Wednesday, 10 December 2003
Dáil Eireann Debate
Dr. Twomey: As stated earlier, in the homes of many people the benefits from social welfare increases will not raise the same whooping and merriment that greeted the Minister for Finance's recent Budget Statement. Sadly there is still huge scope for improvement in all other services that disproportionately affect the less well off in society. I refer here to issues relating to crime, education and the health services.
Many of the issues raised by previous speakers, including disability grants, the rise in the family break-ups and the increase in the number of single parent families, have already been discussed in detail. Does the Minister have any plans to establish a national pension type fund that will protect the future pensions of public servants and help us deal with the major social changes we are expecting to take place? We are aware that the money spent on these type of services will increase in the future.
On occasion, some Members take the opportunity to castigate their fellow Deputies on the remuneration they receive for their work in the Oireachtas. Other Members, Deputy Conor Lenihan in particular, took the opportunity, during the debate on the Hanly report, to criticise the medical profession. Even the Minister for Justice, Equality and Law Reform has decided to criticise GPs and the fees they charge. The health service has been well and truly debated in the House in recent years and three reports on it have been completed. However, it would be apt to consider commissioning Hanly type reports into the Departments of Justice, Equality and Law Reform and Education and Science rather than engaging in the sort of Mickey Mouse type of childish antics that often passes for debate in this House.
I would like the Minister for Justice, Equality and Law Reform to consider the Courts Service, the way the courts operate, the fact that some barristers have been paid over £1 million for less than two years work, and issues relating to Garda manpower. There is more scope for a Hanly type report into the workings of the Department of Justice, Equality and Law Reform than there was in respect of the Department of Health and Children.
There is no disputing the value, in monetary terms, of education. Equally, there is no disputing the positive cost benefits education brings to society. We must acknowledge the legacy of Donogh O'Malley who was Minister for Education in the 1960s. We have all benefited from his work. Ireland might not be what it is today had it not been for the huge investment in education from the early 1960s onwards. Education is a great way to break out of any poverty trap and we are denying the next generation this opportunity because we are not making the same investment, on a continuous basis, in the educational services.
The health service appears to be incredibly well scrutinised from the point of view of value for money and that of its management structures. It would be interesting to see what would happen if this level of scrutiny was applied to other Departments. The Comptroller and Auditor General is charged with seeking out waste in Government spending, but we should consider how the services to which I refer, which cost so much, are established.
The Bill does not contain any dramatic changes. The increases for social welfare recipients do not warrant the massive debate that has taken place. The majority of people, whether in receipt of disability allowance or old age pension will receive between €135 and €200 per week. The amounts given are disgracefully low for a Government which exists in this high conspicuous consumption era.
I ask the Government to consider reorganising its services in 2004. If it will not borrow more money it should, during the remainder of its time in office, try to provide those on social welfare with a fair chance. This Bill is nothing much to talk about.
Mr. Eamon Ryan: I thank the Minister of State at the Department of Health and Children, Deputy Brian Lenihan, for running into the House to hear my contribution. He is obviously keen to hear it and does not wish to miss a single word. I am deeply honoured. I regret the Minister for Finance had to leave following the Minister of State's rapid arrival. God knows he needs a few ideas following the budget. Other than the “out of the magic hat” local election decentralisation programme, the budget, in terms of social welfare and so on, was bereft of radical ideas. Perhaps the Minister of State will impart to the Minister for Finance some of what I have to say today.
Mr. Eamon Ryan: I will pass a copy of my contribution to him. In the limited time available to me I wish to address two issues, basic income and the move towards a basic income type social welfare structure, and child benefit allowances as outlined in the recent budget. The Minister of State will be aware that a cornerstone policy ambition of my party since its foundation has been that we move away from a social welfare system which discourages people from returning to the workforce and classifies sections of our society as recipients of welfare on an almost charitable basis. We should establish a system that recognises the rights of all citizens and, as a wealthy State, provide a basic income, leaving people free to use their creative instinct, to find employment and to provide for their families. It is only through moving towards that type of philosophy in our system that we will eradicate some of the real causes of poverty which are often based on subtle and psychological conditions established by the social welfare benefits we receive.
I am disappointed the Minister failed to take an opportunity to do so in this budget. We have the finance to do it and should take the opportunity to move in that direction. My party's proposal for a movement in that direction involves the establishment of a refundable tax credit system. It is a system the Government will, eventually, have to consider introducing. I asked the Minister why it was not done in this budget when so little else was being done. He obviously did nothing more in the three months prior to the budget than consider budgetary decisions in regard to Knock, Cavan and so on. He could have spent that time examining the possibility of introducing a refundable tax system by, first, giving the 10% of workers on the minimum wage who continue to pay tax a full refund of tax credit which they are not using. He could then have moved in the next budget to allow that refundable tax credit to replace social welfare benefits, thereby merging the tax credit and social welfare systems.
In that way, all people would be treated equally and we would be creating a culture which enables people to seek legitimate employment. Such people would be in receipt of refundable tax credits and anything else they did would be fully taxable thereby creating an equitable and open system. I deeply regret the Minister for Finance, in introducing the budget, failed to move in that direction. Such a move would have been seen by all parties as a move in the right direction.
One could argue that increases in child benefit in recent years have, to a certain extent, resulted in a small step towards a basic income type payment where every adult and child in the State is treated equally. I welcome that approach. The increases were smaller than promised by Government but at least they are moving in the right direction. What is inequitable is that increases continue to be paid on an across-the-board basis. I earn a very high income, yet I receive the same child benefit increases as someone on a low income to whom such an increase makes a substantial difference. I would argue that further increases in child benefit be paid by way of a taxable parenting allowance rather than in direct increases in child benefit which are paid to the son or daughter of Michael Smurfit in the same way as they are paid to those on low incomes. We should continue to increase child benefit, but it is important we target such payments at those on low incomes and not at those who do not have a desperate need for it.
We are moving away from a graded tax system based on income, property or wealth to a system of regressive indirect tax, not only in terms of VAT but across the board in other charges. It is time we adjusted our system and recognised our duty to support those on low incomes. However, we should not do so in a charitable way or in a way that would restrict people to poverty, rather we should try to liberate them to become more productive and creative.
Ms Cooper-Flynn: I welcome the opportunity to speak on this Bill which provides for a record amount of investment in the social welfare system this year. I also welcome the budget. I appreciate the Opposition is doing its best to muster up opposition to what has been a successful budget. However, Deputies, particularly members of the Fine Gael Party, are not unified in their objections to decentralisation. The Leader of that party has taken one line, the Front Bench spokesperson, Deputy Gay Mitchell, has taken a different line in saying that the Government is denuding Dublin, and Deputy John Bruton said it was ridiculous to move Departments and heads of Departments out of Dublin. Yet, these Deputies consider it all right for someone like myself to travel up here from Mayo to debate a matter in this House. While the Opposition are at odds, we on this side of the House are completely at one.
Ms Cooper-Flynn: I do not wish to deal with the Independents on this matter. We all know they are all over the place. I thought they would have had the good grace to welcome the massive investment being made in the social welfare system in 2004. Some €11.2 billion will be spent in this area next year, an increase of €750 million on 2003 figures, representing a 7% increase, which is way ahead of the predicted rate of inflation of 2.5% in 2004. This investment will affect 970,000 people claiming social welfare benefits in 2004. The budget and social welfare provisions will impact on two out of every five people in this Sate. Most people, if not all, will be better off as a result of the changes in the budget and the Social Welfare Bill.
I would like to refer to some of the changes that have taken place since this Government came to office. There have been many conflicting stories in Members' contributions on where we now stand and how that compares with 1997 when the Government took office. The number of people in employment has increased to almost 1.8 million. Unemployment has fallen from 10% to 4.3%. It is significant that 41,000 taxpayers have been taken out of the tax net this year alone. This is greater than the overall number taken out of the tax net in the three years the Opposition was in government.
Social welfare spending has increased massively, from €5.74 billion in 1997 to €11.26 billion in 2004. The 2004 spend is almost twice that of 1997 and is well above the rate of inflation. Social welfare benefits have increased in real terms. This was one of the objectives held by the Minister for Finance and it has been achieved. We have seen new social welfare benefits, such as farm assist, carer's benefit, widowed parent grants and respite care grants, being introduced and enhanced.
We want to continue in line with the commitment in the programme for Government to increase the State pension to €200 by 2007. We are well on our way to achieving this. Looking at the levels of increase given by Opposition parties when they were in office, I listened with incredulity to their complaints about the current levels of increase.
Ms Cooper-Flynn: While it is embarrassing for the Opposition, it is important to look back so that one can look forward in a positive manner. Let me cast my mind back to some of the benefits that I am interested in.
Ms Cooper-Flynn: Yes. However, sometimes one can learn lessons from the past and we learned many lessons in the shape of the derisory payments given to social welfare recipients by the parties now in opposition.
I want to look at the area of child benefit, which has been one of the main priorities of the Government. In 1997, the weekly payment for the first and second child was €38.10, it is now €131.60. It is a massive increase.
Ms Cooper-Flynn: I could also talk about the massive investment in schools and hospitals. The Opposition's track record on school building was appalling during its term of office, not to mention its level of investment in the hospital programme, which does not compare with what the Government has done.
The average yearly increase we have given since 1997 is 13.36% compared with an average increase of 4.16% when the Opposition was in government. Deputy Eamon Ryan mentioned that this was applied evenly and equally to all parents.
Ms Cooper-Flynn: It has been of huge benefit not only to social welfare recipients, but also to working mothers who have had to avail of expensive child care. The manner in which the Government has decided to increase child benefit has positively touched the vast majority of parents. The message from the recipients of these payments is that they are happy with how the Government has tackled this issue as it was ignored for many years. While I would like to have seen an even greater increase this year, we must recognise that the growth of our economy has slowed and that all such payment increases must be ultimately paid for by the taxpayer. Any time we introduce a measure designed to increase revenue to enable us to do more, the Opposition objects to it. The Opposition cannot have its bread buttered on both sides.
Ms Cooper-Flynn: The Opposition is an extremely ungrateful bunch. All that I ask is that when the Government introduces a positive programme, the Opposition would welcome it. This Bill clearly is part of this positive programme. The Opposition should also welcome decentralisation and recognise that the country is made up of many regions. The world does not begin and end in Dublin. This is something Fine Gael should know all about given its performance in Dublin in the last election.
Ms Cooper-Flynn: If I have said anything untrue, the Deputy should point it out to me. I deal only in facts, and facts and figures are the basis of the Bill. While I accept that they portray a harsh reality for the Opposition, it is important that we inform the people of what I suspect they already know.
Ms Cooper-Flynn: While I appreciate your intervention, a Cheann Comhairle, I assure you that I am not in any way put off by the interruptions from the Opposition. I find it entertaining, particularly as the figures on their side do not stack up. If I was currently in opposition and had the track record Opposition Members have, I would probably heckle Government spokespersons too.
I return to the issue of contributory and non-contributory old age pensions. I welcome the €10 increase which is well in excess of our 2.5% inflation rate. It is in line with our target of €200 per week by 2007. The previous programme for Government promised to bring the pension to €127 per week and it was achieved. I have every confidence that the €200 target is realistic. Only an uncaring Government would not take the time and resources to invest in our elderly people who have served us so well in the past. I am delighted the investment we have made in our elderly people has been warmly received by them. Supporters of other political parties are always grateful that when we are in government, we are able to announce such healthy increases in the pension. I sincerely hope this will be a trend that we continue. I particularly welcome the increase in the widow's pension as it was badly needed and attention was drawn to it in successive budget speeches.
I heard other Members talking about the number of people who have been caught in the poverty trap. According to the ESRI, the overall level of consistent poverty in 1998 stood at 8.2%. This has been reduced by over one third to 5.2% in 2001, the most recent year for which figures are available. I listened earlier to Members talking about poverty – I am particularly thinking of the Labour Party and the contribution of Deputy O'Sullivan – and how the levels have increased. This is incorrect. While we all recognise there is much more work to be done, the figures show that consistent poverty levels have decreased.
