Thursday, 23 April 2009
Dáil Eireann Debate
Deputy Michael D. Higgins: When speaking last night, I stressed some of the detail of the impact of this Social Welfare Bill. In conclusion, I want to suggest something else which I have noticed over a long period of years in this House, namely, the reluctance of those responsible for social policy to explicitly state what are their assumptions about the people who are recipients.
It is very clear from what we have heard so far from the Minister that there is no acceptance of the concept of a floor below which nobody would be allowed to fall in terms of some kind of citizenship. Over the years, when I was in my other life and lecturing in this area, there were usually three models of social policy. The first was where one regarded it as a residuum of economic activity — one spent what one had left over to spend. The second model was when one assumed the economy operated in a way that required compensation — one had to correct the effect of the economy — and this was usually the basis for most of the insurance driven policies. The third was the great proposals following the Second World War, introduced by a British Labour Government, which argued that one should have an egalitarian emphasis and, therefore, there should be a floor below which one’s citizens should never sink into poverty. This is the view of the late and great Professor Titmuss and others in Britain.
What is very clear is that the present Government is following the miserable notion of a residual theory of its population and, therefore, one finds this in the second last paragraph of the Minister’s speech, where it is stated: “It is important for each of the savings measures to be considered in the context of the overall economic situation and the need for immediate action to reduce the major gap between public income and expenditure.” In other words, all of those who will be affected by this Bill must pay for the gap that was created by shabby and outrageously neglectful Governments and several institutions responsible to the State, as well as irresponsible behaviour by speculative builders, assisted by equally treacherous bankers with no commitment to the public good. The public good having been betrayed by all of these, do they pay for the situation? If the goal is as stated in the second last paragraph of the Minister’s speech, and if there is a gap to be bridged, do they bridge that gap? No, they do not. We have just been debating how the poorest of the poor will pay at Christmas.
Right through this Bill, there is another streak, namely, the extraordinary emphasis on an anti-young people ideology. I support the elimination of any and every obstacle to a person who wants to get back to education, enter training or upskill. However, if that is the case, why does a person have to remain two years unemployed? What we have in the Minister’s speech are a few deceitful camouflages, suggesting, for example, that a few hours in pre-school is a better and more efficient way to substitute for child supplement. This Bill is an outrageous use of the poorest people, who have no choice and no discretion, as pawns to pay for those to whom the Government will not turn its attention. This is why the Bill should be opposed.
Deputy Martin Mansergh: A Social Welfare Bill is usually for the purpose of resetting rates post budget and there is an element of that in this Bill. However, in broad terms, the purpose of the Bill is to underpin the social welfare system, which it is very important to do, through sustainable public finances. The fact is that in the supplementary budget the rates enjoyed by the vast majority of social welfare recipients have been protected. There has been no general reduction in rates despite the transformation of the price outlook between last October, when the rates were set for this year, and now. I was just leafing through the memoirs of a former Taoiseach of the 1980s, Dr. Garret FitzGerald. According to his own account, he spent a lot of time worrying about over-indexation of social welfare payments. As far as I am aware, it is not a word that has crossed this Minister’s lips.
The previous debate which is relevant to this one concerned the Christmas bonus, which, incidentally, was introduced by Deputy Michael Woods in 1980 when he was Minister for Social Welfare. Of course, it was stopped for two or three years by the Fine Gael-Labour coalition in the mid-1980s. I do not remember much rhetoric from that side of the House——
Deputy Martin Mansergh: ——about it being heartless, savage and hitting the poorest of the poor. It was done, defended and voted on, even by as passionate a person as Deputy Michael D. Higgins, during the mid-1980s. Sometimes the rhetoric we use in this House is overblown and not particularly consistent with what was done by parties in government.
As we know, the public finances are very stretched at the moment. One of the reasons they are stretched is the economic situation. The rise in unemployment is leading to the social welfare bill being €21.3 billion, which is approximately 30% of the budget on the expenditure side. It is an 8.7% increase on what was envisaged last October and a 20% increase year on year. These figures were contained in the Minister’s speech. Maintaining those levels of payments in current circumstances is a real achievement by the Government. By and large, this is recognised outside the House. The vast majority of the criticism of the budget, including in this House, has been that it is so-called hammering the middle classes and the coping classes, and all the rest of it. There is an implicit recognition that the social welfare system has been largely protected. I make a point in passing that my office, the Office of Public Works, is working with the Department of Social and Family Affairs on increasing and improving accommodation for applicants in the current situation.
Among the measures in the Bill is a substantial increase in the employee PRSI ceiling. There is no ceiling on the employers’ side. By definition, that affects the better off. It is a form of solidarity. It has been quite a sharp rise but many commentators advocate that the ceiling should have been lifted altogether.
I would take the view, and I thought I heard such a view being tentatively expressed by the Labour Party spokesperson on finance as an initial reaction on budget night or the following day, that the reduction in the jobseeker’s allowance payment to the under 20s might not necessarily be such a regressive matter. We do not want people at that young age to habituate themselves to being unemployed.
I again compliment the Minister of State, Deputy Barry Andrews, on the substitution of a preschool year for the early childhood payment. Listening to Deputy Higgins, one would never know that it had been Labour Party policy for some years to have an extra preschool year. I believe it is a concrete substitution of a money grant which, of course, could be expended on any purpose, with something from which children will definitely benefit.
As with all housing subsidies. there is a tendency for the rent supplement at whatever the level to be used to the benefit of the landlord. Part of the intention with this change is to put downward pressure on rents. I am very pleased, as are people in my constituency, that the carers allowance was left untouched.
This is the centenary of the introduction of the old age pension in 1909 by David Lloyd George. Our social welfare system has made considerable progress since that date. Unemployment assistance was introduced by Fianna Fáil in 1933. Children’s allowance was introduced by Seán Lemass in 1944. In the late 1960s and early 1970s Charles Haughey introduced the free schemes. In a position of bipartisanship, I acknowledge that after we joined the EEC the Fine Gael and Labour national coalition Government made substantial improvements in social welfare payments. In the turbulent years from 1980 to 1982, there were three years when there were 25% increases albeit at a time when inflation was in the high teens. None the less, that was a commitment. After 1987 there was implementation of the Commission on Social Welfare recommendations, which the previous Fine Gael and Labour Government had claimed was unaffordable. After 1997, pensions and child benefit were increased. The old age contributory pension in 1997 was £78 and today it is €230. Child benefit was £30 and is €166 today, which is a very substantial increase.
An article in today’s edition of The Irish Times expresses deep dissatisfaction with the political system. From time to time people suggest that if only we had bankers, economists and philosopher kings in government how much better the system would be. Fortunately today not many people will recommend putting bankers into government — not after what has happened. I remember in 1987 when Charles Haughey was at a bankers’ dinner and one of them recommended putting a couple of bankers in as Ministers, he said to them: “You look after your business and we’ll look after ours.” The problem is a misunderstanding of the nature of politics. It is not just about finding what is the right decision but actually making it happen and persuading people that it is the right way to go. As the man who first introduced the pension, David Lloyd George, told Irish negotiators during the treaty negotiations: “The politician who thinks he can deal out abstract justice without references to forces around him cannot govern.”
Minister of State at the Department of Health and Children (Deputy Barry Andrews): The measures which are being introduced to implement the decisions announced in the recent budget have, as we know, been driven by the need to achieve a very significant level of Exchequer savings in this year and over the course of several years to come. In this context, it is particularly welcome that the need to achieve real savings in Government expenditure is being accompanied by the most important policy development for preschool children in the history of the State, the introduction of a free preschool year in early years care and education.
As a result, the cessation of the early child care supplement payment to parents of preschool children from the end of this year will be followed immediately, from January 2010, by the introduction of the new scheme in early years care and education for children in their preschool year. This is a development which is to be much welcomed and the response which I have had from the sector over the past two weeks has very strongly endorsed this view.
When the early child care supplement was introduced in April 2006, it was criticised in many quarters because it directed resources away from more beneficial investment in early years care and education, in particular, in the form of preschool education. Many experts in early years care and education, including bodies such as NESF, the National Women’s Council of Ireland and the OECD, argued at the time and since that the funding directed into the supplement as a direct universal payment to parents, was more than twice what would have been needed to implement a free preschool care and education year targeted at preschool children.
The recent National Competitiveness Council report noted that “pre-primary education is a key determinant of student performance at all levels of education as it leads to improvements in students’ skills levels, motivation and the propensity to learn, which in turn raises the private and social returns from all future investments in their education”. These views are also supported by the commitment in the programme for Government to ensure that every child has access to a preschool place by 2012. In re-evaluating the allocation of resources to the early child care supplement, ECS, the opportunity has been taken to establish a new child-centred approach to early years policy and provision and to reinvest an estimated €170 million of the savings made into the preschool year from January 2010.
