SELECT COMMITTEE ON SOCIAL AND FAMILY AFFAIRS díospóireacht -
Tuesday, 22 Feb 2005

Social Welfare and Pensions Bill 2005: Committee Stage.

Chairman

This meeting has been convened for the purpose of considering the Social Welfare and Pensions Bill 2005. I welcome the Minister for Social and Family Affairs, Deputy Brennan, and his officials. We look forward to a productive meeting.

I propose we consider the Bill until 7.30 p.m., the maximum time available to us today. As members may have had previous discussions with the Minister, if they stick to the point rather than make long speeches, we may get better value from our deliberations. Is it agreed that if we do not conclude our consideration of the Bill by7.30 p.m., we will meet again tomorrow at4 p.m.? Agreed.

It is proposed to group the following amendments for the purpose of debate: amendments Nos. 8 and 10 and amendments Nos. 13 and 14. All other amendments will be discussed individually. Is that agreed? Agreed. Members will note a number of amendments have been ruled out of order.

NEW SECTIONS.

Mr. S. Ryan

I move amendment No. 1:

In page 5, before section 1, to insert the following new section:

1.—The Minister shall within 6 months from the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the earnings disregards applicable to schemes operated under the Social Welfare Acts and the impact of transition to work on the recipients of secondary benefits attaching to such schemes.".

The amendment highlights the need to look again at the impact of the earnings disregards. We are trying to create a system which will assist as far as is possible the vast majority of recipients of social welfare benefits to return to the work environment. Sufficient consideration has not been given to the earnings disregards in respect of those in low paid employment and eligible to receive social welfare benefits. When one compares the earning capacity of a person in low paid work with what he or she would get in social welfare and secondary benefits, ones sees that sufficient consideration has not been given to the income disregard in terms of eligibility for secondary benefits. One of the problems in trying to attract people into the working environment, particularly those with children, is the prohibitive cost of child care, an instance of gazumping in recent years. When people weigh up what they would earn, particularly if they exceed the income disregard for social welfare secondary benefits, and the cost of child care, it makes it extremely difficult for those with low educational attainment to try to get back into the workforce. I do not think the Department has paid sufficient attention to the impact of income disregards as a disincentive for those on social welfare to re-enter the workforce. The income disregard should be looked at in an entirely different manner in order that it is responsive to the needs of those in the workforce, making it attractive for people to come off social welfare payments. I look forward to hearing the Minister comment on this issue.

Mr. Stanton

I support the amendment. The research would be very useful to the Minister, the Department, the committee and the public. Has research been carried out on the earnings disregards applicable to the schemes and on the impact of transition to work on the recipients of secondary benefits attaching to such schemes? When were these issues last considered in detail? The Minister would have the support of members if he were to commission research on them.

The process for determining eligibility for secondary benefits in the transition to the workforce is extremely complicated. Many do not understand the system. I recall hearing the Minister say this issue needed to be simplified in order that it would be easier to understand how eligibility was determined. People may not apply for what is available.

Chairman

A significant proportion of social protection payments is means-tested. Prior to the enlargement of the European Union, only 10% of social protection payments in the 15 member states were means-tested while social insurance payments were universal. In Ireland means-testing is carried out in 28% of social protection payment schemes, almost three times the level in our EU counterparts. The means test varies from one scheme to another. As Deputy Stanton stated, complex means-testing leads to a lower take-up, particularly by those most in need. As my colleagues know, some of the schemes are so complex one would need a third level degree to figure them out. They must be simplified and easy to understand. The argument is made that means-testing is an efficient way of targeting resources at those most in need but the complexity of the means test leads to a lower take-up. Allied to this point, our failure to raise to realistic levels the income limits for allowances such as the back to school clothing and footwear allowance means that more and more are pushed out from qualifying for the schemes. I know the Minister will have a reply that will put this issue back into our court.

The Minister will realise that the amendment was framed in a way that would not impose a charge on the Exchequer. One of the beauties of being a Minister is that he can hurl that back straight away. A number of the amendments tabled by Deputies Ryan and Stanton have a similar thrust in that they ask if the Minister will conduct research in the various areas. I hope he will be in a position to examine the restrictive nature of means-testing, in particular, the income disregard which has not kept pace with living standards and leads to a higher level of exclusion from schemes, as opposed to opening them up.

Minister for Social and Family Affairs (Mr. Brennan)

I thank the Chairman and members of the committee for their consideration of the Bill on Committee Stage. I would like to be able to cast my vote in favour of the Chairman later this evening but, as a former Government Chief Whip, that might be a little awkward.

Chairman

I am well aware of the Minister's position.

Mr. Brennan

Before I deal with the specifics of amendment No. 1, I value talking to the committee about these issues because virtually nowhere else in the gambit of society's activity do Deputies come in touch with people's lives other than through the raising of issues about social welfare at their clinics. In so far as there are any experts on how social welfare legislation affects people, all Deputies know from their weekly clinics when the letters come pouring in about the impact of being one stamp short, or €2 over the income disregard. They then write to the Department of Social and Family Affairs and hope somebody will sort the matter out, while at the same time thinking the system should be simplified.

I am genuinely interested in improving the social welfare code; in modernising, simplifying and reforming it. While payments are very important, they are not the only issue. There are serious policy issues behind all the schemes. The Chairman wrote very eloquently about social issues and social welfare payments in The Irish Times recently. I had the opportunity to read the articles in the past couple of days.

I am acutely aware of the need for reform in this area, taking account of the broader social issues. Payments must encourage society in a certain direction. They must not be seen as a conscience payment from the State or a hand-out. That is not the reason for which they are designed but to mould and develop society in a particular direction and to improve people's quality of life. I know nobody here disagrees with that statement.

As I stated on Second Stage, this area accounts for one third of all Government spending. The figure for this year is €12.2 billion compared to half that amount five or six years ago. Substantial resources are being devoted to this area — rightly so — though more is required.

The Chairman dealt with procedural matters. Most of the amendments with which we will deal in the next few hours are pro forma in that they call on me to lay a report on a particular item before the Dáil. The issue relates to the authority of the committee in imposing expenditure on the Exchequer. While I reject the amendments as a device, I am not opposed to reporting to the Dáil in six months time on any matter. The information could be elicited from my Department by way of a parliamentary question or Adjournment debate. I am aware that the Deputies tabled the amendments in the expectation that I would not accept them. I reject them in the same spirit as they facilitate a debate on these important issues.

On income disregards, a number of measures have recently been taken. I share the thinking behind the amendment which seeks to ensure we have a more employment friendly social welfare system in place and that we remove all disincentives to the taking up of employment. Deputies will be aware that in the case of the one-parent family payment, the first €146.50 of weekly earnings plus 50% of the balance to €293 are disregarded. Budget 2005 also provided for a transitional 50% payment for six months after the €293 weekly threshold is exceeded. I proposed this change to the Minister for Finance.

In regard to unemployment assistance, 40% of net earnings from part-time work is disregarded while for disability allowance, the first €120 of earnings from rehabilitative employment is disregarded. In addition, there is a retention of rent and mortgage interest supplements. In other words, secondary benefits are retained on a tapered basis in certain circumstances. There is tapered withdrawal of adult and child dependant increases as the spouse's or partner's earnings from employment increase. The current system provides for a gradual withdrawal of social security payments. Arguably, we can do a great deal more and I look forward to examining how this can be done.

The Chairman has argued many times for a substantial income disregard for lone parents, an issue with which we will deal next. We have all learned that the sudden withdrawal of social security payments is wrong. Such payments must be withdrawn gradually to encourage people in a certain direction, in particular, a return to employment or education. It is worth reminding members that family income supplement is available to low income families. This payment is designed to provide income support for employees with families and low earnings, thereby preserving the incentive to take up or remain in employment in preference to claiming social welfare payments. For example, a family with one child and net earnings up to €446 can qualify for a minimum family income supplement of €20 while the figure for a family with four children is €522. I will not read out the entire list.

We have introduced various income disregards in respect of insurable employment on a scheme by scheme basis. Approximately ten or 12 are involved, including carer's allowance, one parent family allowance, old age contributory and non-contributory allowance, farm assist and so on. For example, in the context of carer's allowance, the first €500 of joint weekly earnings is disregarded if the carer is married. The first €220 of disability allowance is disregarded. I have outlined the position regarding the one-parent family allowance.

It is important to note, in the context of the amendment, that schemes are designed to ease people off welfare payments into employment or education. We design the flow of funds to make this attractive. Much of what has been introduced was introduced by my predecessor. There is, however, considerable scope to do more.

Mr. S. Ryan

I had expected some of the amendments would be grouped for the purpose of discussion. I listened to what the Minister had to say on the amendment. However, from the information he has given, it is obvious there are different procedures and policies for different schemes and that trying to unify them would be difficult. I will withdraw my amendment.

Mr. Stanton

I appreciate what the Minister said but the only way we can have a debate is by using this format. Were we to table the amendments in another form we would be told they were out of order and our discussions on the Bill would be over before we began. Unless the procedure is changed, we are stuck with this format. We are in a catch-22 in that the Minister must reject the amendments because of the manner in which they are tabled.

The Minister stated payments were designed to mould and direct society in a particular direction. I contend they are in place, in the main, to support those who need support. Our first priority should be to focus on those who need help and support to survive. The social engineering about which the Minister speaks should come second. The payments are available to support people to survive and subsist. It is important they are flexible and can be obtained when needed. In that regard, the role of community welfare officers is crucially important. I would be cautious about designing social engineering in order to push society in a particular direction. We must keep a close eye on those in need of support to survive.

The Minister also referred to family income supplement, an issue I have raised before, although I am not sure whether the Minister has had a chance to look at it. Currently, a person participating in a FÁS scheme is not eligible for family income supplement whereas he or she would be if he or she was in receipt of a similar payment from employment. Many of those participating in FÁS schemes are living on very low incomes. Perhaps the Minister will consider changing the eligibility criteria to allow those participating in FÁS schemes to avail of family income supplement in order to raise their incomes to what we all agree is the minimum required to enable them to survive. The number involved is small. I cannot understand the reason this change has not been made. I am aware that participants in a FÁS scheme are in receipt of a State payment but our priority must be to assist those who are suffering. I have met many who are not eligible for family income supplement, although on low incomes while participating in FÁS schemes. Perhaps the Minister will take another look at this matter given that the number involved is small.

Mr. Brennan

I agree that the primary function of social security is to provide income support. My Department's number one priority is to support incomes. However, I am anxious to ensure that in so doing we do not imprison people in a way which will ensure their reliance on such support.

Mr. Stanton

Yes.

Mr. Brennan

I am not in favour of social engineering but of insisting that State payments, rather than entrapping, bring people freedom, quality of life, options and choice. We can reform the system without interfering in any way with people's incomes. That is our primary concern.

I will examine the Deputy's second point. I am told that as FÁS is a community employment initiative targeted at creating employment, adding family income supplement to the FÁS rate would not make much sense because the supplement is designed to make up for low pay. However, I see the Deputy's point. I will look at the issue before Report Stage. I am not sure of the financial implications which I must check for the Deputy.

Amendment, by leave, withdrawn.

Mr. S. Ryan

I move amendment No. 2:

In page 5, 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 impact of the social welfare system on one parent families and on proposals to remove the restriction on formation of a family unit which presently applies to recipients of such payments, and to alleviate the requirement that income disregard be assessed by reference to any particular week rather than averaged over a year or other period.

One parent families face a significantly higher risk and rate of poverty than their two parent counterparts. That is a fact of life. When one looks at the analysis of welfare, dependancy and poverty, it clearly shows that one parent families are most prone to poverty. I said we were trying to reach a position where people could return to education and employment but one of the major inhibiting factors is the cost of child care.

The Minister referred to the position of people at work, where the first €146.50 of weekly earnings was disregarded, as was half the remainder of one's earnings up to €293 per week. He also referred to an amendment he had introduced this year providing for a transitional payment for a one parent family for six months where a recipient's weekly income exceeded €293.

