Tuesday, 17 Jul 2012

Priority Questions

Rent Supplement Scheme

Ceisteanna (1)

Aengus Ó Snodaigh

Ceist:

16Deputy Aengus Ó Snodaigh asked the Minister for Social Protection the number of additional persons to whom the new lower rent supplement ceiling was applied in the past month; the number who have been forced to move as a consequence of the new ceiling to date in 2012; her views on whether it may be too late for parents who are forced to leave their locality to enrol their children in new schools; and if she will seek to make savings on rent supplement by negotiating directly with landlord representatives instead of placing exclusive responsibility for achieving her Departments savings on individual vulnerable tenants. [35043/12]

Freagraí ó Béal (40 píosaí cainte)

Minister for Social Protection (Deputy Joan Burton)

The Government has provided €436 million for rent supplement in 2012. Total expenditure on the scheme over the past five years from 2007 to 2011 was €2.36 billion. At present, approximately 92,000 persons are in receipt of rent supplement, of whom approximately 37,000 are single persons. The remaining 55,000 clients are couples, couples with children and single-parent households.

New maximum rent payments reduced from 1 January 2012 based on a review of the most up-to-date market data available. The emphasis of the rent review was to ensure value for money for tenants and taxpayers while ensuring people on rent supplement are not priced out of the market for private rented accommodation. The revised limits are applicable to new rent supplement tenancies from January 2012 and existing tenancies on review. Approximately 25,000 rent supplement claims have been awarded in 2012, of which 3,700 were awarded within the last month, indicating that accommodation can be secured within the new limits.

When rents are in excess of the limit, clients are being asked to contact the landlord and renegotiate the rent. Where landlords do not agree to reduce the rent within the limits, staff will discuss the options open to the tenant, including seeking alternative accommodation. Statistics on the numbers who have secured alternative accommodation are not available. Officials administering the scheme advise that customers are securing alternative accommodation within their locality. Any customers who have specific issues with regard to relocating should discuss these issues with departmental officials, who continue to provide support and advice to customers in addressing their accommodation and other needs. There will be no incidence of homelessness due to these changes.

Additional information not given on floor of the House.

Rent supplement is specifically for the benefit of the tenants to assist them with their accommodation needs. The Department does not intend negotiating directly with landlords to reduce rents on behalf of a tenant.

I have recently introduced powers of inquiry for appropriate staff to request formally and oblige landlords to provide information in respect of their rent supplement tenants, principally to verify the agreed rent and existence of the tenancy. This measure will improve both the governance and oversight arrangements in place and complement existing compliance arrangements which the Department has in place with the Office of the Revenue Commissioners.

Deputy Aengus Ó Snodaigh

The last sentence spoken by the Minister is completely and utterly wrong as there will be homelessness due to this measure. Those people who cannot find accommodation in the areas affected, where the rent supplement rates have been substantially reduced, are being displaced from areas in which they and their families have laid down their roots. They will be homeless. While they may not be captured by the homeless agency, they will be homeless by virtue of the Minister's steps.

The Minister is a bulk purchaser of a service. Does she not agree that the Department, through local authorities, already negotiates directly with landlords? Why does she refuse point blank in this instance to negotiate the reductions in rent with the landlords rather than through tenants who already are vulnerable? The Department and not the tenant negotiates in the case of the rental accommodation scheme.

Deputy Joan Burton

The Deputy and I have discussed this issue previously. Rent supplement is intended as a short-term renting scheme for people who have lost their jobs and who expect to find new employment within a short period. Over the past decade, the numbers relying on this scheme have grown enormously. The purpose of the scheme is to provide a rent supplement to persons who require that supplement because they are not in employment. I have said previously that it is our intention to reform the scheme in a way that will provide for its transfer to the local authorities. I agree with the Deputy in his reference to local authorities in regard to the rental accommodation scheme. They have housing departments which are experts on the provision and acquisition of housing. The community welfare service staff in my Department are not experts on housing, rather they are experts in giving monetary assistance on a monetary basis to persons in need of assistance and they do this with great consideration and care. As I indicated to the Deputy, more than 25,000 rent supplement claims have been awarded to date in 2012. One must bear in mind that the total number we anticipate this year is 92,000. To date, we have had more than 25,000 people negotiating claims, of which 3,700 relate to this month. That indicates that people are negotiating.