I welcome increases in payments to the long-term unemployed and those in receipt of unemployment and disability benefits. Those increases are all approximately €10 and well ahead of inflation. The average percentage increases by the Government is over 9% compared with a derisory 2.9% when the Opposition was in government. These are the facts and they plainly speak for themselves.
I congratulate the Minister for Social and Family Affairs, Deputy Coughlan, on tackling areas where she felt reform was necessary. I particularly congratulate her on the additional funding for the money advice bureaux. I know this scheme operates successfully within County Mayo. The Minister felt the supplement given to MABS was not being used evenly throughout the health board areas and needed reform. I welcome her allocation of €960,000 to MABS to provide its essential services. The level of referrals to it makes it clear that it has been a great success story. It is a great service and any enhancement of that service is to be welcomed.
The Minister has also made certain changes in the rent supplement regime. There has been much misinformation, as often happens in such matters. Rent supplements were intended to meet a person's long-term housing need. While the scheme was not supposed to be a housing programme, it became one over the years. I welcome the Minister's clarification on this matter because it received considerable media comment. It is to be available to those with housing needs whose safety or well-being is at risk. It will continue to be available to such people. Those with disabilities, the elderly and those experiencing severe social problems will all be able to avail of rent supplement.
The changes in this measure will not affect those on local authority waiting lists. The original purpose of rent supplement was to cater for those with genuine housing needs. In every county we have hundreds of those—
Ms Cooper-Flynn: Those on the housing list for genuine reasons can avail of the rent supplement. Deputy Durkan seizes on issues such as this, which he believes might generate a little media interest but, in effect, he is spreading much misinformation and scaring many genuine people who are availing of rent supplement. If this is the purpose of his information, fair enough, but I believe it is mischievous and wrong. We should ascertain the facts as they genuinely apply.
An Ceann Comhairle: I ask Deputy Durkan to allow Deputy Cooper-Flynn to continue without interruption. I understand he will be in possession during the next slot and I would not like him to be hoarse from interrupting by the time he has to contribute.
Ms Cooper-Flynn: —interrupt me on so many occasions. Given that he has interrupted with inaccurate information, I must reiterate that this measure will not affect those on local authority waiting lists for houses, even if they have been renting for less than six months. Those who are homeless, as defined in the Housing Act, will not be affected either. Those who have been tenants for six months will not be affected, nor will those currently in receipt of rent supplement. We are all aware of isolated hardship cases in our constituencies. The Minister, Deputy Coughlan, has said very sensibly that full and sympathetic consideration will be given to the needs of such people. This will be done in co-operation with the housing authority. This is to be welcomed.
Many of the supplements that have been available through the Department of Social and Family Affairs have not been reviewed. This may have been because of a cowardly reluctance to review them on the part of the Opposition when it was in Government for fear anyone would say something.
Ms Cooper-Flynn: For every €10 in Government expenditure, €3 goes towards social welfare. The Minister has taken a very brave stance and has decided to spend it where the Government believes it is most wanted. If this involves the reform of some schemes and supplements that might not have been used over the years for the purposes for which they were originally intended, so be it because it is wise. I welcome the Minister's bravery in this regard. It is not always easy to adopt such an approach. It would be very easy to go along with the usual budget increases and be praised by everybody for doing so.
Spending in the order of €11.2 billion on social welfare is a record by anyone's reckoning and in terms of the overall spend by the Government. It represents a huge percentage of the resources available to the Government for 2004. It is important that these resources will be targeted where they are most needed. Old age pensioners, those in receipt of child benefit, widows and carers have all received very substantial increases.
We are one and a half years into a five year programme. What we set out in our programme for Government was our ambition over a five year period. It was never our intention that the full programme would be rolled out in a year and a half. Given the very positive nature of the increases this year, I look forward, over the next three budgets and the three social welfare Bills that will follow them, to the achievement of the objectives of the programme. I commend the Bill to the House and commend the Minister.
Mr. Durkan: If I were to welcome this Bill, I would be welcoming it for what it does not contain rather than what it does contain. One can only imagine the Cabinet meetings when the Estimates were being compiled and thereafter. Everybody must have sat around waiting for inspiration. Then there must have been a voice somewhere in the wilderness which said, “Decentralisation”. The Cabinet members seized upon it in accord. Decentralisation became the flavour of the budget and the Social Welfare Bill and will become the flavour of every other Bill that is likely to pass in the House in the next 12 months.
Mr. Durkan: This worked very well until today, when the Minister for Finance disclosed to the House that it was not really a bucking bronco that the Minister for State was riding but a little hobby-horse. It never moved from its position or had any influence whatsoever on decentralisation, social welfare or anything else. It was a sad moment when we learned that the Minister of State, Deputy Parlon, had nothing to do with the budget's announcements or the Social Welfare Bill.
Mr. Durkan: I have some points to make on the Social Welfare Bill proper, for which the poor, unfortunate Minister for Social and Family Affairs obviously had little responsibility and for which the Minister of State, Deputy Parlon, had even less. First, the Minister for Social and Family Affairs is a genuine, decent and caring person. The people I blame are those around her who influenced her and pushed her in the direction she went, and thus she ignored the most needy elements in society—
Mr. Durkan: This is in line with those on the other side of the House who have completely ignored the needy and those who deserve help under the Government's programme, such as the homeless and those without medical cards.
Mr. Durkan: I know several Members on the Government side will claim no responsibility for the Government's programme and many of them have disassociated themselves from all aspects of the budget in the meantime. My colleagues have already indicated that the carers comprise a very deserving group which received minimal attention in the budget. They are making a major contribution to our society and ensuring that the State is saved millions of euro per annum. The Social Welfare Bill grants them virtually nothing.
Mr. Durkan: The issue on which I want to concentrate is that of the child benefit. According to the Government, this is supposed to be the greatest era we have experienced economically since the world was formed. Those in receipt of child benefit got €0.21 per day.
Mr. Durkan: A Deputy on the Government side of the House said yesterday that this side of the House was not able to work out the allowance per hour. Numerically challenged as we are, we have worked it out, and it amounts to 8 cent per hour. This does not give much recognition to the children of this country. This is at a time when child care costs are at a premium and every mother in the country is forced to work to pay a mortgage. Mothers cannot afford to get married because of the policies pursued by the Government.
Mr. Durkan: Mothers are forced to pay for crèches for their children and the best the Government could do for those in that hard-pressed environment was give 21 cent a day. If I were the Chair I would ask those on the Government side if they are ashamed.
An Ceann Comhairle: There is no such thing as a point of information. If the Deputy has some information her colleague will have an opportunity to mention it when speaking next. If she has vital information her colleague can impart it when Deputy Durkan concludes. Deputy Durkan, without interruption.
Mr. Durkan: I have come to the conclusion that the Government does not believe that these people exist. The widows and single parents of Ireland must go out to work and they must pay for their children's care in crèches or playschools. What recognition do they receive from the Government? Absolutely zilch. I cannot understand how the Government can be so uncaring. Surely someone told it there was a group of people which is deserving of its help and which has been ignored for the past three to four years. Surely someone would have said to the Government at some time: “Guys and gals, would you ever have a look at this situation?” It is now generally recognised that the family is a very important feature of our society.
Mr. Durkan: It was increased by 50% in one year alone. I am not surprised those on the Government side are unaware of this because they have lapses of memory, which are very serious when one is in government.
Mr. Durkan: On the supplementary welfare cuts, I feel sorry for the Minister for Social and Family Affairs. She recognised that her colleague, the Minister for the Environment, Heritage and Local Government, was providing nothing in the way of housing. She decided enough was enough and that she would cut back in this area regardless of whether people liked it. She is putting pressure back on the Minister for the Environment, Heritage and Local Government, who has failed miserably to do anything for the homeless.
Mr. Durkan: It is time the Minister for the Environment, Heritage and Local Government got off his behind and faced up to his responsibilities. Instead of whinging about building 5,000 houses, he should do something for the 100,000 people who are on the waiting lists. I am not surprised the Minister recognised something had to be done in this area.
Mr. Durkan: We have heard Government Deputies boasting again and again in the past few days. They are right about the one boast they have – they succeeded in reducing taxes in the past few years.
Mr. Durkan: Before they reduced taxes we had schools that children could attend which complied with health and safety requirements. We had hospitals that people could get into and we did not have to send our people across the water for hospital treatment. We could treat them at home.
Mr. Durkan: We had respectable housing we could give our people, but that no longer exists. We could walk the streets because they were crime-free. That was before the Administration decided it could run Government by cutting taxes and putting more money in people's pockets.
Mr. Durkan: If the Government continues in that direction, we will have another general election, which the Government will have to buy as it did with the last one. I doubt the people will be prepared to take the Government on trust a second time.
Mr. Durkan: The Social Welfare Bill and the budget have not only ignored the poor but they have ignored a large segment of society. We now have two classes in the country, the haves and the have nots, and the latter have grown dramatically in numbers.
Mr. P. Breen: That goes for both sides. The Minister for Finance missed a golden opportunity in the budget to do a lot for everybody, but he ended up doing nothing for anybody. The Social Welfare Bill makes a number of changes announced in the budget. It is the first of two Social Welfare Bills and contains some provisions that relate to the cutbacks announced in the Estimates published on 13 November, which of course were the real budget. The end result will be that the poverty gap will widen, with the poor still having to wait for their fair share. As my colleague Deputy Ring said last night, CORI estimates that since the Government came to power in 1997, the gap between the rich and the poor has widened by €294 per week.
In making these calculations CORI included pay increases and tax reductions as well as social welfare increases. It also included the impact of the new Government savings scheme which many have had to leave, though it suits those who are better off. However, it is beyond the reach of Ireland's poorest people. Over 70,000 households are living in consistent poverty, according to the Combat Poverty Agency, and they do not have the basic necessities such as food, clothes and heating.
The recent child benefit increases in the budget include a €6 increase to €131.60 for the first and second child and an €8 increase to €165.30 for the third child and subsequent children. The Government has committed to increasing child benefit rates to €149.90 and €185.40 in this budget and the next budget, leaving gaps of €18.30 and €20.10 to be filled.
The real value of this increase can be judged after taking into account the effects of inflation. According to the budget this will be approximately 2.5% in 2004 and if one looks at the rates for the first and second child, inflation erodes €3.14 of the monthly increase and the real increase is therefore €2.86 per month. This equals 66 cent a week or 10 cent a day. Is the Government living in the real world where families have to pay for the daily increases in foodstuffs, fuel and many other necessary commodities?
Many Deputies have mentioned the child dependant allowance, which has been frozen since 1994. The Social Welfare Bill has included a provision whereby a spouse or partner of the claimant of child dependant allowance earning over €300 per week will no longer be entitled to the allowance. This effectively gets rid of the half payment of the child dependant allowance for families on low incomes.
I was disappointed by the lack of an increase in the back to school clothing and footwear allowance which amounts to €80 per annum for a child aged under 12 and €150 for a child over 12. This will result in a 2.5% reduction in real terms in 2004. All of us are aware of how costly it is to clothe children on their return to school given that the cost of uniforms, footwear and school books has increased substantially in recent years. I agree with my colleague, Deputy Ring, that the guidelines for the scheme are too rigid and, thus, hundreds of families which badly need such assistance do not qualify for the scheme.
With regard to unemployment benefit, the Bill makes provision that, in cases where a person claiming benefit has 260 social insurance contributions, that is, five years, the maximum number of days for payment will reduce from 390 days to 312. In other words, the payment period will reduce from 15 to 12 months. This could affect a number of women who have taken time off to rear children.