In reality, the figures about which we are talking were introduced in 1993. Correct me if I am wrong but these figures have been in place since 1993. When one compares the situation that obtained in 1993 to the present, how in God's name can we attract lone parents into the workforce given these major problems? How will we deal with the issue of child care? One possible way is to include a child care element in the income disregard. I know it is a complex issue but it must be dealt with.

I do not wish to rehash the Second Stage debate. However, the debate that took place in recent weeks highlighted some difficulties raised in recent years by various groups working with lone parents which have seen a need to modify and change schemes to allow lone parents to return to education and move into employment. Many of these issues, although in the public domain, have not been addressed. I welcome the commitment given by the Minister to have a broadly based debate and discussion on how we can help lone parents return to education and employment and how we can support them in the broadest possible sense.

The Chairman referred to the issue of the income disregard and will address it in greater detail. Suffice it to say that to alleviate the requirement, the income disregard should be assessed by reference to a particular week rather than the average over one year or other period. This is an important issue that needs to be addressed. None of us has all the answers but we can deal with those working on the ground and draw on the experience of Members on all sides of the House. I hope in the next six months or one year the Minister will be able to bring forward a comprehensive report on how we can deal with this issue, bring a wider dimension to it and give people the opportunity to develop and return to education and employment.

Chairman

I apologise to my colleagues for the disruption but a vote has been called in the Dáil. We will resume immediately after it has been taken.

Sitting suspended at 4.35 p.m. and resumed at 4.55 p.m.

Mr. Stanton

In amendment No. 2 Deputy Ryan is seeking to have the Minister lay before the Houses of the Oireachtas a report on the impact of the social welfare system on one parent families and proposals to remove the restriction on formation of a family unit, a topical issue on which the Minister has commented. We support the measures he will take to help people in that regard.

A review of the circumstances of one parent families was carried out by the NESF for the Department in September 2000. It was an excellent report. Has action been taken on foot of it? I am not sure if the Minister has read it but it comments on supports for one parent families, welfare payments, rent and mortgage supplements and recommends the localisation of the administration of the one parent family structure.

I understand another report was commissioned since 2000 on the supplementary welfare allowance scheme which, as far as I know, has not seen the light of day. Will it be published in order that members may debate it?

Will the Minister find out what reports were commissioned by his predecessors but not published because it would facilitate the debate if all the commissioned research was brought out into the open? I am aware of these two reviews and although an up-to-date report would be useful, we should draw on the published NESF report and the report commissioned by the Department.

Chairman

For many lone parents, taking up work is impossible without a payment for child care. That is a sine qua non because of the earning capacity of lone parents. Deputy Stanton is correct that for those on low wages, the cost of child care would use up all of their earned income and that this would leave a lone parent no better off than if he or she was not working. The introduction of the one parent family payment in 1996 was innovative as it allowed lone parents to work and earn up to €146.50 per week without losing any allowances and to earn up to €293 per week before the entire social welfare payment was lost. However, these thresholds have never been increased with the result that lone parents lose all State payments before they earn enough to cover the extremely high cost of child care.

The Minister has outlined the transitional arrangement whereby a lone parent can receive half the lone parent allowance. This was one of the payments affected by his predecessor's cuts, the "savage 16", and members worked very hard to have it restored. The then Minister did not earn any plaudits for the way she handled the issue.

I agree with Deputy Stanton that the NESF report of 2001 is an excellent review. Ms Camille Loftus's excellent report of 2004, issued only three or four months ago, highlighted the many employment supports, education and training initiatives and employment schemes targeted at the unemployed in general which did not take into account the special needs of one parent families. The point we were making was that evaluating whether a lone parent would gain or lose financially by participating in such schemes was a highly complex exercise. The indications are that there is a lack of information available to lone parents on the social welfare system and that little attempt is being made to explain their rights.

It is time this area was reformed. The need for reform has been raised by members and others, on whom I shall not comment further. I have given an example of what I believe is a flaw in the system. The Minister could redress the problem at a cost of less than €10,000. The gross weekly earnings disregard for lone parents is €146.50, which figure is fixed under Rule 1(F)(a), Part II of the Third Schedule to the Social Welfare (Consolidation) Act 1993. In other words, every week is taken individually.

I recently met a young girl who had been offered a casual job in An Post. Coming from a rural area, the Minister will be aware that people are often offered temporary employment for three or four weeks prior to Christmas or during the summer months when full-time staff take holidays. A person working for approximately ten weeks a year could earn €380 to €400 a week or €4,000 for the ten weeks. If the girl in question had taken up the position, once she moved above the €293 threshold, she would have had her lone parent payment reduced to the transition rate. However, she would not have lost out if her payment of €146.50 had been calculated on a yearly basis, approximately €7,500. She would have gained €3,500 to €4,000. That money would have allowed her to take a holiday or to purchase a computer and so on for her child. It is that scenario that causes angst about the social welfare system. This issue has not been re-examined since 1993. The relevant section is being rigorously interpreted by the Minister's officials who, while applying the law, are aware of the inherent injustice.

The girl in question did not take up the position. Had she done so, she would have had to notify the Department and would have been required to return her lone parent allowance book. It would then have taken at least ten days for it to be returned with the half rate transition payments. When she had completed her term of employment, she would have had to reapply for the allowance at the full rate. The same situation would have arisen had she taken up employment during the summer. That is what I call yo-yo bureaucracy. We must bring this to an end.

The Minister is an accountant. If one thing can be said about accountants, it is that they get to the far end quickly and that they do not like meddling. I do not believe the Minister wants the yo-yo bureaucracy outlined above to continue. The change I have outlined would not cost anything extra. The Department would only need to multiply the weekly amount of €146.50 on a yearly basis and the problem would be resolved. Such a change would assist in easing lone parents back into employment.

The Minister stated he was not interested in social engineering and that the objective of the system was to promote a return to employment. Were he to amend the provision, he would assist many lone parents and send out a positive signal to those wishing to take up casual employment. It would give them a foot on the ladder and set them on their way. I appeal to the Minister and his diligent officials to amend this provision to ensure the payment is calculated on a yearly rather than weekly basis. That would result in a transition to full-time employment with no requirement to take up lone parent allowance.

The Minister has stated he intends to reform this area. This is one issue on which he will not need to bring in consultants. We are offering him our advice free of charge. I hope he will take it on board.

Mr. Brennan

The amendment deals with payments for lone parent families, an issue about which there has been a great deal of debate in recent times. However, we must bear in mind when discussing this section that it also relates to widows, widowers, separated and divorced persons and so on. Entitlement to payment is contingent upon there not being cohabitation. As I pointed out before — we have yet to come up with solutions — the condition can also be an obstacle to a person getting married or otherwise living openly with a partner. The objective of the system is to encourage people to consider taking up employment while at the same time supporting them if they wish to remain in the home.

It is generally accepted that one of the most effective outlets from poverty is employment. That is almost a cliché now but it is true. It is the best route open to lone parents. The main element of the provision is a significant earnings disregard of €146.50, rising to a maximum of €293 per week. This provides an incentive for those involved to become financially independent. By and large, they are young. That is the age profile. The income disregards for any other means-tested scheme are not as generous. This must improve.

While we have achieved some success, we have not achieved the same levels of employment participation by lone parents achieved in other countries, as borne out by reports from the European Union and the OECD. That is a source of concern. In a recent report on this issue the OECD pointed out that the number of lone parents in employment in this country was among the lowest in the OECD. That, too, gives cause for concern but it points to the policy direction in which we must move. The findings may point to the fact that current arrangements are not the most appropriate.

I draw the committee's attention to two processes which will come together in the coming months. Last November the Cabinet committee on social inclusion requested the senior officials group which reports to it to undertake a specific study of the obstacles to employment for lone parents. Also, a small working group chaired by the Department of the Taoiseach and with a secretariat from the Department of Social and Family Affairs has been set up to examine the matter intensively in the coming months with a view to reporting by the middle of the year. The group also includes representatives from the Department of Finance, the office of social inclusion in my Department as well as other relevant Departments, all of whom are focused on seeing how best we can reform the current arrangements.

There is scope for significant reform. The proposals which emerge must assist all of us in progressing reform in a way that will enable lone parents to achieve over time greater self-sufficiency through employment and being given more options for joint parenting, a real issue for them. I doubt the existing structure encourages joint parenting but we should try to facilitate and encourage it.

Deputies will be aware that 79,181 one parent families were in receipt of payments at the end of last year, an increase from 59,000 in 1997. In addition, there are 13,120 one parent families with children in receipt of social insurance payments, 8,600 widowed persons and 4,500 deserted wives, making a total of 92,306 lone parents who between them have 150,122 qualified children and are in receipt of weekly payments. We estimate that approximately 60% of recipients of one parent family allowances are in some type of employment, generally low paid and almost all part-time. Some have a gross wage of less than €146.50 per week or €7,618 per annum. We have, on average, 315 new claimants each week, making a total of 18,000 new claimants per annum.

I acknowledge Deputy Ryan's point on child care. Child care is at the heart of any development of this policy but my Department on its own cannot take full responsibility as the Departments of Health and Children, Justice, Equality and Law Reform and Finance also have a major role to play.

Deputy Stanton raised questions on the review of the circumstances of lone parents in 2000. Arising from a report on public expenditure in 2000, a number of changes were introduced, including the localisation of offices. By the end of 2004, 19 local offices were processing one parent family claims. The claims process in Tallaght was fully integrated with the process in other local offices. The weekly intake of claims at local offices is approximately 180, or 50% of the total number of claims made.

Localisation of the one parent family payment links with the Chairman's point and we expect it will have a substantial impact on the scheme. There will be greater interaction between the claimant and officials who will be able to offer advice and assistance where possible. This will help somewhat, as it has in other jurisdictions. In the United Kingdom, for example, persons in receipt of this allowance are invited every six months to meet officials who give them advice on employment and related areas. This is having an impact and I would like to study it carefully.

Another recommendation of the 2000 review was that lone parents should have an incentive to seek maintenance. This recommendation was given effect in 2001 when one parent family claimants were allowed to retain 50% of the maintenance received without it reducing their social welfare payment in any way. That was another substantial result of the review.

I listened very carefully to the Chairman and take his point but one must balance efficiency with people's wish to receive funds on a weekly basis and try to simplify the system. The Chairman made a good point in suggesting that earnings from a job should be averaged out over a period of one year in order that one has a weekly average, thus eliminating the to-ing and fro-ing. Localisation will be of some help in this regard. I will examine the matter.

The Department sends out 970,000 weekly payments, a lifeline for those in receipt of social welfare assistance. However, from the point of view of efficiency — a different perspective — it is not the smartest way to do it. One should consider paying people in advance. However, while that may be easier for them as well as for us, it would have many implications and at this stage I do not want to think about it out loud. What strikes me — perhaps it is my accountancy background — when I see the weekly payments pouring out week in week out is that people must go to collect the payment, although I accept an outing to the post office is a social event but it puts a great many to a great deal of trouble every single week. Perhaps there is a more efficient and sensible way to make payments but such a change would have to be implemented without discommoding or worrying recipients who, by and large, are vulnerable.

I will examine the Chairman's suggestion on averaging as soon as I have an opportunity to do so.

Chairman

How stands the amendment?

Mr. S. Ryan

As Deputy Stanton stated, a number of reports were commissioned on the topic we are discussing. The Minister referred to two committees which are examining the issue. I would not envisage the Minister having a difficulty in agreeing to the general principle of the amendment. Perhaps he will come back to us with a further report on the issue in the next six months.

Chairman

Is the Deputy pressing the amendment?

Mr. S. Ryan

What is the Minister's timescale for returning to the committee?

Mr. Brennan

I have laid out the work to be done in this area. Certainly, within a six month period, there will be a substantial body of work from the different groups which are discussing the topic.

Amendment, by leave, withdrawn.

Chairman

Amendments Nos. 3 and 4 may be discussed together.

Mr. S. Ryan

I move amendment No. 3.

In page 5, 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 social welfare treatment of income from SSIAs.".

