Thursday, 26 April 2012
Dáil Éireann Debate
Deputy Aengus Ó Snodaigh: These provisions are being introduced to allow the lone parents benefit system to change gradually so that, by 2015, only children up to seven years of age and their parents will qualify for this payment. I had congratulated the Government on the gradual change to voluntary contributions and this should also be a more gradual change. There is a substantial jump for those who qualify. Year by year, it reduces from 14 years to 13 years to 12 years and then there is a sudden five-year jump to seven years of age in 2014. While this is being introduced, the promise from the Minister is that we will see the delivery of child care support but this is not being presented as the Tánaiste suggested, coupled with this legislation. If the two were coupled, we would produce a table such as that produced by the advisers, showing the transitional arrangement for how many additional after-school places and holiday places are made available between the ages of seven and 14 years. While reducing the number who qualify on one hand, we would be increasing the number of places available in Irish society. That is not there and it is for that reason I object to the additional amendments put by the Minister. I object to the provisions in the Bill to change from a system which recognised a child as a child until the age of 14 for the purpose of qualifying for lone parent assistance and to drop this to seven years of age.
The Labour Party opposed the Fianna Fáil change from 18 years to 14 years quite vociferously just two years ago and made proper arguments against it. Those arguments still stand and are probably even more relevant given the financial crisis and the fact there has been no increased investment in child care in the country since the passage of that Fianna Fáil Bill. At the age of 14 young people can travel home alone and look after themselves for a period, although they should not be left alone for long periods such as during holiday time, particularly over the long summer holidays. These are the things that should be taken into account when trying to force lone parents into a jobseeker system. The consequence of the proposed change is that these parents will move from the payment for lone parents to the jobseeker payment, which means they must actively seek work and be available for full-time work. If that work presents, the parent will struggle to ensure proper arrangements are in place for the child.
I do not see the logic behind the need to make the changes the Minister has introduced. If these changes were not good enough for the Labour Party two years ago, why are they good enough today when we are in a worse situation? The Minister made the point in her contributions on this and the previous section that the purpose of the Bill is to make lone parents more financially independent. That is illogical. The reason they are not financially independent is they do not have jobs, but they are not likely to get jobs in the current climate, particularly if they do not have additional supports such as child care. Also, the changes the Minister introduced in December in budget 2012 substantially undermined many of the additional supports lone parents had in recognition of the difficult job they have in society and of the need to ensure a progression from social welfare to work or education.
There is a perception that lone parents do not work, but that is not the reality. The Department suggests that only 43% of lone parents are in work, whether full-time or part-time. However, that figure should probably be closer to 60% taking into consideration those fully engaged in education to improve their qualifications so as to have greater access to the work market. This proves that the majority of lone parents are actively working or seeking work and seek to change their circumstances in order to provide better for their children. I do not have the figures to hand but I remember that when we were debating the 2010 change, a Government report at the time suggested that by the time the youngest child of a lone parent had reached the age of seven, the parent was no longer dependent on lone parent’s allowance and had moved into employment and no longer qualified for it. Therefore, there has never been a block on lone parents seeking or engaging in work, other than the blockages the Government and the state of the economy have put in their way, such as the lack of child care facilities, after school care and the lack of education. Now too, due to Government policy, the additional supports that allowed people make that transition have been reduced. The increasing lack of jobs is also a significant block to returning to work. I have already mentioned that there are 50 people on the live register for every job vacancy, but in Germany, which is benefiting from Ireland’s misery, that statistic is six to one.
These amendments are logical based on section 4, to which I was opposed. The Tánaiste said that this part of the Social Welfare and Pensions Bill would be coupled with changes, but we have not seen any coupling. I have looked through the legislative programme a number of times since he made that comment, but have seen no proposed legislation under the education or children and youth affairs umbrella that could be coupled with the proposed changes. No such legislation is due in the summer session and none is listed in section B, the section which would normally be published by the end of the year. The Minister said that she will not proceed with this before the end of the year, but there is no legislation promised in the legislative programme that can be coupled with it. That programme was only presented to us on 17 April, just two weeks after the publication of this Bill and two or three days before she made the statement that she would ensure delivery of after school care. There is nothing listed in section B under the Department of Education and Skills that is relevant to that and there is no relevant legislation promised under the Department of Children and Youth Affairs. Furthermore, there is no relevant promised legislation in the last section of the legislative programme. There is only one Bill there listed under the Department of Education and Skills and it is unrelated to this. The last section of the legislative programme includes the Bills that may be produced at some stage in the lifetime of the Government. The promise made by the Minister is hollow because there is no legislative provision that will collapse this provision come budget 2013 until when the Minister says she will not allow this to proceed.
Parts of this Bill will proceed over the next number of weeks and months. Steps have already been taken for that and as of next week, any new applicant will be affected. Therefore, how can the Minister change this in December and say she will not proceed? She is proceeding with the changes from enactment date, 3 May.
I am opposing these provisions. If at all possible I ask the Minister to explain the reason it has not been more graduated as I have suggested, especially in the case of those already in receipt of this payment, as is the practice in any other major social welfare change.
Deputy Sean Fleming: Amendments Nos. 9 and 10 are short technical amendments but I will concentrate on amendment No. 11 which is more substantive. We have opposed section 4 of the Bill and these measures in section 5 are connected so I will be opposing section 5 which deals with practical transition arrangements.
Amendment No. 11 is three pages long. I ask the Minister to explain the proposals in simple English, to give a bird’s eye view. The amendment proposes to amend the principal Act by inserting four new sections, titled 178B, 178C, 178D, 178E. Section 178B deals with one-parent family payment transitional provision in certain circumstances where a child attains the age of 14. I ask the Minister to give a simple explanation in two or three sentences of the meaning of the new section 178B. Section 178C deals with one-parent family payment transitional provisions in certain circumstances where a child attains the relevant age. Section 178D deals with a one-parent family payment continuation following certain disqualification. Section 178E deals with one-parent family payments, miscellaneous provisions relating to claims made on certain dates.
I ask the Minister to explain the separate sections rather than saying they all deal with transitional payment arrangements. I think section 178B deals with people who were in the system prior to 27 April 2011 and the qualifying age for children is 18 years. I think there is no change to this rule this year but next year, the age will be reduced to 17 years and to 16 years in 2014 and to children under seven years in 2015. I ask the Minister to explain what this transitional arrangement means for those people who have been in the system prior to 27 April 2011 and when a child reaches the age of 14.
Section 178C deals with cases which have come into the system in the past year and until 2 May 2012. People are entitled to the one-parent family payment from 27 April 2011 to 2 May 2012, which is next week. I ask the Minister to explain the meaning of this section.
If people who are in receipt of a one-parent family payment move on to the back to education allowance, by definition they are disqualified from the one-parent family payment but they can return to that payment and some transitional arrangements allow them to return. I understand they would have been entitled to the payment and they can return to the system without penalty. My point of detail is on this section 178D (1)(i) which states, “having gross weekly earnings in excess of the amount specified in section 173(3),”. What is the level of gross weekly earnings in this case? This is a significant difficulty. A person may earn a certain amount while on the one-parent family payment and the ball park figure is approximately €160 a week. There is a disregard and a tapering allowance. The recent budget has cut this amount and this is another method which the Minister describes as being to increase the financial independence of the one-parent family payment recipient. She cut the weekly amount to approximately €146 when the various disregards are included. Where does the level of gross earnings referred to fit into this picture?
I regard my constituency office in County Laois as being quite representative of constituency offices all over the country as it contains both urban and rural areas. Over the years I have become aware of cases where a person’s earnings may exceed the threshold. When the P60 was submitted to the tax office and there was an exchange of information between the Department of Social Protection and the Revenue it was realised that the person in receipt of the one-parent family payment had exceeded the threshold for the payment and a refund was demanded. I maintain that a person’s income is liable to change in the course of a year.
I make the point that even Members of the National Parliament are struggling — I know I am struggling — with the nitty gritty details of these issues. Therefore, it is very unfair to penalise a person in receipt of a one-parent family payment who does not understand the rules when we here are even struggling to understand them. In those situations, the recipient is often chased for a refund of the one-parent family payment and there may also be a taxation implication. Part of the problem is that there is not a quick flow of information between the Department of Social Protection and the Revenue Commissioners. This was exemplified by what happened at the beginning of December last year when 155,000 letters were issued by the Revenue Commissioners to inform people that they may be liable to pay more income tax on their pensions.
There has not been a smooth exchange of information between the Department and the Revenue. More has yet to happen with regard to other categories of payments as this recent event involved people in receipt of the State contributory and non-contributory pension. In some situations the Revenue never knew about the pension and it did not result in a tax liability because even when one took the pension into account they were not liable to pay tax. In other situations the Revenue was aware of the pension being received but was not aware of the current rate, especially when there had been a change in the payments and in some cases that led to a liability.
We will not get into a discussion on the confusion caused to the 155,000 people, many of whom were upset over the Christmas period which is when the letters were sent out. It will be said that it was a rushed job to get the tax certificates ready for the middle of December so that they could be processed in respect of people’s various employments and to have them right for the January payroll, which would be issued in the first week of January but which in most companies were being processed before the Christmas period. We will come back to the PPS number shortly, to which another amendment relates, and the linkage between Departments. I seek flexibility on the gross weekly earnings in excess of the amount specified in section 173(3). How much is the penalty or refund demanded if a person is a small amount over the limit? How well will the situation be highlighted? The Minister must have a figure in that regard and she must be able to give us an estimation based on current records as to how many people could possibly be affected.
The next section with which the amendment deals is 178E. I seek specific information and detail on one-parent family payments and miscellaneous provisions relating to claims made on certain dates. I refer to cases where a person made a claim for the one-parent family payment before 27 April last year and the claim was not fully determined by that date. These claims were within the system but were not determined by that date, and where the claimant would have been entitled to a payment but for the fact that the youngest child had reached the age of 14 years of age but as they were not in receipt of the payment by 27 April last year their entitlement could be affected under the changing rates for age groups. I wish to know how many cases are involved that will be affected by section 178E. The Minister must know because she included the provision. How many people would have been entitled to the one-parent family payment on 27 April 2011, who had submitted their application but where the claim had not been fully determined by that date? Some such cases must be in the system because that is how the system works.
I presume at this stage that no applications remain in the system and that they have all been cleared but I would like to know if some claims remain in the system 12 months on. Some applicants may have been refused after 27 April 2011 and subsequently appealed their case to the appeals office. Such a case could be still pending. The appeals office might decide next month or the following month. We all know cases can take up to a year in the appeals office, not to mind how long it took to deal with the case. Cases involving valid applications might still be pending from more than a year ago involving refusals in the Department or in the appeals office that could yet be determined in favour of the applicant. How will such cases fit into the scheme? The Minister must have an idea of the numbers involved.
