regard to the academic year cycle, in that it is a moving conveyor belt and if one cannot get on at a certain period, one has to go around again. Deputy Wall also made a strong plea in this regard and I undertook in the House to keep this matter under review. The cost of reducing the period to six months would be approximately €7.6 million in 2005 and €13 million in 2006, which makes it a €13 million decision in that sense. I will try to strike a balance by moving from 15 months to 12 to in some way serve the idea that there was some over-use of the scheme for the wrong reasons while, at the same time, reducing the effect of the change.

I will keep the matter under review and will take account of the points made by Deputies. I will reconsider the costings involved to make sure we are not double-counting because the cost of the education allowance is included in the figure of €2.4 million. I am conscious of the strong feelings of the committee and the Dáil. However, I know neither the committee nor the Dáil would want a situation where people who were unemployed for short periods would succeed in a plan to get an allowance that took one through third level education, and there was some evidence that this was the case. Nonetheless, I will reconsider the matter.

Mr. Stanton

How many non-nationals availed of the scheme, as this led to the decision to curtail it by extending the qualifying period to 15 months? It would be interesting if the Minister could present his evidence in this regard to the committee. He stated that for 2003-04, some 7,650 persons were in the scheme. How many of those gave rise for concern? It is difficult to ascertain the impact of this because students who began in 2003-04 would still be availing of the scheme today. Therefore, we do not know what the impact will be in the future.

There is also a contradiction in what the Minister stated in that while there is now almost full employment, there is very significant take-up of a scheme such as this. Those in need must be the ones availing of the scheme because those in employment cannot do so. The number available to take up the scheme is quite small.

Mr. Brennan

It was originally intended to tackle long-term unemployment.

Mr. Stanton

That is correct.

Mr. Brennan

The general definition used by the Central Statistics Office for long-term unemployment is that exceeding 12 months, which is an internationally accepted definition. This also informed our decision to choose a 12-month period. The scheme was not intended for the short-term unemployed to use as a gateway to third level education.

Mr. Stanton

There is a contradiction in that at a time of high unemployment in the 1990s the qualifying period was six months. Now, when there is low unemployment, the Minister is extending the qualifying period.

Mr. Brennan

A substantial number are still on the long-term unemployment list.

Mr. Stanton

Of course.

Mr. Brennan

While I am not sure of the exact figure, it is certainly well above 7,600.

Chairman

I suggest the Minister considers this for Report Stage and examines whether the committee could make a positive contribution. Deputy Stanton made the point that reducing the qualifying period to nine months would help persons fit more easily into the student cycle. If one began in September, one would be out the following June or July and one would be ready to return to the cycle. This change would cost approximately €2.5 million. I am sure something can be found in the lucky bag. We appeal to the Minister to reduce the period to nine months to deal with the cycle issue Deputy Stanton so well elucidated.

Mr. Brennan

I know the Chairman is trying to be helpful and I will reconsider the matter. The budget arithmetic, as the Chairman will appreciate, is locked in. I do not know how much scope I have to move millions of euro around.

Chairman

I appreciate that. However, I suspect, like previous Ministers, the Minister will tell us next June or September that significant savings have been unearthed by his Department as a result of investigations.

Mr. Brennan

Nine months is much more sensible than six. I understand the problem with the six-month period. I will reconsider the matter although I do not know what scope I have to make changes this year.

Mr. Stanton

I am happy with that. The Minister has a problem with six months while the Opposition has a problem with 12 months. We may meet in the middle.

Mr. Carty

It will be a good bargain.

Chairman

Coming from near Ballinasloe, the Minister knows how to bargain. He will do his best.

Amendment, by leave, withdrawn.

Mr. Stanton

I move amendment No. 22:

In page 4, before section 4, to insert the following new section:

"4.—The Minister shall, as soon as may be, after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the impact of the discontinuation of the transitional half rate payment for lone parents where a recipient of the One Parent Family Payment takes up employment where earnings are in excess of the upper threshold of €239 per week.".

The amendment speaks for itself. Therefore, to save time, I will let the Minister contribute.

Chairman

The amendment should read €293 per week.

Mr. Stanton

That is correct. It must be a typo.

Chairman

The threshold has not been changed since 1997 as a result of which many people feel excluded. The Minister might commission a study within his Department to determine the impact of adjusting thresholds to reflect inflation and the consumer price index. Perhaps departmental officials already undertake such an exercise at budget time. It would be interesting to examine this. However, considering that we are scraping the pot to find €2 million or €3 million to reduce the €12 million figure to €9 million, I will not hold my breath.