I refer to the retirement and old age pensions. Age Action Ireland, which represents our elderly, called the social welfare increases disappointing. It stated: “At a time when the percentage of people over 65 living below the 60% of income poverty line has increased from 24.2% in 1997 to 43.3% in 2000, €10 will do little to tackle the plight of our poorer older people”. Deputy Cooper-Flynn referred to the Government's target on old age pensions, which is to achieve a rate of €200 per week. However, this was promised by the Government parties in 1997 but they are a long way from meeting that.
Many elderly people have difficulty living on their weekly pension. Many pensioners who have applied for window and door replacements under the housing aid for the elderly scheme call to my constituency office. Local authorities do not have money to fund the scheme and many pensioners are left without replacement windows and doors because they cannot afford them.
In response to the budget, the Carers Association stated that the means test to be undertaken for receipt of carer's allowance is unfair and inequitable and demanded that it be abolished, which the Government parties have promised to do on many occasions. Every Member attended the launch of the association's pre-budget submission in Buswells Hotel. Only 20,538 people were eligible for the carer's allowance in 2002. However, the association estimates that 170,000 carers are looking after relatives and neighbours.
Despite the recommendation of the Oireachtas Joint Committee on Social and Family Affairs that the means test should be abolished, this was not officially recognised in the budget or the Estimates. Instead, the weekly income disregard was increased by only €40 per week for a single person and €80 per week for couples. This means income disregards will be €250 for a single person and €500 for a couple. These increases will result in only a small number of extra claimants for the carer's allowance. The changes of which the Minister is so proud will be of no use to the vast majority of carers who provide a valuable service without recognition or gratification from the State.
Mr. B. Smith: I wish to share time with Deputy Ellis. I am glad to have the opportunity to contribute to the debate. I commend the Minister for Social and Family Affairs on the excellent funding she has obtained for her Department and the substantial increase that will be provided for social services in the coming year. Deputy Durkan was a helpful Minister of State at the then Department of Social Welfare in the mid-1990s, but in that role he vigorously defended miserable increases granted by the rainbow Government. Earlier he misrepresented the record.
Mr. B. Smith: I will outline facts the Deputy does not wish to hear. Deputy Pat Breen should acknowledge that, when Fianna Fáil and the Progressive Democrats returned to Government in 1997, child benefit was payable at a rate of €38.09 per month for the first and second child and €49.52 per month for the third and subsequent children. Child benefit will be payable in 2004 at a rate of €131.60 per month for the first and second child and €165.30 for the third and subsequent children. These are increases implemented by Fianna Fáil and the Progressive Democrats.
Mr. B. Smith: Deputy Pat Breen's constituents in Clare will be disappointed he is not supporting the Government's innovative and progressive decentralisation programme. Deputy Durkan stated Fine Gael's policy is to increase taxation, abolish benchmarking and oppose decentralisation.
Mr. B. Smith: The Deputy's constituency will benefit significantly from decentralisation, especially the towns of Kilrush and Shannon. His constituents will be disappointed that he is afraid to support Deputy Killeen and his Fianna Fáil colleagues in ensuring County Clare will benefit from the programme.
Mr. B. Smith: What is his contribution to public life? Deputy Durkan and the self-appointed experts in the national media should know better. Commentators and politicians, especially in Fine Gael, have made ill-informed statements in the media recently and they are all over the place regarding decentralisation.
Mr. B. Smith: I welcome the decentralisation of the headquarters of the Department of Social and Family Affairs to County Louth and of other bodies to Deputy Ellis's constituency, Donegal and Longford.
Mr. B. Smith: I commend the civil servants in the headquarters and regional offices of the Department of Social and Family Affairs on the great service they provide to public representatives and their clients. The Department provides an excellent service at all times and I commend the Minister and her officials on their work.
Mr. B. Smith: The people of rural Ireland will be glad the population is increasing. People on the east coast have spoken for years about population imbalance and congestion in Dublin and surrounding counties. A progressive, innovative policy has been introduced but they are the first to object to it. They are inconsistent and the public is seeing through—
Mr. B. Smith: Fine Gael called for decentralisation but opposes it now. The Deputy should be ashamed of himself for opposing decentralisation given that his county is a beneficiary. I hope that is reported in The Clare Champion next week.
The considerable increases in the rates of payment to our pensioners in recent years have been welcome. To a great extent, that is the age group which built the foundations of the success we now enjoy. Prior to the 1997 election, the Fianna Fáil Party quite rightly identified the need to give pensioners a better income as a major priority. All of those commitments have been honoured in full. Over the next three and a half years, I look forward to this Government giving further increases to our elderly. I welcome the fact that the largest ever social welfare funding will be provided for 2004, at a level of €11,262 million for 970,000 claimants. Overall, 1.5 million people will benefit from the allocations.
I wish to refer to one or two small issues. I would like the Department to review the entitlements of people who are in receipt of British or US pensions following their return home, whose sole income consists of such a pension. They should qualify automatically for the various allowances. Members such as the Ceann Comhairle, Deputy Ellis and I who represent Border constituencies, will be aware of the heavy levels of emigration which those areas suffered over the years. Many people return to live in their home areas when they reach pensionable age. Their sole income consists of a pension from Britain or the US and, in some cases, they are deprived of the relevant allowances because they are above the basic qualification level for an Irish pension by a very small margin. I ask the Department to review that situation.
There appears to be an unduly clinical attitude to the assessment of income and calculation of the exchange rate between sterling and the euro. As a result of sterling and euro fluctuations, a person's British pension could be below our comparable in a particular week. However, depending on fluctuations within the following few weeks, they may not get the benefit of a top-up from our Department of Social and Family Affairs. That area should be streamlined. Instead of sometimes adopting a very clinical attitude when dealing with currency differentials, a practical approach should be taken. Department officials at local level should be enabled to take such a practical approach, in terms of giving people who are on the borderline of entitlement to an Irish pension the opportunity to avail of the schemes which are available to those who qualify for Irish pensions.
I congratulate the Minister for Social and Family Affairs, Deputy Coughlan, on bringing forward a progressive and positive programme for 2004. From my contact with pensioners and people who are entitled to child benefit, I know they are very pleased with the real increase in the level of payments for the coming year. I am glad to support this legislation.
Mr. Ellis: I join with Deputy Brendan Smith and others in welcoming the Social Welfare Bill 2003 to give effect to elements of the 2004 budget. The Bill makes a very substantial contribution to the position of people who depend on welfare as their main income. I wish to express my sincere thanks to the Ministers for Social and Family Affairs and Finance and to the Government, for supporting the decentralisation of a section of the Department of Social and Family Affairs to Carrick-on-Shannon. That will be of enormous benefit and shows the Government's commitment to decentralisation. The location of that unit in the north-west, together with existing units of the same Department in Longford, Sligo and Letterkenny, will provide promotional opportunities within that area for those who re-locate as part of the decentralisation process.
There is a very substantial increase in this year's budgetary provision for social welfare payments. In 1997, the figure was €273 million, as compared to the current level of €630 million. That is a dramatic increase in anybody's understanding. The number of people depending on social welfare is also relevant. In 1997, the unemployment rate was 10%. It is now 4.3%, indicating that an additional 5.7% of people are now at work in this country and making their contribution to the overall tax take of the State, including PRSI and PAYE. Furthermore, the Government has decided to continue to increase the welfare budget, rather than decreasing it in proportion to the reduction in the number of people depending on it. That is worth bearing in mind.
An estimated 970,000 people, on average, are expected to claim weekly social welfare payments of various kinds. Almost 1,500,000 people will benefit, directly or indirectly, from such payments, including dependants. While there is generally a sympathetic attitude towards the elderly, this Government has ensured that they have been looked after. In 1997, the weekly old age contributory pension was €99.10. Today, it is €167.30 as a result of the budget increases. That represents an increase of almost €68 – a very significant improvement over a six-year period.
This year's increase of €10 in the rate of social welfare payments is a significant milestone in terms of the Government's commitment to bring the old age pension to €200 within its lifetime. It shows commitment by the Government to fulfilling its promises. It fulfilled and even surpassed the promises it made in 1997, including the increase in the old age pension to £100 or €127. I have no doubt that if our economy continues to improve as it has over the past 12 to 18 months, we will have no problem in ensuring, within the lifetime of this Government, that the old age pension will be well in excess of the promised figure of €200.
With regard to the other increases which will come into operation as a result of the recent budget, child benefit has been increased by €6 for the first and second child and €8 for the third. Deputy Durkan was shouting earlier—
Mr. Ellis: It is not very difficult to provoke the Deputy – I do not need any warning in that regard. However, we have a mutual understanding that if he remains silent, I will probably leave him alone. During his term as a Minister of State with responsibility for social welfare, he was quite helpful to us on the Opposition side. However, his senior Minister in the then rainbow Government was not very helpful to social welfare recipients, in terms of the amounts of money he gave them.
Mr. Ellis: As far as this debate is concerned, regardless of interruptions, we have to understand that there are people in receipt of social welfare payments who have no other income – it is their main source of income. Those people must be helped. By giving an increase of €10 to old age pensioners, we ensure that their lifestyle is maintained ahead of inflation. That is important. It is also important that social welfare recipients know that other available benefits in kind are not under threat.
Carers have been mentioned on numerous occasions in this debate. All Members understand that carers give an enormous commitment in looking after family members and ensuring they do not end up in residential care. This is a saving for the State. However, there is a need to examine the payment rates to carers. There has been a significant increase in the income limits. However, it should be more available in order to allow people to remain in their communities, rather than going into care. The only means by which this can be done is through a person giving up employment to become a full-time carer. This is a category that is entitled to sympathetic consideration for funding.
With unemployment reduced to 4.3%, Government action is proving that it is prepared to invest in helping people out of the social welfare system and back into the employment market. However, there is a section of the unemployed that still finds it difficult to get employment. The scheme being introduced by the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, for people and small farmers in rural areas will be of enormous benefit to them and their communities.
According to the ESRI, the overall level of consistent poverty has dropped from 8.2% in 1998 to 5.2% in 2001 to 4.8% in 2003. If such progress can be made for the next five years in tackling poverty, we will have come a long way. Father Sean Healy and others will say that we are widening the gap between rich and poor. However, if there were not so many people at work, the amount allocated to social welfare could not continue. People do not realise that if the same amount were allocated, it would be spread among a larger number of recipients. The drop in the unemployment rate has been important in ensuring that social welfare payments can be increased to a level people expect.
If we contrast the percentage increases this year to those in 1997, the old age contributory pension has increased by 68.8%. The old age non-contributory pension has increased by 79%, the long-term unemployment assistance rate by 57.3%, short-term unemployment assistance by 62.3%, unemployment and disability benefit by 57.2%. Child benefit payments have risen by 245.4%, child carer's allowance by 55.9% and carer's allowance for those over 66 years by 76.2%. The Government has narrowed the gap between the widow's pensions and other pensions by increasing it by 55.4%. This is important because all Members will accept that widows suffered because of the way the social welfare system was structured in the past. Hopefully, during the lifetime of this Government, the widow's pension will be on a par with the non-contributory old age pension. There have been significant increases in the family income supplement thresholds by €28 and a €7 increase in the minimum payment for respite care grants to €835 per annum from June 2004.
The biggest change in social welfare payments is that the benefits are payable at the beginning of the year. For too long, social welfare increases were given but not applied until June, July and even August of the following year. In some cases, they were only paid for three months of the year.
Mr. S. Ryan: This country is one of the richest in the world. For the past seven years, phenomenal growth in the economy has been reached. We have witnessed money thrown around like confetti as if there were no tomorrow, in many cases for specific political gain. Choices were made which provided more than generous tax breaks for the wealthy. The introduction of the SSIA scheme for people who never demanded such a generous scheme will cost up to €5 billion and was never part of an election promise. It is in this context that we must assess the detail of this Bill, the budget and the Book of Estimates.