The preschool year will be implemented by my office and all voluntary and private preschool services which meet the requirements of the scheme will be invited to apply for entry by the end of next month. The preschool year will run from September of each year, in line with the school year. However, rather than delay the introduction of the scheme to September 2010, which would deny the benefit of the measure to children who are due to start primary school at that time, the preschool year will be introduced from January 2010, immediately after cessation of the ECS payments.
An annual capitation grant of over €2,400 will be payable to preschool services participating in the scheme over a full year. Parents who avail of the preschool year in a playschool will be entitled to a provision of five weekly sessions of three hours per day for 38 weeks per annum. This amounts to a weekly capitation grant of €64.50. Parents who avail of the preschool year in a full or part-time child care service will be entitled to 50 weeks of free preschool provision of five weekly sessions of two hours and 15 minutes per day. This amounts to a weekly capitation grant of €48.50. The service must reduce the weekly child care fee for parents by this amount.
All children aged between three years and three months and four years and six months immediately prior to the start of each preschool year, that is on 1 September, will be eligible. For the preschool year commencing in January 2010, children will be eligible if they are aged between three years and seven months and four years and ten months at 1 January of that year. This is only for the first year of operation of the scheme.
The preschool year will be guided by the principles of Síolta, the early years care and education framework which the Office of the Minister for Children and Youth Affairs is implementing. This will support the provision of a high quality environment for children in this important year. Services participating in the scheme will be supported by Síolta co-ordinators who will work with my office and the city and county child care committees. The introduction of the preschool year in early childhood care and education is an historic step in the development of Ireland’s early childhood care policy and, that this step is being taken at this time of economic crisis and budgetary constraint, makes it all the more remarkable and demonstrates the recognition which is being given to the importance of investing in our children’s futures.
The early child care supplement was introduced under Part 4A of the Social Welfare Consolidation Act 2005, as inserted by section 28 of the Social Welfare Law Reform and Pensions Act 2006. Section 8 of the Social Welfare Bill 2009, which amends Part 4A of the 2005 Act, provides for the reduction of the early child care supplement to half-rate, that is €41.50 per month, with effect from 1 May 2009. As the supplement is paid monthly in arrears, this means that the first payment to be affected by the change will be the June payment. Section 8 also provides for the abolition of the payment from the end of this year. Section 8(2) of the Bill provides that Part 4A of the 2005 Act shall cease to have effect on 1 January 2010. However, as the supplement is paid in arrears, and as the provision in Part 4A of the 2005 Act refers to the period in which a person qualifies for the payment, the appropriate date on which to terminate the supplement is 1 December 2009. This will result in the termination of payments under the scheme with effect from 1 January 2010.
As the Bill as initiated incorrectly provides for termination from 1 January 2010, I wish to advise the House that a technical amendment to amend that date to 1 December 2009 will be introduced on Committee Stage. It was the Government’s decision that payments of early child care supplement would cease in 2009, to be replaced by the free preschool year from January 2010. This amendment will give effect to the Government’s decision and provide that the final payment of the supplement will be made to parents in December 2009.
Deputy David Stanton: A number of figures jump out at us from the Minister’s speech. One in particular that is a cause of concern is that the revised live register figures showed an initial estimate last October of 290,000, a figure that has now been recalculated to 440,000. We now face extra costs of €1.97 billion for social welfare payments this year. This is horrendous. One thing that seems to be missing from the Government’s strategy and thinking is the area of job creation and incentivisation. This should be our priority.
The changes in the back to work enterprise allowance are interesting. People who are self-employed are, obviously, people with initiative. The back to work enterprise allowance is designed to encourage such people to set up their own businesses, which is welcome. Other speakers have mentioned some of the issues in that regard, but I will not go into them now. However, I would like to draw attention to the plight of those people who were self-employed until recently, but who have now lost their work and businesses. I understand these people are not eligible for the jobseeker’s benefit payment because of the rate of PRSI they paid. Neither are they eligible for the jobseeker’s allowance because of their income in the previous years. They may have children in college, but because of their previous income these are not eligible for maintenance payments.
I have met some such people who now have absolutely no income. Their business is gone and they have no income. In many cases, this has happened through no fault of their own. These people worked hard all their lives, set up their businesses and toiled at them and paid their dues and taxes. They have paid their way, but are now left hanging out to dry. I see no provision in the Bill to assist these people. The least the Minister should consider should be to make the jobseeker’s allowance available to them, which would mean a change in the legislation. At least they would then be able to claim that allowance. Currently, these people have no income and when any savings they have are gone, they are left with nothing. I appeal to the Minister to make provision for these people straight away.
The early education and care area is also of interest. We were told the early child care supplement was introduced to cover child care costs. Child care costs include early education and as studies have shown, the quality of early education is important and has a profound impact into the future. I suggest that even if early education costs are paid, high child care costs still remain. Many families have got used to the availability of the supplement and have budgeted for it. It might, therefore, have been a good idea to means test for it so that it could be continued for people on lower incomes. The Minister should consider that. When the supplement was introduced we were told it was being introduced to cover child care costs. I criticised the measure at the time because due to the fact it operated under European legislation, it was also paid in respect of children in other countries whose parents were working here. These were often in countries with highly developed child care and early education systems anyway. I understand this payment will probably not continue, but I suggest we should consider keeping a payment for people who need it. There were also issues raised in the House at the time about trying to ensure that stay at home parents were supported, as well as working parents. This was a significant issue and was one of the reasons the Government brought in the €1,000 per annum payment at the time.
With regard to changes in the back to education allowance, in her speech the Minister equated the payment third level students get from the State through grants with the payments received by the same age cohort of people who do not attend third level and said the payment for all of these should be the same. She also spoke about incentivising people to go to work and said that was the reason she was reducing the payment. She suggested if they received less money, they might be inclined to take up courses. I agree young people should be encouraged and helped to take up work. I would like to hear what additional resources the Government intends to put in place to help young people to avail of these courses or to take up work.
Often, a youngster who leaves school goes straight into work. That quite a number did so in recent years might have been a down side of the Celtic tiger. They are now out of work. If they are younger than 20 years of age, their payments will be halved. If the Government does not put FÁS courses, educational opportunities and the requisite guidance in place, I would worry. Many young people need to be guided, to have someone sit down with them to tell them what is available and how to get there, but this was not mentioned by the Minister. In some ways, the Minister was trying to say that we should try to turn the cutbacks into a positive. Social engineering is being brought in.
The rent supplement was introduced as a short-term payment. However, the Government’s social housing policy has failed. According to the Minister, the number receiving rent supplement has increased by 40% in 18 months and 84,000 households are in receipt of it, although we do not know how many people are involved in respect of the latter. The payment was introduced in 2005 as a means for the State to provide long-term rental accommodation via the rental accommodation scheme, RAS, to households in receipt of rent supplement payments for 18 months or longer.
Despite a budget allocation of €114 million between 2005 and 2008, only €87.5 million has been spent. In January, I was advised that the €87.5 million has only secured private rental accommodation for approximately 9,400 households and has little impact on rent supplement costs. However, the Minister noted that the number of transfers to RAS will increase to 9,000, given her agreement with the Minister for the Environment, Heritage and Local Government on a further 1,000 transfers. Will she clarify the total number on RAS? When RAS was introduced, the initial target for 2005 was to move 5,000 households away from long-term rent supplement dependence into permanent rental accommodation. Five years later, not even twice that number have been moved.
Trying to control rents is useful. The State probably indirectly owns a great deal of housing that has been lying idle, given the nationalisation of one bank and our support for other banks. Could it be used for social housing? We need this type of imaginative movement.
Reverting to my initial point on job creation, the last thing that we need is for hundreds of thousands of people to be sitting at home, staring at the wall with nothing to do. This is bad for people’s mental health. Some commentators have even cited an increase in burglaries, claiming that people with little money and nothing else to do might decide to turn to that business, which we would not like to see occurring. Unless we get to grips with this situation, I am concerned about social unrest. Let us see what we can do to create and incentivise jobs and to get people back into work or training, even if it involves some type of social employment scheme. This would be crucial.
Deputy Seymour Crawford: I welcome the opportunity to comment on the Bill. I listened to a number of Fianna Fáil backbenchers, one of whom asked why anyone would want to do the Minister’s job. He sympathised with her. There is one way to get out of both of their jobs, though, and that is to let the people speak. The public would soon tell those on the Government side whether they should be doing those jobs. The Bill is a far cry from the promises of two years ago. While we were canvassing, the public was being told that the only people who could maintain the economy and do things right were those in Fianna Fáil and that no one else had the knowledge or ability.