I am not happy with sections 4 and 5 but given that section 4 has been voted through I presume section 5 will be voted through. I am pleased the Minister is examining the cases of those caught out on the dates as the date on which one enters the system has a big impact on the transitional arrangements. This arises because if the people were in the system between 27 April 2011 and 2 May 2012, the 14 year age group would come into play and then the payment would affect children aged over 12 years of age next year, ten years the following year and seven years in the following year. Is there provision in the legislation for cases that were submitted before 27 April 2011 to make sure that they will be eligible under the old regime? How many cases are involved? It is a bit convoluted. I accept we got a general note explaining the transitional arrangement but will the Minister differentiate between sections 178B, 178C, 178D and 178E and answer the specific questions on the gross weekly earnings excess and also the number of people who had applied before 27 April 2011 and had not been determined by that date?
Deputy Richard Boyd Barrett: This section essentially deals with the phasing in of the abolition of one-parent family payments for lone parents when their children reach the age of seven. The Minister has suggested that the cut in payments to lone parents when their children reach the age of seven is designed to help them become financially independent, that is, to encourage them to get back to work. The truth is that these are complex transition arrangements designed to minimise the outrage that is likely to be felt, and is being felt, by lone parents as it becomes apparent that the Government is targeting them for a nasty regressive cut that is going to have precisely the opposite effect to the one that the Government claims it wants to achieve, namely, it is going to drive lone parents out of work. Lone parents and organisations representing them who have examined the measures are clear that this would be the effect of the changes, namely, to drive lone parents out of work, exactly the opposite of what the Government has said it wants to achieve.
These sections are designed as the intricate machinery that is required to try to minimise the level of popular anger and protest over what the Government is trying to do. There would be uproar if the Government reduced the eligibility for all lone parents with immediate effect when their children reach the age of seven. The protests we have seen to date would be multiplied by ten or probably a hundred in terms of their size. This measure is designed in a deceptive fashion to phase in the change gradually so that the real impact will be felt a little further down the line and for new applicants for the lone-parents payment. The choreography of the nasty cut masquerading as something progressive cannot hide the simple fact about the legislation, namely, that it is difficult for lone parents to get jobs or to access education because they are lone parents and they need child care. It is as simple as that. Whether lone parents are trying to get jobs or access education and to upskill in order to access the jobs market, they need child care. Lone parents need child care whether their child is aged one to seven or beyond that from seven to at least 14 years. They need support in order to be able to access education and jobs and this measure takes that support away from them.
The Minister’s suggestion that new applicants will be able to apply for jobseeker’s allowance poses a real question which she should answer directly. If someone is to be entitled to jobseeker’s allowance, do they not have to be available for work? Is that not the simple criterion, that one will be interrogated by the local social welfare office about whether one is available for work? If one does not have the means to provide child care for one’s children, one is not available for work and it is as simple as that. One would have to lie to the social welfare office to suggest one was available for work and, therefore, one would not be entitled to jobseeker’s allowance as currently constituted.
Lone parent payments were not so great in the first place but they gave a little bit of a leg up to lone parents to be able to cover the cost of child care. It is completely inadequate given the very high cost of child care in the State, its lack of availability and the extreme difficulty of getting one of the very few jobs now available. It is to the immense credit of lone parents that approximately 60% of them are in employment at present given the lack of support and the lack of affordable child care available to them. They have made a supreme effort. The lone parent payments have been of some assistance, although entirely inadequate, in allowing lone parents to access jobs. This support, which has assisted to some degree in getting lone parents back into the workforce and education, is to be removed once their children reach the age of seven. This is the simple fact and there is nothing else before us.
We have received an off-the-cuff remark and verbal commitments to putting in place child care facilities and other supports which would mitigate against the impact of this nasty regressive cut. However, as Deputy Ó Snodaigh stated, nothing concrete is on the legislative programme and nobody believes it is credible that these supports will be in place. I presume the Government simply hopes the hullabaloo and anger will have died down by the end of the year, that people will just have to resign themselves to this nasty cut and its consequences and that they will forget about the Government’s commitments to a Scandinavian model of child care.
The engineering of the phasing in period is amazingly intricate. Trying to work it all out and figure out at what point people’s entitlements begin to be reduced indicates it took much thought and work, and fair play to the officials for working it all out. However, they are operating under a political direction from the Minister and the Government. Where is the intricate engineering when it comes to putting alongside it and running parallel to it child care supports and facilities and other arrangements to compensate for the cut in lone parents’ payments once children reach the age of seven or the various ages in the phasing in period? This is the simple reality of the Bill and the section. It contains complex engineering to cut the entitlement of lone parents to the vital support they need if they are to access employment and education, driving out of work people who want to work and contribute to society. It is unbelievably regressive.
When Fianna Fáil reduced the age from 18 to 14, the now Minister of State, Deputy Shortall, stated reducing it to the age of 13 would drive 12,000 more people onto the live register and out of work. Why does this logic not still apply? Is this another treacherous U-turn by the Labour Party turning on the very people who probably voted for it looking for protection? It has turned on them, driving lone parents, mostly young women who are struggling as it is, out of the workforce and back into dependency on social welfare and the poverty that goes with it.
Minister for Social Protection (Deputy Joan Burton): This morning, I had the honour of launching a very important document by the ESRI about families in poverty and children being at risk of poverty in Ireland. It shows what a number of Deputies have referenced, which is that children most at risk of poverty are those in lone parent families. It is not me who is stating this, but a group of researchers and professors of the ESRI, including Dorothy Watson, Bertrand Maître and Chris Whelan. The very detailed study of work and living conditions in Ireland contains a huge amount of statistics in its ten chapters. I know it is very difficult for Deputies opposite to accept, but the report shows comprehensively that, aside from the, thankfully, very small but very worrying number of children subject to neglect because their parents may have substance abuse problems or violence issues in the family, those at the highest risk of poverty are the children of lone parents. The highest risk lone parent is one who has left education and stayed exclusively as a lone parent over a long period of time. This may be difficult for some of the Deputies opposite to accept but I invite them to examine the report. If they reflect on this and perhaps go to their constituencies and examine the situation, I think they will find what is shown in the report is correct. The way to reduce this high risk of poverty for the children is to get lone parents to return to education or training as soon as possible and ultimately to enter financially independent work.
The report deals with what we discussed yesterday with regard to the tens of thousands of people in Ireland parenting on their own, but shows they do not fit Deputy Boyd Barrett’s idea of lone parents. They are people whom the country, their families and themselves assisted to keep up their education, qualify, train and ultimately have a financially independent job. I listened to Deputy Boyd Barrett argue profoundly that the current payments to lone parents are not enough. The country is spending more than €1 billion on these payments. I do not know whether he has any consciousness at all about low-paid people in employment who pay taxes and PRSI. We know he is in favour of tax and PRSI because he said so yesterday. Unlike Scandinavia, he is not in favour of a range of taxes or any taxes to do with anything other than work. However, he seems to have no consciousness that people at work, particularly low-paid people at work, contribute through taxation. He seems to have a view that somehow or other everyone in Ireland can receive social welfare but nobody is meant to contribute apart from the few theoretical people who will pay for everything. Countries that are doing well but are not perfect and have good social welfare systems and good outcomes for children do not put lone parents into a separate category for long periods of their working life. Rather they provide them with pathways to continue their education, if disrupted by their having had a child or children on their own. They are encouraged to take part in training and get back to work.
The Deputy does not seem to understand that while social welfare is a support it is a hand-up rather than a hand-out. It is important that our pensioners have a decent income to live on when they retire and that people who lose their jobs are given income support. We are in a difficult place in economic terms. If Leon Trotsky were to return to earth tomorrow morning he would not be able to reincarnate the broken Irish banking system or property bubble. It would take him time to work it out. If we are to ensure that pensioners and everyone else who contributes to social welfare gets a decent level of support when they require it then we must as a country ensure that all our people of working age, regardless of their relationship status, are encouraged, empowered and enabled to work from the time they finish their education until their retirement. Otherwise, we will not have enough people in work to support the type of social welfare system that as a country we are correct to aspire to.
Let us look again at the relevant age in other countries, many of which I am sure the Deputy has visited. It appeared from his contribution yesterday that he has great knowledge of the United States. Why do Germany, Italy, Sweden and Norway end exclusive categorisation of a person as a lone parent when the youngest child reaches the age of three? Each of those countries has in place good quality systems which we would admire.
Deputy Joan Burton: The relevant age in Finland is four years. In the Netherlands, Australia and New Zealand — members will be aware that many Irish people go to visit or live in Australia and New Zealand, some for a year or two — the relevant age is five years. In Canada, the relevant age is six years and in the UK and 90 miles north of here, it is seven years. Is the Deputy suggesting that in changing the arrangements to provide a greater pathway for lone parents to return to education, training or work and become financially independent we are not helping lone parents? We are spending almost exactly the same amount of money, more than €1 billion. We have a social welfare system that is often described internationally as passive owing to the fact that when people take up a specific social welfare payment they are forgotten about rather than assisted in getting employment, thus becoming financially independent. We must offer assistance to people whose education was interrupted owing to their having had a child or children on their own. I do not understand the reason the Deputy fears lone parents becoming empowered, enabled and encouraged to get back into education or training and ultimately, to financial independence.
All of the international and national experts in Ireland who attended this morning’s conference on poverty in regard to children made the same point. Perhaps everyone in the world, except Deputy Boyd Barrett, is wrong. Unfortunately, some lone parents interrupted or ended their education at a relatively young age. I make no apology for providing them with a pathway to resume their education and training, leading them back to work, which I did in 1996, when a Minister of State. That was possibly one of the greatest changes in respect of lone parents in Ireland. It has been successful but not for everybody because not enough lone parents have availed or been able to avail of education and training and because well-meaning people wanted to give them financial support and nothing else.
There are companies in Ireland wishing to recruit Irish people but we do not have enough people with the required skills to take up those jobs. PayPal announced 1,000 new jobs at its offices in Dundalk. Not all of those jobs will be taken up by people on the live register in Ireland because we do not have enough people trained and educated in the skills required for those jobs.