I acknowledge the general increase of €10 a week to social welfare recipients in the budget and provided for in the Social Welfare Bill 2003. However, up to 1 million people who rely entirely on welfare payments still find it difficult to live and bring their families up in dignity. The budget increases are the only ones they receive in the year, while having to endure the continuous introduction of stealth taxes. ESB charges have risen by nearly 27% since the Government came into power. The TV licence has risen by €43 to €150. Eircom bills, stamp prices, transportation costs and gas bills have all increased. These all affect low-earners much more than those with means.
Mr. S. Ryan: The Government entered into the social partnership agreement, Sustaining Progress, and undertook to achieve a rate of social welfare payment of €150 per week in 2002 terms for the lowest rate of payment by budget 2007. To meet that target payment, it will have to rise by nearly €50 for each of the next three budgets. The Labour Party will pursue this issue vigorously to ensure that at least this Government promise is carried out.
A budget cannot be considered in isolation, particularly in an election year. That applies this year as the Book of Estimates, containing 16 savage cuts, will have implications for thousands of families. Lest the Minister for Social and Family Affairs, Deputy Coughlan and the Government backbenchers lose the run of themselves, it is widely acknowledged that the 2003 social welfare increases were an insult to the poorest. A person on the lowest rate of payment on unemployment assistance will receive a real increase this year of 30 cent per week. An unemployed couple with one child are 25 cent per week better off this year. This is some commitment to the less well-off in our society.
It is important to assess the policy direction of Government in eliminating poverty and to the concept of equality which is enshrined in the Constitution. I compliment the various groups working to enhance the quality of life of the disadvantaged, and acknowledge their helpful submissions to us and to Government.
There is a very interesting chart in the CORI justice commission's analysis of the budget, which outlines how much people's take home income has increased under the Fianna Fáil-Progressive Democrats Governments since 1997. Following seven budgets a single person's real increase is about €50 which is about €7 per year. The choices made by the Government are shown in that a couple with one earner who brings in €50,000 got an increase of nearly €310 in those seven budgets. Couples with two earners who bring in €75,000 between them got an increase of €543.
Given the Government's policy of individualisation, it has decided on a particular direction for tax, but for social welfare it has disregarded the concept of individualisation when it suits. Section 12 proposes to amend the supplementary welfare allowance scheme by providing that rent and mortgage interest payments will not be made where the spouse or partner of a claimant is in full-time employment.
At the moment a community welfare officer has discretion in the case of a person in low-income employment of €14,000 to €17,000 with a wife at home looking after the children. Such a couple cannot get local authority housing, but might be on a housing list. If their rent is excessive they can put a case to a community welfare officer. If the wife or spouse can get supplementary welfare or rent supplement to help them pay for the cost of the house, the husband can remain in employment.
When the new regulation comes in community welfare officers will be prohibited from giving such a person rent supplement because the spouse is working. The net effect is that a couple trying their best to remain in a working environment and look after their family have no alternative. They are faced with either the loss of the roof over their heads or the loss of a job, and many of them will reluctantly choose the house and give up employment. The Government claims to aspire to get people into employment, yet it introduces legislation that discriminates against people who have a right to work and have a home of their own.
My colleague, Deputy McManus, will deal with the cuts in some detail. The cuts are draconian in their effect on people's quality of life. In her speech the Minister said rent supplement would continue to be available to those on the housing list. I am delighted she listened to the Labour Party in agreeing to this. While this is acceptable if there is uniformity in the application of the policy throughout the country, the Estimates and the budget are bad for people in need. It will be up to the Labour Party when it next gets into Government to row back the vicious cuts.
Ms McManus: I need to set the record straight. Deputy Ellis spoke about unemployment levels. The quarterly national household survey revealed today that the unemployment rate has gone up from 4.4% to 5.2% in the third quarter of 2003.
This debate is taking place on a day when a major new ESRI report shows definitively that not only is Ireland a deeply divided country in terms of poverty and wealth but that the gap is getting wider. People on low incomes are getting poorer relative to those on high incomes. A very clear picture is painted. Despite the economic boom and its potential to create a more equal society the proportion of people in relative income poverty has more than doubled since 1994.
This is not happening as a result of an act of God or nature. Growing inequality in our society is the direct result of a systematic policy of Fianna Fáil and the Progressive Democrats to marginalise further persons and communities who do not carry political clout.
The author of the ESRI report, Christopher Whelan, has pointed out that welfare increases are well behind increases in real incomes and that significant groups are drifting from what would be considered a reasonable standard of living. He stated that to participate in society without shame and with dignity requires higher incomes. Not being able to do so leads to a day-to-day life of economic brinkmanship, financial strain and psychological distress. In particular, single mothers and older people are at risk, as are people suffering from illness and disability. It is the job of the Government to address the needs of these vulnerable groups. This is what being in power should be all about. However, the Government has no intention of tackling inequality.
Deputy Ned O'Keeffe has said this is the most right-wing Government this country ever had and the Minister for Social and Family Affairs, Deputy Coughlan, is determined to prove him right. While she can bluster her way through questions about the savage 16 cutbacks, she cannot avoid responsibility for the hardship these cuts will cause. While the Minister savages the poor, her Government continues to safeguard tax breaks for the wealthy, and the chasm between the two widens.
A community so divided is not a healthy community, nor is it a safe one. The health status of our society depends on narrowing that gap. Tackling the causes of crime must be fundamental to any initiative against crime today, and this means tackling the causes of disadvantage. We know from international experience that socio-economic factors are major determinants of the health status of an individual. What is remarkable and unique about the two-tier nature of the Irish health service is that it militates directly against those most in need of health care and in favour of the better off who generally suffer less ill health.
This inequity has been exacerbated by a Government policy on health that ensures that fewer people in our population than ever before are eligible for medical cards. Excluding the wealthier over 70s, the number of income-related medical card holders has dropped to an all-time low of 27.7% from the 38% who were covered in the early 1970s when the scheme was introduced and when this country was considerably less well-off than it is now.
The low income ceiling for medical card cover can only be described as criminal. Despite this, the Government has refused point blank to ease the hardship imposed by the onerous income limits. For a single person aged up to 66 years, the allowable income per week is €138. For a married couple, it is €200. It costs between €30 and €45 to visit a family doctor and up to €78 a month to pay for medications. At the previous general election, Fianna Fáil promised that 200,000 new medical cards would be issued. The record shows that, far from receiving medical cards, people are losing them when they experience a slight rise in income.
Outside the House, the Minister for Health and Children stated that the increases in social welfare payments announced in the budget would not affect medical card eligibility. There is nothing in the Social Welfare Bill to indicate that this is anything other than another hollow Fianna Fáil promise. I would like clarification of the protections these people are to be afforded. It is an important issue. The Minister for Social and Family Affairs must spell out how social welfare recipients and minimum wage earners will be able to hold on to their precious medical cards when their incomes creep over the limit.
I take this opportunity to nail the lie that no crèches will close. The Minister for Social and Family Affairs attempted to peddle this line on “Morning Ireland” but her contention simply does not stand up to scrutiny. In my constituency, two crèches are threatened with closure in the new year. Of these, one is part of a vocational training opportunities scheme programme which provides people with a second chance to receive an education while the other is part of a programme specifically designed to provide for teenage mothers and their babies. The latter programme was established to create training, education and employment possibilities for young mothers. It is not possible to conceive of a more valuable and cost-effective initiative, yet Government cutbacks will starve this essential service out of existence.
I also take this opportunity to condemn the Minister for her callous disregard of the people who care for the elderly, sick and disabled. Carers save the State a fortune by providing high-quality, loving care. They have received shabby treatment in the budget. Under the able chairmanship of Deputy Penrose, the Joint Committee on Social and Family Affairs produced an excellent report on the position of full-time carers. There is a wide consensus which supports putting more resources into home care.
The committee's report pinpointed various problems and loopholes in respect of carers which must be addressed. The committee's direct and pointed recommendations include a grant of 50% of the carer's allowance to persons in receipt of widow's or widower's payment, a waiver of the 15 month restriction where a person gives up a job to provide care, and payment of the respite care grant to any carer regardless of which social welfare payment the carer is in receipt. The committee also recommended the provision through the travel pass scheme of a subsidised private taxi payment to rural dwelling carers who cannot access public transport. In particular, the committee recommended the integration of health and social services delivery to ensure that health and social services work together in a manner which fully recognises carers as key partners in the provision of care.
All too often, an integrated approach is lacking and people suffer as a consequence. The recommendations of the joint committee were produced across party lines. While any improvement is welcome, it is terribly disappointing to discover that the Minister, Deputy Coughlan, failed to understand and appreciate the value of carers. If we lose their contributions, we will have to pay considerable amounts of money to replace the valuable work they do.
Simple measures could have been introduced which would have had a transforming effect on the lives of carers and those dependent on them for care. Despite their potential cost effectiveness, they are not being provided. It is a terrible pity that, instead of making the kinds of changes which could end the marginalisation of many, a budget has been introduced which shores up inequality and cuts social provision. The budget demonstrates a lack of imagination and understanding about what it means to be poor and dependent. It is blinkered to real needs and challenges to which the Government is immune and from which it is disconnected.
Mr. O'Flynn: When the rainbow coalition was in power, it spent its time pontificating about social justice. It did nothing positive to alleviate poverty and its related problems. Pensioners received minimal increases over the coalition's three budgets. Former Members of that Government choose to forget these facts. Critics of this budget must be reminded of their own sad social welfare record. To find a contrast, one needs only to look at the record of the current Government. It has reduced our unemployment level to half the EU average which has enabled it to fund major improvements in social welfare and to tackle poverty. Fianna Fáil has introduced the most generous social welfare improvements since the foundation of this State.
Despite increasing pressure on the national economy, the Government has once again delivered substantial budget increases to the vulnerable and the disadvantaged. Its performance in this area is unmatched. Social welfare expenditure in 2004 will amount to €11.3 billion. Social welfare improvements in this year's budget will cost €630 million, which is €100 million more than last year. These figures stand in stark comparison to the €273 million allocated in this portfolio by the rainbow coalition in 1997. Expenditure in 2004 will be roughly two and a half times greater than the level set by the Fine Gael-Labour Party Government.
The Government has ensured that people with disability will enjoy the dignified standard of living to which they are entitled. In 1997, the rainbow coalition paid those on disability benefit the equivalent of a mere €85.73 per week. This represented a derisory increase of €3.81 over three budgets. Since 1997, disability benefit has been increased by €49.07 and now stands at €134.80. On top of the Estimate allocation, a further €25 million has been allocated to support persons with intellectual, physical and sensory disabilities. These figures speak for themselves.
The Government has greatly improved the living standards of older people in society. When Members on the Opposition benches were last in office, increases in old age pensions ran substantially below the rate of inflation. This year, the old age contributory pension has been increased by 6.4%. The budget provides for a €10 per week increase in the full personal rate of old age and related pensions. In 2004, the old age contributory pension will stand at €167.30 per week. This measure goes a long way to ensuring the Government will reach its target on pensions of more than €200 per week before the end of its term in office. The pension rate is well ahead of inflation and represents a real improvement for older people.
Opposition parties say we have done nothing about child poverty. I take this opportunity to set the record straight. During our period in office, we have more than trebled the child benefit payment rates, a record of which the Opposition cannot boast. Between 1997 and 2001, there was a 58% decrease in the rate of consistent poverty numbers among children. The rate has fallen steadily from 15.3% under the rainbow coalition in 1997 to 6.5% in 2001, the most recent year for which figures are available. Unprecedented increases in child benefit since we returned to Government in 1997 have also played a significant role in the reduction of child poverty. Following this budget, increases in child benefit given by Fianna Fáil and the Progressive Democrats will mean the child benefit rate will be €131.60 for the first and second child and €165.30 for the third and any subsequent child.