There are two vacant seats behind me, one of which belongs to the Chairman of the Joint Committee on Social and Family Affairs, Deputy Healy-Rae. Neither he nor Deputy Lowry were present for the last vote. I hope that they will return for the vote at 3.30 p.m., as it is important to know where they stand. They were willing to support the Government after receiving written commitments from the then Taoiseach concerning the goodies that they would get. Now that the harsh reality of a broken economy is hitting them, they are far away from where they should be.
It is easy for the Government to claim that the situation is outside its control. Where the banks are concerned, though, it has sympathy and has been able to find €7 billion to let them off the hook. Ordinary people find it difficult to understand what an amount of €7 billion looks like. Given the fact that those running the banks were getting between €3 million and €6 million per year in pay and bonuses and that the regulators and Ministers were working with them hand in glove, one must question who is in charge of the country and what has occurred.
That the Tánaiste has discussed the need for competitiveness is interesting. Had the issue been examined during the past 12 years, we would not have our current problems, including a social welfare bill of €21.5 billion. If we do not turn our minds away from taxation towards returning people to employment, we are going nowhere. While I welcome the minor changes in the back to work and educational provisions, there is no new thinking that can bring about real change and opportunity.
The Government consistently says that Fine Gael and the other Opposition parties have nothing to offer. Fine Gael tabled a detailed and realistic proposal on how 100,000 people could be returned to work during the next four years. To say that we are not trying to develop initiatives is less than honest. That the Government should accept this fact is important. It is vital that our proposals be utilised by the Government, which we would gladly watch occurring.
The Tánaiste and others should apologise, as they have only just realised that competitiveness is important. Those of us who live in the Border region have known this for a long time. We have seen opportunities north of the Border and elsewhere. Three years ago, I highlighted in the House the problems facing Wellman International Limited. At its factory on the Cavan-Meath border, it is paying twice as much for electricity as it does at its factory in France. This may sound simple, but it is a difference of €2 million per year in running costs. This situation must be evaluated in terms of jobs.
It is time that we examine how to create jobs and minimise numbers on social welfare. If we do so, we will be able to pay the Christmas bonus and maintain social welfare payments for those who need them. However, there is no point in tinkering with the edges and refusing to deal with the real problem, namely, the regulator. Recently, he stated that he would reduce the prices of gas and electricity. He reduced the price of gas by 10% whereas the actual world market price has decreased by 30%. Such a reduction would mean a great deal to the creation of jobs.
Since the Bill comprises many different issues, it is more like a Finance Bill. It addresses the early child care supplement matter. The early child care supplement was brought in just over two years ago to much fanfare as to how it would help people to pay for child care or allow mothers to stay at home — all this sort of jazz — as it was so vital and important.
However, as far as the Government was concerned and as the former Taoiseach noted, all that mattered was to stay in office. The Government paid out the supplement under false pretences and with no intention of continuing the scheme, with the sole purpose of having the cheques in people’s hands on the day before the election in order that it would be elected.
Deputy Kieran O’Donnell: I wish to contribute to the debate by referring to a number of highly relevant comments made this morning by the Minister for Finance. He stated that no one had come up with proposals on where the €223 million in savings could be found. Clearly, he is not familiar with the Fine Gael document. I can find €300 million from direct measures that could have been taken and which would not entail pursuing the vulnerable. The use of generic, rather than branded, drugs in prescriptions would save €50 million while a carbon windfall tax on the ESB and other power generators would save €250 million. Members should recall that ESB charges comprise one bill that hits the vulnerable and the elderly who live on their own. While it receives free carbon credits from the State, it also charges hard-pressed people who are in receipt of social welfare or who have low incomes. These constitute measures the Government could have introduced, rather than going for the soft touch.
The Minister for Finance also claimed that Opposition Members were living in a bubble. The only bubble was the property bubble, which was created by the Government in recent years. It blew up the balloon, which burst like a water balloon and its tsunami effects on ordinary people include cutting the Christmas bonus to save €223 million. My constituency colleague in Limerick East, the Minister for Defence, Deputy O’Dea, will be aware that old people living on their own and lone parents will be obliged to go to the Society of St. Vincent de Paul or to moneylenders. The Christmas bonus allowed those in receipt of long-term social welfare who have children to buy presents for them, as well as allowing the elderly and people living on their own to afford the additional costs of fuel. Only this week, the queues at the social welfare office on Dominick Street, Limerick, extended as far as Parnell Street. Huge numbers of people now are queuing to claim social welfare, many of whom are in receipt of long-term social welfare, and they are being penalised for mistakes made by the Government in the past when it allowed the construction sector to run unchecked. The IMF has stated that stabilising Ireland’s banking sector will require the highest percentage of gross domestic product, of the order of €24 billion, of any developed country.
I ask the Government to see reason and reinstate the Christmas bonus. I suspect it will be obliged to so do. It is morally wrong and, from a financial perspective, will affect the most vulnerable. I know this from visiting people who live on their own. While I acknowledge that people are abusing the social welfare system, others are barely getting enough on which to live. The Government must reverse this measure and shame on it for doing away with the Christmas bonus.
Deputy M. J. Nolan: I welcome the opportunity to speak on the Social Welfare Bill 2009. It is unfortunate that Members must debate such a Bill at this time of the year, but the background is the extremely difficult economic climate we are experiencing at present. It does not affect this country alone as the world economy also is highly depressed. However, due to our dependence on world markets, this affects us more severely than some other small countries.
In her contribution on Second Stage yesterday, the Minister set out in great detail the reasons and purpose of this Bill. One can but stress that social welfare payments constitute such a large component of the Government’s expenditure. Such payments now cost more than €21 billion of a total Government spend of €53 billion to €54 billion. However, the figure is even more startling in the context of the percentage of the revenue stream available to the Government devoted to the cost of social welfare payments. For this reason, it is difficult for any Minister for Social and Family Affairs to be obliged to outline savings that must be made in that Department and in the administration of social welfare payments in particular. The Minister must look with envy at some of her predecessors who, two or three days after the Budget Statement, were able to come into the House and herald great improvements in social welfare payments and benefits. Regrettably, matters have turned very quickly and the Minister is left with the unenviable task of ensuring that the best value for public moneys can be achieved from her Vote.
I am encouraged by one aspect of the Bill in particular, which I am sure strikes a chord with many Members and with the public. I refer to the changes the Minister proposes to make in the jobseeker’s allowance that are designed to incentivise 18 and 19 year old jobseekers and to ensure that such young people, many of whom Members encounter during their work as public representatives, are not led into welfare dependency. I have been around for long enough to have experienced this during the 1980s, when young people left school with no chance or hope and went on to social welfare straight away. Many of them remained in that position and some have not worked since. As a country, a nation or as a community, we cannot afford to fall back into that trap and the changes proposed in the Bill go some way towards addressing that problem.
A person who is under the age of 20 who receives the maximum €204.30 rate of jobseeker’s allowance at present will have that amount reduced to €100 per week henceforth. While reducing the amount is fine, I wish to emphasise the incentives the Minister has outlined in respect of encouragement and the carrot provided at the end of it. The full rate of the relevant scheme will be paid to 18 and 19 year olds who participate in a full-time Youthreach course for young or early school leavers. Alternatively, those who get involved in post-leaving certificate courses also will benefit from the positive aspects of this change.
The single aspect about which I am a little concerned is that, to qualify for a back to education allowance, such people must have been out of formal education for at least two years. This creates a problem for those who have completed their leaving certificates, are 18 years old and who then apply for jobseeker’s allowance. We must ensure there is no margin for error and that individual students are encouraged at the first opportunity to undertake further education, retraining and upskilling. There is a bonus at the end of this in that they will be entitled to the full jobseeker’s allowance.
I ask the Minister to examine the length of time it takes to process asylum applications, which has been brought to my attention. Perhaps savings can be made in this regard. I refer to the time it takes to process appeals following decisions against applications. A number of cases have gone on for years and during that time payments are being made from the Exchequer to individuals who must be repatriated. It is not just the cost and time of administration and processing applications and appeals. At the end of the process the cost of flying individuals to their countries, many of which are African states, is inordinate. I saw figures of up to €100,000 to charter a plane to bring individuals back. At a time of economic difficulty we must examine every aspect of our expenditure and see where we can economise. This is an area for the Minister to examine in consultation with the Minister for Justice, Equality and Law Reform and savings may be possible.
I welcome the announcement on the free preschool year for families, on the basis that €1 billion has been expended by various Departments on the provision of preschool places over the past number of years. The Minister is confident that most, and I hope all, families who wish to avail of the free preschool year can do so. It is a welcome addition.
Previous speakers referred to the difficulties encountered by self-employed businesspeople in accessing social welfare. Through no fault of their own, because of the downturn in the economy and the difficulties in accessing credit lines, self-employed people carried out work and now find it difficult to get paid. I know self-employed carpenters and other individuals in the construction industry who are owed €70,000. They cannot get paid because the builders and developers in question are unable to sell houses. There is a chain reaction involving these business people who have traded profitably for up to 15 years and have never sought to access help from the State during their working lives. They now have no option but to seek assistance. They do not know what they are entitled to or what is available. They have great difficulty and perhaps a section of the Department could identify and educate these people on what to seek and how to make applications.