In this amendment I am inquiring how the income from SSIAs will be treated in terms of social welfare and, in amendment No. 4, whether accrued savings from old age pensions should be regarded as means for the purposes of payment of old age non-contributory pension. In the course of his remarks, in order to be helpful to those who had availed of the SSIA scheme, the Minister referred to the increase to €20,000 in the capital disregard for means-test purposes for all schemes, except SWA. Will he outline how the money accrued under the SSIA scheme will be assessed as means for social welfare benefits?

The Chairman and Deputy Stanton referred to the case made by a person from Cork regarding a person being deemed ineligible for welfare benefit based on savings accrued from contributions made to pensions. We must examine why pensions are being determined as means in the context of the disallowance of benefits. I had hoped and anticipated the Minister would address the issue of SSIAs. Perhaps he might develop the point for us.

Chairman

We are discussing amendments Nos. 3 and 4 together.

Mr. Stanton

A number of issues arise. As members said, we have received correspondence on the matter from a gentleman in Cork who makes some good points regarding the clawback of pension entitlements. He also makes reference to the recent Supreme Court decision, referred to earlier by the Ceann Comhairle in the Dáil, and raises the question of how the entitlements of non-contributory old age pensioners in welfare homes reimbursed moneys on foot of that decision will be affected. Has the Minister considered how they might be affected if they go over the €20,000 threshold? This issue is moving fast down the tracks. Perhaps the Minister will outline his views on that matter.

Approximately €5 million per year is being clawed back from pensioners. Some €5.4 million was clawed back from pensioners' wills in 2004. Approximately 18 cases have been identified so far this year and it is only nearing the end of February. The gentleman from Cork maintains that the clawback policy is non-transparent — he says it is being kept secret — and that people do not find about it until after the event. He suggests the Department is failing in its duty of care by not making the policy explicitly clear in its literature and on its website and that this failure is contrary to Government policy as set out in the publication Towards Better Regulation 2003. Perhaps the Minister would address the issue in the context of the policy of his Department and how people are affected by it.

The gentleman concerned also makes the interesting, philosophical point that if pensioners save their money for a rainy day, for a time when they may need to go into a nursing home — which cost up to €900 a week in the past — and if having passed a particular limit the Department claws back that money, then the Department is interfering in the personal private affairs of pensioners. What the Department is saying is that a pensioner must spend the pension he or she has accrued. If they do not spend it but choose to save it over a significant number of years, the Department will penalise them by either reducing their pension payments or clawing back money from their wills once they go over the means threshold. The gentleman maintains the Legislature did not intend for this to happen. He also states he brought this matter to the Minister's attention in October last and is still awaiting a response. Perhaps the Minister will take this opportunity to respond on the issue.

The main point being made is that the provision is non-transparent and that people are not aware of it. Many Members of the Oireachtas also did not realise it was happening. Will the Minister explain to us how he becomes aware this money exists? By what mechanism does the Department discover, following the death of a person, that this money is there and how does it claw it back? As I stated earlier some €5.4 million was clawed back in 2004 and 18 cases have been identified so far this year. This is an interesting anomaly in the system. The most recent Supreme Court decision which states that money must be reimbursed to elderly people living in nursing homes is a similar parallel though it is not the same.

The SSIA scheme is a different issue. I note the Minister has increased the threshold in that regard and has stated the increase will remove many people from the danger zone. While some people may remain above the threshold for particular reasons, most of them will not. We need clarification and information regarding the claw-back provision. People must be made aware of it and informed of what can happen.

Mr. D. Wallace

I acknowledge the increase in the means test disregard as a significant measure as it provides that people can continue to save and avail of the full maturity value of their SSIA without worrying about its impact on their benefits. The Minister dealt with it in the Dáil last week and it is important it has been cleared up.

I am interested to hear the Minister's views on amendment No. 4. We have all received much correspondence on this issue but many aspects of it are not as straightforward as we may think.

Chairman

Amendment No. 4 is interesting. Deputy Stanton asked how the Department discovers the existence of such money. Following the death of a person in receipt of a non-contributory old age pension the Department seeks copies of the probate. It then examines whether all the assets were included for the purpose of assessment of means. It is easy for the Department to obtain that information. This matter has led to a great deal of consternation among those who survived.

Deputies Stanton, Dan Wallace and Seán Ryan have raised the following matter. Many people who qualify for the non-contributory old age pension do not have great means. They live a frugal existence. They can often live for a fortnight on what some of us here would not live on for two days. They might also save €50 to €70 a week for a rainy day and may accumulate €30,000 or €40,000 over a number of years. The correspondence referred to earlier points out that they make their savings having already been assessed. They then die and the Department discovers the savings and tries to claw back what is, in effect, its own money.

Mr. D. Wallace

What is at issue is how it establishes it is departmental money.

Chairman

Yes. One hits the jackpot if one qualifies for the non-contributory old age pension from day one. That is the position unless one wins the national lottery, is bequeathed 100 acres of land or finds some other form of income in the meantime. The point being made is that pension payments are being interpreted as means.

The correspondent referred to has done a great deal of research on this. He communicated with the Department of Social and Family Affairs on 7 October 2004 and was unhappy that in response, the Department merely acknowledged his correspondence. He submits that the pension payment should not be included with other assets of a pensioner in the assessment of his or her means. He makes the point that in the light of the current debate on the health boards withholding pension books, nobody knows if the Department of Social and Family Affairs will act in a similar way when dealing with the refunds due to pensioners. Some people will be due substantial refunds. How will the Department assess which pensioners should get a refund? The social welfare pension books will be returned to the rightful owners and some people may be due a refund of between €15,000 and €20,000, which brings them back on the circular track. Will the assets accrued from saved pension payments be considered again as means when administering the estate of the deceased?

Mr. Brennan

On the question of SSIAs, late last year I asked my officials to review it in time for the budget because Deputies raised the matter with me in the House. We were pleased to announce in the budget that the capital disregard would be increased to €20,000, an increase of €7,300, which is substantial and applies to all capital, regardless of where it is held. It applies to capital held in an SSIA account, credit union, post office or bank account. The €7,300 increase in the capital disregard was meant to deal with those for whom their only means was the SSIA.

I am not exempting the SSIAs per se on their own. The new arrangements will mean that a single non-contributory pensioner with no other means can have capital of up to €28,000 and still qualify for a pension at the maximum rate. The figure is doubled for pensioner couples. These improvements will come into effect in June. The increase in the carer’s allowance will come into effect in April. The scheme is designed so that it does not act as a disincentive to saving. If a claimant has been contributing the maximum monthly amount to the SSIA scheme, on maturing it will yield somewhat less than €20,000. That is why I selected €20,000 as the new disregard. To repeat, social welfare recipients who have no other means except the capital in the SSIA account will not be affected in any way.

Under the new arrangements, capital up to €20,000 will be disregarded from assessment. All those with capital above €20,000 will see a reduction in the level of weekly means assessed. The average reduction in weekly means on capital up to €76,000, or double in the case of a pensioner couple, is €12.20 per week. Deputies may wish to avail of a table that shows the current and new assessment of capital, rising by increments of €1,000. It also shows the reduction in weekly means over a wide range of capital bands.

A number of Deputies have pointed out that the ascribing of income to these new bands should be reviewed and I am looking at that. At some recent parliamentary party meeting, some Deputies raised the issue of the income ascribed to certain levels of capital and what the interest rate would have to be if one had that money in the bank. From the pensioners' point of view, the maximum value of a SSIA account before interest or investment income is taken into account is estimated to be €19,000, which is less than the income disregard of €20,000. At present a single pensioner can have capital of €20,316 and still qualify for a maximum pension. This will increase to €28,000 under these new arrangements, an increase of €7,700. In 2004, a single pensioner with capital of €68,000 still qualified for a minimum pension. As a consequence of the €12 per week increase in the weekly rate of pension, which was announced in the budget, this amount has increased to €71,105, with effect from January 2005. This will further increase from June, under the new arrangements proposed, to €76,000.

Deputy Stanton asked if payments had been made as a result of the Supreme Court decision. He mentioned a figure of €2,000. I presume Deputy Stanton wishes to have payments resulting from the Supreme Court decision disregarded from any capital assessment. It is possible to make regulation to disregard certain types of capital or income, so that could be done in this case. That would be my view, in response to his question. The Government will take an overall view and will come up with a mechanism to deal with the Supreme Court decision. In my view, it would be best to disregard it, if it is financially possible for the Exchequer to do that.

I was asked also about accrued saving in the case of persons now deceased. In cases where it is established that the deceased had means in excess of those previously declared to the Department for pension purposes, a revised decision is made on the deceased client's entitlement. An overpayment is then calculated and notified to the personal representative for recovery from the estate of the deceased. The personal representative has the right to appeal the overpayment decision to the independent social welfare appeals office.

Deputy Stanton wondered how this came to the notice of the Department and I am advised that the executor is obliged under social welfare legislation to notify the Department. In determining whether a deceased pensioner was overpaid, funeral and legal expenses and capital savings and investments to the value of €10,000 are disregarded in the first instance. In addition, a certain amount of capital is disregarded. It was €200 up to 1997 and was increased to just over €2,500 in that year. In October 2000, it was substantially increased to €12,700 and the Minister for Finance announced on budget day that it would rise to €20,000. I am assured that the Department deals with overpayments in a sensitive way.

I listened carefully to the point the Chairman and other Deputies made about double counting. It is not possible to distinguish savings that come from different sources. To illustrate the point, it is similar to saying that the Chairman pays tax on his income and he then puts all the money, on which he has paid tax, in the bank. He could make the argument that as he has already paid tax on the money, it should not be taxed a second time. However, if one buys a house or even a video with it, one will pay VAT. One continues to pay tax. If the principle was adopted that a pound was taxed once and never again, it would cause havoc in the entire financial system. If a pensioner saves money from his or her pension and puts it away, it becomes capital. It is the same as when somebody saves money from his or her salary. Pension income is a person's income.

I do not know how one would create a structure where one would exempt all pension savings. One would then have to deal with people's savings from non-pension income and compare them to savings from pension income. An army of accountants would be required to figure out which €100 was saved from the pension and which was won on the dogs or horses. It would be a problem. It is a nice idea but we must stick with the principle that capital is capital, regardless of where it originates.

I set out last October to exempt SSIAs per se because we encourage people to save money in them. I took the view that we should exempt them. However, when I read and studied the material, the concept became a nightmare. What was I to say to people who had saved money in credit unions? Was I to say the credit unions should be different? We kept coming back to the same principle, probably the most sensible, that regardless of where one gets one’s capital from, whether one saves it, earns it or collects it, all sources should be treated the same. We have accounted for the SSIAs by raising the disregard substantially to above what one would get from one’s SSIA.

Mr. S. Ryan

When the SSIAs issue first arose and the Minister indicated that he would examine the matter, I was not convinced that he would be able to deal with it adequately. However, on the basis of the report and the figures he has given to the committee, I believe he did exceptionally well. I compliment him on increasing the figures for means and capital up to €20,000. The figures he outlined will be helpful to us as public representatives. We have had a good debate on the matter.

Mr. Stanton

I welcome the fact that the Minister is examining the money coming back to people in welfare homes and that disregards are being considered. That is a new development which it is useful to flag at this point. The policy of clawing back money from pensioners' wills should be made more openly known. People do not realise it will happen. If they did, they might spend the money rather than leave it behind. That fact is not widely known.

I do not know if one can write to people and tell them that if they die, the Government will take all their money over a certain limit. It has to be done sensitively. People do not realise that when they save all this money, it will be clawed back, even if they save it from a non-contributory old age pension and can demonstrate that the pension is their only source of income. Perhaps the Minister will examine the matter with regard to those who can show that such a pension is their only source of income. I accept the Minister's point that it is extremely difficult. The aim should be to make the policy clear in order that people will realise that there will be a claw-back if their savings go over a certain amount.

Chairman

The Minister has done well with the SSIAs and we appreciate it. It was a dangerous area. We discussed it at Question Time in the Dáil and could see the difficulties involved. If the Minister were to provide for tracing the source of funding, it would require a significant number of professional personnel. The gentleman concerned certainly made a number of points and I accept the Minister's response. However, Deputy Stanton is correct that many people do not realise that executors are under a fiduciary duty to report and distribute the estate and then to report to the Department, particularly where non-means-tested income has been derived from the Department. If the Minister could ameliorate this through an increase in the capital disregard, it would help.