Opposition comments describing Government neglect of the poor are simply untrue. Old age pensions have increased by well over two thirds, disability benefits have increased substantially and child benefits have increased by a significant 350%. These are the facts and nobody can dispute them.
Labour Party speakers like to quote statements we were reported to have made during the election campaign of 2002. They conveniently forget, however, that they promised during their campaign to raid the fund we put in place to guarantee future pensions. The Labour Party did not say where it would get the money needed to pay for pensions. It should volunteer that information during the debate on this Bill as it owes an explanation to taxpayers who are funding social welfare payments. Does the Labour Party propose to increase personal taxation? We should hear from them now. It is of interest to those who are nearing pension age that the Labour Party wants to abolish the National Pensions Reserve Fund, established by the Minister, Deputy McCreevy. The fund will be self-funding for some pensions by 2020.
I would like to speak about those who helped to build this country when they were younger. Such people deserve the full financial support the country can afford at this time. The fact that older people will receive increases that are three times the rate of inflation is welcomed across the country. I was at a Christmas party for senior citizens in Cork last Sunday.
Mr. O'Flynn: I was there with my colleague, Deputy Dan Wallace. My son, Councillor Gary O'Flynn, who will take over my corporation seat, was also present. We were greeted with applause when I mentioned during my speech that the Government has given substantial increases to older people in the last six years.
Mr. O'Flynn: We should think of older people, people with disabilities and people living alone with no friends or relatives at this time of year. Such people may not have anyone to turn to at Christmas. In the coming weeks, there will be many more Christmas parties for senior citizens similar to that organised last Sunday by the Lower Road residents' association in Cork. It is great to see the number of volunteers who are actively involved in looking after our senior citizens. I refer to people like Margaret Corcoran, Nancy Hennessy, Noreen Meaney and the hundreds of volunteers in Cork city and county.
Mr. O'Flynn: Such people, who are found throughout the country, spend a great deal of time caring for older people in their communities. The Government accepts that it has to care for them financially and to put in place provisions to that end in the budget. I may speak again about older people, who have a special place in my heart at this time of the year and at all times of the year, if time permits.
The phrase “dancing on the head of a pin” is not used enough. It describes the approach to life that prevents a person from seeing the big picture. The phrase comes to mind when one listens to the ridiculous statements coming from the other side of the House. The annual report of the Combat Poverty Agency states that the best of the two ways out of poverty is employment. The other way out of poverty is increased social welfare payments.
The Social Welfare Bill proves that the Government is delivering social welfare payments. The social welfare measures in the budget for 2004 will accrue mostly to those at the lower end of the income distribution scale. Such people would experience a significant deterioration in their income without such measures. The most significant net income gains will be enjoyed by those on the lowest incomes. Much smaller gains will accrue to those in middle to high income brackets. The budget announced last week is highly progressive. Those who depend on social welfare will receive the greatest gains from it. It ensures that the lowest income groups will gain progressively from welfare payments to a greater extent than higher income groups, which will contribute progressively more to the cost of public service provision. The overall distributional effect is similar to that in budget 2003, but there will be a greater impact this year as a consequence of the increased payments across the different sectors.
We acknowledge the social welfare increases were well ahead of what pundits had forecast. We also acknowledge the Minister's statement that he will implement the social welfare commitments contained in Sustaining Progress.
According to a recent ESRI report, consistent poverty has been reduced significantly from 14.5% in 1994 to 4.9% in 2001, the most recent year for which figures are available. Long-term unemployment, which is one of the greatest causes of poverty, has decreased from over 5% in 1997 to approximately 1.5% today. One cannot deny that progress has been made in alleviating poverty.
It is clear that we have delivered on our promise to increase social welfare payments. Despite the fact that it is the best way out of poverty, it is not well recognised that employment creation is the other way out of poverty. Fianna Fáil has undeniably delivered in this regard since it returned to Government in 1997. One should not forget that the national debt has almost been halved since 1997. Ireland has the second lowest debt in the European Union. Its debt repayments are at their lowest level since the early 1980s. When debt servicing costs, which are a factor in public expenditure across the EU, are excluded, Irish public expenditure is 43.7%, which is close to the EU average of 44.3%. Ireland's level of public expenditure is remarkably high, especially when one considers our low levels of national debt and unemployment.
Certain Deputies on the Opposition side would love to see increases in corporation tax and PAYE. As revenue is required to fund social spending, should we not set tax rates to maximise revenue, which is what the Government has done since 1997? Reductions in income tax between 1997 and 2002 have resulted in an increase in receipts of 41%. Reductions in corporation tax in the same period have resulted in an increase in receipts of 93%. We reduced corporation tax to promote enterprise. The level of unemployment is half what it was in 1997. If we allow for recent increases in the unemployment rate, it is a resilient performance for a small, open economy during an international downturn.
We must be competitive in a real way if we are to create and keep employment in Ireland. Low corporation tax provides a competitive edge on other countries which are looking for foreign direct investment. We need to make the best use of our advantages. An increase in corporation tax would jeopardise our success in creating jobs. It would risk a return to the dark days of the 1980s when many of my generation were forced to emigrate. Our unemployment rate is half the eurozone average. The fact that we do not have to spend as much of our resources on supporting those without jobs as we did ten years ago is a consequence of our success.
Social welfare expenditure has increased despite the decrease in unemployment. Although the unemployment rate has halved from over 10% in 1997 to under 5% today, we have increased social welfare expenditure by over €4 billion since 1997, to over €11.4 billion today. The Government has acted positively to help those on lower pay. It introduced the minimum wage, which will increase by 10% next year. An extra 41,000 people will be taken out of the tax net in 2004, meaning that 35% of those on the tax record will not pay tax.
The Opposition's withering comments about the Government's neglect of the poor in Ireland are simply untrue. This is demonstrated by an examination of the increases in social welfare payments. In our efforts to tackle poverty, old age pensions have increased by well over two thirds. Child benefit is up more than 300%. I must keep saying that, and I hope that other members of the Government parties will keep saying it, since it does not seem to be getting through to the other side of the House. The revenues to fund those increases have been generated by a low-tax, competitive and enterprising economy. Increasing taxes would jeopardise jobs and the revenues necessary for the social provision that we all want for all sectors of the community unable to care for themselves.
I will return to the issue of the elderly. This is the time of year when we see advertisements for Christmas gifts for children. They started at the end of August. We were talking about advertising in the House last night, wasting a great deal of time on a Bill which there was no need to introduce. Those three hours of Opposition time could have been used for more productive gain than what we had to endure last night, especially with the BCI already introducing the code, moving it forward and, shortly, publishing it.
There has been a strong media campaign by advertisers for some time. We are all made aware of those coming festivities at an earlier date every year. The lead-in period seems to extend every year. Thoughts of the Christmas season and anticipation of the joy and happiness it brings to us all are with us at this time of year, and it would be nice if we used the extended run-in time to give more intense focus to our thoughts on a sector of society that needs our increased care and support at this time.
I refer, of course, to the elderly who live alone and may not have any living relatives. I think of the elderly who may have lost contact with their sons or daughters through family circumstances. I think of them alone with their thoughts on Christmas Day. Memories of the past in remembrance of loved ones long gone will come to their minds. The joy and the happiness they see around them will remind them of olden days and better times. Christmas to them can be a very sad time. We have been and are supporting the elderly by giving them increases, but it is not enough. We must give more to the elderly. We must all give more time to them and spend longer looking after them. That is why I praised the voluntary sector for the work that it is doing.
We should stay in touch with the elderly in our locality and in the extended community, not only at Christmas but throughout the 12 months of the year. I believe that we owe a debt to those people who worked so hard to build up this country over the last few decades. It will not be long for us. If we all live for another decade or 15 years, some of us will be in that category ourselves. We will be seeking support and comfort from people of a different generation. While we are getting on with our busy lives up here, my message for those who care for the elderly, and those who forget to do so, is that they should please give them the gift of their time this Christmas, even if that means only calling in to see them, spending some time with them and seeing that they have enough food on the table and if there is anything they can do to support them. I am almost 100% sure in saying that a lonely older person would prefer someone's time to the significant increases we will give them from 1 January.
Mr. Morgan: As two of my party colleagues, Deputies Crowe and Ferris, have already spoken comprehensively on this Bill, I wish to concentrate primarily on changes regarding the rent supplement. The attack on the rent supplement whereby applicants must have been renting for at least six months is scandalous and reprehensible. It will have dreadful consequences for many people. The Government has chosen to attack rent allowance for the second consecutive year, following last year's unreasonable cap on rent allowance at €107. While the rent supplement scheme is flawed and does not represent a preferable method of assisting people in housing, in the absence of housing reform it fulfils a necessary function which enables many people who would otherwise become homeless to remain in private rented accommodation. Rent supplement is necessary because the Government continues to fail to fund social housing adequately and has failed to cap rents in the private rented sector.
It is not good enough for the Minister for Social and Family Affairs to attempt to rebut criticism of that callous change by stating that rent supplement is not a housing measure. It clearly is a housing measure, and I can refer to a Minister in support of my claim. Speaking in this House recently in defence of the Government's policy on housing, the Minister of State with responsibility for housing, Deputy Noel Ahern, stated:
The general strategy for realising this aim is that those who can afford to do so should provide housing for themselves with the aid of the fiscal incentives available and that those unable to do so from their own resources have access to social housing or to income support to secure and to retain private housing.
Who is correct? Those two Ministers are clearly at odds. The Minister of State, Deputy Noel Ahern, claimed that rent supplement formed part of the Government's effort to address the housing needs of the less well-off. The Minister, Deputy Coughlan, on the other hand, claims that is not the case. Such lack of co-ordination and failure to accept responsibility shows a very slipshod attitude towards the housing needs of citizens of the State.
A significant number of non-governmental organisations working with the homeless – those experiencing housing difficulty, the elderly, young people and refugees – have come out in opposition to the move, among them are Threshold, the Simon Communities of Ireland, Focus Ireland, the Society of St. Vincent de Paul, the Jesuit Centre for Faith and Justice, the Irish Refugee Council, the National Youth Council of Ireland, the Irish National Organisation of the Unemployed, Age Action, the Children's Rights Alliance, Women's Aid, the One Parent Exchange Network, and Cherish, the National Association of Single Parent Families. All claimed that the Department's new restriction is unnecessary and only serves to highlight the lack of joined-up thinking characterising social housing policy.
It is unacceptable that the Minister, Deputy Coughlan, showed no regard for the consequences of the change for people at risk of becoming homeless. It contradicts the Government's stated aim of preventing homelessness. Many people will not be able to meet the six-month condition. They include refugees, those who become unemployed within six months of moving into private rented accommodation, women who become lone parents and move out of overcrowded accommodation in the family home, and those who become separated and have to move out.
No evidence has been put forward to show the necessity of this change, and it appears from the disagreement between the Minister of State with responsibility for housing and the Minister for Social and Family Affairs that there has been no cross-departmental consultation on its impact or implementation. As far as the Government was concerned, it was merely a fiscal action implemented at the stroke of a pen without any regard for the consequences for those whom it will affect most.
The Minister, Deputy Coughlan, has suggested that the change will help people trapped in private rented accommodation who will be eligible for social housing, as local authorities do not treat people receiving rent supplement as a priority. That argument essentially amounts to pushing people out onto the streets and telling them that it is for their own good because, if they are homeless, the local authority will accommodate them much more quickly. Members should think about that for a moment. Are we supposed to take that argument seriously? If local authorities do not house people who ought to be eligible for social housing, it is because the Government has failed to meet its own social housing investment targets. An example of that can be seen in the way successive Governments have ignored the Kenny report on dealing with the housing issue since as far back as 1973. The Minister for Social and Family Affairs must accept that, until the Government ensures that local authorities are given the resources necessary to house all those eligible and in need of social housing, rent supplement will continue to have a role in enabling people to house themselves. I urge the Minister to reverse the changes regarding the six-month condition. I urge the removal of the €107 cap on rent allowance, which is causing severe hardship, because little rental accommodation is available which costs less than that.