This brings into question the interdepartmental transfer of staff because of the pressures on the Department of Social and Family Affairs. The departmental officials in Carlow are most helpful and do their best in difficult circumstances. They are dealing with a major increase in the number of requests for assistance and inquiries about social welfare payments. In that climate they are working hard and are courteous and helpful. In consultation with human resources sections in various Departments, perhaps there could be an easier way to transfer staff. Within some Departments, where pressures are not so great, there may be a surplus of staff that could assist the Department of Social and Family Affairs. In the private sector it is a matter of form that this will happen. In Carlow a large company is rationalising and staff are obliged to move in order to retain posts. They are doing so at a lower income and it is timely that all Departments examine this.
I wish the Minister well in her proposals, some of which are enlightening. We cannot lose sight of the context and climate in which this Bill is debated. Hopefully the measures will be short-term rather than long-term.
Deputy Paul Connaughton: In my long experience in this House I have never seen a more vicious Social Welfare Bill. There are reasons for part of it because the Minister found herself in a difficult position. Some of the measures are most unfair. I refer to those trapped in social welfare and those who can be kept out of the social welfare net if a small amount of imagination is used in the Department of Social and Family Affairs and other Departments.
It is of great importance that at a time when the country is on its knees, we try to be reasonably fair to those who cannot get a euro anywhere else but from social welfare. This comment is more relevant now than any time in the past. Anyone on the average social welfare payment of approximately €200 does not have a great quality of life, in good times or bad. In this assembly, we must ensure that those who genuinely depend on social welfare are looked after through disability or illness payment. I refer also to the aged and the carers. Anyone bleeding the system unnecessarily and unjustly must be penalised. I heard the Minister refer to this recently.
For the teeming thousands losing their jobs, we had better understand, from a psychological point of view, that step from the last day they were in employment. This applies irrespective of how many levies were imposed on wages, which we will all know about in a couple of weeks. The baseline of social welfare is a very dark place to be. However it could be organised, it is not fair or reasonable to deny people the Christmas bonus. It has been a traditional high point over the years. Even when we did not have it as good before the Celtic tiger there was a bonus at Christmas for most recipients of social welfare. This applied not alone to the elderly but to the unemployed, people with disabilities, etc. The payment was usually made at the end of November.
The bonus had two or three beneficial effects. It was very satisfying for the recipients and was an indication of a kind of Christmas box from the State, which demonstrated the recipients should be treated in this way. Every euro of the payment was spent locally, with businesses in cities, towns and villages being the direct beneficiaries of what was quite a lot of money.
Given the history we have and even with the financial straitjacket we are currently in, one would think the principle of the payment would have been adhered to. Even if the Government and Department could not come up with all the payment this year, why was half of it not paid? A half a loaf is better than no bread. It would give a signal from Government to those elderly people that it is thinking of them even in an hour of great national need. Instead, the whole payment has been scrapped, which is despicable conduct. I hope that if savings are found in the Department between now and next October and November, something will be done to provide the people with some type of Christmas bonus. Even if the payment was halved, it would be some way of saying that the State appreciates what pensioners have done for the country over the years.
I have another issue I wish to discuss which relates to social welfare. It is reasonable to raise it on an occasion such as this. It concerns the new administration of the medical card applications. Two or three weeks ago I got an opportunity at a meeting of the Oireachtas health committee to raise this issue with the Minister for Health and Children and Professor Drumm. I cannot understand why 1.5 million people across the country would have to apply to an office in Finglas in Dublin for a medical card. Whatever bureaucracy that may have existed in counties or headquarters hitherto, a person now has to deliver all the information to an office in Finglas in Dublin which has just one freefone number. I will give anybody €100 if he or she can get through to that number in one day, let alone one call. The freefone number is there because it means nobody can get through.
Deputy Paul Connaughton: No, and there is not even any background music. The tragedy is, those over the age of 80 are trying to contact the office in Finglas. The process has just started and there will be much more about this in the next six months.
We all saw the letter from the Department which indicated that if people over 70 believed they had more than €700 per week in income, the medical card would remain. I met several people in the weeks after who got a contradictory letter which stated that the medical card must be applied for again. Those people had to go to their doctor to get the application signed and they had to go to the post office if they were in receipt of their pension by way of a book in order to verify that the pension was being received.
The Department has done its best over the years to get people’s pensions paid directly to their banks, which is right. In order to verify the pension, which is going directly to the bank, pensioners need to go to the bank and the personnel in the local banks need to go to headquarters in Dublin to get proof that people are in receipt of a relevant pension. Another two or three weeks are gone in this process. On top of this, pensioners must get another verification from the bank regarding the bit of money they have to bury themselves, as they say down the country.
That is fine for able-bodied people but if we are to subject people up to the age of 90 and 95 to that carry-on, who would we be kidding? What sort of a country would that be? This will save no money at all because up until now, when applicants for medical cards went to headquarters in Newcastle in Galway or elsewhere around the country, the process went through the community welfare officer. Those people were able to help out and advise applicants. They got all the necessary information and nobody ever got a medical card to which they were not entitled.
There will be thousands of applicants who have problems such as illness and will not be able to communicate this to the office in Finglas. It means that the discretionary element of this medical card has been removed for good.
Deputy Paul Connaughton: Of course they do not. This process was put in place in the full knowledge that such consequences would come about. What is going on is nothing short of pure skullduggery and it is only a matter of time before the majority of the 1.5 million people affected realise what is happening. It will then be too late. The Minister for Defence is present but they all sit around the same Cabinet table. Whatever the Government argues in terms of cost and cutbacks, there is nothing from a cost perspective involved in this. It is bureaucracy gone daft.
In answer to a question I raised with him, Professor Drumm of the HSE stated that his problem was whether they would be able to get necessary IT equipment up and running to make the process efficient. If the Department does so, it will be the first time it has. We can imagine the flood of 1.5 million applications into one office. We might have thought the debacle with the voting machines was bad but it will be nothing beside what will happen in Finglas in the next year or two.
The Minister referred to the back to work enterprise scheme and I hope she will act as she said she would. We should enact any law or make any provision, if that is possible, to allow people an opportunity to work, irrespective of how low paid it is at the outset. I understand there were two schemes, the back to work allowance scheme and the back to work enterprise scheme, and these will be amalgamated. One of the schemes had an eligibility rule where the applicant had to be unemployed for two years before he or she could apply for it. Surely in this recessionary period any two-year period should be cut. People may have an idea to create a job for themselves so why would the Government commit them to two years on the dole unnecessarily?
Officials from the Department of Social and Family Affairs indicated to me this morning that they expect to be informed on 1 May of the new rules governing the back to work enterprise scheme. I sincerely hope the scheme will be workable, practical and, above all else, sensible. By sensible I mean that after six months persons who believe they can create employment for themselves, either individually or as part of a collective, should be allowed to enter the system. Under the old scheme, applicants who were successful would receive the full amount of the jobseeker’s allowance for the first year, 75% of it in the second, 50% in third and then the payment would finally be phased out. This provided people with a great guarantee and peace of mind because they knew that while they were testing their new projects, some form of payment that would allow them to survive would still be coming in. There is nothing new in that because similar schemes operated 20 years ago. In the good times, however, there was no great need for such schemes.
By the time the Bill is enacted — irrespective of what might be said during the various debates on it — I hope people will be encouraged to take up the scheme because they will know they will be guaranteed to receive a certain proportion of their social welfare payments while trying to get projects off the ground. Nothing could be more sensible than that and I do not know how the Government could argue against it, particularly when so many people are out of work. However, in light of my past experience with regard to matters which should have been put right in this House but which were not, I will bet someone will throw a spanner into the works. The eligibility rules will probably be framed in such a way that many people will be excluded from the scheme. It will be nothing short of a disaster if that proves to be the case.
There is another aspect of the Bill on which I wish to comment. As stated earlier, I hope we will do the best we can for the recipients of social welfare and that we will do everything possible to keep people out of the social welfare net by working with the Departments of Finance and Enterprise, Trade and Employment to put in place initiatives to ensure these individuals will not be obliged to draw the dole. As I am sure other Members did, in recent weeks I met a number of young married couples who have young children and who also have extremely large mortgages. Some of them informed me that they had the opportunity a couple of months ago to transfer to fixed rate mortgages. Regardless of whether what they did was right or wrong, the advice they received was that it would be better to switch to fixed rate mortgages — 5.9% in a couple of cases — because interest rates might rise. In the interim, interest rates have continued to fall.
