Social Welfare Benefits.

Dáil Éireann Debate, Wednesday - 10 March 2004

Wednesday, 10 March 2004

Ceisteanna (18, 19, 20)

Michael Ring

Ceist:

91 Mr. Ring asked the Minister for Social and Family Affairs if the new restrictions in social welfare payments and EU enlargement undermine the stated commitment to the free movement of labour between EU member states; if the new restrictions are legally sound; if these restrictions affect the Irish emigrants who have lived abroad for a number of years returning here; if these restrictions will affect the children of Irish emigrants; and if she will make a statement on the matter. [7966/04]

Dan Boyle

Ceist:

93 Mr. Boyle asked the Minister for Social and Family Affairs if a prior investigation was undertaken by her Department with her counterpart Departments in the Governments of the EU accession states, regarding the likely number of their citizens who would avail of the right to transfer their social welfare payments after 1 May 2004. [8027/04]

Freagraí ó Béal (28 píosaí cainte)

Minister for Social and Family Affairs (Mary Coughlan)

I propose to take Questions Nos. 91 and 93 together.

Free movement of persons is one of the fundamental freedoms guaranteed by Community law and includes the right to live and work in another member state. The right of free movement does not only concern workers, but other categories of people such as students, pensioners and EU citizens in general.

While the EU treaties provide for full freedom for citizens of the accession states to move freely through the enlarged EU they do not provide for automatic access to labour markets. Under the accession treaties, the EU has put in place a transitional measure by which existing member states will be able to exercise discretion as to the extent of access of persons from the new members states to their respective labour markets.

Unlike other member states, Ireland is not imposing any restrictions on the numbers of people from the new member states who wish to come here and work. I emphasise that this Government gave a commitment that EU citizens who wish to come and work here from 1 May are very welcome to do so and we will honour that commitment.

The Government has decided to put in place a number of measures which will restrict access to qualification for certain social welfare payments by introducing a habitual residence test which will act as an additional condition to be satisfied by a person claiming a social assistance payment or child benefit. The new condition is designed to safeguard our social welfare system from abuse by restricting access to social assistance and child benefit payments for people from other countries who have little or no connection with Ireland.

The new condition will require a claimant for social assistance to be habitually resident in the State or the rest of the common travel area which is the UK, Channel Islands and the Isle of Man, for a substantial continuous period. If they have been present in the State for less than the two year period it shall be presumed that they are not habitually resident. The onus will be on persons to prove otherwise. Even if a person is more than two years in the State, he or she will still be required to satisfy the general requirements relating to habitual residence. People who claim welfare payments but do not satisfy the habitual residency test will be assisted to return home and the necessary arrangements will be made in co-operation with the Department of Justice, Equality and Law Reform. I emphasise that these measures are being introduced to ensure our social welfare system does not become overburdened which is a prudent and sensible measure. All other countries in the European Union impose residency restrictions on entitlement to social welfare benefits. The new residence condition will apply to social assistance payments and child benefit. However, it will not apply to social insurance-based payments such as disability benefit, retirement pensions and where entitlement is gained by the payment of social insurance contributions.

A person must establish a degree of permanence to be considered habitually resident in the State. The term "habitual residence" is well known in other jurisdictions and in EU legislation and has been clarified in EU court judgments. It is intended to convey a degree of permanence in the person's residence, clearly the duration and continuity of their residence would be important factors and also their intentions. The factors, as set down by EU case law, to be considered in determining whether a person satisfies the habitual residence test would include: length and continuity of residence; employment prospects; reasons for coming to Ireland; future intentions; centre of interest, for example, family and home connections. People who have resided in the common travel area, the UK, Channel Islands and the Isle of Man, will be regarded as habitually resident for the purpose of the new test. Each case will be examined on the facts and the person's degree of permanence in the State and no single factor will be conclusive.

With regard to Irish emigrants returning from abroad, it is expected that the vast majority will be able to prove habitual residence without difficulty because of, for example, their strong family ties with this country, previous residence in the State, etc. It is also possible that such emigrants will qualify for social insurance-based entitlements.

