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Social Welfare Code Reform

Dáil Éireann Debate, Tuesday - 4 November 2014

Tuesday, 4 November 2014

Ceisteanna (203, 234)

Terence Flanagan

Ceist:

203. Deputy Terence Flanagan asked the Tánaiste and Minister for Social Protection her plans to deal with social welfare reform; and if she will make a statement on the matter. [41595/14]

Amharc ar fhreagra

Terence Flanagan

Ceist:

234. Deputy Terence Flanagan asked the Tánaiste and Minister for Social Protection the social welfare reforms she has introduced since becoming Minister; if she will indicate her plans for the remainder of the Dáil Éireann term; and if she will make a statement on the matter. [42117/14]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Social)

I propose to take Questions Nos. 203 and 234 together.

Since the Government took office in March 2011, I have implemented an unprecedented programme both of policy reform in the social welfare system and organisational change in the Department of Social Protection.

The Department successfully completed the most significant merger in the history of the Irish public service, while at the same time reducing expenditure and meeting increased demand for services. More than 1,700 posts from the Community Welfare Services of HSE and FAS were transferred to the Department. In parallel, I have radically overhauled labour-market activation policies and overseen the transformation of the Department from the passive benefits provider of old to a public employment service that is actively assisting people back to work, training or education.

Some of the significant reforms to the social welfare and labour market activation systems since I took up office in March 2011 are set out below.

From welfare to work:

- Major “activation” reforms have been introduced to help people back to work. Pathways to Work is the strategy driving these reforms.

- The centrepiece of Pathways to Work is Intreo (launched October 2012), the Department’s employment service which is replacing old-style social welfare offices with Intreo offices. These provide jobseekers with both income supports and employment services - like individually tailored personal progression plans and job-search assistance - in the one place.

- The number of DSP caseworkers on activation duties doubled due to internal deployment within the Department by the end of 2013. In addition, JobPath, which is expected to commence in mid-2015, is a new programme of employment activation aimed specifically at the long-term unemployed (over 12 months) and those most distant from the labour market.

- A Record of Mutual Commitments is now signed by jobseekers, which outlines joint commitments - on the Department’s behalf, to providing income support to jobseekers and in helping a jobseeker find work or progress back into the labour force; and on the client’s behalf, to engaging and working with officials from the Department along an agreed progression path. Where a jobseeker refuses an appropriate offer of training, or other such intervention, legislation now provides for a reduction in payment levels.

Ensuring access to work and that work pays:

- Activation is just one element of the radically new approach to social welfare in Ireland, the purpose of which is to ensure that people are better off in work than on welfare.

- A new scheme called Jobseeker’s Transition was introduced in July 2013 to assist Lone Parents back to work and towards financial independence.

- The Partial Capacity Benefit scheme was launched in February 2012 to allow people with disabilities avail of employment opportunities while still receiving income support from the Department.

- The Department is working with the Department of the Environment, Community and Local Government on the roll-out of a Housing Assistance Payment (HAP), to replace Rent Supplement. HAP will subsidise rent for people on welfare and in low-income employment so that they will not lose housing assistance when they move from welfare to work. The Department’s strategic policy direction is to return rent supplement to its original purpose of a short-term income support scheme. HAP was introduced on a pilot basis in Limerick City and County Council in April 2014 and has since been recently extended to Waterford City and County Council, Cork County Council (15th Sept), and South Dublin County Council, Kilkenny County Council, Monaghan County Council and Louth County Council (1st Oct).

- Through the new Back to Work Family Dividend scheme announced in Budget 2015, long-term unemployed jobseekers with children who leave welfare to return to work can retain the child-related portion of their social welfare payment on a tapered basis over two years. This includes those who move to self-employment, such as the construction sector. It will also apply to One Parent Family Payment recipients who similarly go back into the workforce. The scheme will be worth €1,550 per child in the first year of employment or self-employment and half that amount again in the second year.

New schemes, more places:

- This year, the Department will spend more than €1 billion on work, training and education places to benefit 85,000 people – and the number of such places has steadily increased.

- JobBridge, the national internship scheme, launched June 2011, has proved a major success. An independent evaluation of the scheme by Indecon Economic Consultants found JobBridge had a progression rate of 61% - meaning three in five participants secure employment after completing their internship. This is one of the best outcomes for such a scheme anywhere in Europe. Over 32,000 people have participated on JobBridge so far.

- The introduction of Tús, the community workplace initiative (2011) and Gateway, the local authority workplace initiative (2013), has provided opportunities for jobseekers to maintain their work readiness and harness new skills.

- Following a review of community employment and other employment support measures funded by the Department, revisions were made to community employment, the Back to Education programme and a number of other training support measures to offer greater access and flexibility to ensure more focused use of resources on the needs of jobseekers.

- In addition to the overall Pathways to Work reforms, further changes are being made to how the Departments engages specifically with the young unemployed under the Youth Guarantee Implementation Plan published earlier this year. In particular, all of the young unemployed will be engaged with immediately on becoming unemployed, regardless of their profiled probability of re-employment. Re-employment subsidies will also be available for young people at an earlier stage in terms of duration of unemployment, and a specific variant of JobBridge is being launched for particularly disadvantaged young people.

Working with employers:

- The Department now has a dedicated Employer Relations Division, which works with employers to assist them with their recruitment needs and find employees from the Live Register.

- The Department works hand-in-hand with State agencies such as the IDA to attract overseas investment to Ireland by demonstrating to international companies that their recruitment needs can be met in Ireland. This is done through “job-matching” profiles – matching potential positions with appropriate candidates.