Mr. Gregory: This Bill does not deserve a Second Reading because it provides for the implementation of social welfare cutbacks which will undoubtedly cause serious hardship for people on meagre incomes. These cutbacks have been rightly condemned by many groups which work with the homeless, special child care projects and marginalised people. I listened to the IMPACT representative on “Morning Ireland” this morning and he suggested some of these cutbacks have more to do with administrative convenience and interdepartmental squabbling than anything else. If that is the case, it is a deplorable state of affairs. On the same programme, the Minister seemed to unwittingly confirm this by passing the buck in regard to responsibility for new applicants for rent supplement to the Department for the Environment, Heritage and Local Government and the local authorities. She seemed to deny the reality that there is already a huge housing crisis with long waiting lists and no housing capacity to provide for the needs of those homeless people, hundreds and thousands of whom linger in hostels, bed and breakfast accommodation and shop doorways on the streets of our capital city. The Government cannot provide for these people let alone the many applicants who will come forward for rent supplement through no fault of their own.
I agree with the IMPACT representative that this will be devastating, in particular for many young vulnerable homeless people. To refuse rent supplements without putting in place alternative housing measures demonstrates a disgraceful lack of social responsibility. This is also the case in regard to the Minister's removal of crèche supplements with a casual comment that no crèche will close and that direct funding of crèches is preferable, despite the fact that child care supplements are paid out only after careful assessment of individual exceptional needs. This particular cutback means the Government is now targeting toddlers and denying children in the most deprived circumstances a place in a crèche, without providing genuine alternative funding.
In that context, I refer to the statement of the Dublin city child care committee, which expressed its deep concern and anger at the decision to withdraw child care payments through the supplementary welfare scheme. It goes on to state that children whose parents are dependent on social welfare find themselves deprived of access to places in crèches, nurseries and play groups. These services are among the first lines of support for children who are at risk of problems such as addiction, early school leaving, anti-social behaviour and criminal activity. It points out that the report, Investing in Parenthood 2002, highlights that early childhood intervention is vital to reduce the risk of these problems. The Dublin city child care committee urgently seeks a meeting with the Minister for Social and Family Affairs to defer actions which will further marginalise the most vulnerable children in society. I hope the Minister responds positively to that request and to the wishes of that organisation and defers or eliminates these cutbacks.
Yesterday, I attended the presentation of certificates by the Lourdes youth and community services project, which is a valuable and worthwhile project in the north inner city. Certificates were presented to successful trainees and some of the young single parents who spoke having received them pointed out that without child care supplements, they would not have been in a position to attend courses to better themselves. These parents and the community projects which provide such valuable services to disadvantaged communities will suffer as a result of these cuts.
As Deputy Morgan pointed out, the cuts in rent supplement have been roundly condemned by every organisation representing the homeless. They state that they will exacerbate the already unacceptable levels of homelessness. Since these cutbacks will particularly target young single people, we will see more young people in blankets in doorways on the main streets of Dublin and other towns and cities. The cutbacks will drive more young people into the despair which puts them at the mercy of drug dealers, leading to the spectacle of people living on the streets, which is already a black mark and a blight on Ireland and the Government. It is disgraceful that this cutback should be introduced and it will add to this already serious problem.
While I have always been appalled at the incredible amounts of money which end up in the pockets of landlords who exploit the homeless and at the lack of accommodation, the real fault lies at the feet of the Government for failing to use the billions of euro of Celtic tiger surpluses to provide sufficient social and affordable housing. If that had been done, the money would have been put to a more meaningful use and the rent supplement would not be necessary on the same scale.
This is increasingly becoming an unequal and divided society. I understand Ireland now has the greatest social inequality of any EU country, with an ever-increasing gap between the affluent and those on the margins. In deference to my colleague, Deputy Sargent, I will conclude.
I pay tribute to Mr. Noel Cleere of the Society of St. Vincent de Paul whose death was reported today at 65 years of age. He was a man who we might have expected to benefit from some of the care which the organisation has given to so many in their older years. It is a tragedy that a man like this is no longer with us. He was an example to many in this society in respect of the spirit which should prevail, particularly at Christmas. It is difficult for his family and we extend our sympathy to them.
As Mr. Cleere would have often said, it is unacceptable to live in a society in which the poor are always being told to wait, that they will get their reward in due course and that they must accept things as they are. The reality is we live in an unequal society and the Social Welfare Bill 2003 does no more than tinker with that inequality. It provides a complex matrix of shifting and cross-referenced figures about which one would need to be well-fed and rested to come to terms with, even on a good day. The complexity of the social welfare system which is part of Government policy in this and other countries is but one good reason the Green Party argues for the introduction of a guaranteed basic income.
The Government has nodded in the direction of acknowledging the benefits of this from time to time in discussions and by way of introducing a Green Paper, etc. However, the Government must firm up its policy in this area. The fact that such an income would be universal and not taxed gives it a particular appeal for those who have felt marginalised. These individuals would receive the same payments as others, although the rich would not benefit because the tax system would be adapted to take them into account. Such an income could be seen as a basis of citizenship and a dividend in the country. Everyone would be in a position to declare themselves equal in terms of citizenship. We could then work on the position vis-à-vis their incomes.
At this point it is worth engaging in a comparison between the Departments of Social and Family Affairs and Agriculture and Food. The latter has been coming to terms with the phenomenon of decoupling. To some extent there has been a period of empowerment in that people involved in agriculture have come to realise that they will receive a payment but that it will not be conditional on production. The Department of Social and Family Affairs must learn, to a certain degree, from the phenomenon of decoupling and its effect on the agricultural community. Although the Minister may state with some fanfare that, in 2004, unemployment assistance will rise from €124.80 to €134.80, people remain unable to break away from the social welfare system for fear of losing a payment here or there, being left in a poverty trap or falling between stools. As a result, the potential and incentive to empower people is lost. When people fall upon hard times, they become disempowered.
If the Government is even to reach the target of €150 per week, in 2002 terms, for the lowest rates of social welfare by 2007 in the national anti-poverty strategy review, a much higher level of increase in unemployment assistance will be required. We estimate that an increase of €14 in 2005, €16 in 2006 and perhaps €17 or €19 in 2007 will be needed. The cost of living is rising more quickly than that.
There is a need to address the widening gap highlighted by the Conference of Religious in Ireland, which has stated that, since coming to power in 1997, the Government has widened the rich-poor gap by €294 per week or €15,341 per year. In making these calculations, CORI has included both pay increases and tax reductions as well as social welfare increases. It has also included the impact of the new savings scheme which better-off people can access but which is beyond the reach of Ireland's poorest people. That is a terrible indictment of the Government. The problem, which is worsening all the time, must be addressed.
As the Government effectively depends on unemployment to keep down wages, it must be honest and state that it is probably more afraid of Honduras and other countries with low wage economies than it is of the Opposition in this House. At Christmas time, we are all aware of the exploitation of workers who create products for the consumer society in the West and who are paid €4 for a 12 hour day. These people are now losing out to those in other countries who are paid as little as €1 per day.
Although the Government boasts that Ireland has the most globalised economy in the world, it must be borne in mind that this is also a curse because it makes it difficult for us to become self-reliant in any area other than, perhaps, that of beef production. That is the reality with which we are faced. It is not adequate to refer to a few euro being saved here and there. What we need to do is address fundamentally the widening gap between rich and poor and consider how we can become more self-reliant when global conditions make it difficult for us to get by.
Mr. Callanan: I welcome the increase in social welfare under this year's budget. It will cost an additional €630 million in a full year and is an increase of €100 million on last year. This means that social welfare spending has increased from €5.74 billion in 1997 to a projected €11.26 billion in 2004. For every €3 that will be spent by the Government in 2004, €1 will go towards social welfare. Two out of every five people will benefit from these social welfare payments.
The increase of €10 in all weekly social welfare payments is well ahead of the rate of inflation and represents an increase ranging from 6% to 8% which, in the case of the lowest payments, is more than three times the expected rate of inflation of 2.5% in 2004. The increase of €11.50 per week for widows and widowers aged 65 and over and in receipt of contributory pensions is welcome, as are the €6 and €8 increases in child benefit, which will take effect in 2004, and the €28 per week increase in the family income supplement threshold. I also welcome the €100 increase in the respite care grant. This will give someone caring for one person €835, or €1,670 to someone caring for more than one person.
I welcome the increase in the weekly income disregard for the carer's allowance of €40 for single people and €80 for couples. This means that the first €250 of a single person's income and the first €500 of those of married couples will be disregarded. That is a large increase. When the carer's allowance was first introduced, I had to inform most people attending my clinic that they would not qualify. In recent years, however, I have been able to inform the majority that they qualify.
I am a member of the Joint Committee on Social and Family Affairs which recently launched a report which calls for no means test on the carer's allowance. Everyone is aware that this will cost money and take time to achieve. However, I welcome the move towards achieving it.
I also support home-based subvention which was not introduced in this budget but which we hope will be put in place in future. This subvention would give people the choice to remain in their own homes. At present, financial considerations encourage people to enter nursing homes. I have nothing against such homes but everybody should have the choice to remain at home for as long as possible. If home-based subventions were introduced, they would level the playing field.
Since the Government took office, the number of people at work has increased to approximately 1.8 million and the rate of unemployment has fallen dramatically from 10% to 4.3%. In addition, the number of lower-paid people removed from the tax net has increased. In 2004, 35% of all those on tax records will not pay tax.
All the Government's budgets have been characterised by measures designed to improve the position of older people in society in terms of their pensions. In the 1997 election campaign we promised to increase old age pensions to at least €137 or £100 during the Government's term of office. We delivered on this commitment. In the 2002 campaign we promised to increase the State pension to €200 per week and we will deliver on this commitment during the current term of office. The budget for 2004 has put us well on track to deliver as it provides for a €10 increase in the full personal rate of old age and related pensions. It is worth emphasising that when this Government was returned to office in June 1997 child benefit was payable at the rate of €39.09 per month for the first and second child and €49.52 for the third child and subsequent children. The priority attached by the Government to increasing child benefit means child benefit will now be payable at the rate of €131.60 for the first and second child and €165.30 for the third child and subsequent children, an increase of three and a half times the amount it was when the Government took office.
Many people who will receive increases in their social welfare payments are in receipt of differential rents from local authorities. Perhaps the Ministers for the Environment, Heritage and Local Government and Social and Family Affairs will ensure there is no increase in local authority rents. It is not fair to give increases on one hand and take them away with the other.
Mr. J. Brady: I welcome the Bill and compliment the Minister for Social and Family Affairs, Deputy Coughlan, who is, as Deputy Callanan rightly said, a caring Minister. We are lucky to have had, during the past six and a half years, two excellent Ministers dealing with social welfare. The former Minister for Social and Family Affairs, Deputy Dermot Ahern, excelled in that area during the Government's previous term in office.
I also compliment the Acting Chairman, Deputy Kirk, and the Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, on securing the offices of the Department of Social and Family Affairs for Drogheda. My constituency is located two miles from Drogheda and the people of Meath welcome the location of these offices in Drogheda. Deputy Kirk and the Minister for Communications, Marine and Natural Resources are to be complimented on their achievements in that regard.
The social welfare improvements in this year's budget will cost €630 million in a full year, a massive increase of €100 million on last year. This nails the lie that has been peddled about social welfare cutbacks. The €630 million figure for this year stands in stark comparison to €273 million in the rainbow Government's last budget in 1997. It means social welfare expenditure in 2004 will be almost two and a half times the level set by Labour and Fine Gael when last in government. Furthermore, as a result of changes made in the 2002 budget, all social welfare weekly increases will be paid with effect from 1 January. As a result, increases for those dependent on social welfare are payable more than five months earlier than when Fine Gael and Labour were in government. An estimated 970,000 people are expected to claim weekly social welfare payments next year and almost 1.5 million people, including dependants, or two out of every five people in the State will benefit from these payments.