The Minister referred to the €2,000 payment. Significant sums will have to be refunded under whatever scheme the Government devises on foot of the Supreme Court judgment. Those repayments should be red-circled and disregarded for means. This is money that was rightfully theirs originally. We can look at whatever system was in place to evaluate how people did not get it in the first place but the end product is that they are entitled to the repayment of money that would have been theirs on a weekly basis. As it could well have been dissipated, why should anybody calculate the payments as part of a person's capital to ensure he or she would fail to qualify for something to which he or she should be entitled?

The Minister has indicated that it is not possible to trace the sources of funds because they have been mixed. There is a huge amount of case law on the issue. However, a similar argument can be made against the Minister to the effect that if people had received their pension money when they were entitled to it on a weekly basis five years ago or so, he cannot argue that the money would not have been dissipated or spent. Now that the people concerned will get it in a lump sum — it could be €15,000 or €16,000 — I argue strongly that he is not entitled to take it into account in any assessment of means. I urge him to argue this point strongly when the Government brings the scheme before him. Otherwise, somebody somewhere will take a case in the absence of this being clarified.

I have some legal knowledge and can envisage a case where it will be argued that this sum has accumulated due to an error. Therefore, a penalty imposition should not be visited on the recipient.

Mr. Brennan

I listened carefully to the Chairman. Obviously, the Government will have to make final decisions in response to the Supreme Court decision. As I commented, payments that are some form of compensation are obviously in a different category. However, I am not in a position today to confirm how they will be treated for social welfare purposes. I accept the point that they are of a different nature but that will have to be taken into account in the decision the Government will take on foot of the Supreme Court decision.

Amendment, by leave, withdrawn.

Amendment No. 4 not moved.

Mr. S. Ryan

I move amendment No. 5:

In page 5, 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 implications of providing a national waiver scheme for waste charges either through the social welfare code or otherwise.".

This refers to an important issue, the need for a national waiver scheme for waste charges. Earlier in the debate we spoke about people who had means, savings, capital and so forth. However, there are a number of social welfare recipients and old age pensioners. The increase brings them to €166 per week between the ages of 66 and 80 years. If they are over 80 years of age, the figure goes to €172. That is their only income.

Regardless of whether it is an increase of €12 or €14 per week which may represent €2 per day, the normal annual increases are being hit on an ongoing basis. If people are lucky enough to be living in a local authority house, there might be an increase in rent of €1.60 or €1.80. There also would be increases in a range of items such as food, clothing, etc.

There is a new waste charge for this year — one could call it a stealth charge — but the important point is that it is different in different local authority areas. If people are lucky, the local authority which carries out their waste collection will have a waiver scheme. However, in other local authority areas where the waste service has been privatised, there may be no waiver. There is a discrepancy in this regard.

I was interested to note that one of the groups looking after older people, the Irish Senior Citizens' Parliament, recommended in its pre-budget submission a national waiver for waste charges. The Labour Party agrees with this recommendation, for which it makes no apologies. However, we do not claim the whole responsibility should lie with the Department of Social and Family Affairs. While a local authority may operate a waiver system for certain people, perhaps those in receipt of contributory or non-contributory old age pension, it might still request €120 or €140 per year as a basic charge before a collection charge which might attract a waiver is considered.

The social partners raised this issue of uniformity in regard to people in need, the people about whom we are talking. I do not want to enter a debate on whether people should pay the charges. We are talking about existing charges and the need to have a proper waiver system in place. In this regard, reference can be made to the household benefits package which provides electricity, gas, telephone and fuel allowances for certain categories within the Minister's code. Rather than simply throwing out these points, I am serious about the need for the Government to deal with this issue and implement a national waiver system. The amendment provides an opportunity to debate the matter.

Mr. Stanton

Deputy Ryan raises the important point that different payment and waiver structures are in place. If one lives in a rural or urban area with a private scheme, there is no waiver because the State cannot interfere with private business due to competition laws. It is an important issue. Some form of universal payment should be considered to remove the hardship being experienced and have a fair system. It is unfair that some can avail of a waiver scheme while others cannot.

We should move towards a system whereby old age pensioners or those experiencing or at risk of poverty who are dependent on social welfare are supported and helped to survive. As the Minister stated, this is the most important point initially. The charge is an imposition which has grown out of all proportion in recent years and is causing hardship across the board.

Has the Minister had discussions on this matter with the Department of the Environment, Heritage and Local Government? If not, will he consider some form of discussion between that Department and the Department of Social and Family Affairs to find whether a common approach can be arrived at?

Chairman

Westmeath County Council has managed to retain a waiver system because it retains overall control despite the service being contracted out. It proved useful when the council introduced this measure in 1986 or 1987 for old age pensioners, people in receipt of disability allowance and on low incomes who were generally in receipt of social welfare payments. Others can get some relief through the tax system, which is a key point. This is positive and means that any of us could benefit, probably at the marginal rate but possibly at the fixed standard rate. However, in this context, the approximately 950,000 people to whom the Department makes payments every week are those who probably most deserve relief.

The payment is implemented under EU legislation on the polluter pays principle which covers everybody from children to the oldest individuals. The rule is in place, as most realise. However, what causes angst and resistance is that there is no relief for those who feel hard done by. The Minister has read reports on those who have fallen into the poverty trap or enter consistent poverty and is trying to develop or reformulate policies to attack these trends. However, if the State, or any component of the State, whether local authorities or otherwise, imposes charges which have been significantly increased in line with the polluter pays principle, following efforts made through the tag system to get the public to minimise, reduce and recycle, encouragement should be provided for and the burden lifted from the public through a national waiver system.

Deputy Ryan is correct in that this matter may not be completely the responsibility of the Minister. His Department's budget is nearly €12 billion. He tries, therefore, to allocate funding to areas of greatest need. On any given day the committee could probably suggest ways of spending €1 billion of that budget. We accept that hard decisions must be made and it serves no purpose for the committee to run away from this fact. However, this is an issue on which the Department of the Environment, Heritage and Local Government should have some say.

This is similar to the debate on the differential system in which we indicated to the Minister and his predecessor, Deputy Coughlan, that one should notify local authorities of the Minister's intention when awarding increases of, for example, €12 to one category or €8 to another, namely, that the Minister believes a certain category is particularly vulnerable or more in need of an increase as they grow older. We indicated to the former Minister, Deputy Coughlan, that we did not want local authorities introducing a differential rent scheme to gobble up the increase provided for that sector.

Likewise, this system is also implemented through the Department of the Environment, Heritage and Local Government policy at local authority level, for which we all have some responsibility. We may create another difficulty in regard to the income pot available to the most vulnerable by removing funding that should be spent elsewhere for the comfort of elderly people.

As I understand it, this issue is not taking the Minister by great surprise. His own parliamentary party discussed it in detail and he has given some thought to it. He is certainly not being ambushed as he already has been exposed to this criticism. As he says, his colleagues, like us, are all sounding boards every Saturday and Monday at their clinics. The press may not believe it but we are sounding boards every Sunday too. We do not have much time off. On whatever days we are out as public representatives, someone approaches us with a problem. This particular problem has arisen and the Minister is no different from anyone else.

I ask the Minister and his Department, with the Department for the Environment, Heritage and Local Government, to look at this matter. We do not want him to carry the can entirely. However, there is a household benefits package in place and he is best situated to bring forward a scheme. Let the Department of the Environment, Heritage and Local Government help with its financing but the Minister is best placed to implement it as, with the household benefits package, he is also implementing the panoply of schemes in place for a particular purpose, namely, that the living standards of the most vulnerable and marginalised are sustained and improved. They will not be improved, however, if the people concerned have to pay considerable moneys every week in refuse charges. This would offer a way out.

Mr. D. Wallace

We discussed a motion on this matter last week in the House and it was voted down. If the system can work in Cork, why is it not working in other parts of the country? We have a very generous waiver scheme in Cork City Council. Every old-age pensioner has been given a waiver and there is consideration for all. While I am prepared to listen to the Minister's views, I do not see why we must intervene nationally in a matter which should be resolved locally.

Mr. Stanton

Does the council scheme also apply to private operators?

Mr. D. Wallace

There are private operators in Cork too. What I am saying is that the solution lies at local level but that is not where the decisions are being taken. Pressure is not exerted at local level. We are not talking in the dark because we have the example of a scheme which is working very successfully in Cork. While political attacks have been made on it recently, it is a very good one. The Minister may respond but at this point I am not convinced that the matter should be dealt with nationally because every situation is different. It is clear that waiver schemes are not in place. Managers and local authority members are not implementing them, although it is their responsibility to do so.

Mr. Brennan

I am aware that a Labour Party motion on this issue was discussed recently in the Dáil and that the discussion was hot and heavy on both sides. I have acknowledge that there is an issue. As the Chairman said, it is not the primary responsibility of one Department. This is probably an area where there is a need for joined-up government and where local government must play a role. My colleague, the Minister for the Environment, Heritage and Local Government, laid out the Government's position on the matter in the House during the debate referred to.

Mr. S. Ryan

I hope that is not the Minister's position.

Mr. Brennan

There is collective responsibility. There is no provision in the Bill for waiver schemes, although we are discussing them in a broader context.

Regarding social welfare recipients, I am concerned about the absence of a waiver scheme, given the new structure for waste charges. As Deputies have noted, there is a range of systems for charging operated by companies by means of refuse sack tags, weight and so on. This has led to anomalies in the treatment of those on low incomes who live in the different local authority areas. Irrespective of the local authority involved, a pensioner who receives an unexpected bill does not care where he or she lives because it is still a bill he or she cannot pay. It is incumbent on all of us, local authorities and everyone else, to see how best we can address the issue.

The Combat Poverty Agency carried out some research and concluded that a major problem for low income households was the impact of having to make one large annual payment. It also concluded that the most effective delivery mechanism was a locally operated waiver scheme which should be operated by local authorities and controlled by national guidelines.

There have been discussions within the social partnership process to seek to identify and address any inequitable impact the waste charging system may have on the disadvantaged. The discussions continue. The Minister for the Environment, Heritage and Local Government, Deputy Roche, and I, with our respective Departments, continue to have discussions on how best we can help. The matter has been complicated by the fact that, by and large, waiver schemes are not operated by private operators. This can lead to anomalies in the treatment of those on low incomes who happen to live in different local authority areas. It is only sensible for me to accept this.

Clearly, my Department has major administrative issues with a specific allowance to cover waste charges, given the different waste collection methods and providers between and within local authorities. The Minister for the Environment, Heritage and Local Government, Deputy Roche, and I have discussed whether it is possible to attach conditions to the issuing of licences to private operators whereby they would be obliged to take account of the need for a waiver scheme. One of the downsides would be that in large areas where a substantial number would normally qualify for waivers one would have difficulty in getting private operators to become involved. Presumably, the local authorities would have to serve these areas which clearly would bring its own problems. Presumably, the Department of the Environment, Heritage and Local Government could amend the legislation in order that the local authorities which privatised the domestic waste collection system could assist low income families with their waste charges. This could allow local authorities to help. The legal advice is that it is currently not possible for local them to subvent the private sector in this way.

Clearly, there is much work to be done in this area. I agree with Deputy Wallace that we must acknowledge that, because we are entering an era of privatised waste collection services, it is no longer easy to administer a waiver scheme. Because of the plethora of systems in place it is not as easy to give a waiver but I have to find a new way forward. As Deputy Wallace noted, the local authorities have a major role to play. The Minister for the Environment, Heritage and Local Government, Deputy Roche, quoted the former Minister, Dick Spring, who said in 1983 that all this was a matter for local determination, that it was not a matter in which the Minister of the day should intervene.

