Dáil Éireann Debate, Wednesday - 11 February 2004
83 Mr. J. O'Keeffe asked the Minister for Social and Family Affairs the reason for the introduction of new rules restricting the payment of child dependant allowance to recipients of unemployment benefit whose spouses or partners are working; and if she will make a statement on the matter. [3841/04]
Amharc ar fhreagra115 Mr. J. O'Keeffe asked the Minister for Social and Family Affairs the reason the child dependant allowance will no longer be payable to many recipients of unemployment benefit; and if she will make a statement on the matter. [3842/04]
Amharc ar fhreagraI propose to take Questions Nos. 83 and 115 together.
Provisions included in the 2004 Estimates for social welfare spending included the introduction of an upper limit of €300 on weekly earnings by a spouse for entitlement to CDA in respect of all UB claims. CDA is an additional weekly payment made to social welfare recipients, including those on unemployment benefit, in respect of each qualified child dependant. A full CDA rate of €16.80 is payable to recipients of unemployment or disability benefit, together with a qualified adult allowance where the spouse's gross weekly earnings do not exceed €210. The new measure continues to provide for payment of half rate CDA where the gross income of the spouse exceeds €210 but for withdrawal of payment where it exceeds €300 per week. Prior to this, half rate CDA would have continued in payment regardless of the spouse's earnings.
The practice of linking spousal earnings and the withdrawal of increases for dependants has been in place for a number of years in the form of a reduced qualified adult allowance and payment of half rate CDA. This new measure extends the practice by applying, for the first time, an upper income limit for receipt of CDA.
The new measure will only take effect where there is a minimum family income equivalent to €22,600 or more per annum when the social welfare personal rate of €134.80 and earnings are combined. Where there is a non-earning or lower earning spouse, CDA entitlements remain unchanged. As the measure applied from 19 January, people already receiving half rate CDA on that date, with a spouse earning more than €300, are not affected by it while they remain in continuous receipt of the existing payment.
It is estimated that the majority of claimants affected by this measure are those with a spouse or partner in full-time employment and earning considerably in excess of the €300 threshold. The measure enables available resources to be directed towards lower income families.
Does the Minister accept this is another sneaky anti-family measure? Considering all the measures which became effective in January, does she accept that January was a black month for social welfare dependants? Does she accept that this measure, which was not publicised and was brought to my attention by someone who is involved in the system, is particularly anti-family and altogether unfair to an applicant who has paid PRSI contributions? Such an applicant who has four or five children will now receive no child dependant allowance, whereas he or she would have received half the allowance. Will the Minister consider this draconian measure again before it is introduced, rather than trying to justify it on the basis of adding the social welfare payment to the spouse's earnings in order to arrive at a gross annual figure?
There is no basis for that whatsoever.
This amounts to a sneaky, nasty further cut affecting the family and the poorer sections of society.
It is an underhand action.
The measure is neither sneaky nor underhand, nor does it attack the family. The measure applies only if the recipient's spouse is in full-time employment with earnings of more than €300 per week.
A measure already exists within the system whereby a recipient whose spouse earns up to €210 per week receives half the rate of child dependant allowance. People who are earning more than €300 will no longer receive the half-rate CDA. This will also be based on a change in the qualified adult allowance.
I do not see this as an attack on families. If it were sneaky or underhand the Deputies would not know about it. I was more than up-front in saying exactly what the new measures were, where they came from, the changes they would effect and their costings.
This was one of the 16 cuts.
The average weekly number of people who will be affected by this change is approximately 16,000. I do not see the measure as draconian. We have considered overall family income.
The Minister seeks to justify this nasty little cut. It only affects 16,800 people but that represents 16,800 families. For them it is very important and for the rest it will not matter at all.
What savings will the Minister make by introducing this measure? In reviewing the effect of this measure, will she bear in mind its impact on a family with five children where the husband or wife is fortunate enough to be employed and have a gross income of €300 per week. This measure will leave nothing for the five children. The Minister knows as well as I do how expensive children are nowadays. Does she not agree that a modest amount should have continued? A family with five children would have received €42 per week in extra benefit. Surely a person who has paid his or her PRSI contributions and has lost his or her job is entitled to that little support during a period of unemployment?
Hear, hear.
I am glad Deputy O'Keeffe's children are reared because it would cost the State a fortune if he were receiving the very good increases in child benefit.
There will be much smaller families in the country because we will not be able to have them.
There will not be a child in the country if the Minister has her way.
There will be no childer.
I am sure Deputy O'Keeffe's darling wife would have been ecstatic if she had received the level of money being provided now.
Did I miss the best of it?
When this measure was discussed in the select committee in recent weeks I was asked the reason for this measure. There was a saving to be reached within the target of my Department and the overall Government target. That has been balanced by an increased budgetary package made available to me in order to ensure that the baselines received a substantial increase, which we hope to progress in the next number of years.
I evaluated every departmental scheme last year. In June, we evaluated and prepared for the Estimates. With regard to every possible change, we looked at where it would have the least impact on people. This measure affects people who are in receipt of unemployment benefit. They will continue to receive their benefit. Until now they have been in receipt of half-rate CDA. In future, if a recipient's spouse is in full-time employment and earning €300, he or she will no longer receive CDA. People in receipt of unemployment benefit are also governed by other conditions. They must be available for full-time work and be seeking work. It is my intention, through the employment action plan, to support people who are unemployed and who would like to return to work and to ensure they get back to work as quickly as possible and not find themselves reliant on benefit.