The increase of €10 in all weekly social welfare payments is well ahead of the rate of inflation. It represents an increase from 6% to 8% which, in respect of the lowest payments, is more than three times the expected rate of inflation of 2.5% in 2004. The number of people in employment has increased to almost 1.8 million; unemployment rates have fallen dramatically from 10% to 4.3%; the number of low paid removed from the tax net has increased and in 2004 35% of all those on the tax record will pay no tax; social welfare spending has increased from €5.74 billion in 1997 to a projected €11.26 billion in 2004, almost double the rate of inflation; payment rates for recipients and their families have been considerably improved in real terms; substantial improvements in the conditions for entitlement to a range of social welfare schemes and services have been implemented; and new social welfare benefits such as farm assist, carer's benefit, widowed parent grant and the respite care grant have been introduced and enhanced.
In the budget, personal rates for disability-unemployment benefit have been increased by €10 to €134.80. In their final budget the rainbow parties increased this by a mere €3.81 to €85.73. Other key positive measures in the budget include an increase of €28 in the threshold for family income supplement and a €7 increase in the minimum payment; an increase in the respite care grant to €835 per annum from June 2004; and an increase in the widowed parent grant to €2,700 from budget day.
The overall level of consistent poverty in 1998 was, according to the ESRI, 8.2%. This level has been reduced by more than one third to 5.2% by 2001, the latest year for which figures are available. All budgets introduced by this Government have been characterised by measures designed to improve the position of elderly people in our society in terms of pensions. At the 1997 election, the Government promised to increase old age pensions to at least €127 – £100 per week – during its term in office, and it delivered on this commitment. At the 2002 election, the Government promised to increase the State pension to €200 per week during its term in office and it will deliver on and exceed this commitment.
The budget puts us well on track to deliver. It provides for a €10 per week increase in the full personal rate of old age and related pensions. People with selective political memories should not be allowed to forget that in the three budgets introduced by the rainbow Government, the then Labour Party Minister for Finance gave pensioners a total average increase of €2.95. In contrast, the average increase to pensioners under this budget stands at a massive €9.75. In percentage terms, the old age contributory pension increased by less than 10% during the rainbow Government's time in office while this Government has increased the amount by well over two thirds. The figures speak for themselves. In monetary terms, the statistics are even more stark. The effect of the increases under Fianna Fáil is that the rate of old age contributory pension will now stand at €167.30 per week. This is a monumental increase on the €99 per week which was the payable rate on the day the champions of social justice in Fine Gael and Labour left office. The increases in pensions this year are real and well ahead of inflation. Our critics on the Opposition benches should explain the reason old age pension increases were below the rate of inflation when they were last in office.
The widow's contributory pension and deserted wife's benefit increased by €11.50 per week. In its last budget, the rainbow Government increased this by a miserable €3.81. In this budget, all other personal weekly rates increased by €10 per week. The budget provides for a special increase of €16.10 in the invalidity pension qualified adult allowance rate where the qualified adult is aged 66 or over.
Building on the massive increases we have devoted to child benefit, this year we are providing an additional €81.88 million in a full year to further increase this vital support. Child benefit rates will increase by €6 per month for the first and second child and by €8 per month for the third child and subsequent children. To appreciate the scale of child benefit increases under Fianna Fáil-led Governments, it is worth emphasising that when we returned to government in June 1997, child benefit was payable at a rate of €38 per month for the first and second child and at €49.52 for the third child and subsequent children. The priority the Fianna Fáil-led Governments have attached to child benefit means that following the budget, child benefit will be payable at a rate of €131.60 for the first and second child, and €165.30 for the third child and subsequent children. This means that the rate of child benefit payment has increased by three and a half times the figure it was on the day we took over from the rainbow Government.
Over 41,000 taxpayers will be removed from the tax net next year. In comparison, 38,000 taxpayers were removed from the tax net as a result of the measures introduced in the budgets of the rainbow Government. This means Fianna Fáil has removed more people from the tax net in one year than the rainbow Government did in its three budgets. The scale of this achievement is further enhanced when one considers this has been done in the midst of the greatest global downturn in 20 years.
Tax reductions of €300 million have been outlined in this budget and build on the €5 billion in taxpayers' money we have put back in Irish workers' pockets over the past six years. This means we have provided €3.8 billion more in tax reductions than the previous Government. To keep the income tax burden low, especially for the lower paid, this budget increases the employee tax credit by €240 to €1,040 per annum. This will continue to ensure that tax is not payable on 90% of the minimum wage. The budget also increases the income tax exemption limits for those aged 65 and over by €500 for single persons and €1,000 for married persons, bringing them to €15,500 for single persons and €31,000 for married persons.
I have listened to the contributions of Government Deputies all afternoon and everyone started by saying that the Minister for Social and Family Affairs is a caring person. While I have no doubt that she is a caring person, I would say that she has as little input into this brief as I had when it was being set up before the budget. Members can rest assured that it was the Minister for Finance, Deputy McCreevy, who decided on the 16 cuts.
Mr. Connaughton: Members of the Government should be ashamed of themselves for some of the measures it has introduced. I have heard Deputies Johnny Brady and Callanan comparing what happened in 1997 with what is happening today. The Deputies are not comparing like with like.
Mr. Connaughton: There is no point in doing this and Deputies are living in cloud-cuckooland. Agencies such as CORI, the Society of St. Vincent de Paul and the ESRI clearly state that the gap between rich and poor is continually widening. No matter how the figures are massaged, the gap is widening – surely all those agencies could not be wrong.
Mr. Connaughton: I received a letter from the Minister of State, Deputy Callely, this morning in which he went to some lengths to explain all the good work he is doing in terms of services for older people. He referred to home help and the good the Government has done in this area. I received a letter from a constituent today on the subject of home help. The letter opens with the following: “I am writing to you to highlight a situation in east Galway which is dreadful, mean, uncaring and horrible.” The daughter-in-law of an 87 year old woman who lives alone wrote the letter. The old woman has had an hour of home help on five mornings a week since her son's death in the late 1970s, but the service has been withdrawn. The letter concludes with the writer asking that the service be restored before it is too late. When one is 87 years old, one would want to quickly get whatever is coming one's way. Is this an example of a caring Government or a caring Minister? There are huge gaps in the system.
A cancer sufferer telephoned me recently and told me that although she was slightly over the limit for a medical card last year, the health board was in a position to grant her a card on medical grounds. This discretion has been taken from health boards this year and the card was removed. Are these the actions of a caring Government? Where are all the millions involved? Irrespective of how the figures are massaged, the Government will not be able to convince those concerned that this State is good for them. These problems must be solved and they are replicated a thousand times throughout the country.
The Minister of State, Deputy Roche, may have a smile on his face as we discuss this matter because he is at an altogether different level. He would not be concerned about the type of people we are discussing. However, the trouble is that many more in Government are not concerned about them either. I assure him that the day will come when the smile will be wiped off his face.
Mr. Connaughton: What did the Minister of State do about that? He is not able to take criticism. This is one of his problems. Is it the case that Fianna Fáil would not be in east Galway? If that is so, fair enough. It must not be in east Galway considering what happened in respect of decentralisation. I am glad to see Deputy Callanan in the Chamber, given the discussion about Ballinasloe losing 1,000 jobs. Where was Galway on the list? It was 20th out of 25 counties. This is a disgrace.
Mr. Connaughton: We had the three factories and they did not close until the Minister of State came into office. This is what happened over the past seven years. The Minister of State would not know about this.
Mr. Connaughton: What did the Government do in respect of community employment schemes? It abolished 5,000 places. The Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, has introduced a new scheme for small farmers, as he calls it. I find nothing wrong with that. Will the Minister state how this integrates with the farm assist and the community employment schemes that have machinery in place? Hundreds of thousands of pounds of taxpayers' money was spent on training the supervisors of CE schemes, some of whom will now receive redundancy payments. Will there have to be a new training scheme for them? I sincerely hope that the Minister, Deputy Ó Cuív, is not reinventing the wheel and that there is not a competition between him and his neighbour, the Minister of State, Deputy Fahey, to see who will deliver. I only hope the Minister for Social and Family Affairs can put some sense into their heads to prevent this.
Mr. Hayes: I am pleased to have the opportunity to say a few words on this important Bill. I am delighted I allowed Deputy Connaughton finish his point because he was in full flow. It was well worth listening to and I note that the Fianna Fáil backbenchers agreed with what he said.
Mr. Hayes: It is well worth having somebody like that. When one addresses this Bill one must consider the Estimates. The most important issue, which may not have been discussed that much in the House, is the decision on the money advice and budgeting service supplement. That was the craziest decision ever made. The money advice and budgeting service is one of the most successful services in the country. It operates in my home town and, on several occasions, I have sent people in financial difficulties to avail of its services. It provides a wonderful service to everybody.
The positive effect of the supplement is to break the cycle of poverty. It is a targeted, short-term payment which is reviewed regularly and hence does not become part of income. It is a planned method of payment in partnership with people in debt. Many have huge financial debts and the supplement might not seem much to them, but it certainly has a great effect.
The supplement can be positively linked to outcome measures. Expenditure on the supplement is not excessive, and it helps people to pay their rent. The effect of the withdrawal of the supplement will be that clients will remain trapped in debt. They can be very much affected both physically and psychologically and may live in fear of receiving bills or letters from sheriffs or solicitors. The withdrawal of the supplement may result in the affected parties and their families living in fear.
If people in such financial difficulties receive no advice, they tend to go to moneylenders. Repayments on €500 borrowed from moneylenders over one year would amount to €750. The repayments on the same sum borrowed from the credit union would amount to €520. With the help of the credit unions and the money advice and budgeting service, those in financial difficulties are steered in the right direction. The withdrawal of the supplement is a dreadful mistake. I could quote examples of several people in my constituency who have been affected.
The Minister is not the kind of person who likes to make such a cutback and I beg of her not to make it. Not only does it affect those who have borrowed from financial institutions but also those who pay rent to local authorities. The supplement is money well spent and its maintenance could result in training and assisting people.
There has been much debate about medical cards. Before the previous general election, we were promised a huge increase in the number of medical cards, to which people looked forward. In the past two years, the numbers entitled to medical card were reduced by more than 30,000, and a further reduction is expected on foot of two recent Government announcements. This is deplorable. Medical cards must be reviewed every year and this costs the taxpayer a huge amount of money. There is no need for this because cardholders have long-term illnesses. There is a cogent argument to be made for giving them a medical card for life.
Mr. O'Dowd: I want to make some important points on the social welfare system and the changes that must be made thereto. I am delighted there has been a significant and welcome drop in the level of poverty, as measured by different independent groups. We must now deal with those on the lowest income in society, that is, the lowest social welfare benefit. Experts say we should link future social welfare increases not to the level of inflation, but to the average industrial wage or take-home pay. That would be significant because while poverty has reduced in absolute terms, the gap between those even on average incomes and those on the lowest incomes has increased.
The pressures on children are not solved by the budgetary provision of a miserable €6 per month increase in child benefit for the first and second child. The pressures of society and the cost of living is remarkably high for children and teenagers. For example, if a child wants a pair of shoes they must be the trademarked shoes, Adidas and so on, rather than shoes from Dunnes Stores. There are significant pressures on families which did not exist before and an opportunity to give greater support to families and children was sadly missed in the budget.
It is also important that lone parents of one or two children should be attracted to part-time employment. That encouragement existed heretofore and the opportunity for single mothers to take up part-time employment while getting full social welfare benefits was very constructive. It brought people out of the poverty trap and got them involved in jobs in their community. It also gave them the self-esteem and status to which they were entitled. It is unacceptable that the Minister is now cutting back on those benefits. It is a retrograde step.