My Department has not been in contact with the competent institutions in the new member states regarding the likely numbers who may wish to avail of their rights to transfer their social welfare payments after 1 May 2004. However, under EU Regulation 1408/71 it is possible for an unemployed person under certain conditions to "export" their unemployment benefit for up to three months while seeking work in another member state. The regulations also allow people to exercise their right to free movement within the EU and to have their social insurance-based entitlements such as contributory pensions exported to another member state. These arrangements are not affected by the habitual residence condition.

Mr. Ring

Will the Minister assure the House that her proposals and those of the Government are in line with EU legislation? Will she assure the House that the social welfare payments of Irish emigrants who have been working abroad who return to live here will not be affected nor will their child benefit payments be affected? On the question of free movement of labour in and out of Europe, does the Government propose any other restrictions? The Minister comes from a county like mine where there has been a great deal of emigration over the years. Mayo and Donegal are like many other parts of Ireland in that regard. We were glad that other countries took our people in and assisted them in any way they could. Many Irish emigrants suffered abroad in jobs with bad pay. Many of them worked on the lump system which meant they did not pay for a stamp and are now suffering when they reach pension age.

This legislation worries me. I believe there will be a legal challenge to the Government either through the Irish courts or through the European Court. I ask the Minister to assure the House that there will not be a legal challenge and that the Government is operating within the law? Britain is in contravention of EU legislation. When the British legislation was introduced it was decided that it would apply only to the ten accession states. The Minister now states that any EU citizen who comes to Ireland and has not been in residence for two years, will not qualify for social welfare payments. There is no evidence that thousands upon thousands of people will come here. If a single person came here he or she would get €134 and the child dependant would get €19. One would not live well on that. I want the Minister to give me an assurance with regard to the questions I have asked.

Mary Coughlan

No more than the Deputy, I cannot give a guarantee that a legal action will not be taken on anything. I am not able therefore to answer that question.

Mr. Ring

I will not be as lucky as some down at the tribunals.

Mary Coughlan

The proposal is within EU law.

Changes in social welfare qualification regulations can be made as long as they are applicable to all EU members. That is what I have done, unlike the British Government. For the first time we are introducing an habitual residency requirement. This is a permanent change. It is not a transitional matter and is not part of the accession treaties. There has been no change in the Government's view about the free movement of labour. It is important to emphasise that. People are more than welcome and are entitled to come here to seek work and to participate in our work force. We have been glad to have 47,000 people here on work permits. Equally, we will welcome new EU members to our shores to participate in the labour force.

With regard to the impact of the changes on Irish immigrants who return home, as I indicated in my reply, this will be examined on a case by case basis. The issue of habitual residence is not a conclusive decision. People could be here for less than two years and could prove to be habitually resident under the guidelines which I have outlined to Members. In normal circumstances, those who go abroad to work bring their contributions with them if they have participated in the work force within the EU, or where there are applicable bilateral agreements. If they have not and they are waiting for an assistance scheme they can apply. With the residency test, those who are returning home will satisfy that test if they are coming back to reside, for example, if a family decides to come and puts their children into school. An indication of permanency for those returning home will in itself be a determination of habitual residence. Everyone has to satisfy the normal parameters and criteria for application to any of the assistance schemes. This is a new criteria to be introduced. The measures are prudent and capable of being realised.

I am not sure whether somebody will take an action against the Government. The Attorney General has advised me he is satisfied that this works within the parameters of EU law.

With regard to the changes in Britain, I had the opportunity to meet the Minister and I discussed the changes with him. We have agreed that any changes will not extend outside the habitual residence requirement in the common travel area and the reciprocity that we have between ourselves and the British, which is a special agreement between the British and Irish Governments. On the issue of whether the British changes are within the parameters of EU law, I am not a lawyer and I would not wish to comment on the floor of the House on those issues.

Mr. Ring

It is discrimination.

Mary Coughlan

I had the opportunity to meet the new Commissioner. We discussed these issues casually, not formally. The Commission does not have to be notified of any changes although from an information point of view the commissioner considers it prudent to bring together all the changes within the EU for the benefit of those who wish to come.