- JobsPlus is the new employer incentive scheme, launched July 2013, which provides cash grants to businesses which hire persons who have been long-term unemployed. Under the scheme, the State covers approximately €1 in €4 of the typical cost of hiring someone who has been on the Live Register for 12 months or more. Budget 2015 provided for an additional 3,000 employees to be supported by this scheme.

Combatting welfare fraud :

- The Programme for Government commits to maintaining core welfare rates while taking a zero-tolerance approach towards welfare fraud.

-The Department’s Fraud Initiative 2011-2013 significantly strengthened what is known as “control activity” – i.e. rooting out fraud and eliminating overpayments. In 2013, more than 1 million reviews of individual social welfare claims were carried out, and savings of €632 million were achieved through control activity.

- Departmental officials have been given a range of additional powers to combat fraud. Social welfare inspectors now have the powers (introduced in June 2012) to question people at ports and airports whom they believe may be entering the country to claim social welfare payments fraudulently.

- Legislation was introduced in December 2012 to increase the amount that the Department can recover from an individual’s personal weekly payment in cases of overpayment. The Department can now recover up to 15% of a person’s payment whereas previously it had been as little as €2 a week.

- To further enhance the powers to recover overpayments, the Social Welfare and Pensions (Miscellaneous Provisions) Act 2013 introduced additional powers for the recovery of social welfare overpayments by way of notice of attachment to earnings and/or money held by an overpaid person in a financial institution. The 2014 Act now includes a provision to extend Notice of Attachment to other state payments.

- Data exchange with Revenue has been considerably enhanced allowing for focused control activity – particularly in relation to customers who receive means-tested welfare payments but may not have declared all their means to the Department.

- The Public Service Card, which involves face-to-face registration and the capture of biometric data to prevent identity abuse, has moved into full production, with well over a million cards issued to date. It is now an integral part of claim processing and control activity. To further strengthen the Public Services Card registration process, the Department acquired facial imaging matching software to help detect and deter duplicate registrations.

- In April of this year the Department published a new Compliance and Anti-Fraud Strategy 2014 – 2018. The new strategy builds on the approach and progress made under the previous Initiative. In terms of new measures being progressed under the Strategy 2014-2018 the Department will:

- Utilise predictive analytical techniques to enhance the methods currently in place to identify claims that are more likely to be fraudulent.

- Enhance debt recovery through a new debt management system which will ‘go live’ by the end of 2014.

- Have a greater presence on the ground through the secondment of 20 Gardaí to the Department’s Special Investigation Unit.

Sustainability of Pensions

- A broad range of legislative and regulatory reforms been made over a number of years to improve the sustainability of defined benefit pension schemes and protect members’ benefits into the future.

- In Quarter 1 2014, the governance of the Pensions Board (17 paid members) was restructured to consist of a three-person Pensions Authority to provide operational oversight of pensions regulation and a separate unpaid Pensions Council, with a majority of members which will represent consumer interests and advise the Minister on pensions policy.

- A Steering Group has been established with regards to merger of the Office of the Pensions Ombudsman with the Financial Services Ombudsman, as recommended in the Critical Review. The timeline for implementation has yet to be fully finalised but it is hoped to complete the merger by mid-2015.

- The decision to reform the State pension was taken in the context of changing demographics and the fact that people are living longer and healthier lives. There are currently 5.3 people of working age for every pensioner and this ratio is expected to decrease to approximately 2.1 to 1 by 2060. This has significant associated pension costs for the State.

- The Social Welfare and Pensions Act, 2011 provides that State pension age will be increased gradually to 68 years. This began in January 2014 with the standardisation of pension age for all at 66 years. From April 2012, the number of paid contributions required to qualify for a State Pension increased from 260 paid contributions to 520 paid contributions. From September 2012, new rate bands for State Pension were introduced, which more accurately reflect the social insurance history of a person.

- In line with the Programme for Government, the recent 2014-2016 Statement of Priorities confirmed that during 2015 the Government will agree a roadmap and timeline for the introduction of a new, universal supplementary pension saving scheme.

Reforming Existing Schemes:

One-Parent Family Payment

- The Department is currently undertaking comprehensive reform of the One-Parent Family Payment (OFP). These reforms are designed to tackle long term welfare dependency and the high rates of lone parents who are at risk of consistent poverty. The reforms see a reduction in the age threshold of the youngest child at which a lone parent is still eligible for the OFP. The age is being reduced to seven years of age on a phased basis to 7 years by 2015

Free Travel variant of the Public Services Card (PSC)

- The introduction of the new free travel variant of the PSC in December 2013 will help eliminate the fraudulent use of the Free Travel Pass. The new card includes customer photo identification and a number of additional security features. Over 270,000 free travel variants have been issued to date.

Water Support

- The introduction from 2015 of “water support”, a new payment of €100 per annum, paid on a quarterly basis (€25) to all those in receipt of either the household benefits package or the fuel allowance, will help compensate for the costs of water services.

School Meals

- Budgets 2014 and 2015 provided for an additional €2 million in funding each year for the School Meals scheme (bringing total funding to €39 million for 2015). The extra funding in 2014 was made available for school meals for all DEIS schools who were not participating in the scheme. The 2015 additional funding is primarily for the provision of breakfast clubs to support school going children in disadvantaged areas, and where possible, to increase funding for existing DEIS school as a consequence of increased pupil numbers.

The Advisory Group on Tax and Social Welfare

- I established the Advisory Group on Tax and Social Welfare in 2011. This group harnesses expert opinion and experience to address specific issues around the interaction of the tax and social protection systems, and make cost effective proposals for improving employment incentives and achieving better poverty outcomes. Three reports have been completed and published:

- Child and Family Income Supplement payments (February 2013)

- Disability Allowance budget changes (April 2013)

- PRSI for self-employed (September 2013)

- The Advisory Group submitted its final report, on working age payments, in August 2014. This will be published in due course.

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