Deputy Ring has asked what will happen to those on rent allowance. I do not have a problem with a review of the rent allowance system – nobody could have – but greater account should be taken of single people living at home, particularly those in their late teens and early 20s. They are assessed on their parents' means and receive a very small amount in unemployment assistance, perhaps €10 per week. Pressure is put on them to go out into the community in order to get rent allowance and full unemployment assistance. That gets them out of home and into a community where they may not be ready to live, with consequent problems in apartments all over the country. Young people are living outside the family home with no income support and they are costing the State money. It would be far better if the State made it more attractive for those in that category to get full unemployment assistance at home, which would be socially progressive.
The Minister has erred greatly when it comes to people seeking rent allowance, particularly the single parents of one or two children, who now have to rent for six months before getting it. This is an impossibility. It is a hoop through which they cannot go and there is no logical justification for it. It will mean that those on reduced incomes who cannot get rent allowance will have to go back to the rat-infested hovels of our towns and cities because it is cheaper. That will be the only accommodation they can afford and there will be a consequent negative impact on their health and the health of their children. The Minister must think again. The community welfare officers and other bodies have made a strong case for her to row back on these rules. They strike at the heart of poverty by making people poorer and their health worse as a result of living in poor conditions. Their children will also suffer greatly.
The system contains an ambiguity in the way it deals with someone in full time education who is living at home. If the person's family receives the fuel allowance that will continue until the student is 22, but the allowance is lost after that. This was recently brought to my attention and I asked the Department for the relevant statistics. Hundreds of people come into this category because if they are over 22 years of age they are deemed to be adults. However, they are totally dependent and are generally deemed to be the spouse of the person concerned. If that were changed it would be socially just and progressive.
Mr. O'Dowd: That is a good point on which to conclude. I ask the Minister to open her eyes to the reality and to examine the adverse circumstances which will affect poor people as a result of her actions.
Mary Coughlan: —a bhí páirteach sa díospóireacht seo a bhí, i mo thuairimse, an-tábhachtach. Bhí craic agus spórt ann, ach ag an am céanna, don chuid is mó den díospóireacht, bhí daoine ag caint óna gcroí agus ar son na ndaoine.
I thank Members on all sides who participated in the debate, which was very constructive. We may have scored the odd political point but despite differences within the body politic most people are speaking from the heart and on behalf of their constituents. All of us would like to see the eradication of poverty as our goal as legislators and public representatives. I am sorry Deputy O'Dowd has left the Chamber. I was going to tell him I was looking forward to moving to his constituency with the decentralisation of my Department. I am sure he and the Acting Chairman will look forward to it—
Deputy Connaughton raised the new rural initiative scheme, which is not necessarily reflected in the legislation but is important to all rural Deputies. The Deputy had some specific questions on its modus operandi but it is being proposed by my colleague, the Minister for Community, Rural and Gaeltacht Affairs. I am in discussions with the Minister at present to facilitate the introduction of the scheme as close as possible to the beginning of the year. We will not be looking at additionality in training or supervision and we are looking at reflecting specific needs of those who, in the main, are on farm assist. There will be further opportunities to discuss implementation of the scheme. It has been very creative and will support those in rural Ireland who have had difficulty obtaining meaningful employment, particularly because of their geographical location.
A number of speakers took a roundabout view of some of my proposals on unemployment. Deputy McManus said I was incorrect to state the unemployment rate is 4.9%. She said it is 5.5% but she did not complete the sentence I uttered, which concluded that the rate is seasonally adjusted to 4.9%, which is the correct figure to use. It is grand to utter half a sentence but it must be completed to give an accurate overview.
There was fair and unfair criticism of the adequacy of the increases. Most Members appreciated the €10 per week increase for pensioners and the minimum rate of increase on all maximum personal weekly payment rates was welcomed. The increases provided for in the legislation demonstrate my commitment and that of my Department to ensuring our customers will receive adequate support when they need it.
Much reference was made to the inadequacy of child benefit. Deputy Ring took the opportunity to get on his high horse, as he normally does on these occasions. I will outline the facts. Child benefit has increased from €38.09 per month for the first and second child—
Mary Coughlan: In 1996, child benefit was €38.09 per month for the first and second child and €49.52 for the third and subsequent children. In 2003, it is €131.60 per month for the first and second child and €165.30 for the third and subsequent children. That is a significant investment.
Mary Coughlan: The family income supplement threshold has been increased and this is more than beneficial. I will correct another inaccuracy in this regard. FIS will be disregarded when claimants apply for rent supplement. This change is one of a number of cushioning measures I have introduced which are more supportive of people on low incomes. FIS will be disregarded similar to child benefit.
The school meals scheme is not covered by the legislation. However, I will provide €1 million next year in addition to the €2 million I provided this year and I have carried out a review of the scheme. School meals were only available to children in our cities. That has been changed and schools were invited to make applications in consultation with the Department of Education and Science to my Department to provide school meals through a breakfast club, lunch club or after school club. A number of schools applied but I am disappointed that not many have done so. I will again publicise the availability of the scheme.
Mary Coughlan: I will also include the Deputy's photograph. All educationalists indicate breakfast is the most important meal and the scheme addresses educational disadvantage. I have witnessed the administration of these schemes through schools and clubs and it is has been beneficial. The scheme had not been reviewed for more than 80 years. A report was published last year and I progressed its recommendations by providing additional funding this year. I hope Members will advise school authorities of the availability of the scheme and the absolute necessity to ensure children have an adequate meal.
Mary Coughlan: There have been ongoing discussions over the past number of years about child dependant allowances, which provide disincentives. The Department examined CDAs in 1994 and because social welfare recipients lost their CDAs when they entered employment, they created a disincentive. The rate of the allowances was also too high. Income support for families with children comprises an amalgam of child benefit and CDAs. This has increased by almost three and a half times the rate of inflation. It is good policy not to touch CDAs because of the universality of child benefit and the amalgam of both payments is more supportive and constructive.
My argument will stand up when the child benefit strategy is completed and the issue of child poverty is examined. A special initiative will be taken under the partnership agreement to examine the second tier of income supports for children in low income families. I agree with the ESRI that they should be studied and evaluated. Since the publication of recent reports, it has been agreed the child poverty special initiative under Sustaining Progress will examine the merger of FIS and CDAs into one payment that might be paid to low income families, irrespective of their employment status. This issue will be addressed in the arrangements under the special initiative.
A number of Members stated schemes are not re-evaluated and reviewed. Deputy Ring is not enamoured by all the reviews conducted by the Department but they are beneficial because anomalies are examined as well as changes in circumstances, employment trends and lifestyle habits. I intend to proceed with the special initiative to examine improved ways to support children in low income families.
Many Members referred to carers. The chairman of the Oireachtas Joint Committee on Social and Family Affairs stated he was disappointed, following the publication of the extensive study conducted by his committee, that I did not implement many of its recommendations. I thank the committee for its work. It reached a pragmatic decision and put forward fine proposals. Unfortunately, they were not costed.
Mary Coughlan: I am determined to work with the committee and other Members to support carers. Carer's allowance and carer's benefit provide recognition of the people who care and they are not payments for caring. No Government in the world could pay a person to care for another but it is a recognition and support. The Government has a target on that basis to increase the income disregard to a certain level. I have almost achieved that target in two years and the income disregard has been beneficial. We can have academic discussions on whether carer's allowance should be means-tested.
I am of the view that the removal of means tests can lead to resources being allocated where they are not necessarily required. I believe an increase in the threshold is much more beneficial. However, I have increased the income threshold this year and we will discuss the carers' situation in due course – it is outside the specific ambit of this Bill. In my view, the additional €10 to carers, the increase of €100 in the respite care grant and the substantial increase in the disregards by this Government, will benefit 24,300 carers in 2004.
With regard to the recommendations of the Joint Oireachtas Committee on Social and Family Affairs, many of those proposals can be incorporated within the deliberations and discussions on implementation of support and financing for long-term care. I hope the committee will put forward its proposals arising from the consultation I will initiate shortly and I look forward to hearing what people have to say in that regard. Following publication of the report and subsequent consultations, we will have to look at particular types of structures with regard to the modus operandifor delivery of long-term care as between my Department and the Department of Health and Children.
There is a view, which has my personal support, in favour of the subvention of home support. People in the pilot programmes have indicated to me and, no doubt, to other Members, that they were more than happy with their situation, particularly in terms of living at home for as long as possible.
Mary Coughlan: The pilot area projects which operated in my health board area, but not that of Deputy Stagg, indicated quite clearly that the amalgam of all of those services is important. However, there is also an important question as to how it will be paid for. It is a long-term issue, as in the case of pensions. We have to look at a number of methodologies in preparing for a more elderly population in future years. Those demographics will underline the need for long-term care.
I assure the Chairman of the joint committee that the proposals and recommendations from his committee will be considered. I look forward to further consultation and deliberations. Following the consultations, I hope a working group will be set up in mid-2004 to look at the full implementation of proposals to fund long-term care.
Many speakers in this debate referred to the work of the St. Vincent de Paul society. I wish to express my sympathy to the family of the late Noel Clear, former national president of the society, who made an invaluable contribution to the society and the vulnerable people it assists. We learned of his death on Monday last. I also express my sympathy to the members of the society.
A number of press releases issued by the St. Vincent de Paul society have signalled a significant increase in the number of people making contact with it. The Government is committed to addressing this issue and that is reflected in our approach under the national anti-poverty strategy which was published in 2002 and our national action plan for social inclusion which was submitted to the EU in July of this year. There are very ambitious targets included, not only on income support but also encompassing a range of policy areas which impact on poverty, social exclusion, education, health, employment, housing and accommodation.
The targets in my Department are €150 for the lowest social welfare rate in 2002 terms and an increase in pensions to €200 by 2007. Those are the policies being pursued by the Government. It is my view that the proposals are realistic. I intend to pursue the provision of supports for the less well-off in the context of a €630 million budget package this year. I appreciate that Opposition Members do not like being reminded of how much has been invested in my Department over the last number of years. Perhaps it would be unfair to go back as far as 1994, when the figure was €199 million.
Mary Coughlan: The figures are an exemplary reflection of Government support for the less well-off. It is very easy for Members to criticise budget packages as being inadequate. However, they tend to ignore the amount of money provided over the last number of years to give additionality to people.
Mary Coughlan: I know it is very difficult for people to listen to good news from this side of the House occasionally. Let us discuss rent supplement. The Deputy was apoplectic when I introduced a cap on rents. He almost lost his reason, claiming that people would be homeless as a result.
Mary Coughlan: No, they were not. Not one person was made homeless. Anybody in need of support was supported, because of the flexibility in my regulations. I will reiterate the position for the benefit of those who do not wish to listen. Those in receipt of rent supplement, MABS supplement, crèche supplement or diet supplement will not be affected by the current changes.
Mary Coughlan: I have said on a number of occasions that I would listen to the concerns of the Opposition, my own party and many other organisations. I have also indicated the flexibility which will be introduced in allowing people into the rent supplement scheme.
Mary Coughlan: With regard to crèche supplement, one of the claims made was that crèches were closed. Crèches were not closed. Those in receipt of crèche supplement will continue to have it. More particularly, arising out of this, at long last someone is prepared to take action on particular crèches in this city and will ensure they will be supported on a more full-time basis, rather than a haphazard emergency payment such as SWA. That is the best way forward.
Mary Coughlan: I am sure Deputy Seán Ryan would agree that his crèche would be better served by long-term funding and support from the proper agency, the Department of Justice, Equality and Law Reform.Tá
Ó Cuív, Éamon.
Ó Fearghaíl, Seán.
Broughan, Thomas P.
Durkan, Bernard J.
Ó Snodaigh, Aengus.
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