One Parent Exchange and Network, OPEN, a delegation from which has met the Minister, CORI and other organisations have pointed out that this payment has remained at €293 for seven years. It serves to disqualify people and acts almost as a poverty trap in that it does not facilitate the transition from welfare to work. The mission statement of the Department is based on moving as many people as possible into work so that they contribute to the social insurance fund and do not have to claim benefits. The restriction on this scheme is seen as a barrier to that transition and many organisations involved in this area believe it is time to revisit it. This is the general thrust of our argument, as elaborated by Deputy Stanton.

Mr. Stanton

I understand that the number involved in the scheme is quite small and that it would not cost much to return to the original situation. I welcome, however, that the Minister is reinstating the payment for a six-month period.

Mr. Brennan

Prior to 2004, recipients continued to receive 50% of benefit under the one-parent family transitional half-rate payment for 12 months after returning to work. This provision was dropped entirely last year and I have now restored six months of it. This is an appropriate period which strikes a balance between the two concerns. At 11%, Ireland has one of the highest percentages of lone-parent families in the EU. A relatively small proportion of such parents are in employment as compared to the situation in other countries. The six-month period goes a substantial way to facilitate single parents in returning to work. Furthermore, a lone parent can earn up to €293 per week, or almost €15,000 per year, and still retain entitlement to some level of payment. Those earning approximately half of that sum will receive the maximum rate of benefit.

For now, I am satisfied that I have responded satisfactorily to the requests to reinstate this allowance. Moving back to six months will allow us to meet this requirement quite well. The nature of employment is now more volatile and vibrant and the six-month period is adequate in this context.

Mr. Stanton

I understand the cut-off level for this benefit equates approximately to the minimum wage.

Mr. Brennan

It is just over the minimum wage.

Mr. Stanton

This provision relates to full-time employment. I accept that the Minister will keep the six-month period of payment under review but, as the Chairman observed, the threshold is an issue that might also be considered.

Mr. Brennan

Recipients of this benefit can also apply for family income supplement.

Amendment, by leave, withdrawn.

Question proposed: "That section 4 stand part of the Bill."

Mr. Stanton

The Minister might at some stage consider the introduction of a cost of disability payment into the provisions of section 4. Such a measure has been discussed in terms of the Disability Bill 2004 and the disability strategy. The cost of living is more expensive for those with a disability because, for example, they may be unable to travel to a major supermarket where food is cheaper or they may have greater heating costs. It is a measure that has been mooted for some time and I take the opportunity to raise it, if I am not out of order.

Chairman

The Deputy is technically out of order but I will allow it as he has remained well within order all day.

Mr. Stanton

I thank the Chairman.

Chairman

I believe Deputy Stanton made the same point in the House yesterday and I am sure the Minister will take note of it. It is an important point and I support the Deputy's observations.

Question put and agreed to.

Sections 5 and 6 agreed to.

SECTION 7.

Mr. Brennan

I move amendment No. 23:

In page 5, subsection (1), line 5, to delete "7.—(1) Section 39(1)(a) of the Principal Act is amended” and substitute the following:

"7.—(1) Sections 39(1)(a) and 41I(1)(a) (inserted by section 11 of the Social Welfare Act 1997) of the Principal Act are amended”.

Under the mid-term review of Sustaining Progress, it was agreed to raise the limit of reckonable weekly earnings referred to in the calculation of maternity benefit to 80% over the life of the agreement. Under the social welfare code, a significant similarity exists in the application and administration of both the maternity benefit and the adoptive benefit schemes and the Department wishes to retain this similarity. Accordingly, this provision, which will come into effect on 1 January 2005, will increase the percentage of reckonable weekly earnings referred to in the calculation of the rate of payment of both maternity benefit and adoptive benefit from 70% to 75%. The cost of this provision in 2005 will be approximately €6.5 million and is expected to benefit some 8,200 people, mainly women. It is a technical amendment.

Amendment agreed to.

Section 7, as amended, agreed to.

Section 8 agreed to.

Amendment No. 24 not moved.

Section 9 agreed to.

Schedules A and B agreed to.

Title agreed to.

Chairman

I thank the Minister and his officials for their attendance. We have had a good discourse in regard to the various issues. I also thank my colleagues for their co-operation on Committee Stage and hope the Minister has taken cognisance of some of the points we have made, especially in regard to the back to education allowance. He is aware that members of the committee try to be as constructive as possible. While we argue our points, we realise the importance of the Minister's role. We hope to see some changes on Report Stage which reflect the positive contributions that members have made.

Mr. S. Ryan

Considering all the changes and improvements the Minister has made in regard to social welfare provisions, and without seeking information that may be for his own purpose, is there any information available other than that already presented which might incorporate all of these improvements? All Deputies would welcome such information, particularly members of this committee.

Mr. Brennan

I will take note of that. It is not like me to be shy.