The people to whom I refer went back to their banks and building societies and stated that they were finding it more difficult to meet their mortgage payments each month because they had lost their jobs and due to the fact that they are now paying rates that are 2% or 3% higher than those which apply in respect of tracker or variable mortgages and asked if they could switch. I do not know who is running the banks but if what I have been told is true, then what is happening is nothing short of scandalous. In three or four cases, the people involved were informed that because they had signed up to fixed rate mortgages only three to four weeks ago they could not switch. In one instance, a person with a mortgage of €200,000 was informed that it would be fine to switch to another bank or building society but in order to do so a penalty of €12,500 would have to be paid.
At a time when taxpayers are on their knees trying to ensure the banks remain in business, would it not be in everyone’s interests if the banks and the building societies applied the lowest possible interest rate to these families’ mortgages to give them the opportunity to pay their way out of their difficulties? The family with the €200,000 loan informed me that the difference between the repayments that apply in respect of the fixed and variable rates is approximately €200 to €300 per month. Why would the building societies, the banks and the Government not want what I have outlined to happen in order that people might pay their way out of the depression in which we find ourselves?
The Government should take this matter seriously. In view of everything that has happened with the banks — the bringing in of outside directors, etc. — is it not time we took an imaginative approach to this matter? If, five months ago, a bank could grant a loan to a young man and his wife or partner on the basis that it believed they could meet the repayments, why would it not be possible for it to reduce the rate of interest that applies without imposing huge penalties? Who do the banks and building societies think they are kidding?
The banks are saying that individuals may pay only the interest on their mortgages for the next six months. However, that is merely a case of passing the buck because people’s financial problems will remain at the end of that period. The people to whom I refer require assistance and it should be provided.
Minister of State at the Department of Education and Science (Deputy Seán Haughey): Was the Ceann Comhairle expecting that the Minister for Social and Family Affairs would reply to the debate at this point?
Deputy Kathleen Lynch: I am not surprised at the Ceann Comhairle’s hesitation in calling me to speak, particularly when one considers this is a Government slot. Nor was I surprised by the Minister of State’s reaction when he looked behind him and discovered that there was no one present on the Government side to contribute to the debate on this crucial legislation.
The position was the same last evening, which is understandable because people might not have expected the debate to run late and they may have gone home or left to attend meetings. However, the fact that this has happened twice seems to indicate that it is a deliberate attempt to collapse the debate on the Bill. Were it not for the efforts of Deputy Michael D. Higgins last night, the debate would have collapsed. If that had happened, there would have been newspaper headlines to the effect that the Government could not even provide a speaker to ensure the debate on this crucial legislation, which will shape people’s lives for the next 12 months, did not collapse. All this takes place despite the fact that a guillotine is due to be applied to the Bill at 3.30 p.m. There are members of my party and others in opposition who would have relished the opportunity to contribution to this debate. The Government has set out to stifle debate on this legislation in the same way it deliberately did not send in speakers on the Private Members’ motion on the same subject. That is a dangerous precedent and if it lies within the remit of the Ceann Comhairle, he should speak to the Government Chief Whip about it. It should not be allowed to continue without at least the Opposition being told that the Government wants the debate to collapse unless the Opposition supplies speakers. Hopefully that will never happen because usually enough of us want to speak.
For many years the story about social welfare was that the Government threw money at it without looking at the underlying structures. Every time there was a problem or a group became disgruntled, the Government put more money into it. Now, when huge numbers need support, the Government is withdrawing funds from social welfare.
I always maintain that budget day is a day for headlines and not news. The detail is in the Finance Bill and the Social Welfare Bill. This Social Welfare Bill contains one of the sneakiest cuts I have ever seen and we have had enough of them from different Fianna Fáil Governments. This cut means the Government has decided that people who have worked for years, and who have paid their contribution to the social fund so that it would be there to support them when needed, will no longer get jobseeker’s benefit for 15 months, but only for 12 months. Coupled with the removal of the Christmas bonus, it means there are people who have recently become unemployed who will be long-term unemployed by November and not alone will they have lost three months jobseeker’s benefit, they will also lose the Christmas bonus. It is outrageous. That attitude to social welfare must be addressed. Social welfare is not a discretionary payment, it is a system to support those who cannot support themselves.
The health levy has been doubled. For a family on €40,000, not a large amount these days, it will mean €66 a month less, on top of losing mortgage interest relief, income levies and all of the other things coming down the road. The early childhood supplement is to be halved this year and removed entirely next year. People do not know what is coming next. These measures are included in this legislation, for which the Government chooses not to supply speakers, ensuring the collapse of the debate, bringing it to a vote as soon as possible. What is the point in talking about it?
When the early childhood supplement was first introduced, the Labour Party said the money should have been used to establish a system to give every child a place in preschool education. The Government disagreed. People were offered a choice between money in their hands or a system where children were given preschool places and naturally the popular thing to do was to give people the money. The right thing to do, however, was to put in place a system whereby every child in the country received preschool education. Now the Government is taking away the early childhood supplement but says it will put in place preschooling. It will not happen because the preschool places do not exist and the money does not exist to invest in them. Such tricks will not work.
The unemployment figures are not true. There are tens of thousands more who are unemployed but who are not registering because they were forced by their employers to take out C2s and C35s. They were told they were to become self-employed. The employer would continue to give them jobs and supply them with materials but they were to employ themselves. The employer as a result had no responsibility for any of the protections, such as pension, PRSI or health and safety, and employees were forced into the position because they were told they could find work elsewhere if they did not want to do that. That was how the construction industry was structured, leaving nowhere else for employees to go. All of those people, because they did not pay contributions, are not entitled to a penny. These are not the massive developers who bought land in Ballsbridge for €54 million an acre, they are people who worked on building sites, doing the work the Government drove them to do. They have no nest egg, there is no villa on the Costa Brava for them and there are no assets. These people do not owe €30 million to Anglo Irish Bank. They have been left penniless and the Government must do something to rectify that. It is outrageous that they have been pauperised. They have families and commitments but now they have no work and no entitlements. It was an outrageous scheme in the first place and we must pick up the tab now.
When the Government decides not to allow Deputies to speak on this legislation, it is saying to those who find themselves in a queue outside the labour exchange or queuing to see overworked community welfare officers that it is not interested and it does not want to discuss the issue. It is telling them to go away. The Government failed these people when they were working and it is failing them now when they are unemployed.
Deputy Arthur Morgan: I have also spoken to significant numbers of people caught in the trap described by Deputy Kathleen Lynch. We call it the C2 trap, where people did not appreciate they would not be entitled to welfare benefits if they did not pay PRSI. People did not know this was a cost saving exercise on the part of contractors. Unfortunately these people were not given adequate advice on what they were doing.
This Bill is another example of the Government placing the burden for the economic crisis on the backs of low income families. Poor families throughout the State are paying dearly for this Government’s mistakes. The biggest problem is that after 12 years of mismanagement of the economy and social policy, the Government still has not copped on. The entire focus of its reign continues to be on bailing out the banks. It is not just the banks, of course, because the national asset management agency will bail out the speculators as well. Meanwhile, this Bill places the entire burden on low income families.
The Government missed a significant opportunity in the budget to deal with two of the cornerstones that must be put in place if we are to build our way out of this Government-created economic crisis job retention and job creation. There is little or no mention of them in the budget, which is most unfortunate. Yesterday, there was a change in the number of Ministers of State. Although that is welcome, government reform is not taking place, even at a token level. Ministers and Ministers of State still have up to six civil servants working in their constituency offices, while Ministers have two fully qualified gardaí to drive them around instead of those gardaí being out on the beat or engaged in crime detection and prevention.
I could continue on that issue but I wish to focus on the features of this Bill that cause me considerable concern. The first is the rent supplement, which is to be reduced by approximately 8%. That will create extreme hardship for low income families. The Government says this cut is aimed at reducing the cost of rent. If the Government wishes to reduce rents, there are other ways of doing so, such as through legislative or regulatory reform. It is not necessary to cut the rent supplement to people who cannot afford the full rent for the house in which they are living. My concern is that the reduction in rent supplement will result in additional under-the-table payments. Every Member knows, as do the community welfare officers, that almost everybody in receipt of rent supplement is making under-the-table payments to the landlord. Otherwise, the landlords would not tolerate them. I am worried because the under-the-table payment will increase due to this capping of the rent supplement.
There is also the issue of people who have been told they qualify for rent supplement being unable to move into the property because they do not have the deposit being sought by the landlord. A number of local authorities have stopped paying deposits to landlords on behalf of people approved for rent supplement. This causes huge problems because community welfare officers will not pay deposits either. I have a suggestion which the Minister might discuss with her colleagues. I have no wish to see local authorities or community welfare officers paying such deposits to landlords as I do not believe public money should lie in a landlord’s bank account. However, perhaps a letter of comfort could be given by the local authority. It could state that in the event of a default or where the tenant moves on and the deposit is required, the local authority would make the payment. That is a more efficient way of dealing with the matter than what is happening at present.