I invite Deputies to think about what would change the system to give lone parents better opportunities. I have never heard Sinn Féin Members say that the relevant age of seven years in the North of Ireland is wrong or that it is wrong that the relevant age in Canada is six years, in the Netherlands five years and in Finland four years. The reason for those age limits is because those countries see families as families, parents as parents and children as children and believe that parents should be provided with education, training and work and that all children should be in families that ultimately have work. We must have an active society in which everyone is included and is a participant. We have a much more passive system here. All international visitors, from the universities and so on, say that the Irish social welfare system is passive. I acknowledge that is difficult for some people to understand.
Deputy Fleming asked why the complexity in terms of the timescale. Having been a member of the previous Government for 14 years, the Deputy will be aware that during the boom — I acknowledge this was well meant — a great deal of additional money was paid out without enough detailed work on services being provided in a whole range of areas. When one looks at a series of areas in social welfare, one finds in many cases that the issue of services is as important as the cash income. The service might even be more necessary than the cash.
A number of Deputies have asked how this country can create preschool and after-school services. In fairness to the previous Government, it adopted the early childhood initiative as an alternative to a direct cash payment. I congratulated the Government on its approach at the time. As a consequence of the initiative, most children of preschool age now receive at least one year of preschooling. People doubt that this country can develop preschool and after-school care services. I think the development of those services will be demanding. I remind Deputies that in the 1960s, the children of working class people did not sit the leaving certificate. They were lucky if they completed the equivalent of the junior certificate at the time. In the 1950s, most people finished their education at primary school level. My parents, like most people’s parents, did not go beyond primary school. In the 1960s, we decided as a country that we could and should offer people secondary education up to leaving certificate level. That opened many doors and broadened many horizons for a generation of people in this country.
In the 1970s, the OECD asked this country to establish regional technical education throughout the country, along the lines of what was offered in Dublin at the time. When this country was planning to join the organisation that later became the European Union, there was a suggestion that we would not be allowed to do so if we did not improve our educational standards. As a consequence, educational institutions in towns and cities like Galway, Sligo, Athlone, Letterkenny, Cork, Waterford and Carlow allowed people to access education. I refer to people in this country who would not have been able to access it otherwise. Along with my Labour Party colleagues, I was part of the Government that decided in the 1990s it was right that the child of somebody who worked for Dublin Bus should be able to access university-standard third level education. Before that decision was made, the only people who could usually afford to do so were from places like Killiney on the south side of Dublin. As a result of what the Government did in the mid-1990s, a person from the north side or the city centre — like me — could pass Trinity College on the bus and say “one day I will go there”. People were able to do just that.
The Deputies opposite are asking me to believe that a country which has achieved great things cannot develop better preschool and after-school services. I do not know what they think of their own country. Clearly, they do not think much of its capacity to do anything. Ireland is perfectly capable of doing this. It will take time to plan it. A great deal of work will be required. I hope that the next time we talk about lone parents at a conference, they will not stand out for the poverty risks of their children. I hope it will not be the case that so many children of lone parents have not been able to complete or further their education to the extent required by people who want to get good jobs in a modern knowledge-based society. The difficult economic recession in this country was caused by the collapse of the banking sector, the mismanagement of the economy and the bursting of the building bubble, etc. I predicted that much of what has happened would happen. When the Finnish banks crashed in the 1980s, the Government of that country decided to invest in preschool and after-school education, in education in general and in innovation. As a result, Finland is now recognised for its achievement of a better and more equal society and better outcomes for children. Others might not believe in this country’s progress, but I do. Our current social welfare expenditure could be better used to give people more opportunities. That is what this is about.
Deputies on the other side of the House have expressed their objections to transitional changes. Deputy Sean Fleming asked why this process must be so complicated. I remind him that I inherited it. We hope to make it less complex. I agree with the Deputy that many of the small changes that were made when large sums of money were spent during the Celtic tiger era require a great deal of understanding. Of course the transitional arrangements will apply to people who are currently making appeals. That is the standard way it happens in the Department of Social Protection. In the case of a person who applied for a particular payment, his or her application will obviously go back to when it was initially made after his or her appeal has been heard. There are many transitional arrangements in this regard. People who go back into the back to education allowance, for instance, will be allowed to come back in. I think the transitional arrangements are good. Deputies need to reflect on the fact that much lower ages are provided for in those countries which are often cited. That does not mean the countries in question do not support lone parents or their children. It means that lone parents and their children receive the same range of entitlements and benefits as all other parents and children.
Incidentally, it will have been noted by my colleague, the Minister of State, Deputy Shortall, that this approach also allows for the possibility of a greater role for the father of the child. Deputy Ó Snodaigh mentioned that yesterday. I expect that everybody would welcome that. Every child has two parents, even if one of them is parenting on his or her own. Very frequently, the other parent wishes to be actively involved in the life of his or her child. Our system should encourage that. There has been a certain amount of fear-mongering — perhaps inadvertently — on the part of some Deputies in this respect. We are spending over €20 billion on our system of social protection this year, in the teeth of a very difficult recession. Such a large figure indicates that this country attaches a value to all levels of social provision. If we are to retain such a level of payment, we have to make sure that as many people as possible are helped to get back to work. That is important in the interests of their own financial independence and the future of their children. It will help to sustain the strong model of support for social protection that we have in this country.
As I said yesterday, it is important to reflect on certain figures in relation to lone parents. The average duration of a one-parent family payment is 6.1 years. During this discussion, people tend to talk about lone parents as people who parent on their own and are in receipt of State social welfare benefits. Some 92,000 people are in that category. Tens of thousands of other people who are parenting on their own do not receive particular State payments beyond ordinary child benefit or family income supplement. I have mentioned that the average duration of a one-parent family payment is 6.1 years. I mentioned last night that 10% of those receiving the payment have been doing so for one year or less. It is a transitional support for them while they re-establish themselves. Approximately 13% of those receiving the payment have been doing so for between one and two years and 28% have been doing so for between two and five years. This morning’s study showed that where this payment is used transitionally — where parents move back into education and ultimately into work — that is the best way of ensuring a lone parent can have an independent financial future. The statistics bear that out. Some 12% of those who receive this payment have been doing so for between five and seven years and 37% have been doing so for seven years or more.
The average durations for different age groups are three years for claimants aged 25 or younger, seven years for claimants aged between 25 and 39, seven years for those aged between 40 and 49, and eight years for those who are 50 or older. Having introduced the reforms in the 1990s, I realise most of those who are 25 or younger return to education nowadays. Those who are over 50 were probably in the earlier system. Younger people are much more likely to go back to education and, ultimately, work, and their parents are much more interested in supporting them.
The two counties with the largest concentrations of lone parents are my county, Dublin, and Cork. Next are Limerick, Donegal, Galway, Wexford, Kildare and Louth. Some 82% of lone-parent allowance recipients are Irish. Some 18% of payments are made to non-Irish nationals. This is a very complex picture. It is important that Deputies have an opportunity to examine the data and perhaps today’s report and ask themselves honestly why all the international and Irish evidence suggests that encouraging lone parents to return to education and work, with appropriate child care, including preschool and after-school child care, produces the best outcome for the children. A system that develops in that way will be strongly supportive.
This Government chose to dedicate a Ministry to children, a Ministry for all children, because it recognises it is crucial to give the best possible future to all children, regardless of the relationship status of their parents. I hope the Deputies accept that all the evidence supports what the Government is doing extremely strongly.
Change is always difficult. If, in a perfect world, we had more money, I would invest it in education and educational services. Education, particularly for children, presents the greatest opportunity. I am disappointed that the Members opposite seem to believe this country, which has built secondary, technical and third level education systems, is not capable of building a system of preschool and after-school care. I find this distinctly odd. I hope the Deputies have more ambition for and faith in our country and its people.
All the countries referenced are countries in respect of whose child care systems I have heard Members in the Opposition benches express admiration, bearing in mind that the countries’ systems are not perfect. Why have these countries and most OECD countries decided to prioritise giving people the capacity to have financial independence and employment?
In Africa, where I worked and lived for a number of years, the key objective in development was to give women the capacity to earn their own incomes and build their own businesses. It is a question of their becoming independent rather than dependent.
On the complexities of the current lone parent allowance system, Deputy Fleming will have to question his colleagues because they were in charge of it for the past 14 years. The system is complex but there are transitional arrangements. I assure lone parents that the changes, as set out, will take considerable time to come into effect.
Deputy Aengus Ó Snodaigh: I will be relevant because the Minister has managed to raise a number of interesting points in response to our contributions. I have tried to be constructive in this debate. I said from the outset that I do not have a problem with seven being the age of eligibility if the relevant supports are in place. It is not right to misquote us and say we are opposed to the measure; it is absolute claptrap. The Minister needs to listen. She referred to the conference on the ESRI report, which I have not seen, but I know the position from my constituency, which is one of the most disadvantaged in the country and which has a considerable number of lone parents, some of whom are dependent on lone parent family payments and others of whom are in work or are lucky enough to receive family supports or other supports, in the form of maintenance payments, from the father of the children. I acknowledge this and deal with it on an ongoing basis. The problems have been created not only by the current Government but also by the previous Government because of a lack of investment in education.
The Minister needs to listen to what is being said. The required services are not in place, as she acknowledged. However, we have not heard from the Minister for Education and Skills, Deputy Quinn, or the Minister for Children and Youth Affairs, Deputy Frances Fitzgerald, this week. It would have been great if a committee had been in a position to invite them or their officials to appear before it to outline the plan for the additional supports that are not, but should be, in place. Such supports are evident in Canada and the Six Counties, and Scandinavia in particular. The Scandinavian model is the one we aspire to. Where is the promise of investment?
The Minister met representatives of the troika. We are stuck in here today so I do not know what progress has been made today but I know the troika has not been approached by the Government to invest a number of billions of euro in the education system. The Minister stated she would invest the money if she had it. She had it but gave it away to Anglo Irish Bank and will continually do so. She has a choice to invest in education, after-school services and child care facilities. If she made this choice, we could follow the model Finland set out for us. She could couple this with implementing the changes over a transitionary period. What I propose is not happening and the Minister does not have a plan. What the Minister proposes, therefore, should not proceed, to use her own words.
I agree with the Minister that one way to break the cycle of poverty is education. Many Governments have invested in education but the current Government confirmed, only a number of weeks ago in this House, cuts to DEIS programmes and schools dealing with disadvantage. It backed down on some of the cuts but others are going ahead. There are schools that are now in dire straits because of cuts being imposed by the Minister. She can blame Fianna Fáil or whoever else she wants but the decision lies with the current Government.
There are cuts to community employment programmes, which were among the vehicles being used by single parents, in particular, to educate themselves and obtain further training and qualifications. These programmes are all being affected. It will now be a lot more difficult for lone parents to gain access to community employment given the additional costs the Minister has imposed.