I am less concerned about turf wars than the fact that we have pensioners who suddenly have bills for up to €300 and possibly more which they were not expecting. My Department would not be worthy of its name if we did not express concern about this. The Government's position is that it is primarily a matter to be resolved at local level. The Minister for the Environment, Heritage and Local Government, Deputy Roche, and I will continue to have discussions on it. There are other discussions ongoing within the social partnership process to see how we can help. I remain willing to do so if we can find a structure. Rushing into a national scheme of allowances from one Department would not be helpful in the short term. The Department would have to deal with major administrative and cost issues.

The collection of waste is organised on a local basis. Therefore, waiver schemes should be organised in a similar way. Having said that, the Minister for the Environment, Heritage and Local Government, Deputy Roche, and I, in the context of the ongoing social partnership process, will continue to study the matter to see if some progress can be made.

Chairman

Deputy Wallace is right in saying the system is grand when it works. However, the matter was circumscribed in order that a waiver scheme would have to form part of a contracting out process. With my party I was opposed to contracting out but since it was going to happen, we circumscribed the matter in order that a waiver scheme would have to form part of the contractual arrangements. That is the case in Westmeath. Perhaps the Minister should ask his officials to investigate how it is working there. Pensioners in the county receive 18 tags or 12 tags — some of which are for ordinary refuse and some for recycling — and this is of help to them. I take the Minister's point. However, he and the Minister for the Environment, Heritage and Local Government, Deputy Roche, have a responsibility — almost a duty — to ensure that the moneys given to people are not gobbled up by rent increases and refuse charges. The latter represent an absorption, on an almost semi-State level, of the increases granted by the Department of Social and Family Affairs, which is something we do not want.

A circular should be sent to local authorities to encourage them to implement a waiver system to take cognisance of the financial circumstances of the groups of people — pensioners, those with disabilities, etc. — to whom we are referring. As Deputy Dan Wallace indicated, an appropriate waiver system is operating well in the Cork County Council and Westmeath County Council areas. However, such systems do not appear to be in operation in many other local authority areas. This represents inequality of treatment. The cure is staring us in the face. Why should people in some counties suffer major inequalities, while old age pensioners in Westmeath, for example, are in a position to benefit from the refuse waiver system?

This problem would not have arisen in the 1980s or 1990s because most of the refuse collection services were under local authority control. It has arisen now because such services have been contracted out on either a full or part-time basis. I accept that this matter does not come under the Minister's remit. However, he has a role in terms of ensuring that people's needs are catered for and has €12 billion per annum to spend in that regard. It would be a bad day for everyone if we allowed to go unrecognised the plight in which people can find themselves when they are hit with bills of a significant nature in January or February following finalisation of local authority estimates.

The situation is being further aggravated — I make this point in a non-political way — by the fact that county managers have the power to impose the charge. We can jump up and down and complain about this but it does no good. County managers are less compassionate in setting such charges than Members would be.

Mr. S. Ryan

I welcome the Minister's acknowledgement that a problem exists. I am of the opinion that, in the context of the cost of waste management and future developments, the position is going to become worse. We take a serious view of this matter. The amendment seeks that a report be prepared and brought before the Houses. I am not stating that this should be the sole responsibility of the Minister's Department; the Departments of Finance and the Environment, Heritage and Local Government also have a role to play. There is no reason the Minister could not take the amendment on board. In light of the fact that he has acknowledged the existence of a problem, perhaps the three parties could be brought together and a proposal drawn up. If we do not apply pressure in terms of trying to resolve this issue, the most vulnerable people in receipt of social welfare payments will be adversely affected in the future.

Mr. Brennan

I appreciate that the Labour Party has expressed concern about this issue through the Private Members' motion it tabled. I fully acknowledge its commitment to ensuring that we do what we can in this area. The only difference between us probably comes down to approach. The Government's position is that it is a matter for local authorities, which have a lead role to play in this area. The Government will continue to support the discussions within the social partnership process which will seek to identify and address the impact of the charges and investigate how we can be of assistance. We probably differ on methodology rather than substance. However, I appreciate that progress must be made in respect of this matter.

Amendment put and declared lost.

Mr. S. Ryan

I move amendment No. 6:

In page 5, 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 status of the 16 social welfare cuts imposed prior to the commencement of the term of office of the present Minister.".

I made a detailed argument on Second Stage regarding the areas on which the Minister has not responded in the context of the savage 16 social welfare cuts introduced by his predecessor. Those of us in the Opposition issued warnings about the impact these cuts would have on a range of benefits relating to people who are at work and those who are not. In his reply to the Second Stage debate, the Minister stated that he would keep the cuts under review in order to see how their effects could be minimised. These cuts continue to have an impact on some of our most vulnerable people.

Mr. Stanton

When he entered the Department, the Minister discovered that this issue was a timebomb and that he would have to take action in respect of it. It was a mistake on the Government's part to introduce these 16 cuts. The Minister did his best to reverse them because he saw the error of the Government's ways and those of his predecessor. A number of the cuts have still not been reversed. They have been amended, adjusted, considered and changed. The Minister has only been in the Department a wet week and has not yet had time to take the kind of action in respect of these cuts that he would have wanted. He made an effort to reverse them but there is a great deal more to be done.

The Minister referred earlier to the need to bring people into education and employment. The back to education allowance was a useful and important mechanism for bringing people back into education. The scheme was changed so that a person had to be out of work for 15 instead of six months before he or she could qualify. That was madness and made no sense. The Minister reduced the period to 12 months and indicated that he will consider reducing it further to nine months. He more or less agreed on the legislation with which we dealt before Christmas that he would do this at some stage. I am disappointed that he is not doing it in this Bill.

As matters stand, if a person loses his or her job in October or November, he or she must be out of work for 12 months before availing of the back to education allowance. When one bears in mind that most education courses begin in September, the 12-month period means that someone who qualifies for the allowance in October or November will be excluded from enrolling. When the allowance was initially introduced — I believe by the then Minister of State, Deputy O'Dea — the high level advice provided was that the period should be a minimum of six months. In that context, even nine months would be too long. It does not make sense. On the one hand, the Minister speaks about the importance of education and encouraging people to go back to school while, on the other, he stands over this nonsensical arrangement. There is no reason for it and it would not cost much to change it. Perhaps he will surprise us all and bring it forward on Report Stage to clear this mess up once and for all. He wants to support and encourage people to go back to education.

A former bright student of mine who had been out of work for more than 12 months approached me some months ago to say he wanted to go back to college. This allowance would have just been sufficient to enable him to survive in college but he could not avail of it. It will be next September before he can start. He wanted to do so last September. This is madness and does not make any sense. If he had gone back to college, he would have almost completed his first year at this stage. In two years' time he would have a degree and be paying tax, paying back whatever it cost, in spades. I cannot understand why the change has not been reversed to a period of six months.

The Minister has not at any stage explained the rationale behind the change or said why he has not reversed it. Perhaps he will tell the committee how much it would cost to reverse it, although this is difficult to quantify. Ultimately, it is false economy. The transitional half-rate payments were restored for recipients of one parent family allowance for six months, where income exceeded €293 per week. Prior to the cutback, I understand they received the payments for 12 months. We are talking about one parent family payments and the transitional half-rate, which is important. What is the advantage in having the period set at six months? The Minister said the payments were meant to mould and push society in a certain direction. In what direction does he want to push those one parent families?

I asked about the supplementary welfare report commissioned by the Department in 2000. Has it been published? Perhaps the Minister will tell me or I can submit a parliamentary question. Crèche supplement payments have been continued but are more difficult to avail of than before. We are waiting for the diet supplement to be provided. How long does it take, and why not leave it in place until the review has been completed? What was the hurry in removing it? Why not undertake the review and then make the changes? Instead, the Department removed it and left people without anything pending the outcome of the review which could possibly continue for a couple of years. This makes no sense and it is the weakest in the community who are affected.

The income threshold for families claiming half-rate child dependant allowance has been increased from €300 to €350. According to the Minister, this will benefit 4,600 families. However, by June this cutback will have reduced the number receiving the payment by 17,000, a reduction of 30%. I could go down through more items in this way — the so-called "savage 16 cutbacks", as coined by Deputy Penrose and the Labour Party.

Rent supplement is an issue about which people are unclear, even community welfare officers. Those fleeing domestic violence may avail of the supplement. From talking to the CWOs, however, I gather they are not clear on the position.

There was no increase in the back to school clothing and footwear allowance. We spoke before about family income supplement and the need to advertise it more in order that it may be availed of. I have not seen any recent activity but perhaps the Minister has news for us in this regard.

Chairman

The committee chased the matter of the cut in the back to education allowance. We were absolutely shocked but it was emasculated more than cut. I do not know from whence the view surfaced that the scheme was being abused. I forewarn the Minister that there will be a major debate on the habitual residence provision. I was kicked out of the Dáil today over a simple matter but I will chase this issue to the end. The Minister's predecessor, Deputy Coughlan, brought it forward on the pretext that we would be flooded and overrun. It was a reaction to tabloid journalism, particularly the red tops from Britain. The reason I was ejected from the Dáil was that I did not react to this emotive stuff. I believe in people being treated equally. I would not like to see different rules being applied to Irish citizens when they travel abroad, as many of them did, or to see them being discriminated against. I was insisting that the period in respect of the back to education allowance should be restored to nine months. I believe the cost is about €1.5 million. It is possible for the Minister to scrape the pot somewhere to find this amount.

I have told the story of the young girl who went back to do her second year in college. Eleven months after having a baby she could not get the allowance because the qualifying period had been extended to 15 months. As Deputy Stanton indicated, had this not happened, she would perhaps now be a teacher paying taxes. Such initiatives can contribute enormously to economic development in the long term.

The barriers to self-sufficiency were made worse for many by the savage 16 cuts which have been tinkered with but not reversed. The abolition of the crèche and dietary supplements is a further example, as is the cutback in the back to education scheme, an important avenue of opportunity for people to improve their lot. The restrictions on entitlement to one parent family payments for those in employment with modest earnings with the rent allowance restrictions represent an entire amalgam. It was the most reactionary piece of work imaginable by the Minister's predecessor for the sake of saving €50 million. Between the various investigations we received close to €1 billion. This €50 million should have been given back to the vulnerable and marginalised. At least some of it should have been utilised to ensure cutbacks were not unfairly implemented.

The Labour Party has identified a number of cutbacks which it is important to reverse. I thought the Minister was going to introduce something relatively quickly as regards the back to education allowance. To date, however, we have just his commitments. Nonetheless, we must take him at his word because he has done some good work, which I acknowledge. He has inherited provisions not of his making which we appreciate will be difficult to redress. He has tried. To paraphrase his party's election slogan, he has a good bit done but much more to do.

Mr. Brennan

This is very much a work in progress for me. I listened carefully to the debate on these measures among the social partners. In response to a review we have made the following changes. The transitional payment for recipients of one parent family allowance has been restored and will be available for a period of six months where income exceeds €293 a week. I take the point, however, that perhaps more can be done. The qualifying period for the back to education allowance is being reduced from 15 months to 12. In addition, the allowance is being increased to €400. These are the changes which have been made as a result of my review of the famous 16 measures.

The income limit for entitlement to the half-rate child dependant increases for unemployment, disability and related schemes will be increased to €350 per week. The saving of €700,000 arising from last year's Money Advice and Budgeting Service supplementary measure is being redirected to the MABS to enable it to further improve its services. An additional €2.3 million——

Mr. S. Ryan

What is the Minister saying?

Mr. Brennan

The change, which was made as part of the famous list of 16, removed €700,000 from MABS. I restored that money, but I have not been prescriptive as to how the MABS should use it. I have given the MABS a special budgetary allowance of the same amount on the basis that the bureau knows best how to spend it. It is not a precise restoration of the €700,000 that was removed from that area. It is a similar figure, which the bureau can use as it wishes, which gives it more flexibility.

A total of €2.3 million, which is an amount equivalent to the savings achieved by the discontinuation of crèche supplements, is now being made available to ensure that vulnerable families can continue to have access to crèche supports. Examples includes cases where a social worker or public health nurse deem this necessary as part of their work with the family. I will consult with the Minister for Health and Children and the Minister for Justice, Equality and Law Reform on how to finalise this. We put an equivalent amount back into the budget for a crèche supplement of €2.3 million.