I received a letter this morning from a constituent. She tells me that, to her horror, what she describes as our reverend masters — I believe she is referring to the Minister and the Government — have decided in their wisdom to deprive the elderly of their guardian angels, namely, personal alarms. She says she is not asking for this service to be restored, but demanding it. She asks me what I will do about it and tells me to answer immediately. She signs herself as Nuala Early, secretary of Drogheda Senior Citizens Interest Group. Nuala is a very straight talking person.
She probably thinks the decision will be overturned because this Government, and it is the one thing I admire about it, has the capacity to do U-turns. We have seen how that happens. Issues are teased out in the Chamber, a few Government backbenchers huddle in the Dáil bar, contact the Minister and, lo and behold, a U-turn takes places. We have seen this happen on a significant number of occasions. I hope there will be a U-turn in respect of the €2.5 million scheme, which provides old people with additional locks on their doors and alarm pendants. I hope the Government will restore that miserly sum for the benefit of these people. Approximately 10,000 people were benefiting from the scheme annually. It is a significant and laudable scheme.
I mentioned Government backbenchers but I should have mentioned the Green Party. I must say I am quite jealous of Fianna Fáil being in government with the Green Party. I would love to be in government with the Green Party because it is a cake walk, a gift. The party is a walkover on every issue that arises. Fair play to the Fianna Fáil side of the Government for getting away with it.
Section 5 of the Bill refers to putting in place a system that will require recipients of jobseeker’s allowance to participate in a course. I am a little concerned about that and am anxious to hear the Minister explain it. Does that mean the jobseeker will lose his or her benefit if he or she does not participate on the course? Is it aimed at young people only or at all age groups? Will additional courses be put in place? If I were in that category, I would not be attracted to many of the courses currently available through FÁS. I received representations about this during the week. A constituent told me he had been seeking a course in FÁS and had applied a number of times. On two occasions he was told he could not get the course because, as there were not enough participants for the course, FÁS could not run it. FÁS needs to examine how it is presenting these courses and the nature of the courses. Some work must be done in that area.
The back to education scheme is welcome. There is a reduction in the amount of time a person must be in receipt of jobseeker’s allowance to qualify for it. However, there is a difficulty in that it does not cover a person who wishes to do a master’s degree. I received a representation this week on this issue. The young man had been in a reasonably senior management position with a local business that unfortunately had to make him and a number of other employees redundant. He wishes to go back to college to do a master’s degree but that is not covered in the back to education allowance scheme. It is people in that category whom the Minister should want to benefit from the back to education scheme. These are people who wish to upskill themselves and be prepared for the upturn when it will inevitably come, although that probably will be after a change of Government. Nevertheless, we need such people on such courses now. I am surprised it is not provided for in the Bill.
With regard to carer’s allowance, I am aware of cases where people are appealing the decisions on their applications for the allowance. The authorities are currently processing appeals that date from December. There is a four-month overhang for appeals. Everybody knows that carers provide a significant saving for the State because people who are being cared for are not in nursing homes. Keeping them in their own homes is more beneficial. I hope something can be done to shorten the backlog.
I wish to put on record my appreciation of the work the Department does. The officials are always extremely helpful and very understanding when dealing with individual cases. They deal with people empathetically within the regulations. If they can, they err on the side of the applicant, which is a good approach by a Department of State.
One issue that has come to my attention is the question of social welfare for people who were self-employed. They find themselves with no support services. This is a serious problem because many of them have nothing. Whatever savings they might have had during the boom disappear very quickly. We should impart education and knowledge to the self-employed through public information campaigns. Where we can identify people who are self-employed or as they become self-employed — please God there will be more of them than there are at present — we must make them aware of the entitlements they do not have. If possible, we should have an information campaign for people who are self-employed, to tell them how they can protect themselves and their savings or what funds they can avail of in the private sector that would assist them when times turn bad. I refer in particular to people who were involved in the building industry, many of whom are ordinary people with a basic education. Some of those people may not have spent too much time in secondary school and they are going through a very lean period currently. I would like to think that the support services available to them would be improved. An information campaign would be most important in that regard.
Nuala Early was mentioned by Deputy Morgan. I endorse what he said. Senior citizens around the country are especially concerned that the funding for personal alarms has been withdrawn. I accept the matter comes under the remit of the Department of Community, Rural and Gaeltacht Affairs. I found the statement by the Minister, Deputy Ó Cuív, on the Department’s website to be particularly sickening. He is effectively saying the system is now in limbo and that it will take two or three months to review it. Anybody who has received a personal alarm will keep it but, in effect, the scheme has been discontinued.
The scheme must be restored, as many elderly people have no hope of support in isolated communities. A person may be unable to get to a telephone if he or she falls and if nobody lives with him or her a personal alarm is of the utmost importance as a near neighbour or whoever is the designated person can be alerted in time of difficulty. That scheme was most helpful to the elderly and its discontinuation is a significant blow to elderly people, especially those with a disability or who are isolated and have nobody living with them.
In many counties the housing aid for the elderly scheme has been discontinued, which again, is a withdrawal of services to senior citizens, this time through the local government system. That creates a serious problem for persons in acute hospital beds in need of discharge. They can only go home if a home help is in place but also if their homes are adapted for their needs. People who suffer from serious heart disease can no longer climb stairs and they need toilet and shower facilities downstairs. It is a retrograde step that those works will no longer be provided. That means those people who are most at risk in society, those who are most likely to need help in their homes, will have to do without. That is a negative development.
Older people are most concerned about the Christmas bonus because they have traditionally looked after their grandchildren at Christmas and the opportunity will no longer be there. One elderly person put it to me that it is as if his or her wages have been cut by €4.50 a week. That is upsetting and annoying for people. The Minister will be aware of the strong feelings that exist on the matter. I hope the Government can do its sums in another way and restore the Christmas bonus for the elderly.
The charge is often laid against Fine Gael that it took a shilling off old age pensioners in the 1930s. The removal of the Christmas bonus from people who need it and who have no other source of income will be the historic legacy of the Minister.
Deputy Willie Penrose: This is an important debate. I share many of the sentiments expressed in the worthy statements of my colleagues, Deputies Shortall and Kathleen Lynch, to which I listened carefully.
There is a Victorian attitude to social welfare in this country, and that has been the case for many years. More money is spent on pursuing and supervising people to ensure that they do not work rather than on focusing efforts to ensure people get work and to provide adequate training in technological skills, construction and other trades so that people can get work. We must get rid of the Victorian attitude that is prevalent within Departments.
The Department of Social and Family Affairs is an excellent Department. The Minister’s senior official, who is present, has been an old sparring partner of mine for the past five years. He probably thought he had seen the last of me today but I have come back to haunt him. I acknowledge that he and other officials have been helpful to me since becoming spokesman for social and family affairs. The same is true of people working in offices throughout the country. They are only implementing the law and no blame to them for that. We need to change the law.
There is too much centralisation. One related example is from the health service. Medical card assessments is one area that could be transferred from the Department of Health and Children to the Department of Social and Family Affairs. They should be done locally. Those assessments are centralised now in Finglas in Deputy Shortall’s constituency. However, people knew the circumstances in Mullingar, Athlone, Longford or wherever else. Community welfare officers, CWOs, knew the circumstances and with a quick visit could assess or analyse a person’s priority for a medical card. Persons with cancer or other diseases should be sure they will get a medical card. Medical cards should be automatic for anybody suffering from cancer. Such people should not have to go through the additional burden or trauma of having to be assessed. I have always held that view and, if in government, I would like to see such a scheme implemented.
I do not understand why services are centralised and taken away from the very people who have the expertise and who have dealt with people through the years. Decentralisation was supposed to be Government policy but it has been abandoned for medical card assessments. Now assessments will take months and people will have to wait a long time for an outcome. No expedition will be achieved. I do not see where the cost savings will occur as a result of centralising the assessment process. That is something the Minister can bring back for consideration.
I fought vehemently the attempt to subsume CWOs within the Department of Social and Family Affairs. I note the regulation has not been enforced yet, but it should be thrown in the dustbin. CWOs have discretion and once they are subsumed within the Department they will be strangled with bureaucracy and red tape. They will not be in a position to make decisions. We often contact CWOs at weekends to ensure that those people who are less fortunate than ourselves and who are in need of temporary accommodation or money to secure the basic necessities for their families are looked after. Subsuming CWOs into the Department of Social and Family Affairs will do away with the very ethos that led the late Frank Cluskey to introduce the discretionary payment scheme, which is extremely important in this context. I hope in this difficult time for her that the Minister will throw that regulation into the bin and never take it out again.