If the Minister does not remember the cuts, she will find them listed in OPEN’s document “7 is TOO YOUNG”. The affected benefits include rent supplement and child benefit. Not all applied exclusively to one parent families but some were directed exclusively at them and they will suffer the consequences, especially in regard to community employment. Those cuts will push them away from one of the pathways to work. They might not have been working ideally but cutting the training and materials grant is not the way to ensure community employment schemes work. I know the Minister will say the progression rates from community employment schemes to work were terrible. Those figures are based on those participating in community employment schemes at the height of the boom when work was available to the vast majority of people. Many of those on community employment schemes found it more difficult to access the jobs market and were struggling to get qualifications. Those progression rates were not based on today’s figures. Even today, the progression rates would not be great because there are no jobs. Time and again we come back to that key point.
It is all very well to change the age from 14 to seven but all one is doing is moving people from the lone parent payment to jobseeker’s allowance. One is not moving them into education because the education supports are not in place and are not likely to be because, according to itself, this Government does not have the money even though it is spending it in a different way. That is where the money should be spent.
The Minister accused us of scare-mongering but I have shied away from scare-mongering. She announced these changes and proved to lone parents that she will make substantial changes to the way they are trying to survive in society. There is no denying the progress over the years in terms of education. The reason Ireland is regarded as a developed country is specifically because of those changes. I am a firm believer that if we educate our children, we will have a better economy in the future but we must create the jobs to keep them here and must not export them abroad.
I welcomed the commitment from the Minister last week that this will not proceed without the changes which are not only sought by me, but by those engaging with the Department, through their lobby groups, and with the people directly affected. OPEN set out some of the supports which should be in place and it is probably more capable of doing so than I am. It said after school care provision which is affordable, of consistently high quality and widely available should be in place, but that does not exist. It said a programme and the resources to accompany it which provides proper career guidance to lone parents should be in place, but that does not exist. It said training and education which leads to a career that moves a lone parent out of poverty and into work should be in place. Some training and education is available. The pathways to work and NEES programmes, when fully rolled out, will, hopefully, address that. I acknowledge progress can be made.
We have no problem at all with that. The problem is that when the new service, NEES, was being set up, it was clear that lone parents would not be its priority. The Department stated that once activation NEES programmes were rolled out to cater for people on the live register, it would then cater for lone parents — the afterthought — and people claiming illness and disability payments. One of the ways to ensure lone parents will be dealt with is if they are no longer lone parents.
A point I made earlier, which the Minister confirmed, was that the vast majority of lone parents are no longer in receipt of the lone parent payment once a child has reached seven years of age because she said the age is 6.1 years. That proves there is progression if the jobs are available.
Deputy Aengus Ó Snodaigh: There is access to child care at the level required by lone parents and education is immediately accessible. Education here is not immediately accessible to all of those who wish to access it. That is the argument. All of the countries to which the Minister keeps referring — I have no problem with most of them——
Deputy Aengus Ó Snodaigh: The point I am making is that those provisions are in place in those countries, or are being put in place. They are not being put in place here. There have been cutbacks in investment in education and an increase in the number of unemployed in recent years. Unless the Minister comes into the House with a plan to address that, I must reject these amendments because they are not backed up by what she and the Tánaiste said will happen.
It is correct to encourage people to get back into education and into the workforce but only if it is not to the detriment of their children. The Minister said the children are important. If they are so important, she should come back to the House in one month's time, six months’ time or in a year’s time, having withdrawn these amendments, with a plan so we can say we are moving in the right direction. It is no good giving a verbal commitment in the House. A financial commitment is required. If the Minister goes to the troika to say we will invest an additional €1 billion over the next two or three years or whatever in after school services, education and access to third level education for people in receipt of one parent family payment and in jobs which they can access, then I will look at this in a different light.
Deputy Sean Fleming: I will be very specific to what we are talking about here. I asked the Minister two specific questions on the detail which she made no attempt to answer but I will give her a second chance. If she does not have the answers, she should say so and we will just proceed. I asked about the number of people who had made a claim for the one parent family payment before 27 April 2011 but where the claim had not been fully determined at that date.
Deputy Sean Fleming: It is in the ballpark. I have a broader issue to discuss, but I asked a specific question on section 178D and the gross weekly earnings in excess of the amount specified in section 173(3). What income level are we discussing? Section 178D on page 5 of the list of amendments deals with the continuation of one-parent family payments following certain disqualifications. If someone is disqualified — it is a funny word, but it is the technical one being used — from receiving the one-parent family payment because he or she is on the back-to-education allowance scheme, I presume he or she can swap back to that payment again. Every Deputy agrees this is fine, but reference is made to a second group of people who may be able to resume the payment after being disqualified on the basis of having gross weekly earnings in excess of the amount specified in section 173(3) of the principal Act. What is the income level involved and is there any flexibility in that regard? The legislation specifically refers to a figure for gross weekly earnings, but what is the figure?
Deputy Sean Fleming: I will explain what I mean to help Members. This is not my question. Rather, it is what is printed on page 5 of the book of Committee Stage amendments, specifically those amending section 178D of the principal Act. The amendment states:
Deputy Sean Fleming: I have it. This links with my original figure of €146 or whatever at which one would be cut off from 100% of the payment if one had income from employment. I will try to answer the question myself now that the Minister has provided the figure. A person with an income of up to approximately €140 will retain the full amount of the one-parent family payment, but if one earns more than €140, the one-parent family payment starts to taper off and is fully removed once a person’s income from employment reaches €425. Is this the gist of the Minister’s comments?
Deputy Sean Fleming: I am beginning to guess that a person would need to earn more than €425 to be removed from the system fully. One could have income of €300 from outside employment and be in receipt of a reduced one-parent family payment. We are discussing the figure above which one can earn and continue to receive some level of payment. According to the Minister, if one earns more than €425, one receives none of the payment.
I wish to address the Minister’s reply to one of my previous comments. Amendment No. 11 runs for more than three pages in the book. It is longer and has more substance than the entire section as published. Part 2 of the Bill deals with amendments to the Social Welfare Acts. It starts at the bottom of page 3 and runs into page 6, amounting to less than three pages in total. The amendments to the Bill run to more than 18 pages, yet there were originally only three pages on the subject. This is the reason there has been so much discussion. I was disappointed and taken aback when the Minister stated——
Deputy Sean Fleming: I know, but we will all get an opportunity. The Minister made a reference. I have asked for a breakdown on a particular amendment that is longer than three pages and was introduced by the Minister yesterday morning. When I asked her to explain the amendment, she told me to ask my predecessor. He did not introduce this amendment.
An Ceann Comhairle: Please, Deputies on both sides should adhere to the procedures of the House. Deputy Sean Fleming will make his point and the Minister will reply. They should not have conversations across the floor.
Deputy Sean Fleming: I asked a simple question, namely, that the Minister explain this amendment, but she told me to ask my predecessor. That is not an appropriate way in which to consider legislation.
Deputy Joan Collins: I will address the section on transition years in respect of the one-parent family payment. During the Minister’s last intervention she made many points. The single most shameful matter with which Ireland has never dealt is the lack of a child orientation, particularly in terms of young children’s education, after school and preschool services and supports. In the 1990s, the Labour Party played a role in developing the circumstances to improve access to third level colleges. Money should also have been invested in early child education. Had working class children been provided with that education, they would have been able to go on to third level education. Although this formed part of the Labour Party’s programme at the time, it was not done. In the 15 years since the Labour Party was last in power, Fianna Fáil did not do much either.
I know couples where one parent left work because child care for three kids cost too much, sometimes as much as a full wage. That was during the boom, but we are now in a recession and up to 450,000 people are unemployed, many for the first time in their lives. For this reason, the social welfare bill is €20 billion. People are not on the dole or in receipt of jobseeker’s benefit because they want to be or because it is a lifestyle choice. They are in a terrible position, in that they have found themselves out of work and must ask for mortgage interest supplement, rent supplement and other supports to get them through this time.
The countries to which the Minister referred provide good supports for child care and they also have jobs. The Netherlands nearly fell apart over the weekend because of the austerity measures that were being proposed. Dutch people were not prepared to accept cuts to child benefits and support systems and there was division in the government.
The Minister should not touch the transition years until the necessary supports are in place. If the Ministers for Children and Youth Affairs and Education and Skills are preparing these supports, what models are being considered and how will preschool and after-school care be put in place in 18 months? How will they determine the number of children needing child care, investigate training requirements and ensure child care is affordable and accessible?
This is a big issue. When I was in the CWU a proposal was made to provide child care facilities in O’Connell Street which would be funded by all the companies in the area. Employees from the GPO and the shops in the area could bring their children to a community crèche or child care space on the street. These suggestions have been under discussion for a long time by members of the Labour Party and others but we are still in the shameful position of not providing facilities anywhere. Child care is generally provided through small for-profit facilities but while some of these are very well run they are not accessible to people on low incomes, whether they are lone parenting, on the dole or in low-paid jobs. If these people are to return to work where are the jobs and what sort of training will be provided? Money should be funnelled into education and affordable child minding services, where it is badly needed.
It is disingenuous of the Minister to raise these issues. The women who face a predicament because of what she is proposing are telling me that seven years is too young. The transition measure should not be implemented until we put in place the child supports people in this society need. If a strategy is being devised, what is it, where will it lead and when will it be in place? If the Minister can give us that information people will be more willing to accept her argument.
Deputy Richard Boyd Barrett: The Minister deserves a medal for the smokescreen she has created in order to present this regressive legislation as something positive for lone parents. She waxed lyrical about a preposterous vision for a wonderful child care and education system which would make lone parent payments unnecessary. Let us clear the decks of the red herrings. All of us would like the level of public services available in the countries to which the Minister referred. The difference is that Finland, Germany and Sweden have state-of-the-art education systems and child care supports that are affordable or, in some cases, free. If this or any other Government succeeds in putting such systems in place, I will be the first to applaud.
However, we have to start from where lone parents are at present. How will lone parents be impacted by the changes introduced in this Bill? They will gradually come into force over the next several years until we reach a point where lone parents will not receive payments once their children reach the age of seven.