Mr. S. Ryan

Payment was to continue for the existing recipients at the time that the cuts were brought in.

Mr. Brennan

Existing recipients continue to be paid.

Mr. S. Ryan

Will this €2.3 million facilitate other people?

Mr. Brennan

It will provide for crèche supplements to be paid in certain circumstances. It is an equivalent amount of money to that which was in the scheme last year. It is not necessarily a continuation of the same scheme. It represents the exact amount of funds made available for crèche supplements to be paid, especially in cases where health and social workers deem that the crèche supplement is necessary. The number of payments of crèche supplements at the end of 2003 was 1,793. The number currently stands at 202. An analysis done at the end of December revealed that crèche supplements in 2003 amounted to €2 billion for 1,735 cases. We have restored €2.3 million, which is equivalent to what was taken out of that scheme. I am happy that the guidelines associated with it ensure that anyone who needs crèche support will get it. The €2.3 million restored to the scheme is being targeted at those who need it.

The diet supplement has been restored and €2 million is being made available to improve the diet supplement arrangements. Dietetics institutes are involved in laying out what amounts to a 21st century diet compared to diets which were accepted as healthy heretofore. I have made €19 million in funding available from the rent supplement scheme.

Mr. S. Ryan

Is the Minister saying that he is restoring the diet supplement scheme to what it was?

Mr. Brennan

Yes. I have restored it, put the same amount of money back into it and improved it. It is not exactly the same scheme because we have consulted with the dietetics institute. The Irish Nutrition and Dietetics Institute was contacted with a view to having some research work done on this area. Following initial inquiries on diet supplement, the Department commissioned the institute to examine a number of issues on the average cost of a proper nutritionally balanced healthy eating diet and to establish how this cost corresponds to the current measure of cost. It was also asked to examine the various types of diet currently prescribed and the extent of the need for a special diet over a nutritionally balanced diet, as well as the cost of the specialised food items which form the various diets. There is a fair amount of updating needed in this area and it is intended to introduce improvements in the diet supplement scheme at the earliest opportunity based on the conclusions of this study.

Mr. Stanton

There is no scheme at present.

Mr. Brennan

It is not the case, as someone suggested in the House, that we will have a study before we decide whether we will put the diet supplement back. The contrary is the case. We have restored the supplement, made €2 million available to improve it and have asked the professional body to answer questions about a modern diet. We will introduce those improvements in the diet supplement scheme at the earliest opportunity. I believe it is the right way to proceed.

A total of €19 million from the rent supplement scheme is being transferred to local authorities as an initial measure to enable them to put long-term housing solutions in place. The six months rule for entitlement to rent supplement has been abolished and has been replaced by an approach which will ensure that bona fide tenants who experience a change in circumstances are not disadvantaged. It will demonstrate a genuine housing need. The main bugbear was the six months rule and that has been removed. I have been in touch with the health boards in this regard. The rent supplement will now remain in payment unless a third offer, as distinct from a second offer, of local authority accommodation has been refused. That was also one of the 16 issues which were raised. I have decided not raise the minimum contribution for rent supplement this year.

Mr. S. Ryan

Can the Minister provide the committee members with a copy of the regulations which his Department has drawn up and sent to community welfare officers?

Mr. Brennan

The circular has already been sent out.

Chairman

The circular explains how it operates.

Mr. Brennan

The circular was sent out a month ago. The widow's payment was changed last year. The remaining payments are still work in progress and I wanted to deal with the major payments first, such as those for diet, back to education and rent. The back to education allowance has been raised by a number of Deputies. I moved the threshold from 15 months back to 12 in response to the queries raised about it. As it is not in the legislation, it is a non-statutory item. The Government could decide to change that date at any time. It will be September before most people will be signing on. Between now and then, we will have a closer look at it.

Mr. Stanton

Good.

Mr. Brennan

I considered taking it back to nine months and we are currently looking at that. As I am aware that September comes fast, we will need to close our thinking on that in the next month or two. I did not move it back from 15 to six months because there are a number of interesting figures on it. Everyone would want us to focus on it as it is second chance education. This is the philosophy which I have been preaching about regarding getting back to education, so I have to be consistent. At the same time, it was never intended to be an alternative form of support for third level. It was meant to focus on those who need it.

Of a group surveyed by Lansdowne Market Research, 54% had been in receipt of a qualifying payment for 12 months or less when the scheme was assessed. In this context, it is important to note that 83% of people leave the live register within a year of signing on. It is interesting to note that over half of those surveyed were from the higher socio-economic groups, which raises questions about their suitability for the scheme on grounds of marginalisation and distance from the labour market. Some of the statistics indicate a requirement for reform and we will close on that in the next month or so. On Second Stage, I gave an undertaking that we would consider the nine-month option. While we have not moved on it, it remains under consideration. I acknowledge the raising of the matter again today.

The Chairman raised the issue of habitual residence by non-nationals from accession states. I understand that the Chairman and his colleagues feel strongly about the matter, but the debate is one which must be conducted as much as possible on the basis of facts and figures. Approximately 8,000 people per month come to Ireland from the ten accession states. In January 2005, 7,500 people entered the country and in the first week of February the number was almost 2,000. While most of them obtain personal public service numbers and are available for work, the numbers are quite large and we must be very circumspect before we make changes to existing provisions. A number of Departments other than my own are involved. It is useful to record the figures. The number entering from accession states was 9,000 in July 2004, 5,600 in August 2004, 6,500 in September 2004, 8,800 in October 2004 and 5,900 in November 2004. The number in January 2005 was 7,500 and will be 8,000 for February. Members will have to draw their own conclusions from the figures.

Mr. S. Ryan

The average is approximately 6,500.

Mr. Brennan

The average in the last couple of months has been approximately 8,000. If one considers the figures from July on, the average is probably approximately 6,500 to 7,000.

Mr. Stanton

Are all of those counted adults?

Mr. Brennan

Yes.

Mr. Stanton

As they cannot receive State supports, can we take it that they are entering employment?

Mr. Brennan

My advice is that they are mainly adults.

Mr. Stanton

Are they entering employment?

Mr. Brennan

They are available for employment. I am advised that two thirds of them have taken up employment.

Chairman

There is a problem. As we have all become aware, they are not all paid a proper wage. That is another argument. The problem is with the latest legislation which is causing extreme hardship to people who find themselves in dire circumstances. Such circumstances can arise as a result of the loss of employment, accident, sickness and other events which demand support and protection for the people involved. Unless a person can prove habitual residence in Ireland or the common travel area, which includes the United Kingdom, the Channel Islands and the Isle of Man, for the previous two years or longer, he or she can be refused unemployment assistance, one-parent family payment, carer's allowance, disability allowance, supplementary welfare allowance, other than exceptional and urgent payments, and, of course, child benefit. These people are the first in respect of whom the Government has removed the universal right to child benefit payment.

A number of factors must be considered in deciding whether a person is habitually resident in the State, including length and continuity of residence, length and purpose of absence from Ireland, the nature and pattern of employment, the applicant's main interests and his or her future intentions in the circumstances. The guidelines in no way address a person's urgent need for support and assistance and seem designed to exclude as many people as possible on a bureaucratic basis. According to the guidelines, where an applicant has a home or close family in another country, he or she will be deemed normally to retain habitual residence there. How can a migrant worker who loses his or her job, suffers an accident, becomes ill or, as in circumstances of which I am aware, strikes to secure his or her proper entitlement to equity of treatment with fellow Irish workers possibly qualify for support under such conditions? Most migrant workers will find it impossible to meet the criteria on the intention to live in Ireland permanently. Why should they have to have such an intention to access protections while they are here? I wrote an article on this and will publish a further one.

In some cases, the legislation is not properly understood. Why would an Irish citizen, who has spent a couple of years in England and is not deemed to be habitually resident when making a claim, have to wait for his or her case to be investigated when England is part of the common travel area? The example of a non-EU worker who has been working in Ireland on work permits for more than three years is a real one. His family has been left destitute after being refused recognition under the habitual residence conditions following the loss of a job and the accommodation which went with it. My job as a Member of the Legislature is to bring such problems to the fore and avoid being mealy-mouthed about it. Where I feel there is an injustice, it is my job to expose it.

We will have to re-examine this matter. The legislation was rushed and we have again paid the price in spades. The Minister should not be surprised if there is a further price to be paid in respect of rushed legislation with what I am sure are unintended consequences. The Minister should remember that it was only last August that members of religious orders returning to Ireland having worked in Zambia and other countries were denied payments. We had crimson faces trying to solve a problem which no one had anticipated. We must be clear that we make mistakes. If we discover them, we should rush to correct them before corrective measures are imposed upon us. Such measures often prove to be the most costly.

Mr. Stanton

The Minister said earlier that two thirds of those who came to Ireland from the accession countries have taken up employment. Does he have any information on what the other third are doing? If, as I understand it, they receive no support from State, how do they survive?

I presume those who have taken up employment make pay related social insurance contributions. Are they not entitled to any benefit from that? For what are they being charged? If they are not entitled to any benefit on foot of the payment, is it not the case that they should be reimbursed for payments made and no longer charged?

If a person in employment here, who has come to Ireland in good faith, has an accident and cannot work or is dismissed because a position no longer exists, what supports will be available to him or her? What can he or she do to survive, having been sending money home to his or her family to keep them, as many Irish people did in the past? We have seen cases in which people have ended up living rough on the streets because they had no money to pay rent.

Mr. Brennan

The issue of habitual residence is legally complex.

Chairman

With respect, that is why I gave a forewarning. Forewarned is forearmed.

Mr. Brennan

The Chairman is an esteemed lawyer, so I will choose my words carefully.

Chairman

I do not know about being esteemed, but I am some sort of a lawyer.

Mr. Brennan

The Attorney General's office is in regular consultation with regard to this area. These conditions apply not only to people from accession countries, but to Irish people also. The condition of habitual residence applies to any of us here in the same way that it applies to those from accession countries. We are not targeting people from those countries. I want to make that clear.

There is no simple two year cut-off rule. Habitual residence means that one has a proven close link to Ireland or another part of the common travel area, namely, Great Britain, the Channel Islands, and so on. Before one is entitled to any type of social security payment, or the list that is here, one must demonstrate that proven link.

Five factors are considered when deciding if a person qualifies as habitually resident. One must prove that the common travel area is one's main centre of interest and in this regard certain facts are taken into account, such as whether one has a home, close family, job and friends, whether one is a member of a club or a professional body, and whether one has financial or bank accounts. In this way, the centre of interest is one test. Another test is the length and continuity of one's presence in the common travel area, namely, Ireland and the UK. A third test is the length and reason for any absence from the area. A fourth is the nature and pattern of one's employment, if any, in the common travel area. The fifth test is one's future intentions to live in the Republic of Ireland as it appears from one's particular situation.

This list is not exhaustive and no single factor is most important. However, these are the types of factors taken into account, and most Irish people would meet the requirements. It underlines my point that the conditions are not aimed at non-Irish people, but at anybody.

One is likely to satisfy the habitual residence condition if one has spent all of one's life in the area, lived in the area for at least two or more years, worked in the area and now lives in the Republic of Ireland, or lived in other parts of the area for two or more years before moving to the Republic of Ireland with the intention of making it one's permanent home. The evidence applied to each factor depends on the facts of each case, and the decision is taken independently by a deciding officer. I want to make it clear that this regime is not intended to target anybody specifically but to ensure there is a connection with the area.

Almost all other members of the European Union have put in place much more stringent and, in some cases, highly targeted regulations and rules which seem specifically aimed at people from accession countries. Compared to any other member state, what we are doing here is extremely mild.

Deputy Stanton asked about the remaining third of people from accession countries. They are either dependents of the two thirds who work, or they have gone home. With regard to PRSI, they would not be eligible for welfare if they did meet the habitual residence conditions, therefore, they would most likely leave. The two thirds who work pay PRSI like anybody else. In response to the Deputy's question about occupational accidents, they receive the same cover as everybody else by virtue of their number of PRSI payments. They would be treated in exactly the same manner as Irish workers in that regard.