Deputy Aengus Ó Snodaigh

We know people are negotiating and they are doing so from a position in which they are in severe distress. They have no choice because the Minister will not meet her responsibility in that regard. She mentioned the rental accommodation scheme. Why are the numbers under that scheme reducing? According to the Revised Estimates for public services in 2012, the numbers under the scheme have shrunk from 6,800 to 6,300 and the Minister has outlined her big solution. We have argued about the issue previously and the Minister referred to the local authorities. Why does she not give them some of the 230,000 vacant housing units across the State? There are only 100,000 families on local authority housing lists. They are the ones in need of accommodation and many of them are in receipt of rent supplement. I have never supported the notion of the State subsidising private landlords. I have always argued that it should provide social housing. Why is the Minister not delivering the NAMA houses and the empty units around the country to the local authorities, rather than continuing to subsidise private landlords?

Deputy Joan Burton

The issue concerning the NAMA houses, an important potential resource, is under negotiation between my colleague, the Minister for the Environment, Community and Local Government, and NAMA. The Department of Social Protection commands approximately 40% of the private rental market. There has been a fall at historic levels in the value of housing and property assets and the Deputy is seriously suggesting those who rent privately – they account for 60% of the private rental market - should have their rent driven up by the Department oin order to benefit private landlords.

Deputy Aengus Ó Snodaigh

Nobody is suggesting that.

Deputy Jonathan O’Brien

That is just-----

An Leas-Cheann Comhairle

Order, please.

Deputy Joan Burton

The private landlords need to give value for money on their tenancies. I have advised Deputy Aengus Ó Snodaigh that in the past five years the country has spent €2.36 billion on rent supplement. That is a great deal of money in anybody's language. I share any concern the Deputy may have about any individual in distress, but the officials in the Department, community welfare officers, have been extremely careful to be diligent towards those who are renting and who may have special requirements.

Deputy Aengus Ó Snodaigh

That is just not true.

An Leas-Cheann Comhairle

Please allow the Minister to speak.

Deputy Aengus Ó Snodaigh

It is the exact opposite.

Deputy Jonathan O’Brien

The Minister is living in a bubble.

An Leas-Cheann Comhairle

Order, please.

Deputy Joan Burton

We are in an exceptionally difficult financial position and Sinn Féin is suggesting the Department should push up private rents.

Deputy Aengus Ó Snodaigh

No, we are not suggesting that.

An Leas-Cheann Comhairle

Will the Deputy, please, resume his seat?

Deputy Aengus Ó Snodaigh

I have suggested money should be spent on social housing and given to local authorities.

An Leas-Cheann Comhairle

Deputy Ó Snodaigh, please resume your seat.

Deputy Aengus Ó Snodaigh

I have never suggested that private landlords or their like should get any extra funding.

An Leas-Cheann Comhairle

Deputy Ó Snodaigh, please resume your seat.

Deputy Aengus Ó Snodaigh

The Minister is misrepresenting me, absolutely.

An Leas-Cheann Comhairle

The time for this question is up. We must move on to Question No. 15.

Deputy Joan Burton

Deputy Ó Snodaigh has just made allegations-----

Deputy Aengus Ó Snodaigh

I have not made any allegations.

Deputy Joan Burton

-----about staff in the Department of Social Protection.

Deputy Aengus Ó Snodaigh

I did not make any allegation against any member of the Department's staff. Stop misrepresenting what I say.

Deputy Joan Burton

Deputy Ó Snodaigh has not accepted that the staff in the Department of Social Protection are working very hard.

Deputy Aengus Ó Snodaigh

I did not say anything about the staff. I said the Minister's Department was not doing its job, which is to negotiate with landlords. I did not make any insinuation about the community welfare officers.

Deputy Joan Burton

The staff are the Department.

An Leas-Cheann Comhairle

We are moving to Question No. 15 in the name of Deputy Cowen.

Deputy Joan Burton

The staff are the Department. I am glad Deputy Ó Snodaigh has withdrawn his comment about them.

An Leas-Cheann Comhairle

Order, please.

Deputy Jonathan O’Brien

He has nothing to withdraw because he never made an allegation in the first place.

Deputy Aengus Ó Snodaigh

I have not withdrawn anything because I never made such a comment in the first place. I cannot withdraw an allegation I did not make.

An Leas-Cheann Comhairle

Deputy Ó Snodaigh, please. We are moving to Question No. 15.