The Minister indicated she wants an 8% reduction in the rent supplement. Most tenants have legal agreements with their landlords. Whatever about prospective tenants dealing with landlords, how are we going to protect existing tenants? Many of them are in a vulnerable position, suffer illnesses or are barely literate. Illiteracy is a big problem in this country and one has to be on the ground to realise that. What will happen to a person who may not be in a position to renegotiate? The landlord can say “Get lost Willie. You made your agreement and you are bound by its terms and conditions”. What will happen when a person is told to get lost and they are put out? What body will undertake to ensure that people will be secure in their accommodation? How will the Minister provide security for them? An additional 1,000 rental accommodation scheme, RAS, places are no use. We would be building houses and providing employment for people. That was always a fundamental Labour Party ethos and policy. We would build houses and give labour-intensive employment and ensure social houses would be available to people rather than filling the pockets of landlords.
Cutting the dole is all very well for people under 20 if they have somewhere to go such as college or access to one of the schemes we advocated such as bridging the gap, the back to education allowance and the back to work allowance. We advocated that the qualifying periods for those schemes should be reduced. It would be great to enhance the eligibility for community employment schemes but what will happen if the young people do not have a place to go? Who will look after them? What does a 19-year old do with €100 if he or she has nowhere to go? It is very fine in theory and it would be laudable if ancillary services were available and people could seek the necessary retraining and skills to ensure they would get a job.
Deputy Michael Ring: I agree with Deputy Penrose on medical cards. I spoke about this two weeks ago on a Private Members’ motion and I also tabled the matter for a debate on the Adjournment. I agree with Deputy Penrose that it would be a big mistake not to process applications locally. Government policy was to decentralise bodies from Dublin to the regions and now we are going in the other direction, from the regions to Dublin. This is wrong and should not be allowed to happen.
While I am sometimes very critical of the way officials work, I realise community welfare officers are under awful pressure at present. They are finding circumstances very difficult and many are out sick with stress because of their workload. The Minister was to supply extra staff; in some cases she did so and in others she did not. It is impossible for the officers to work under the present conditions.
Consider the position of farmers who will be seeking farm assist payments. A major milk producer contacted me some days ago and stated he had been producing milk for the past few years and was never on social welfare. He asked to be assessed for a farm assist payment and was told he would have to be assessed on last year’s income. Circumstances have changed in this country so fast that one should no longer carry out a means test based on last year’s income. Those days are over. A year ago, every business in the country was flying while today they are all in difficulty. Builders, businesses and farmers are in difficulty.
I ask the Minister and her officials to adopt a different line on farm assist payments such that accounts from last year or earlier will not be sought. Those days are over. Whatever money the farmers had last year is gone today. I ask the Minister and her officials to talk with the staff and make life easier for farmers who are going through difficult times. I refer to farmers who never drew social welfare payments and who depended solely on the land. They are now finding matters difficult because the milk prices they received 20 years ago were higher than those they receive today.
The Minister made some minor changes regarding the back to work and back to education allowances. We need new thinking and ideas in the Department of Social and Family Affairs. There is no point adhering to the old rule that one must be unemployed for 12 months before going on a FÁS scheme. This period has now been changed to nine months.
Deputy Michael Ring: If someone wants to participate on a FÁS scheme or other training scheme, he should be allowed to do so. It is better to have people in these schemes than drawing social welfare. At least they are being retrained and re-educated and may re-enter the workplace when the economy picks up.
With regard to the Christmas bonus, the Minister will have a big test next December when the budget is announced. The easy target in the last budget comprised the recipients of the Christmas bonus. They have no lobby group to fight for them and will not be able to protest outside the Dáil because some will not have the resources or money to come to Dublin. They are located all over the country and there is great anger over the stance on the Christmas bonus, in respect of which the Minister has failed. In the December budget, the Minister must protect the most vulnerable, including people on social welfare. While an increasing number of people is joining the live register, representing a draw on the Exchequer, we must look after the most vulnerable and ensure their income, livelihoods and families are protected.
The recent budget was anti-family. There seems to be an attack on the family in this country all the time, particularly since the time of the former Minister for Finance, Mr. Charlie McCreevy. The trend has continued under the present Government. Our Constitution stipulates that children and families should always be treated equally but they have not been looked after.
The jobseeker’s allowance has been decreased from €200 per week to €100 per week, which is wrong. When the son or daughter of parents already on social welfare is given €100 per week in social welfare, he or she finds it inadequate. If young people go out at night to a disco or make a contribution to the household, this sum is not enough. It is wrong that they are being treated in this way. They do not want to be on social welfare but want to have a job.
Minister for Social and Family Affairs (Deputy Mary Hanafin): I thank the Deputies for contributing to this Social Welfare Bill, which takes into account not only provisions that need to be implemented regarding social welfare but also other provisions, particularly from the Department of Health and Children. The Department of Finance must also be considered in this regard because of the timely nature of this Bill. As I indicated last night, a number of legislative changes are still necessary but were not ready in time for this Bill. In the interest of clarity and so Members will be prepared, I will indicate the amendments I intend to introduce on Committee Stage, one of which I have not mentioned yet.
I am conscious of the impact the current global recession is having on the value of Irish pension funds. It is estimated that in excess of 90% of defined benefit schemes are in deficit. This is presenting trustees of pension schemes with significant challenges in their efforts to optimise the benefits for pension scheme members. Deputies will be aware that we put a number of measures in place last December to ease the funding pressures of these schemes. While these were helpful in the shorter term, I must indicate my intention to introduce further measures that will support the job of the trustees of the schemes in meeting the challenges that confront them and provide greater flexibility and regulatory support to improve the affordability and viability of defined benefit pension schemes. With regard to a separate but related issue, I will also be amending the National Treasury Management Agency Act.
I propose to introduce amendments to protect 18 and 19 year olds leaving the care of the HSE to ensure their additional needs can be met. I will be making a technical amendment to section 7 dealing with the supplementary welfare allowance. I will be making some technical amendments to section 12 of the Bill. I will deal with amendments to the Health Contributions Act and provide a saver provision to ensure that health contribution deductions made on redundancy payments received on or before 30 April 2009 will be made at the old, lower rates.
As Deputies will be aware, the Bill provides that the rates at which health contributions are to be made are to be increased from 1 May. As these changes are being made in the middle of the contribution year, provision must be made to average the new rates over the year. This is provided for in the new section 4A(1). However, one of the consequences of the provision would be that an individual who received a redundancy payment prior to 1 May and who paid health contributions at the rates in place until then would be caught for the extra payment due in accordance with section 4A(1). It is proposed to address this by providing a saver provision that will ensure the health contributions deduction made on any such payments made on or before 30 April would be made at the old saver rates.
I will be introducing an amendment to the Financial Emergency Measures in the Public Interest Act 2009 to provide for the changes announced in the supplementary budget regarding the public service pension levy. The Minister of State, Deputy Barry Andrews, indicated that as the Bill, as initiated, provides for the termination of the early child care supplement from 1 January 2010, it will be necessary to make a technical amendment to the Bill to amend that date to 1 December 2009. This will not affect the payment in December because the payments are made a month in arrears. People will continue to get the payment in December. This clarifies the Committee Stage amendments I intend to make next week. I am sure Deputies will have amendments also.
A number of different issues arise in the Bill. Quite rightly, Deputies have focused on the desire of all Members in the House to have people return to work and to support those who have lost their jobs. The size of the social welfare budget, €21.3 billion, is such that our focus must be and is on having people return to employment. Doing so not only supports the unemployed and respects their contribution to society, it also helps to reduce the social welfare budget. At a time when €6 of every €10 entering the Exchequer is spent on social welfare, we would much rather have the burden reduced so as to be able to target resources at the most needy.
We should not lose sight of the fact that there are still 1.8 million people working in Ireland and they continue to make a considerable contribution. Our aim is to help those who do not have the correct skills and training or who need to be upskilled to return to work. This was the principle behind the initiative regarding 18 and 19 year olds. In fairness, many Deputies who spoke appreciate the importance of ensuring that an 18 or 19 year old does not become dependent on welfare. We all know of cases where the 18 year old is trotted into the social welfare office by the family almost on his or her birthday and told “Sign here, I have done it and your grandfather has done it”. There is this intergenerational dependency on welfare. Unfortunately, those young people, because they are the most likely to have dropped out of school and not to have training or education, are those who are destined to remain on welfare for the rest of their lives, and none of us wants to see that happen. As I indicated, however, unless there is some financial incentive for them, our evidence is that the cohort of people to which I refer, in particular, will not participate off their own bat.
There are thousands of places available for these young people, probably 5,000 on a weekly basis, and maybe rising to 9,000 next year. Already in the budget we indicated additional places that are being provided between the training initiative strategy where 12,000 places are to be provided on short-term and on long-term courses, transition courses, certificate courses, full-time third level places and additional ones being provided.