Mr. Boyle

I am disappointed the Minister has chosen to take these two questions together because they are two separate areas, one dealing with the nature of the policy she is making and my question which asks how she has informed herself in reaching that policy decision. Nothing in her reply indicates to me that she has spoken to any of her counterparts in the social welfare departments of the Governments of the EU accession states. At the very least, if we are anticipating the danger of thousands coming here to use our social welfare system, there must be a mirror-like image in each of the EU accession states of the numbers likely to leave their shores and consequently save a social welfare payment in their own countries. That the Minister has not asked and that the information does not appear to exist indicates to me that this is a problem that does not exist and is not likely to occur. Figures have been given in debates here which indicate that less than 2% in the EU live and work in countries other than their national countries. The report from the EU indicates that within five years of their coming into the EU, the likely movement of people from the new EU accession states will be 1% of their total population. On these grounds there was no need to make this decision. Neither the Minister nor her officials have done anything to inform themselves of the likely problem that exists in this area, when there is none.

This has proved to be a convenient smokescreen on the part of the Minister in that she can seem to be resolute in regard to a problem that does not exist while real problems for her Department are manifesting themselves in the cuts she announced in November and December about which we hear daily on our national radio.

Mary Coughlan

If the Deputy was present he would have heard my reply, which was that I did not and did not need to——

Mr. Boyle

I heard the answer.

Mary Coughlan

There are a couple of issues here. An interdepartmental committee is in situ, discussing the implications of accession on a number of issues, one of which has been the impact on benefits and free access of labour. The question asked the likely number of their citizens who would avail of the right to transfer their social welfare payments after 1 May 2004. I cannot answer that, on the basis that I do not know how many people will transfer, nor does anybody else——

Mr. Boyle

Did the Minister speak to her British counterpart?

Mary Coughlan

——know how many people will transfer their entitlements.

An Leas-Cheann Comhairle

The time has expired for dealing with these questions.

Mr. Boyle

The likely number?

Mary Coughlan

No one knows that. I cannot even tell the French Government how many people here will travel to France and export their entitlements because I do not know.

Mr. Boyle

Less than 2%.

Mary Coughlan

I am sorry, I cannot see into people's minds. We have not been able to get an estimate. Some 1% appears to be the likely number who will transfer within the EU. It would be wrong, illogical and inconsiderate not to have imposed certain changes given that Ireland is the only country in the EU that has not protected its social welfare system. If nothing happens, nothing happens.

An Leas-Cheann Comhairle

The time has expired for dealing with these questions. We must move on to the next question.

Mary Coughlan

If there was an overburdening on our social welfare system, I am sure the Deputy would do his duty by advising the Minister she had not done her job and had not prepared.

An Leas-Cheann Comhairle

The Minister will have to conclude.

Mary Coughlan

I have prepared fairly.

Willie Penrose

Ceist:

92 Mr. Penrose asked the Minister for Social and Family Affairs if her attention has been drawn to the severe difficulties created for persons in seasonal, term or limited contract employment, such as school wardens, as a result of the decision of her Department not to pay unemployment benefit award for any period in which they are laid off, such as Easter or Christmas or periods in the summer; if there are holiday days accrued; the steps she intends to take to deal with this anomaly in view of the hardship it can create for persons on low incomes; and if she will make a statement on the matter. [7965/04]

Mary Coughlan

Social welfare legislation provides for the payment of unemployment benefit in respect of days of unemployment. Any day on which a person either receives or has an entitlement to holiday pay is not regarded as a day of unemployment and a person has no entitlement to unemployment benefit in respect of that day.

With the exception of people in school-related employment, people in seasonal, term or limited contract employment who claimed unemployment benefit have always had to supply details of all holiday pay entitlements due during each temporary lay-off period. Unemployment benefit is not paid in respect of any day for which there is an entitlement to holiday pay.

These long~standing arrangements were extended to people in school related employment in 2003 following the application of the Protection of Employees (Part-Time Work) Act 2001 in their case. The new procedures are designed to ensure that all persons on temporary lay-off from their employment are treated in a similar manner. Full details of holiday pay entitlements must be provided in respect of each school vacation period, so that the level of entitlement, if any, can be determined.