Deputy Aengus Ó Snodaigh

The Minister should stop misrepresenting me. Every single time on Priority Questions she misrepresents me. Maybe she needs to get her ears cleaned.

An Leas-Cheann Comhairle

We are moving on to Question No. 15 in the name of Deputy Cowen.

Deputy Joan Burton

Deputy Ó Snodaigh never objected before, so obviously he has been holding a lot of it back.

Deputy Aengus Ó Snodaigh

I did but the Minister does not listen.

Sick Pay Scheme

Ceisteanna (2)

Barry Cowen

Ceist:

15Deputy Barry Cowen asked the Minister for Social Protection if she will outline her plans to introduce statutory sick pay on employers for the first four weeks of illness; and if she will make a statement on the matter. [35041/12]

Freagraí ó Béal (11 píosaí cainte)

Deputy Joan Burton

From 2008 to 2011, inclusive, total expenditure on illness benefit, invalidity pension and disability allowance was €10.6 billion, of which €3.6 billion related to illness benefit. It is estimated that expenditure on illness benefit in 2012 will be €847 million. The introduction of a scheme of statutory sick pay, whereby employers would directly meet the costs of illness-related absence for an initial period of illness, is being considered in the context of the need to reform the social welfare system to bring it into line with practices in other countries in this area, the need to address the deficit in the social insurance fund and the need to limit progression from short-term illness to long-term illness or disability, as well as in the wider context of enhancing the health of the workforce and addressing absenteeism levels.

Most other European countries, including all of our major competitors, oblige employers to pay for some sick pay costs. The extent of this obligation varies considerably. For example, it is two years in the Netherlands, 28 weeks in Northern Ireland and the UK, six weeks in Germany and nine days in Finland. I will circulate a table with the Official Report which illustrates in a concise format the statutory sick pay arrangements in a range of other countries.

A range of complex issues needs to be addressed before any decision can be taken by the Government on the possible introduction of such a scheme. These include the extent of coverage, the duration of payment, the rate of payment, compensation mechanisms for smaller scale employers and how to ensure such a scheme would be enforced and policed.

Earlier this year, I hosted a consultative forum on the feasibility and implications of introducing a scheme of statutory sick pay. This afforded an opportunity to key stakeholders to discuss the complex issues involved. All of these issues will be discussed in the course of the wider process associated with the preparation of the 2013 budget.

Additional information not given on the floor of the House.

Any decision which might be taken by the Government on the possible introduction of a scheme of statutory sick pay will be considered in that context. One of my priorities in this regard is to promote wellness in the workplace and to address levels of absenteeism generally.

Table: Statutory sick pay in a range of countries

Country	Statutory Sick Pay	Details
Australia	Yes	10 days per annum
Austria	Yes	6 – 12 weeks on full pay plus 4 weeks at half pay
Belgium	Yes	4 weeks full pay
Czech Republic	Yes	2 weeks @ 60% of average pay
Denmark	Yes	Top-up of illness benefit to normal pay
Finland	Yes	9 days
France	Yes	Top-up of illness benefit to normal pay
Germany	Yes	6 weeks on normal pay
Hungary	Yes	15 days at 80% of salary
Iceland	Yes	1 month at normal salary
Italy	Yes	180 days (6 months) per year
Luxembourg	Yes	13 weeks
Netherlands	Yes	2 years at a minimum of 70% of salary plus 1 year funding of disability benefit
New Zealand	Yes	5 days for each year of service
Norway	Yes	16 days at full pay
Poland	Yes	33 days at 80% of pay based on previous 12 months
Spain	Yes	15 days (1st 4 unpaid)
Sweden	Yes	14 days at 80% of pay
Switzerland	Yes	3 weeks at full pay, then 80% for up to 2 years
UK	Yes	28 weeks at sickness benefit rate

Deputy Barry Cowen

The Minister said there needs to be more consultation in Government on this proposal. Is she aware, however, that some Government backbenchers and one Cabinet member have stated they do not agree with her proposal? Last week, the Deputy behind the Minister, Deputy Harris, said that the sick leave situation in Departments was three times more serious than in the private sector. He suggested this should be dealt with before we examine sick leave arrangements in the private sector. Is the Minister aware that small businesses and the self-employed are still awaiting legislation on upward-only rent reviews and proposals for new methods by which rates are calculated, let alone paid? Is she aware that many of those whom she implies should be brought into this sick pay arrangement - taxation by the back door – cannot afford an arrangement which could possibly amount to €89 million in new taxation?