Chairman

I apologise for initiating a debate that was not on the agenda, but I thank the Minister for replying.

Mr. S. Ryan

The Chairman is entitled to do so.

Chairman

I am not really entitled to do so.

Amendment, by leave, withdrawn.

Section 1 agreed to.

SECTION 2.

Question proposed: "That section 2 stand part of the Bill."

Mr. Stanton

The Chairman is moving very fast, but I would like to raise a minor — and possibly technical — point. I could be wrong in what I am saying. With the Chairman's indulgence, I wish to refer to section 2(2). There is a Schedule which lists many preconsolidation amendments, one of which refers to "section 4 of the Act of 1889". However, this is not mentioned in Part 2 or in Acts referred to. Perhaps it is somewhere in the Bill or perhaps it was not supposed to be mentioned. It is a small technical point. It is amazing the Bill goes back that far, and the amount of work that has gone in to consolidate all of the legislation is unbelievable. We will meet this head-on at some stage later in the year and will have great fun. I recognise the work people have done.

Chairman

I can see a great amount of interest arising already.

Mr. Stanton

People will be hanging off the rafters.

Question put and agreed to

NEW SECTION.

Mr. Stanton

I move amendment No. 7:`

In page 6, before section 3, to insert the following new section:

3—The Minister for Social and Family Affairs shall within 3 months of the commencement of the Act lay before the Houses of the Oireachtas a report on the effectiveness of Child Benefit and Child Income Support as a tool for tackling child poverty.".

We must start taking the issue of child poverty seriously in this country. A recent CSO report stated that 15% of children under the age of 14 suffer from consistent poverty, or live in homes which suffer from consistent poverty. This is not relative income poverty, but consistent poverty. We examined the report and came up with a figure of 120,000 children, which is almost twice the number to which the Minister alluded earlier in the year. We must start targeting the issue. The child dependant allowance specifically targets children in such situations, and the Minister and the Government have turned away from that.

Regarding the family income supplement, there is an issue with getting information to people about their entitlements. The clothing and footwear allowance is another scheme of which people are often not aware, and it is not sufficient. There is no excuse in this day and age that such consistent poverty should exist and that children should live in it. Once they are in poverty, they find it difficult to move out of that situation. It effects everything — health, education and their future life chances. Will the Minister comment on the CSO report, with which I am sure he is familiar? What is he going to do about child poverty and child income support in particular? We must move on this issue soon, because according to recent CSO data, approximately 120,000 children are affected.

The Minister and his colleagues speak about the importance of work and I agree that work is a way out of poverty, but not if the wages are so low that one is still stuck in the trap and is perhaps worse off because one can lose secondary benefits, such as medical cards. Many commentators have alluded to the fact that we have a new working poor in Ireland, namely, those on low wages. They are also caught in the trap with regard to the enormous cost of child care. We have referred to this but very little is happening. People on low wages find it extremely difficult. As the Minister said earlier, Deputies and Senators meet people day in day out who are suffering because they pay very high rents, perhaps €700, €800 or €900 per month. They are trying to rear children but do not have medical cards. There is another issue concerning rent. Recently, I advised somebody on low wages that they might obtain tax relief on the rent they were paying. However, they were told by the landlord that if such relief was sought, the rent would be increased. Therefore, the person was caught again and is now worried about discussing the matter with the landlord because they want to avoid a row. Such people have enough pressure to deal with already. Much needs to be done, especially where children are concerned.

I realise that there is a lot happening but the CSO figure really alarmed me. I thought the situation was bad at 66,000 but it is almost double that. I want to hear what the Minister has to say about the urgent issue of child poverty.

Mr. Brennan

I thank the Deputy for moving amendment No. 7. The figure of 66,000 was accepted by all of us until the recent SILC report which showed that the extent of poverty in the country was substantially more than previously indicated. If one extrapolates that to children, it increases substantially the figure of 66,000. I will get the details for the Deputy. When that report came out questions were raised about the methodology used to compile such figures. In its advice to me, the CSO said that it could not be taken as a definite indication of increasing poverty in the State. Neither the CSO nor the ERSI considers, from a statistical perspective, that the level of difference between the two surveys is unusual; nor does the question of one being more correct than the other arise. Differences of this order of magnitude are not unusual between surveys and they are not peculiar to the Irish situation. It will be some time before data are available from other EU countries because this was the first of the EU studies. However, there are indications that there will be many difficulties in making comparisons between the EU's SILC and earlier surveys. No single answer is given to explain the variations but they mention a number and provide a list of possible variations.

The new poverty data published last January showed a rise in relative income poverty but the consistent poverty measure had grown substantially, by approximately 10% compared to a 5.2% rise in the ESRI survey. That is quite a substantial difference. It is not possible to compare deprivation measures between both surveys. The CSO and the ERSI agree that both surveys are methodologically different. From my point of view, the survey does not reveal any reduction in support for those in poverty. The figures expended annually in this area are in the public domain. Given this information, we need to be somewhat cautious about making assumptions based on the new survey. I am not saying it is wrong but the methodology employed is different. I have already made this point publicly. As to whether one is talking about 66,000 or twice that figure, I will let the statisticians sort that out.

There are real issues, however, concerning consistent poverty. My job is to ensure that whatever the number is, we must wipe it out fast. There is a range of weapons we can use in that regard. I examined the child dependant allowance as a possible one and I accepted the argument that my predecessors have accepted for ten years. All holders of this office have not touched the child dependant allowance because they all accepted that child benefit was better. It is employment neutral and it does not dictate how much one will lose if one returns to work, whereas the child dependant allowance can be affected if one does. In addition, it does not act as a disincentive to employment. I must be the seventh or eighth Minister of all parties in this post who has accepted that argument. The independent evidence is that the child dependant allowance is not the best mechanism.

I am examining the possibility of trying to amalgamate the allowance with a new family income supplement allowance. It would be a merger of the two allowances and the ERSI is working on it. If we can package, cost and resource that proposal, and the Government agrees, it would be a second-tier child benefit. It would not be a universal payment but would be targeted only at those who require it — the 66,000 or 120,000 families, whichever figure one wants to accept. It is clear from the research that most of those children are in lone-parent families. Much child poverty does not exclusively affect the unemployed; low-income families also experience a lot of child poverty. That is why putting the FIS together with the child dependant allowance could have a good impact on the problem.

Back in 1994, child benefit represented 29% of total child income support, whereas it now represents 66%. It will reach 70% when the final phase of the current child benefit is completed. In other words, a person at that time would only lose 30% of his or her child income support when he or she moves from a welfare payment to employment, compared to what happened previously.

It has been agreed as part of the "Ending child poverty special initiative" under Sustaining Progress to request the National Economic and Social Council to undertake an in-depth examination of child income arrangements with a view to considering the possibility of a second-tier, child-related payment, involving the FIS, CDA and possibly the back to school clothing and footwear allowances. We will complete that during the course of this year and it will inform policy in the area.

The budget 2001 commitment on child benefit was equivalent to €1.9 billion. The estimated expenditure on child benefit in 2005 is €1.916 billion, or over 96% of the commitment achieved. I reiterate the commitment given by the Minister for Finance that in next year's budget we will complete the child benefit package to which we committed ourselves some years ago.

Mr. Stanton

I am glad the Minister's regards this matter as urgent. He said he would move on it fast, which I welcome. He also said he would act on the ESRI's report this year so, hopefully, by next autumn we will have some real information on which we can act. I will not comment on the statistics going back and forth because we would be here all day. I will withdraw the amendment based on the commitments the Minister has given.

Mr. S. Ryan

Does the Minister not see any merit in increasing the direct provisions allowance, which amounts to €19.10 per week?

Mr. Brennan

I am advised that payment is the responsibility of the Department of Justice, Equality and Law Reform.

Mr. S. Ryan

Is it?

Mr. Brennan

It is a matter for the Department of Justice, Equality and Law Reform, yes.

I wish to reply to a point raised by Deputy Stanton, which he will be glad to hear that I have examined. Section 16 in Schedule 4 refers to the Bankruptcy Act 1988, replacing section 4 of the 1889 Act. In the Schedule, the list of Acts refers to the Bankruptcy Act 1988, which is as it should be. I am impressed that the Deputy raised the matter.

Amendment, by leave, withdrawn.

Section 3 agreed to.

Sections 4 and 5 agreed to.

SECTION 6.

Question proposed: "That section 6 stand part of the Bill."

Mr. Brennan

With your permission, Chairman, I would like to mention an amendment that I propose to bring forward on Report Stage. It is appropriate to do that now. Section 6 provides for amendments to the qualification conditions for carer's benefit to facilitate entitlement to carer's benefit for certain seasonal and atypical workers who have difficulty in meeting the current employment-related condition.

As currently drafted it was proposed to remove the employment-related condition. However on further examination it is not considered necessary or appropriate to break the link with employment completely. Instead, it is proposed to allow sufficient flexibility in the employment condition so as to remove the difficulties being experienced by seasonal and atypical workers without breaking the link to work altogether. The new proposal will provide that a claimant, in addition to meeting the existing PRSI conditions, need only be in employment for a total of eight weeks in the six months prior to the date of application and have worked for not less than 16 hours in each of those eight weeks, or an aggregate of 32 hours in a fortnight.

During the course of Second Stage I informed the House of my intention to bring forward a Report Stage amendment to this section in easement of the situation.

Mr. S. Ryan

I welcome it.

Chairman

We would welcome that.

Question put and agreed to.

NEW SECTION.

Chairman

Amendments Nos. 8 and 10 are related and may be discussed together by agreement.

Mr. S. Ryan

Can I clarify what time we will finish?

Chairman

At 7.30 p.m.

Mr. Stanton

I move amendment No. 8:

In page 7, before section 7, to insert the following new section:

7.—The Minister for Social and Family Affairs shall lay before the Houses of the Oireachtas a report on the review of social welfare payments for carers.".

I wish to speak on both amendments. I will be as brief as possible, given how late it is. Regarding amendment No. 10, will the Minister clarify whether carers are treated differently to pensioners for an assessment of capital means? I believe that is the case. If that is so, we must look at the matter. I would welcome information in that regard. I will not go into great detail. I am sure the Minister has information on it in regard to widows, lone parents, carers, pensioners and so on. I wish to see where carers fit in, in terms of the assessment of capital means.

We welcome the respite care grant introduced by the Minister in section 7. It will help many people. A review of carers was carried out in 1998 and the Oireachtas Joint Committee on Social and Family Affairs produced a report in 2003. In spite of those reports not a great deal has been done to advance policy on carers who are saving the State a great deal of money. Carers work very long hours, 24 hours a day, seven days a week. They are always on call to look after their relatives or spouses. It is best that people are looked after in their own homes if possible and we should encourage and support that. We must revisit those two reports and any other reports that have been done. Some form of advanced thinking must begin in this area, although I accept that the respite care grant is a positive step. I also welcome the fact that thresholds and so on have been eased. I will leave it at that as a great deal has been said on the subject in recent times.

Mr. S. Ryan

I wish to clarify a point in respect of the increase in the respite care grant, which we welcome. Does the Minister envisage that full-time carers who are not entitled to a carer's grant would be eligible for it? If so, how will we notify people in that category who would not have applied for a carer's grant because they would have been over the income threshold for one reason or another?

Mr. Brennan

We are currently conducting an internal review of carer's allowance and carer's benefit. We have taken on board what has been said in committee and in the House. Even though we are still trawling through them, we have already moved on some of these proposals. For example, we introduced a substantial improvement in the respite care grant in section 7, to which Deputies referred. We will also bring forward proposals that will make carer's benefit and carer's allowance more accessible. We are working on that. These issues have been teased out in the context of the review and will be made available to the joint committee when they are finalised.

Regarding Deputy Stanton's point, the provision for the assessment of capital means for carers is the same as applies to all other schemes, except for the supplementary welfare allowance. The Bill continues that principle and the enhanced disregard applies to all the relevant schemes, including carer's allowance and the contributory old age pension allowance. The general means disregard for carer's allowance has been increased by €20 per week to €270 for a single person and by €40 a week to €540 for a couple with effect from the beginning of April. This means that further progress has been achieved towards reaching commitments to bring the disregard up to the average industrial earnings in June, which will be €561.

