Section 19 of the Social Welfare, Pensions and Civil Registration Act 2018 provides that I, as Minister, will arrange to "consult with stakeholders on examining ways in which social welfare rates are increased with the aim of ensuring adequacy for all recipients and shall do so in quarter 1 of 2019".
In this context, my Department met with numerous interested stakeholders to solicit views on how the adoption of a benchmark, and a system of indexation, might apply to social welfare rates. This involved bilateral meetings with certain stakeholders and roundtable meetings with a range of groups. The organisations consulted included the community and voluntary pillar, ICTU, IBEC, the ESRI and the Department of Public Expenditure and Reform. Various views were put forward as part of the consultation process including adopting an earnings link for social welfare payments, benchmarking and indexing to the Minimum Essential Standard of Living (MESL) measure produced by the Vincentian Partnership for Social Justice, adopting a twin-lock approach to indexation (wages and prices), and maintaining the current system of adjusting rates in line with available resources at Budget time.
In addition, the issue was considered and discussed at my Department's Pre-Budget Forum earlier this month. The Pre-Budget Forum included representatives from the community and voluntary sector, ICTU and IBEC, among others.
As the Deputy is aware, the Roadmap for Pensions Reform, published last year, commits the Government to examine and develop proposals to set a formal benchmark of 34% of average earnings for the State Pension and to institute a process whereby future changes in pension rates of payment are explicitly linked to changes in consumer prices and average wages. My Department is currently considering options to implement this commitment.
Any change to the current process of setting social welfare rates of payment would require Government approval and would have to be considered in the overall policy and budgetary context. This would include taking account of stakeholder views, as well as considerations of cost, work incentives, poverty alleviation, policy alignment and the administration of any proposed system.
I hope this clarifies the matter for the Deputy.