An Leas-Cheann Comhairle

Thank you, Deputy.

Deputy Barry Cowen

Earlier this month, the Minister said she was considering raising employer PRSI in the budget, a move which would further undermine confidence in the private sector and small and medium-sized enterprises.

Deputy Joan Burton

I have stated on a number of occasions that in the context of the consultative forum held a short time ago, a statutory sick pay scheme would have to take into account the needs of different sectors of employment, particularly those small businesses, and other specific situations. The costs relating to illness benefit, disability allowance and invalidity pension are enormous. The number of people claiming these payments and the costs relating to them have soared in recent years. I wish to put a point to Deputy Cowen. All of our principal competitors have statutory sick pay systems and they have found - this is evident from published information and from conversations I have had with people from other countries - that it improves matters and provides for a much better atmosphere in places of work. In other words, these systems lead to employers being interested in both the health and welfare of their employees and in promoting a wellness environment in the workplace. The most up-to-date international research, including that compiled by the OECD over a protracted period, indicates that this is good for everybody. It is a win-win situation for employers and employees. It is particularly positive for employees who may develop problems and who, together with their employers, can actually access assistance in order to provide for their good health.

Deputy Barry Cowen

I welcome that there has been some movement on this issue. That is evident from the Minister's initial reply and her comment to the effect that proposals in this regard will be categorised. In other words, the scheme will be based on an ability to pay and the needs of different categories of businesses to which it apply will have to be taken into consideration. She also indicated there would be a saving of €89 million if employers paid the first four weeks of sick pay.

Deputy Joan Burton

Absolutely.

Deputy Barry Cowen

When the Minister first mentioned this matter last year, she stated the saving would be €150 million.

Deputy Joan Burton

That is in a full year. It would be introduced halfway through the year.

Deputy Barry Cowen

At this stage of the Minister's quest to bring this scheme forward, is it the case that, in light of the dissent that is obvious within the ranks of Government backbenchers and among some of her Cabinet colleagues, the saving involved has been watered down by half? What is being proposed does not go far enough. It is not enough to state that everything will be categorised. How is it proposed to categorise the scheme? Will a table be produced - well in advance of any decisions the Minister might make - which will give an indication of who exactly is going to be lumped with paying this?

I return to my initial point that this is merely taxation by the back door. What provision will be made in respect of PRSI contributions, over and above those statutorily required, for self-employed people whose businesses might fail and who may need to claim benefits from the Department?

Deputy Joan Burton

The savings indicated have been exactly the same on every occasion on which I have commented on this matter. As stated earlier, introducing a statutory sick pay scheme involves a series of very detailed steps and an in-depth examination must be carried out. Both the dialogue and the consultation process which have taken place indicate that all sick pay schemes generally take into account the needs of smaller firms. There is no doubt, and the OECD frequently reports this fact, that Ireland is probably the only country which does not have a statutory sick pay scheme.

I reiterate what I stated previously, namely, that except where companies, Departments or whatever have sick pay schemes in place, most employees, regardless of whether they work for small or large employers, pay for the first three days of their illness. There is no proposal to change that. The first three days of sick leave are not paid for by the employer, they are paid for by the individual. Following this initial period, an employee is obliged to obtain a medical certificate from his or her doctor to claim illness benefit. One of the issues some employers raised during the consultation - individuals dealing with occupational health issues were among the most prominent speakers - was the perception among employers, which I share, that there were serious issues about the way in which some medical practitioners issued sick notes. This emerged as a significant issue for employers during the consultation process. Having examined what employer groups such as Retail Ireland have stated about this issue, it is an important point. At the end of the day we want to have good sick pay schemes for persons who are ill, while reducing the overall level of absenteeism. I acknowledge that absenteeism is a significant problem in large parts of the public sector, although generally not among all employees but often among less than 25% where a pattern has been formed. This information gathering is part of the process of looking at this important issue.