A question was asked about how the €1,000 respite care grant would be paid.

Mr. S. Ryan

For people who are not in receipt of the carer's allowance.

Mr. Brennan

Employment related conditions are attached to it. It is extended to all carers who provide full-time care, subject only to their not being employed for more than ten hours per week, in receipt of unemployment payment or signing for unemployment credit. If they are employed for more than ten hours per week, they are not available for full-time care. It is not meant to replace those payments; it is a specific grant to all carers subject to these employment conditions. They make sense because carers are supposed to be either in employment or available for employment.

It is planned that full details of the scheme should be made available following the signing of the regulations in early April. I will endeavour to ensure that the application procedures are simple. The application form will include a checklist to help customers assess if they would qualify for it. We intend to target those who are likely to qualify for the grant, including advising customers who have been disallowed for carer's allowance in the past 18 months, for example, because of means. They would be first in line to receive it. We are liaising with carers' groups and propose to give information presentations to their members. Information on the scheme will also be available in all social welfare offices and citizens' information centres. When the scheme is finally launched there will also be a dedicated telephone information line.

With regard to the estimate of 9,000 additional beneficiaries, the figure is based on census 2002. I was asked that question previously. I hope I have answered all questions.

Mr. S. Ryan

That is positive.

Chairman

I shall keep a close eye on the qualification criteria. I previously referred to a case of a farmer in his 40s who is looking after his mother who is in her 80s. She is confined to a wheelchair and that is the only way she can get around. From what I can gather of the conditions written into the legislation we are passing, a person who is up all night in a caring capacity may not qualify. The farmer in this case is a bachelor and is very attached to his mother. He does not want her to go into care. He does some farming but has only about 40 acres. He looks after his mother in the morning, and comes and goes during the day. He is back in the house every couple of hours. He is a full-time carer but the definition outlined in the legislation would give an official an excuse to refuse such an applicant. If that happens I will make it known on the floor of the Dáil because such a man is saving the State approximately €28,000 per year. He has not asked the State for anything. He immediately springs to mind as a deserving case. He deserves the measly €19 per week. As a taxpayer I am prepared to contribute to somebody like him who is saving us all over €500 per week.

I hope we do not get bogged down in regulation. I made the point on Second Stage that we could regulate this measure out of existence. With respect to the Minister, I already smell the scent of regulation. If that is the case, I will be very disappointed.

Mr. Brennan

I accept the Chairman's warning. The grant has been extended to include all carers who give full-time care and attention. Each case will be examined on an individual basis. I will ensure the scheme is administered in the correct spirit, as requested by the Chairman. However, the grant is not meant for or targeted at people who are unavailable to give full-time care and attention. Rather, it is targeted at those who are available and are providing care and attention.

An attempt is made to measure this in the legislation but the Chairman is warning against an over-rigorous application of it. For example, those engaged in farming have particular circumstances which must be taken into account when measuring hours worked and so on, with which I am familiar. The Department will examine each case on its merits and will be as sympathetic as possible. This is meant for people who give care and attention. However, I will take the Chairman's warning and keep an eye on the matter.

Amendment, by leave, withdrawn.

Section 7 agreed to.

NEW SECTION.

Mr. Stanton

I move amendment No. 9:

In page 10, before section 8, to insert the following new section:

8.—The Minister for Social and Family Affairs shall lay before the Houses of the Oireachtas a report on the equity of people with disabilities living in residential institutions who are in receipt of the Disability Allowance and also those people with disabilities who are living in residential institutions who are not in receipt of the Disability Allowance.".

A number of complex issues arise in this context. We welcome the €35 extension of the disability allowance payment. However, my understanding is that there are two categories of residents, some of whom are in receipt of the full disability allowance and others who have received nothing but will now receive €35. A change was made in 1999 about which the Minister could give us some information. Why does one person living in a residential institution receive disability allowance while another person living beside him or her does not? Why is there inequity in this regard? This is the moot point.

Another issue has arisen on foot of the Supreme Court ruling last week. I understand that the Tánaiste has today confirmed that some people who were in receipt of disability payments had these payments taken from them, that this was illegal and that the money would have to be repaid. This will have major implications. I am not sure what the involvement of the Department of Social and Family Affairs wll be in this process. However, the Tánaiste confirmed that it is the case that the illegality of State appropriation of patients' property also extends to this group.

I understand that approximately 9,000 people belong to this group. Reference was made to the Statute of Limitations being invoked and I want to know the Minister's view on the matter. This is another group of people who are residents in institutions and whose payments were taken from them. It now seems this was also illegal and comes under the Supreme Court referral.

My initial point was that of two groups of people one receives disability allowance while the other does not. Why is this the case? The new category of people will receive the allowance of €35 per week, the administration of which I understand has moved from the health boards to the Department. However, why are these people not receiving the same payment as the others? What is the difference? Why is one group being discriminated against vis-à-vis the other? Perhaps the Minister would clarify the issue because there is confusion about it.

Mr. Brennan

Responsibility for the disabled person's maintenance allowance was transferred from the Department of Health and Children to my Department in 1996. One of the qualifying conditions was that payment could not be made to people who were in residential care where their maintenance cost was met in whole or in part by the health board. Pocket money or a personal allowance could be paid by the health board to people in such circumstances but this was not standardised across all boards, as Deputies will be aware.

Since the transfer of the scheme to my Department, there has been considerable improvement to ease the restriction and, since August 1999, existing recipients of disability allowance who were living at home retain their entitlement when they subsequently go into hospital or residential care. This measure is targeted at people who were in residential care pre-1999.

I announced that a decisive step is now being taken towards the removal of the anomaly whereby people who were in residential care before 1999 are not entitled to receive disability allowance. To address that situation, we are introducing a payment of up to €35 per week, which will be made to the people affected by this restriction, as a tangible measure in progressing towards the removal of the disqualification. Most of the organisations in this area have welcomed this development.

The Deputy is correct that a number of very complex practical and administrative issues remain to be resolved with the Department of Health and Children and we must progress these. In this regard, my Department has already made specific arrangements whereby service level agreements will be put in place with any institutions concerned. These agreements are designed to ensure that any such payments will be used solely and exclusively for the benefit of the person concerned.

Following a data gathering exercise by my Department with the health boards, it has been established that the number of people disqualified for payment of disability allowance in residential care is approximately 2,400 and that there is a considerable variation in the amount of pocket money or personal allowance paid by the different Health Service Executive areas. It is clear this has been targeted at people who were not in receipt of the allowance pre-1999. It is also now clear that we must move beyond this point.

As an interim measure, payment of the disability allowance of up to €35 per week will be made from June 2005. This is an incremental step towards the full removal of the anomaly. The estimated cost for this new measure will be €1.69 million in 2005 and €2.8 million in the full year. It is intended to review the implementation of this measure in the context of budget 2006 to try to remove the disqualification altogether and ensure that persons in receipt of disability allowance in residential care are treated the same as other social welfare recipients.

I apologise for my long contribution but I wished to indicate that some 2,400 people were left in a situation pre-1999 which required to be addressed. It is being addressed by section 8.

Mr. Stanton

I wonder whether that is good enough. In August 1999, two categories of people were created, namely, those who lived at home and were allowed to retain the full disability allowance, and those whose home was a residential institution and who were not. We are on very thin ice in this regard. The fact that we recognise that these people must receive a payment and that the Minister is moving eventually to address the anomaly begs the question of why he should not go the whole way now and treat everyone equally. They are all resident in the same institutions and being treated in the same way except in this respect.

Many people of the 9,000 who were resident in institutions had money taken from them. I ask that the Minister seriously examine this matter again and perhaps bring it back to the Cabinet because it is unfair that some people whose home was in an institution and others whose home was their house were treated differently. Some people received disability allowance before they entered the institutions but others were barred from receiving it. They were told they could not apply for it because they were not entitled. What was the difference between the two?

We are now thankfully moving to a stage at which both groups will be entitled to the disability allowance. We are on thin ice although I bow to legal experts. However, if a case was taken, we could find ourselves in trouble on this matter. Apart from that, many of those receiving the payments had money taken from them and must now be repaid.

Mr. S. Ryan

I am slightly concerned and unsure about this issue. I hope Deputy Stanton resubmits the amendment on Report Stage so that the Minister might review the situation. People in institutions prior to 1999, such as psychiatric hospitals, would have been entitled to disability allowance. In some cases, they were not in receipt of it and in others they were deprived of any money earned when working in workshops. Short of opening a hornets' nest, given other recent developments, we must be certain that everyone gets an opportunity to receive justice, even if it has to be retrospective. I am concerned about whether the Minister is going back sufficiently far. I look forward to having a full report on the issue and an opportunity to make a more detailed contribution on Report Stage.

Chairman

I have deep concerns that this will be a legal hornets' nest. The State was involved in the wilful deprivation of people's entitlements. It showed a penny pinching attitude to visit these impositions on the poorest sections of society, on people who had neither advice nor a voice. The Minister should return to this as his attempt to remedy the situation could create a further injustice, in that he might not be going back sufficiently far to deal with it. The Minister should get the Attorney General's advice. Deputy Stanton has indicated that he will withdraw the amendment and will resubmit it on Report Stage. This will afford us an opportunity to have a more expansive debate in order that we can get to the bottom of it.

We do not wish to enact legislation and have our discussions quoted in the courts in a couple of years' time. Sometimes, committee discussions are used by lawyers to advocate a particular line and are examined to understand the reasoning and arguments as to why a particular amendment was enacted. Occasionally, having examined the debate, courts use a teleological approach and find that the interpretation being given to legislation is not consistent with the points made by the legislators. I do not wish to proffer advice to the Minister, as he has many eminent people around him to do so, but the safe approach is to return to the issue on Report Stage. The Attorney General's advice should be sought and his legal advisers should take cognisance of the concerns that were articulated by the committee.

Mr. Stanton

Our opportunities are limited when we reach Report Stage Rather than withdrawing the amendment, the committee should adjourn, allow the Minister to reflect and return tomorrow with a detailed answer. The committee has just begun to touch on this complicated issue and our available time is up.

Chairman

I had hoped that it would be resubmitted for Report Stage. I want to get through the rest of the amendments.

Mr. Stanton

The committee could have a vote, which would detain it for another 20 minutes. I would prefer to put the Minister——

Chairman

There is no need to push the issue to a vote if it can be resubmitted on Report Stage and the Minister gives an undertaking——

Mr. Stanton

I am not happy with that.

Mr. Brennan

: I do not want to give the impression that a major problem has suddenly been discovered. I am satisfied, from my legal advice, that this is fully in order. I am happy to return to this complicated issue in detail tomorrow, if the committee wishes. The amendment's purpose is to give income to people. The other issue of how one pays for the home is separate.

Mr. S. Ryan

Giving them income that they were not in receipt of before.

Mr. Brennan

: Yes, but it is different from the Supreme Court decision where——

Mr. S. Ryan

I know that, but they could well have been entitled to it before.

Mr. Brennan

: The law stipulated they were not entitled to it at the time. We are now making them eligible to receive money to which they were not previously entitled. We are providing income to individuals who entered institutions before 1999 by making them entitled to disability allowance. People who entered institutions since 1999 are already entitled to it. The purpose of this section is to provide income.

The bigger issue of paying for nursing homes and medical care is very much in the public arena but is not at the core of what we are doing here. Possibly, acute legal minds might begin to extrapolate, but the Attorney General has approved the legislation before the committee. If it wishes, I would be happy to go into more detail tomorrow.

Mr. Stanton

I welcome the Minister's offer to go into greater detail tomorrow.

Chairman

As it is past 7.30 p.m., I propose that we conclude business for the day. I thank the Minister and his officials for attending. I look forward to meeting everyone again tomorrow.

Progress reported; Committee to sit again.

The select committee adjourned at 7.35 p.m. until 4 p.m. on Wednesday, 23 February 2005.