It would be useful to rehearse the concerns raised by the Minister of State at the Department of Health, Deputy Shortall, with the then Minister for Social Protection, Deputy Ó Cuív, in June 2010 in regard to proposals to reduce the age limit for eligibility for lone parent payments to 13. This is relevant because after next week new applicants with children aged 12 or 13 years will not be entitled to lone parent payments. She stated:
An Ceann Comhairle: I apologise for interrupting the Deputy but what we are debating now appears to be more appropriate to Second Stage. We are dealing with three amendments and I ask the Deputy to address their contents. We are not asking who said what, when. I am trying to protect Members. A lot has been said about the amount of time that has been allocated but if we keep going back to the Second Stage debate they will not be able to discuss all of their amendments.
Deputy Richard Boyd Barrett: They pertain to the transition from the current age limit of 14 years to seven years. There will be an immediate impact on new applicants who have children aged 12 or 13 years and from next year the measure will affect new applicants with children aged ten years or older. This change will directly affect lone parents’ ability to access employment and education. While the Minister is trying to justify it as a labour activation measure designed to assist lone parents, it will in fact have the opposite effect, as her colleague pointed out when similar moves were made by the previous Government. Therefore, the quote is relevant to these specific amendments. Speaking when in opposition, the Minister of State, Deputy Shortall, continued:
I could not put it better than that. I do not understand how the Labour Party could argue all of this in 2010 and now argue for precisely the opposite. The Minister of State, Deputy Shortall, believed at the time it would drive lone parents out of work and would act as a disincentive for them and their children to access education and employment. The Minister is trying to convince us that the same measures will actually assist people into education and employment. It does not add up. Therefore, one can only conclude it is a smokescreen.
The other big difference between our country and the other countries the Minister mentioned is that they do not have the same unemployment crisis we have. Where are these jobs? To put it simply, as of next week a new applicant for one-parent family payment with a child of 12 or 13 years of age will not be eligible and will be refused. What is such a person to do? Earlier I asked the Minister a question that she did not answer. I believe she said yesterday that such a person should apply for jobseeker’s allowance. However, a person who is minding his or her children and, therefore, not available for work would not be entitled to jobseeker’s allowance. How can somebody, who is not available for work, be entitled to jobseeker’s allowance without lying and claiming he or she is available when he or she is not? That will be true for new applicants from January 2013 if their children are aged ten or older. It continues until the age limit of seven is reached.
As of next week lone parents with children aged 12 or 13 will be disadvantaged. The Minister cannot tell me that by next week this beautiful vision of child care support and education support, to which we would all subscribe, will be in place. That is preposterous. I ask the Minister to tell the truth. It has nothing to do with Leon Trotsky or jibes about Killiney and the north side and all the rest of it. That is demeaning.
What should be withdrawn are these measures which will attack mostly women, lone parents, who form one of the most vulnerable and impoverished sectors in our society as the Minister acknowledges. Given that there are no complementary supports in terms of child care or education to compensate for the loss of these payments, how can the Minister paint removing these supports as anything other than a nasty attack?
On the issue of name-calling and the rest of it, I cannot see how this is motivated by anything other than a belief in some of the stereotying and stigmatisation of lone parents that has justified the attacks on them in the past. It is appalling that the Minister would be involved in justifying any of that because I do not believe she herself believes any of those stereotypes and yet this legislation can only be motivated by that because that is the effect it will have. It will attack those very sectors of society which two years ago the Minister and her party colleagues were championing and defending against precisely this sort of legislation.
Deputy Joan Burton: I hope the Deputy has an opportunity to look at his comments from yesterday and that he has the courage to withdraw and regret introducing that kind of language regarding what I understand refers to people who are lone parents. I understand his language comes from the American right wing. In many cases he cited the Party for Freedom in the Netherlands earlier, so perhaps extreme left meets extreme right.
Deputy Joan Burton: Thank you, a Cheann Comhairle. While I may have it wrong, I believe it has been the tradition in this House that if somebody uses seriously wrong language, he or she normally has the politeness to withdraw. It is a clever way of putting——
Deputy Joan Burton: Legislative changes were introduced in the one-parent family arrangements in the Social Welfare (Miscellaneous Provisions) Act 2010. These came into effect on 27 April 2011 and reduced the maximum age limit of the youngest child for the receipt of the one-parent family to 14 years. Transitional arrangements were put in place for existing one-parent family customers at the time with the age limit not coming into effect until 2016 as per the table Deputies were given in the handout. Customers were informed of these arrangements at the time. These transitional arrangements will now continue until January 2015 at which point the age limit of the youngest child for receipt of one-parent family payment will reduce to seven years of age. These further reductions will be considered in the context of the further development of relevant activation and support services. Where existing one-parent family payment recipients have a child aged over 17 who is in full-time education, payment will continue to the end of the 2012-13 academic year.
Section 178C applies to existing customers in receipt of one-parent family payment from 27 April 2011 to 2 May 2012. This customer group currently has an age cut-off of 14. This will remain the case in 2012, and there will therefore be no change. The age limit will then reduce on a phased basis to age seven in 2015. These reductions will be considered in the context of further development of relevant activation and support services. From 3 May 2012, new one-parent family payment customers will be subject to the new age qualification criteria for the youngest child. That is, the payment will not be payable where the youngest child is aged 12 or over in 2012, aged ten or over in January 2012 and aged seven or over in January 2014. These reductions will be considered in the context of the further development of relevant activation and support services.
Section 178D deals with the continuation of one-parent family payment following certain disqualifications. It is not desirable that current one-parent family payment customers decline to take education or training opportunities or opportunities to increase employment during the transitional phase. For this reason, recipients who leave the scheme during the six-year phasing-out period to participate in the back to education allowance scheme, or whose earnings exceed the qualifying earnings limit, can reapply for the one-parent family payment based on the age conditions within the saver period — that is, to 2016.
Deputy Sean Fleming: On a point of information, we received a briefing document. What the Minister is reading is extensive and detailed information on this amendment, which I do not recall seeing. She might arrange to recirculate it, one way or another.
Alongside the provision of free third level education, in 1995, my then colleague, the Labour Party Minister Niamh Bhreathnach, started the first universal preschool education system in Ireland, which was called Early Start and which was particularly targeted at communities in which there was disadvantage or poverty. That scheme, which the Deputy has possibly heard about, has been one of the most successful schemes, and I am happy to say it was initiated by the rainbow coalition. It has benefited many thousands of children.
I will not give details of all the initiatives in the Department of Education and Skills, but in the Department of Children and Youth Affairs there is the early childhood care and education programme, ECCE, which is open to all children aged between three years and four months and four years and six months in September of each year. Under the programme, child care providers are paid a weekly capitation fee in respect of each child. Up to now, this fee has been provided at a rate of €64.50 per child per week, or €75 per child per week where the preschool leaders hold degree-level qualifications in early education. Following the changes announced in budget 2012, these rates will change to €62.50 and €73, respectively, from September 2012. As such, this change will not take effect in the current preschool year. Some 61,000 places are being provided under the ECCE programme, consisting of 17,000 community places and 44,000 private places. That is sufficient to provide the children in that age cohort with a free preschool year.
The community child care subvention, or CCS programme, assists some 1,000 community-based non-profit child care facilities nationwide to enable them to charge reduced child care fees to disadvantaged and low-income families who avail of their services. Parents in receipt of social welfare income support, including family income supplement, are subsidised by €100 for five days of full-day care, although most of them use half-rate or seasonal places, which are subsidised at reduced pro rata rates of €50 and €33, respectively. Other parents who have medical cards or GP visit cards receive a lower subsidy of half the full day care rate, which is €50. Data with regard to the eligibility of parents in the 2011-12 annual return has recently been sent to the Department of Children and Youth Affairs and is currently being processed and examined.
The child care education and training system is implemented by the Department of Children and Youth Affairs on behalf of FÁS and the VECs. Under this scheme, parents who are FÁS or VEC trainees and who need assistance with child care costs so that they can access education and training with the aim of entering or returning to employment no longer need to pay for child care. Participating services are paid a weekly capitation fee of €170 for each child care place they provide for trainees, because, as the Deputy pointed out, child care in Ireland is expensive. From September 2012, the capitation fee will be €145 per week, and child care services will be allowed to charge an additional day care fee of up to €25. There are 2,800 places under this scheme. To bring the Deputy up to date, there are 15,864 after-school places supported by the national child care investment programme, out of a total of 75,297 places. A further 37,000 primary school children are cared for by childminders.
The expansion and development of child care, both preschool and after school, is a big job for this country. However, we are not starting from zero. We actually have a significant child care infrastructure, including all of the crèches and so on built during the boom, but we also have the primary school network. As Deputy Ó Snodaigh mentioned, there are primary school buildings that close in the late afternoon, which many of us would like to see being made available for a variety of community purposes. In my own constituency we have the Fingal model partnership, which involves the county council, community centres, child activities, the county child care committee and the primary schools. That model now applies in quite a significant number of schools and in joint campuses of primary and secondary schools, and is working very well. Although there is a lot of work to be done, there is significant child care provision already. We must seek to expand this significantly.
A new study called Understanding Childhood Deprivation in Ireland was published this morning by the Department of Social Protection and the ESRI. The study was conducted by independent experts who have been working on this data and producing a series of studies over a number of years. The key finding is that children have a higher poverty risk than adults, and these children are more likely to be in low-income and jobless households. Poverty is especially detrimental for children due to its long-term effects, which persist into adulthood. An adequate income is the basic requirement. Child and family income support plays a critical role in protecting children. Beyond this, mothers’ education, employment, especially of the mother, and family stability are critically important. I suspect this is not anything we do not know already, even in terms of our own family experiences. These are the acknowledged Irish and international experiences. I hope some of the Deputies would look at some of these changes in that context, in terms of the betterment of children. Change is difficult but although we continue to spend more than €1 billion per year on lone parents and their children, with another €2 billion going to supports for families and children in general, the current system is not producing the quality of outcome to which our lone parents or people parenting on their own and their children are entitled. I return to the question that arises from experience in other countries. Why do they emphasise an earlier age? It is to provide for and encourage people to get back into education and training and, ultimately, back to work at an earlier age.