Community Employment Schemes

Ceisteanna (3)

Barry Cowen

Ceist:

18Deputy Barry Cowen asked the Minister for Social Protection the progress that has been made on the findings of the reviews she commissioned in relation to community employment schemes; the schemes that have been earmarked for closure, cuts in materials and training grants; and if she will make a statement on the matter. [35042/12]

Freagraí ó Béal (7 píosaí cainte)

Deputy Joan Burton

Total expenditure on the community employment programme in 2012 will be approximately €340 million. The number of places available on the community employment programme has remained constant at 23,300, including supervisors. The financial review of the schemes has been completed, and the Department has contacted schemes to advise them of their revised materials and training allocations. The materials and training budget for community employment schemes has been increased by €9.5 million from the original budget of approximately €11 million following transfers from savings identified elsewhere in the departmental budget. The new materials and training budget is thus €20.5 million.

Under the revised arrangements, schemes will no longer be given universal amounts of financial support but will instead be provided with specific levels of support aimed at meeting the particular costs of community employment schemes, having regard to the overall level of funding available for community employment nationally. To date, significant savings have already been made to the overheads of community employment projects in annual insurance costs and audit fees.

I am not aware of any proposals to close community employment schemes following the outcome of the financial review. I urge all schemes, supervisors and boards of management to work closely with officials of my Department to ensure community employment continues to play an important role in the provision of local community services, work experience and training opportunities. I thank the many sponsors, staff and participants in community employment schemes who co-operated with the Department's review in a positive manner.

On the training allocation for schemes, community employment participants may also access a number of Springboard, VEC and FÁS courses free of charge. I am working on this issue with the Department of Education and Skills to ensure courses are made available to participants in community employment schemes which assist them in securing employment in the future.

Deputy Barry Cowen

As the Minister stated, in recent weeks community employment providers received notification that the review of community employment schemes was complete. They were also notified of the details of their revised grants for the year. The Minister also noted a slight increase of €9 million in materials and training grants from the originally budgeted figure of €11 million. The allocations made to many community employment schemes have been cut by between 30% and 40%. That will tip many of them over the edge in their efforts to continue in existence. Given that it had been going on since the budgetary process in January, when was the review completed and placed on the Minister's desk? When will she publish the plan for us to review? In direct communications and also at the Oireachtas Joint Committee on Education and Social Protection, Deputy Ó Snodaigh and I have asked her to publish the plan.

Deputy Joan Burton

It was a very substantial piece of work because, as the Deputy knows, the FÁS employment officers and responsibility for the community employment, CE, schemes transferred to my Department on 1 January. The review was a major undertaking and I received the report in recent weeks. I do not have the exact date, which I can get for the Deputy, but it was towards the end of June. As soon as I received it we contacted those involved with the schemes. However, I was very impressed by the level of contact between the social protection officials, who are now managing CE, and the schemes. I had the opportunity, which I greatly valued, to visit and meet a number of sponsors of schemes and those involved. As there are almost 1,000 schemes, obviously I could not visit them all, but I visited very many of them and had very detailed discussions about how people envisage the schemes being used for the improvement and enhancement of their communities as well as providing quality experience to the participants.

Deputy Barry Cowen

From my discussions with those involved in CE schemes in my constituencies and beyond, I have discovered extensive variations in the size of cuts. In some cases those cuts will lead to possible closures of the schemes. The Minister is very precise in saying the budgetary allocation towards that materials and training grant has increased from €9 million to €11 million in this year's budget spend. Obviously it compares unfavourably with the allocations for last year and previous years. Can the Minister say to me definitively - as definitively as she mentioned the increase in her initial allocation from €9 million to €11 million - the revised average cut taken by CE schemes? It has been a long and drawn out process. We all recognise and pay tribute to those involved in the schemes and the good work they do in their communities. We acknowledge that and it goes without saying. The process has taken a long time and been very labour intensive with intense negotiations and deliberations by the departmental officials in arriving at their conclusions. Based on that process, surely the Minister can indicate the percentage cut to these CE schemes.

Deputy Joan Burton

Schemes have been allocated funding of between €500 and €1,000. Approximately 6% of schemes have been allocated less than that because the process depended on two things: the submission and application the schemes themselves made and the availability of funding for both materials and training of up to €1,000. Some schemes would have other forms of funding whereas other schemes might have almost no other sources of funding. We have moved away from the old system whereby everybody got exactly the same amount towards a customised approach-----

Deputy Barry Cowen

They have to wait until July each year.

Deputy Joan Burton

-----to the actual work the scheme is doing. We have looked very closely at the work the scheme is doing in the community as well as the provision of the training experience to the community employment scheme participants.