Many Deputies asked whether there will be enough places. As an indication, the VTOS schemes provide 5,000 places and a number of these would suit that. The post-leaving certificate courses, if these young people have their leaving certificates, provide 31,688 places. There are plenty of places around the country.
Deputy Mary Hanafin: ——provides approximately 50,000 places. The Department will give the young people coming in details of their local VECs, of where courses are available, and of FÁS training programmes so that they can immediately get the information and get themselves signed up to courses. Obviously, it is important that they would do courses that can help them——
Deputy Mary Hanafin: Indeed, FÁS is offering a range of places, in everything from engineering-related courses to pre-employment courses. Whether it is sports and leisure or electronics and industrial servicing, courses range right across the spectrum.
Deputy Mary Hanafin: There are additional places, as I have indicated. As announced at the time of the budget, between the Departments of Enterprise, Trade and Employment and Education and Science, it is proposed that an additional 23,500 places are being provided and this provides more than enough scope to facilitate such 18 and 19 year olds.
Bearing in mind there are a number of these young people who will not want to do this — there is more than a mere financial incentive and they will need particular care — I genuinely believe this is a way of ensuring that people at an early age will not just take the €204 a week and see it as a long-term measure, which, unfortunately, has happened.
As I outlined last night, the back to education changes are also important. More people will be able to access the scheme. The reform of the back to education allowance at second level, where one can access it now at three months instead of at six months, is important. As the second level option includes the post-leaving certificate courses due to the way they are organised, additional access will be available.
Also, eligibility for access to the third level option is being reduced to nine months. Deputies asked why I cannot make it any earlier. It is really important that this is targeted at those who would genuinely be able to benefit from it because they have been unemployed. We need to avoid — Deputies have agreed with this in the past — a typical leaving certificate student who wanted to go on to third level using this as the vehicle to get the allowance. As I indicated, the back to education allowance, at over €10,000 a year, is far more generous than the third level grant would be.
Perhaps the following has been clarified for Deputy Enright. There was a little confusion on the back to work enterprise scheme. In fact, there are now two separate schemes that can be accessed. This is an important development. There are many people, particularly those who, unfortunately, have lost their jobs in the technology area in companies such as Dell or SR Technics, who have good ideas and good initiative. They no longer, as soon as they lose their jobs, need to wait a particular time and they need not be actively seeking work. If they show they have a good viable idea — we can work closely with such bodies as the partnerships and county enterprise boards — then they will be given the back to work enterprise allowance which will allow them to develop their ideas. This is an exciting proposal because it does not involve a waiting period. I accept there must be nothing more soul destroying for somebody who is well educated and who has a great commitment to the workforce to have to wait to access a scheme, and now that will not happen. I look forward to seeing how that works.
Deputies also asked about the position of those claiming benefit who were self-employed in the past. Undoubtedly the case used be that one’s projected earnings were based on one’s earnings in the previous year. We have long since accepted that such is no longer viable because, for many, projected earnings this year are far less than those of last year. The policy and the practice, as stated to the Department’s offices throughout the country, is to look at such persons’ current situations because we must appreciate these people are in particular difficulties.
The rent allowance scheme is one to which a number of changes have been introduced in the Bill but there is probably considerable scope as well to ensure that we get the best use and value from this scheme. The numbers availing of it have grown significantly, understandably through those who have already been in rented accommodation who now find that their circumstances have changed and who obviously need support, but also through the formation of new households. This has been a bit lax, with the local authority merely signing off and recording that somebody has applied for local authority housing without a full assessment taking place. Where new households are to be established the Department needs to know that they have a genuine housing need; it is important that this function would be carried out by the body which, ultimately, will have the responsibility for providing that housing which, of course, is the local authority. Then we can ensure that we support them through rent supplement.
The scheme was always meant to be a short-term measure. That also can be brought about by ensuring that the local authorities do not provide for long delays between offers of housing. There is evidence of people who turned down the offer of social housing on the basis that they prefer living in the private accommodation. Although it does not give them the security of the social housing, they might prefer the area or whatever else, and they buy time. It is important that there be more co-ordination in that regard and we are working closely with the local authorities to ensure that we are getting this.
Deputy Mary Hanafin: ——and it is a jump for them, we did not reduce the rates. If they got social housing in the morning or if they were put on the RAS scheme in the morning, they would end up having to pay more.
Deputy Mary Hanafin: For example, I mentioned that in Dublin city tenants must pay €25.80. In Dún Laoghaire the figure is €25 and in other counties around the country it is even more. It is important to align the two more closely.
When I mentioned the rent reductions I indicated that different percentages would be applied. Of course the rents for different types of accommodation have not all reduced to the same value. As was mentioned last night, rents for bed-sit accommodation for the single person have not come down as far, for example, as those for a family house. In looking at the different new rent levels, we will average them out over different percentages. Naturally, we do not want to place anyone in jeopardy. However, this is regular and guaranteed money for the landlord. A landlord will be very glad to have a guaranteed rent these times. Other rental accommodation is also available.
|Ahern, Dermot.||Ahern, Michael.|
|Ahern, Noel.||Andrews, Barry.|
|Andrews, Chris.||Ardagh, Seán.|
|Aylward, Bobby.||Brady, Áine.|
|Brady, Cyprian.||Brady, Johnny.|
|Browne, John.||Byrne, Thomas.|
|Calleary, Dara.||Carey, Pat.|
|Collins, Niall.||Conlon, Margaret.|
|Connick, Seán.||Coughlan, Mary.|
|Cowen, Brian.||Cregan, John.|
|Cuffe, Ciarán.||Cullen, Martin.|
|Curran, John.||Dempsey, Noel.|
|Devins, Jimmy.||Dooley, Timmy.|
|Fahey, Frank.||Finneran, Michael.|
|Fitzpatrick, Michael.||Fleming, Seán.|
|Flynn, Beverley.||Gallagher, Pat The Cope.|
|Gogarty, Paul.||Grealish, Noel.|
|Hanafin, Mary.||Harney, Mary.|
|Haughey, Seán.||Hoctor, Máire.|
|Kelleher, Billy.||Kelly, Peter.|
|Kenneally, Brendan.||Kennedy, Michael.|
|Kirk, Seamus.||Kitt, Michael P.|
|Kitt, Tom.||Lenihan, Conor.|
|McEllistrim, Thomas.||McGrath, Mattie.|
|McGrath, Michael.||Mansergh, Martin.|
|Martin, Micheál.||Moloney, John.|
|Moynihan, Michael.||Mulcahy, Michael.|
|Nolan, M. J.||Ó Fearghaíl, Seán.|
|O’Brien, Darragh.||O’Connor, Charlie.|
|O’Dea, Willie.||O’Hanlon, Rory.|
|O’Sullivan, Christy.||Power, Peter.|
|Power, Seán.||Roche, Dick.|
|Sargent, Trevor.||Scanlon, Eamon.|
|Treacy, Noel.||Wallace, Mary.|
|White, Mary Alexandra.||Woods, Michael.|
|Allen, Bernard.||Barrett, Seán.|
|Behan, Joe.||Broughan, Thomas P.|
|Bruton, Richard.||Burke, Ulick.|
|Burton, Joan.||Byrne, Catherine.|
|Carey, Joe.||Clune, Deirdre.|
|Connaughton, Paul.||Coonan, Noel J.|
|Costello, Joe.||Coveney, Simon.|
|Crawford, Seymour.||Creed, Michael.|
|Creighton, Lucinda.||D’Arcy, Michael.|
|Deenihan, Jimmy.||Doyle, Andrew.|
|Durkan, Bernard J.||English, Damien.|
|Enright, Olwyn.||Feighan, Frank.|
|Ferris, Martin.||Flanagan, Charles.|
|Flanagan, Terence.||Gilmore, Eamon.|
|Hayes, Brian.||Hayes, Tom.|
|Higgins, Michael D.||Hogan, Phil.|
|Howlin, Brendan.||Kehoe, Paul.|
|Lynch, Ciarán.||Lynch, Kathleen.|
|McCormack, Pádraic.||McGinley, Dinny.|
|McGrath, Finian.||McManus, Liz.|
|Morgan, Arthur.||Naughten, Denis.|
|Neville, Dan.||Ó Caoláin, Caoimhghín.|
|Ó Snodaigh, Aengus.||O’Donnell, Kieran.|
|O’Dowd, Fergus.||O’Keeffe, Jim.|
|O’Mahony, John.||O’Shea, Brian.|
|O’Sullivan, Jan.||Penrose, Willie.|
|Perry, John.||Quinn, Ruairí.|
|Rabbitte, Pat.||Reilly, James.|
|Ring, Michael.||Sheahan, Tom.|
|Sheehan, P. J.||Sherlock, Seán.|
|Shortall, Róisín.||Stagg, Emmet.|
|Stanton, David.||Tuffy, Joanna.|
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