|Barry, Tom.||Breen, Pat.|
|Bruton, Richard.||Burton, Joan.|
|Butler, Ray.||Buttimer, Jerry.|
|Byrne, Catherine.||Byrne, Eric.|
|Cannon, Ciarán.||Carey, Joe.|
|Coffey, Paudie.||Collins, Áine.|
|Conaghan, Michael.||Conlan, Seán.|
|Connaughton, Paul J.||Conway, Ciara.|
|Coonan, Noel.||Corcoran Kennedy, Marcella.|
|Costello, Joe.||Creed, Michael.|
|Doherty, Regina.||Donohoe, Paschal.|
|Dowds, Robert.||Doyle, Andrew.|
|English, Damien.||Farrell, Alan.|
|Feighan, Frank.||Ferris, Anne.|
|Fitzpatrick, Peter.||Flanagan, Charles.|
|Flanagan, Terence.||Griffin, Brendan.|
|Hannigan, Dominic.||Harrington, Noel.|
|Harris, Simon.||Hayes, Brian.|
|Hayes, Tom.||Howlin, Brendan.|
|Humphreys, Kevin.||Keating, Derek.|
|Kelly, Alan.||Kenny, Seán.|
|Kyne, Seán.||Lynch, Kathleen.|
|Lyons, John.||McFadden, Nicky.|
|McHugh, Joe.||McLoughlin, Tony.|
|Mathews, Peter.||Mitchell, Olivia.|
|Mulherin, Michelle.||Murphy, Dara.|
|Nash, Gerald.||Nolan, Derek.|
|O’Donnell, Kieran.||O’Dowd, Fergus.|
|O’Mahony, John.||Penrose, Willie.|
|Perry, John.||Phelan, Ann.|
|Rabbitte, Pat.||Reilly, James.|
|Ryan, Brendan.||Spring, Arthur.|
|Stanton, David.||Timmins, Billy.|
|Tuffy, Joanna.||Walsh, Brian.|
|Adams, Gerry.||Boyd Barrett, Richard.|
|Broughan, Thomas P.||Browne, John.|
|Calleary, Dara.||Collins, Joan.|
|Collins, Niall.||Colreavy, Michael.|
|Donnelly, Stephen S.||Dooley, Timmy.|
|Ferris, Martin.||Flanagan, Luke ‘Ming’.|
|Fleming, Sean.||Fleming, Tom.|
|Grealish, Noel.||Halligan, John.|
|Kelleher, Billy.||Kirk, Seamus.|
|Kitt, Michael P.||Mac Lochlainn, Pádraig.|
|McConalogue, Charlie.||McDonald, Mary Lou.|
|McGrath, Finian.||McGrath, Mattie.|
|McGrath, Michael.||McLellan, Sandra.|
|Martin, Micheál.||Murphy, Catherine.|
|Nulty, Patrick.||Ó Fearghaíl, Seán.|
|Ó Snodaigh, Aengus.||O’Dea, Willie.|
|Pringle, Thomas.||Ross, Shane.|
|Smith, Brendan.||Stanley, Brian.|
|Tóibín, Peadar.||Troy, Robert.|
Deputy Sean Fleming: Okay. I have a question on this for the Minister of State and would like to hear the briefing note on it. There are three subsections in section 5. Subsection (1) 173A deals with a situation where the one-parent family payment is being made and following the death of one of the parents the surviving spouse, cohabitant or civil partner is in receipt of the payment. I understand that where one of the parents has died, the payment will continue for two years following the death or until the child is 18 years, whichever is less. I ask the Minister of State to inform me if that understanding is incorrect.
I understand that subsection (2) deals with a situation where the payment is not yet being made but the parent dies within two years of the parent being eligible to receive the payment. In that situation, the payment will continue to be received until the payment period expires in the normal course. Will the Minister of State read the note on that?
Minister of State at the Department of Education and Skills (Deputy Ciarán Cannon): Having consulted the officials, the Deputy’s assessment of the legislation as it stands now is correct in the context of the alterations being made in terms of the ages of the children and how that dictates the entitlement to these supports from the State. None of the amendments impinges negatively in any way upon the provision whereby the payment will continue after the death of a spouse.
Deputy Sean Fleming: Will the Minister of State read the briefing note on subsection (3) concerning people in custody? It states, “The Principal Act is amended by substituting the following section for section 176...” and it replaces it with a new section 176. Perhaps the briefing note will answer my questions, but, if not, I will put my questions.
Deputy Ciarán Cannon: I understand that it was always a part of the provision that where a person was incarcerated, the payment was payable to that person upon release. Therefore, that will continue under the new legislation. There is no change to that provision.
Deputy Sean Fleming: I will proceed with my questions on the section. If the Minister of State does not have the details to provide, I am happy to accept a note on them later today or tomorrow. I will not delay proceedings if the information is not available now and will be happy if note is taken of my questions and I am provided with a response later.
Section 5(1) and (2) relate to continuing payments and deal with the situation relating to surviving spouses, cohabitants or civil partners in the case of the death of a parent. However, subsection (3) relates specifically to people whose spouse or civil partner has been committed to prison and excludes a cohabitant. Why is the cohabitant excluded in subsection (3), although included in subsections (1) and (2)?
Again, subsection (3) refers to a situation where the civil partner or spouse — but not cohabitant parent — has been “committed in custody”. Does this also refer to people on remand, in custody and awaiting trial? The subsection refers to a person committed in custody for not less than six months. Many of those on remand are on remand for periods far longer than six months. Therefore, why is there no provision here with regard to people on remand? The following line of section 176 refers to a person “committed in custody to a prison or place of detention”. Can the Minister of State explain what is envisaged by a “place of detention”? My understanding is that a place of detention deals with minors, for example, St. Patrick’s Institution, whereas Castlerea, Portlaoise and Mountjoy are prisons. This seems like tautology. Why are we including a section dealing with spouses or civil partners when talking about people in places of detention, who are, by definition, minors? How many married people would be in a juvenile prison or place of detention? I suspect the answer is none. Will the Minister of State clarify why there is a reference to a place of detention? Perhaps it means something else in the context of female prisons.
Section 176 goes on to state that payment will “continue for a period of 4 weeks after the release of such spouse or civil partner from the prison or place of detention”. Why should a woman’s payment cease after four weeks merely because her spouse or civil partner has been released from prison? That assumes the partner will return to the family, but that may not be the case. In many situations where a person is sent to prison, the person is not welcome or may not choose to return to the family home. There may be many reasons for that. However, the payment to the spouse or civil partner will now be discontinued after four weeks because the other person has been released from prison, notwithstanding the person in question may not return to the family home. I understand they may have to reapply for payment. This seems unfair. The relationship may be over and the couple may no longer live together. It seems unfair that the payment would only continue for four weeks.
How do the Department of Social Protection and the Irish Prison Service communicate with each other? Does the Prison Service provide information on a daily, weekly or monthly basis to the Department and does it provide the PPS numbers of people being released so that the Department can be aware of spouses in receipt of payment and stop it?
The next section refers to extending the list of Schedule 5 to the Social Welfare Consolidation Act as regards PPS numbers. Is the Irish Prison Service included in that list? How is information provided by the Irish Prison Service to the Department of Social Protection with regard to the date of release of prisoners? In fairness to the Minister of State, I do not expect he has all the answers to hand and I will accept a commitment that the answers will be provided in due course. I wished to raise those points because that subsection caught my eye.
Deputy Ciarán Cannon: On the finer points of the drafting of the Bill and the definition of “detention” to which the Deputy referred earlier, the Department will respond to the Deputy once clarification is sought from those who drafted the Bill.
As regards the release of prisoners, it is my understanding the reason for the four-week period is to allow for the spouse to return to the family home on release from prison. The four-week period is a transition period and is a supportive strategy. Where the spouse does not return to the family home, the payment will continue on the basis of the normal assessment in assessing any individual lone parent payment application or claim.
Deputy Sean Fleming: It states that the one-parent family payment shall continue to be paid for four weeks after release of such spouse or civil partner. However, I do not think that issue is being addressed in the wording in front of us. I am happy to wait for a note of clarification in due course.
Deputy Ciarán Cannon: The conditions of the scheme dictate that a person in prison is deemed to be separated from his or her family unit. Once a person leaves prison and returns to the family home, the four week transitional period is available. On the other hand, if a person does not return to the family home, in order for the lone parent family allowance to continue, the lone parent claiming the allowance will be required to go through the usual assessment process to ascertain whether he or she is fully separated from the spouse in order to claim the payment.
This is a short amendment to change the use of PPS numbers. The section allows for access by the vocational education committees, the Pensions Ombudsman and the Pensions Board. My amendment would allow the Department of the Environment, Community and Local Government, to use PPS numbers for the purposes of the electoral register. I had previously tabled a similar amendment. The Minister indicated when dealing with the previous Social Welfare Bill which dealt with PPS numbers that she would consider the proposal and that it would be dealt with in the next Bill. I will not press this amendment. She has accepted the principle of the proposal and given the debacle associated with the electoral register in this State, that this might be a mechanism to ensure that all names are included on the register of electors. How it is used for constituency purposes could be decided by the Department. This provision is merely to allow the Department to use the PPS number.
Deputy Ciarán Cannon: The Minister is sympathetic to the thinking behind this amendment which I assume is to provide for better authentication of the identity of persons for electoral register and voting purposes. It would be premature at this stage to extend the use of PPS numbers to this area without first examining the range of important issues involved. Given the range of privacy and data protection issues to be considered before a public sector body or agency can be permitted to use PPS numbers for the purpose of transacting with customers, that body or agency must first be statutorily authorised to do so. That statutory authority is given by amending Schedule 5 to the Social Welfare Consolidation Act 2005 so as to add to the list of specified bodies. As part of the process of giving that statutory authority, the body or agency in question must first submit a business case to the Minister’s Department. In deciding the merits of the case, the Minister will then consult with other interested parties, including in particular, the Data Protection Commissioner and legal advice would also be sought where appropriate. A number of significant privacy and data protection issues could arise if PPS numbers were to be used for electoral purposes. In particular, such data must not form part of the published electoral registers. The data protection and other privacy implications of the proposal need to be examined carefully by the Department, the Data Protection Commissioner and any other interested parties. Very recently the Department received correspondence from the Local Government Management Agency in respect of an electoral register improvement project, an overall project to improve the standard of the electoral register and that matter is being currently examined by the Department and a response will issue in due course. On that basis the Minister does not propose to accept the amendment.
Deputy Aengus Ó Snodaigh: I am pleased that progress is being made and I hope it will be quicker than progress on many of the other electoral reform changes. I will withdraw the amendment and I hope the Minister, in consultation with the Minister for the Environment, Community and Local Government, will produce legislation to address this matter.
These amendments are required following the implementation of the provision relating to specialist assignee relief programme in the recently enacted Finance Act 2012. The special assignee relief programme will reduce the cost to employers of assigning skilled individuals from abroad to take up positions in Irish-based operations of their employers by exempting income tax on 30% of salary between €75,000 and €500,000, for employees who assign for between one and five years. The income on which this relief is granted will, however, be fully chargeable to both the employee and employer PRSI. The purpose of the amendment is to ensure the collection of PRSI on these sums and thereby protect PRSI income payable to the social insurance fund.