A person can only have an entitlement to unemployment benefit for any day of unemployment which forms part of a period of interruption of employment, that is, where he or she is fully unemployed for a period of at least three days in any period of six consecutive days. In addition, payment of unemployment benefit is not made for the first three days of unemployment which are known as waiting days. However, where a person had a recent claim in respect of certain schemes, payment may be made from the first day of the claim.

The position is that unemployment benefit is payable to those who are laid off from school-related employment, on the same basis that applies to those in all other seasonal, term or limited contract employment. I do not accept that there is any anomaly in this.

Mr. Penrose

January is normally a cold month for the citizens of the State. This January was savage, bitter and sour for a large number in receipt of unemployment benefit and social assistance, not least the widows, who were affected by the savage 16 cuts which we highlighted here, who were to lose disability and unemployment benefit. Was this not another memo which emanated from the Minister's Department on 15 January 2004 to all its offices? Paragraph 3.1 stated that unemployment benefit is not paid in respect of any day for which there is an entitlement to holiday pay, and that this applies to school wardens and people in seasonal, term or limited contract employment. This was nothing more or less than a circular intended to implement another sneaky cut.

Is the Minister aware how difficult it is to get personnel to take up work as school wardens and of the importance of their work in terms of ensuring the safety of young school children? Surely, she is not blind to that reality. Some local authorities and school wardens have made agreements that accumulated holiday pay for three weeks per annum will be paid in full in June when the school year ends, as they are entitled to do under sections 19(3) and 20(3) of the Organisation of Working Time Act 1997.

Why was this decision taken? The Minister should be aware that this is vital and systematic part-time work. School wardens are not free to take up other offers of employment as they must be available to schools. Moreover, the Minister has made an important error and has been wrongly advised. Despite school wardens being classified by the Department of Social and Family Affairs as being in school-related employment, they are employed by county councils and local authorities, not by the schools or the Department of Education and Science — an interesting point. On behalf of the many thousands of school wardens providing valuable work, I ask the Minister to reverse this decision. Is holiday pay not a statutory entitlement?

Mary Coughlan

It is.

Mr. Penrose

Why should school wardens be penalised throughout school terms when they are not receiving accrued holiday pay at that time? It is wrong. The Minister should tear up this circular and put it on a bonfire with the rest of the circulars which have been implemented as part of a savage 17 cuts. How many more cuts are there that we know nothing about? People in all parts of the country are complaining about the cuts and that must be reflected in this House. There will be a campaign to eliminate this cut because, otherwise, we will not have the personnel to carry out this vital work.

Mr. F. McGrath

The Minister should answer that.

Mary Coughlan

I will. The Deputy was a teacher and values school wardens, as we all do. However, this measure comes under particular legislation. Perhaps it should have been raised in the context of the Protection of Employees (Part-Time Workers) Act 2001. The situation is that if one is entitled to holiday pay, one is not entitled to unemployment benefit. The Deputy is correct that agreements are locally made with local authorities for particular reasons, often personal, where school wardens accrue their holiday pay. The problem is that we cannot deal with accrued holiday pay on the basis that people had entitlements to certain days. In the main, if wardens were paid their holiday pay at Easter, Christmas and in the summer, they would not be entitled to unemployment benefit. However, when becoming unemployed, as a consequence, they would be entitled to unemployment benefit.

Local decisions between local authorities and school wardens are in some way skewing the imposition of the eligibility criteria for unemployment benefit. The situation concerns accrued holiday pay entitlements which are often paid in a lump sum at the end of the school year instead of at each temporary lay-off period, and I must implement the measure according to the legislation. This seems to be what school wardens often want to do. If they were advised that if they took their holiday pay at the time at which they were entitled to it, perhaps they would not find themselves in this situation. This does not concern every school warden as a number of them do not have agreements with local authorities. It would be a matter for local authorities to advise their school wardens of the implications of accruing lump sums of money.

Question No. 93 answered with QuestionNo. 91.