I remind Deputy O'Keeffe that I identified the savage 16 cuts. This measure was No. 5, after the measures affecting rent supplement, crèches, MABS and the dietary supplement allowance. As one who comes from a large family and whose father was made unemployed periodically by the council, I saw the insidious nature of this measure and that it was an attack on families.
Is it not the case that the Minister is saving only a few million euro?
There will be maximum hurt and minimum return.
Surely Mr. Magnier and Mr. McManus, who enjoy tax-free status as stallion owners and are now fighting over a football club, could pay some of their tax-free stud fees to ensure that the 16,800 families could be paid their child dependant allowance. A payment of €9 for each of three children, which amounts to €27, would provide the necessities of life for one day for that family. If rent of €100 has to be paid out of an allowance of €300 per week, very little money is left.
This measure is an insidious attack on the family and I said so when it was introduced. If we want a balanced society we should hit those who are living outside the country while receiving tax-free money.
I would rather not talk about stud farms or Manchester United, of which I am no more a supporter than Deputy Penrose. I am a GAA woman.
I like the horses but not at the expense of families.
Deputy Durkan, who talks plenty, represents a constituency which relies heavily on the horse industry and I am sure he is very supportive of it.
I enjoy horses——
People in my part of the world envy the fact that the horse industry creates such employment.
——but why hurt so many people?
They can pay their taxes like everyone else.
The measure will create an overall saving of €10 million.
It is easy to say what should be done when the horse has bolted. I prepared my Estimates on the basis of the amount of money made available to me. I had to reduce my expenditure by €57 million and I have more than compensated for those reductions with the significant increases I have provided through the social welfare rate. For the first time we were able to make an overall payment of €10 per person in receipt of a pension or benefit, with subsequent qualified adult allowances and a greater increase to some people. That has been more than beneficial to people who are less well off, many of whom, such as pensioners, are more than dependent on the welfare system.
In support of such people, this Government has been more than forthright and forthcoming in the support of children, with child benefit to top €1.3 billion this year. We have dealt with pension policy and the support of the elderly, with all the ancillaries including continuous support of carers, where we will reach our target for the increase in the disregard figure. In the overall context of support for families, particularly those dependent on my Department, of which there are 1 million weekly, €11.3 billion represents real progress and support.
Given that the Minister is adamant that the level of child dependant allowance payments is frozen and has remained so for a number of years——
Ten years.
——is she not in favour of it, and would she like to see it phased out in the long term? Is this measure the first phase of such a phase out? The Combat Poverty Agency and several reports have indicated that the failure to increase CDA payments over the last few years has had a negative impact for those dependent on welfare payments, particularly in the case of families with children. Considering all that, the Minister is introducing a second measure that is underpinning an already flawed policy in terms of supporting the poor.
Under the special initiatives of Sustaining Progress, we are looking particularly at the interaction between CDAs and family income supplement with a view to a more realistic second tier family income support. Though I was not a believer in CDAs in their day, when one talks of them being available over ten years it is obvious that all of the policy people who have visited this House have seen that a CDA is a disincentive to a return to work. We must however ensure, particularly through family income supplement, that those who join the workforce have a sustainable second tier child income support. We are currently analysing that issue and I hope that fairly soon the committee under Sustaining Progress will bring forward proposals.
Regardless of what those on the Opposition benches believe, child benefit is the best and most progressive way of looking at a child poverty initiative and a child care initiative. We have delivered on 82% of what we agreed to provide. That has been very beneficial, and as something which will always be available to people on a monthly basis, it is a more progressive way than one whereby people would lose a CDA by moving into the workforce.
This debate will not be completed over the next few weeks, but if we can see a more targeted second tier family income supplement, that may be the best way forward.
Since declarations are being made regarding Manchester United, I should declare my support for the club, and for the bloodstock industry, which gives good employment to about 25,000 people.
We have a lot of supporters here today — one, two, three, four.
I will return to the fundamental questions. We have 16,800 families carrying a burden, an extra weight of €10 million. Is it fair that such a relatively small number of families should have to carry that burden? I know the Minister has an interest in family life, but in the sense of looking around the country from a ministerial point of view, does she accept that this is one cut which from a family point of view should be withdrawn, and that those families, whether with two, four or six children, should continue to get the very modest support given under the old system?
ESRI figures show 20% of people living in poverty in this State — that is one in every five people. The working poor form one of the fastest growing groups in Irish society. Are these the people the Minister speaks of when discussing the child dependant allowance and saying it would provide a disincentive to getting jobs? Does the Minister accept the ESRI figures and accept that it is these families which will suffer most from these cutbacks?
What the Deputy is referring to is a European indicator pointing to people at risk of poverty, which is not the indicator used by my Department. That indicator is consistent poverty, and we have seen a major decrease in the number of people in that category.
Perhaps that is a coincidence?
No, it is a result of forthright policies by the Government and the man on my left-hand side, the Minister for Finance, who has provided the funding for this measure.
A champion of poverty.
The figure dropped from 14% to less than 5%.
Is the Minister to blame for the position of these families?
It is the intention of myself and the Government to reduce that figure to 0% if possible. The elimination of poverty is something we all want to see, and we will continue to introduce policies with that purpose.
Written Answers follow Adjournment Debate.