Deputy Sean Fleming: This issue was debated on Second Stage and we did not have time to submit an amendment. I am somewhat confused as to the Government policy with regard to this issue. The Minister for Finance announced with great fanfare on budget day the special assignee relief programme scheme in the budget is designed to reduce the cost to employers of assigning skilled workers from abroad to companies in Ireland. These employees would be exempt from income tax on 30% of their salaries between €75,000 and €500,000. This was designed as an incentive to companies to locate key people in Ireland which may in turn attract more companies to locate in Ireland. This was announced as a pro-employment initiative and to promote foreign direct investment. When it comes to the Social Welfare and Pensions Bill, the Minister for Social Protection is, essentially, flying in the face of her ministerial colleague who made an announcement on budget day that this would be exempt from tax. I suspect the Minister for Social Protection is not happy with this type of approach to tax reliefs. She is now saying to the Minister for Finance that he may forgo his PAYE but that she wants PRSI from those people. The Minister of State might indicate what the top rate of PRSI will be on the levels of income we are talking about in terms of the employer’s contribution and the employee’s contribution. It is sending out a mixed message because people would have got it into their heads since 6 December that this scheme was a tax-free incentive. Little did people know there would be a PRSI sting in the tail once the legislation is passed. That was not flagged. I do not believe it was the Minister’s intention. My concern is that it sends a mixed message.
There is one aspect of this particular scheme that it would be remiss of me not to mention. Also under the scheme the Minister announced on budget day that the Irish taxpayer will pay up to €5,000 for private education fees in second level schools for those people who come to this country under the special assignee relief scheme. The Minister announced on budget day with a nod and a wink that he would provide income under the counter without deducting any tax and that with a further wink, wink, if those who qualify for the scheme have children in second level that they would be given €5,000. There is specific reference to that in the Finance Act and the budget day announcement. I suspect the Minister for Social Protection is not happy with such measures. If she is to be consistent she should seek a PRSI contribution in respect of the €5,000 that is being paid by the taxpayer to those people as a benefit-in-kind or some form of additional remuneration by the taxpayer to them. Given that the Minister is taking PRSI off the amount that we understood to be tax free, why is she not following her own logic and pursuing that extra €5,000 for PRSI that is being given as a bonus to those people if they have children in second level education to pay for their school fees? I accept it is a small amount but the same principle applies.
Deputy Ciarán Cannon: As the Deputy is fully aware, the IDA has been successful in continuing to attract foreign direct investment, FDI, into this country. Last year alone 13,000 jobs were created as a result of its efforts. That occurred through companies consolidating and growing their presence in this country and new companies being attracted to set up. One of the reasons the measures were announced by the Minister for Finance, Deputy Noonan, in the recent budget was arising from significant consultation that took place with the IDA and also some of the ideas emanating from the global economic forum which was held in Dublin Castle in recent months. A number of senior people in the FDI sector in this country pointed out to Government that to make this concession would be most beneficial, not alone in terms of expanding existing FDI presence in this country but also in attracting new operations.
At the time when announcing the tax exemption the Minister, Deputy Noonan, was specific in his reference to it in his speech, that the income that would be exempt from tax would not be exempt from either the universal social charge, USC, or from PRSI. In the Finance Bill it was made clear that the USC would be chargeable on all of the income and what we are doing now is putting the final part of the jigsaw in place in introducing an amendment to ensure that the income is subject to PRSI. That was always the case; there was no wink, wink or change of mind or heart or conflict between the Minister for Social Protection, Deputy Burton, and the Minister for Finance, Deputy Noonan.
Deputy Sean Fleming: The allowance is specifically under the new special assignee relief programme announced by the Minister on budget day. He gave two incentives; first, to give a certain amount of income tax free and, second, on budget day he announced an additional incentive for those people who have children in second level education — that there would be an additional payment made tax free to them. I presume it went through the employer and that it would also be tax free to encourage them to bring their family with them and put them into school in this country. We would pay their school fees up to an amount of €5,000 for each child. That was in the budget day announcement. I wonder why the Minister is not going after that €5,000 for PRSI but I accept it might be a matter for the Finance Bill as much as anything else. I have made the point. If the Minister of State has a response that is well and good but if he does not then we will move on.
These amendments are required to accommodate the payment directly to the Revenue Commissioners of PRSI on the gain from taxable share options. Currently, arrangements for the payment of PRSI on taxable share options is quite complex. If the individual is still employed by the company which awarded the share option, the employer is obliged to deduct the PRSI chargeable. If the individual has left the employment the PRSI must be paid directly to the special collection unit in the Department of Social Protection within 30 days. The tax and USC are paid separately to the Revenue through its relevant tax and share options system of collection. To rationalise the collection systems to allow PRSI to be paid by the individual directly to Revenue when they are paying the tax and USC payable it is necessary to relieve the employer of the obligation to deduct the PRSI and this section achieves this objective. This means that PRSI, together with tax and the USC on gains from taxable share options can all be paid in one transaction directly to the Revenue Commissioners. To ensure that the necessary arrangements are fully in place these provisions will be brought in by commencement order.
The purpose of these amendments is to provide clarity on share-based remuneration arrangements on which employer PRSI is not chargeable. Share-based remuneration was brought within the charge of PRSI effective from 1 January 2011. This refers to shares in the individual’s employing company or the company which controls it. In May 2011 the Minister for Finance announced the abolition of the employer PRSI element of the charge. The exemption of employer PRSI liability on share-based remuneration was generally provided for in the Social Welfare Act 2011, however, to ensure that the exemption from employer PRSI applies to all forms of relevant share arrangements the definition of share-based remuneration is being amended to provide a comprehensive list of the schemes affected. The amendments also provide for refund arrangements for PRSI which may have been incorrectly paid.
The purpose of the mortgage interest supplement scheme is to provide short-term support to eligible people who are unable to meet their mortgage interest repayments. The supplement is paid in respect of a premises which is the person’s sole place of residence. The supplement assists with the interest portion of the mortgage repayments only and not with the capital repayments. There are currently more than 18,000 people in receipt of mortgage interest supplement, an increase of more than 340% since 2007.
My Department reviewed the administrative policy and legal aspects of the mortgage interest supplement scheme and this review was published in July 2010 in conjunction with the interim report of the mortgage arrears and personal debt review group. The final review of the mortgage arrears and personal debt review group was published in November 2010 and its recommendations were considered by the interdepartmental mortgage arrears working group whose report to the Government’s Economic Management Council was published on 12 October 2011. The Department supports the key findings of the mortgage arrears and personal debt review group which is also supported by the Government’s Economic Management Council, that the curtailment of the mortgage interest supplement scheme should be introduced in light of other alternative social housing solutions now being proposed. The budget for 2012 provided for the curtailment of access to the mortgage interest supplement scheme for the first 12 months while the person is involved in the mortgage arrears resolution process as set out in the code of conduct on mortgage arrears applying to mortgage lenders. The underlying principle is to ensure the mortgage arrears resolution process functions alongside State supports such as mortgage interest supplement and that the forbearance arrangements implicit in the mortgage arrears resolution process are reflected in the eligibility criteria for the mortgage interest supplement scheme.
Deputy Sean Fleming: Fianna Fáil opposes amendment No. 17 in its entirety. It is a scandal and a shame and I am shocked at it. I know the Minister of State was not personally involved in its drafting but I am shocked that a Minister of the Labour Party would table a proposal to curtail mortgage interest supplement. We have discussed changes to the one parent family payment, and those in receipt of it are at the end of the scale, the most economically disadvantaged, and experience a high level of poverty. Aside from them if one were to ask the people to list those in the most economically distressed situation for whom they have most sympathy they would say those with mortgage arrears. People in mortgage arrears fall into various categories but those in receipt of the mortgage interest supplement are those suffering most due to their income situation and not being able to maintain their mortgage payments. They may have lost their job since they took out the mortgage and when they took out the mortgage they may have been well able to pay it. One person may have had a loss of income or perhaps both people in a house may have lost income.
It is very difficult to obtain the mortgage interest supplement. One must go to one’s community welfare officer and one must go through hoops to get it. Community welfare officers have turned down numerous applications for mortgage interest supplement where the banks are chasing people for arrears. A common cause for people being refused mortgage interest supplement is a community welfare officer deciding the interest rate one had on a sub-prime mortgage was very high to start with, notwithstanding that the rate is less than the rate now charged by some of the State-owned Irish banks, in particular Permanent TSB. A community welfare officer may also refuse having decided the level of mortgage was too high for the person to take on in the first place or that the person should not have taken on such a large financial commitment because the value paid relative to the loan taken out was too high. To receive mortgage interest supplement is a tough ask compared to receiving rental supplement. Those trying to put their own roofs over their heads amount to a fraction of the people who receive rental supplement and who are not putting their own roofs over their heads.
The Minister stated clearly the Department supports the findings which recommend curtailing the mortgage interest supplement scheme. I find this very severe. Essentially this will create a legal curtailment with regard to the most hard-pressed borrowers in the country. However, no matching curtailment is being placed on the banks who lent the money. I am shocked that in light of everything we have gone through no action has been taken on the Cooney and Keane reports. The Taoiseach has stated the issue of mortgage arrears is a personal priority but we find the first legislative action to deal with it is to restrict and curtail mortgage interest supplement. However, to obtain mortgage interest supplement one must be on a very low-income to start with. Many people in mortgage arrears would not be eligible for mortgage interest supplement. We are discussing people with a very low level of income. Sometimes mortgage interest supplement is a fundamental factor in helping people avoid going into arrears. The Government’s answer to people in mortgage arrears is to take the mortgage interest supplement from them. This is the first legislative action by the Government for people in mortgage arrears. Shame on the Minister and the Government for doing so. I am shocked.
On Second Stage, the Minister stated she would not proceed with reducing the relevant age for one parent family payment to seven years unless she obtained a bankable commitment from the Minister for Finance and the Government. She should tell the House she will not proceed with this unless she has a bankable commitment from the Minister for Finance with regard to tackling the banks. However, the banks have a bankable commitment. The Minister of State and I and the taxpayers of Ireland have already given €5 billion to the banks to deal specifically with mortgage arrears. This should be trickling down to help those in arrears. It should be used to help those in receipt of mortgage interest supplement. However, what is the response of the Government? The banks have been given €5 billion with no legal restrictions on them with regard to how it is utilised and none of the reports is being implemented, yet a legal sanction is being placed on the little person on the lowest rung of the ladder in the Irish financial situation. I cannot understand the Bill and I will say so to the Minister.
The Bill has done three things. It has attacked one parent family payments, it will cut jobseekers benefit for those on a two or three day week trying to cling onto their jobs and it will reduce mortgage interest supplement and so affect those who, more than any group, need help with their mortgages. It is a shameful Bill. Everything about the amendment is wrong and shameful but I suspect the Government will ram it through one way or the other.
I want to deal with the specifics of what is proposed. A person will not be able to receive mortgage interest supplement until he or she has complied with repayment arrangements for a cumulative period of not less than 12 months under the mortgage arrears resolution process as set out in the code of conduct on mortgage arrears applying to mortgage lenders. This is shameful. People are being forced to go further into arrears before receiving the payment.
What I find objectionable and sick about the amendment is that for the first time we will give the banks a veto on who can receive mortgage interest supplement from a community welfare officer. Community welfare officers have moved from the HSE to the Department of Social Protection but I did not know they had moved to work for the banks. The banks will be able to give orders to community welfare officers whereby unless a person has a 12 month agreement which is fully complied with the community welfare officer will not be able to award mortgage interest supplement. A community welfare officer will not be able to award a mortgage interest supplement payment without verification from the bank that the person is complying with the scheme.
There must be two sides to everything. Yesterday, the Minister stated €50 million of taxpayers’ money is being given to the banks under the mortgage interest supplement scheme and that she wants a bang for her buck on behalf of the Irish taxpayers. She is right but what she should be doing in parallel to the change being made to the mortgage interest supplement is placing a legal curtailment on the banks with regard to how they deal with their customers. She is taking a one-sided view. She thinks she will get something from the banks but all she is doing is penalising the poor borrower. No legal restrictions are being placed on the lenders who caused the problem. I do not blame any 20 or 21 year old or couple who received too large a loan from a bank. A person seeking a mortgage from a bank, which has been in existence for years, is reliant on the financial advice of that bank and if told he or she can afford a mortgage of €300,000 he or she will accept that. I do not blame the young couples or individuals in their twenties who took out huge mortgages. The banks are to blame for that. Yet, the legal restriction being introduced through this measure is on the borrower rather than the banks.
This section deals with the banks and financial institutions which are party to the mortgage arrears resolution process through the code of conduct on mortgage arrears. Many of the banks providing mortgages in Ireland are not Irish banks. While the main banks, most of which we own, are Irish a number of other banks in this country are mortgage providers that do not have a centre of business operation here and whose main business is operated from abroad. These banks are not regulated by the Irish Financial Regulatory Authority but from eastern Europe and elsewhere.
The Minister might think I am being alarmist but I am stating the facts. Banks that do not have a presence in Ireland, in terms of an office, and as such are not regulated here can prevent a community welfare officer in the Department of Social Protection giving a hard pressed client mortgage interest supplement. Shame on any Minister who would introduce such a provision. If there is one inaccuracy in what I am saying, I invite the Minister to point it out to me. The Minister has engaged in a great deal of scaremongering over the past three days. I wish I was wrong but I know I am not.
This section refers to banks which are party to the voluntary rather than the legal code. Before we conclude our discussions on the Bill today, I would like clarification from the Minister on the role of local authorities in this regard. I have tabled several parliamentary questions on this matter. Local authorities also provide mortgages. Many people who have local authority mortgages are in receipt of the mortgage interest supplement. Prior to applying for a mortgage from a local authority a person must have been refused same by two banks. By definition, such a person is in a bad situation before even applying to the local authority for a loan. Many people who have local authority mortgages are in receipt of the mortgage interest supplement. As I understand it, the local authorities are not part of the banking federation.
I have asked in various parliamentary questions when the local authorities will sign up to the code of conduct on mortgage arrears which is being operated by the banks and have been told time and again the matter is being looked into and that circulars in this regard were issued some years ago to the local authorities. However, when one visits one’s local authority one is told they are not obliged to follow the code of conduct on mortgage arrears. I am speaking in this regard about my local authority in County Laois. I am sure the same applies in other areas. Laois County Council has repossessed more homes in County Laois than have all the private banks in County Laois put together, primarily because they are not obliged to adhere to the code of conduct on mortgage arrears. The banks are holding off for 18 months and are not repossessing many homes relative to the number of people in arrears but the local authorities continue to repossess homes.
I was delayed attending this morning’s Order of Business. I received a telephone call last night at 10.25 p.m. from a distressed constituent who was in tears having received an eviction notice from a local authority in respect of a shared ownership loan which she took out with the authority, part of which was being met through mortgage interest supplement. That is what local authorities are doing. They are not covered by this provision. To qualify for mortgage interest supplement a person must have complied with an alternative arrangement under the code of conduct on mortgage arrears scheme. How is a person to get mortgage interest supplement if his-her lender is not party to the scheme? I hope it will not be suggested that local authority managers will be issued circulars because that will not work. While some local authorities are adhering in part to the code their heart is not in doing so. People in arrears on shared ownership homes who, having lost their jobs, wish to discuss the matter with their local authority are being told the authority will not engage with them until their arrears have been paid.
The Minister stated that one bank has 350 people designated to dealing with arrears. While local authority staff are excellent they are not sufficiently trained to deal with mortgage arrears. This amendment is a scandal. It is the first legislative provision by this Government to deal with the issue of mortgage arrears and all it does is penalise the person at the bottom of the ladder on mortgage interest supplement and allow the banks off scot free, which is a disgrace.
Deputy Jonathan O’Brien: These amendments were published last Monday. While an impact analysis is carried out on all legislation when published, there was no impact analysis of these significant Committee Stage amendments, which is wrong. People are still trying to get their heads round the proposed amendments and their impact on the most vulnerable in society.
Amendment No. 17 states that to qualify for mortgage interest supplement a person must engage with the mortgage arrears resolution process. However, there is no obligation on the banks to offer an alternative payment arrangement under that process. The amendment states that a person can only apply for mortgage interest supplement if he or she has, arising from such engagement, entered into and is, where required, complying with an alternative repayment arrangement. What happens if the bank refuses to offer an alternative payment arrangement?
A large proportion of the mortgage repayment of people who purchased homes in the past few years goes on interest. The people applying for mortgage interest supplement are more than likely people who have lost their jobs, who are already unable to meet their mortgage repayments and who, if the mortgage arrangement offered by the bank is an interest only payment arrangement, may not be able to comply with that arrangement. The amendment not alone states that an agreement must be entered into but that the person must be compliant with the alternative arrangement. As such, a person who is offered an interest only payment arrangement will not be able to access mortgage interest supplement because he or she may not be in a position to comply with the interest only arrangement. In that situation, a person would have to wait 12 months before applying for mortgage interest supplement. This creates a number of problems. It does nothing to help those people in short term difficulty, namely, those who have lost a job or have been placed on temporary working. If a person in such situation cannot access the mortgage interest supplement he or she will end up in arrears on their mortgage, which they will have to try to clear if they find new employment.
The second issue relates to a person who is offered an alternative arrangement payment by the bank, such as an interest-only arrangement, but is unable to meet the terms of it. If such a person had the ability to access mortgage interest supplement, that could represent the difference between them being able to make a interest-only mortgage payment and not being able to do so. This needs to be examined. We are talking about the most vulnerable people in society. We have been told that one of the aims of this Government is to ensure nobody loses the roof over his or her head. The amendment that has been proposed will make the loss of homes a reality because it will cause people to face increased backlogs, arrears and difficulties.  If someone is unfortunate enough not to have regained full employment after the 12-month period has elapsed, an assessment will be made of whether mortgage interest supplement will be paid to him or her. One of the criteria that will be used in that assessment will be whether the mortgage arrears are manageable. The introduction of this amendment will increase the possibility of a build-up of an unmanageable backlog of arrears. That is a flaw in this proposal. I ask the Minister to withdraw the amendment.
Deputy Aengus Ó Snodaigh: As Deputy O’Brien has said, there are key concerns about the process by which we reached this point. This amendment has been introduced at the last minute. It will have significant consequences for those who will apply for mortgage interest supplement. I will give the House an example. One usually receives a redundancy package when one loses one’s job. That money is used to try to hold one’s life together. One always lives in the hope of being able to get another job. One does not always look for mortgage interest supplement straightaway. One’s first port of call is to try to look for work and ensure one can hold things together. As one’s redundancy payment or savings start to whittle away, one realises that one might not get another job. One might not approach the Department of Social Protection to look for help under this new scheme until six months or a year after one became unemployed. One will try to find a way of taking the big burden of one’s mortgage off one’s shoulders while one struggles to survive on the social protection one is receiving at that stage. One’s priority will be to ensure one has a roof over one’s head.
The process of making such an application can take a number of months. At that stage, the Department tells the applicant “sorry, you have to liaise with your bank and come up with an agreement”. The whole onus falls on the applicant, who is already in distress. That is fine until the applicant approaches his or her bank only to be told “sorry — no agreement, no hope, no nothing”. The code of conduct on mortgage arrears, which the Minister will probably mention, does not oblige the bank to enter into an agreement. There is an obligation on the bank to meet the mortgage holder. If it refuses a request, it is obliged to write a note setting out the reason for the refusal. Even if the bank agrees to the request, it will be another 12 months before mortgage interest supplement is granted by the Department under this new scheme. Where is one supposed to get the money to pay one’s mortgage, in line with whatever is agreed, in the meantime? One has to comply with the requirement to make every repayment under the agreement for a full 12 months before the Department steps in to help. I know the Minister will say that a certain amount of money is being spent on this, but I suggest that some of the money that was pumped into the banks should have been conditional on a write-down of the mortgages that are held in the banks. That would have been much more beneficial to Irish society. What is done is done, in some ways. The onus to change the system is now being placed totally on the person in mortgage distress, rather than on the banks.
I would like to refer to the case of a person who re-engaged with me this week about a particular problem he is having. Some of the banks that are trading in this country no longer have offices here. I refer to Bank of Scotland, for example. One cannot meet a Bank of Scotland official in this State. Such a person does not exist. A company deals with the bank’s mortgage accounts on behalf of the bank. When one tries to engage with someone in that company as part of this process, or in the event of a problem, one cannot get beyond the person one meets at reception. One has to deal with it on the telephone or send a letter. The person to whom I refer has entered into an agreement. In fairness, the Department is paying mortgage interest supplement to him. As a result of the bureaucratic incompetence of the company in question, Certus, the man in question is being forced to jump through hoops every three months. He receives a bill for the interest because the company in question is incompetent in its processing of documentation. It is not the fault of the Department or anybody else. This problem has continued for two years because the man cannot deal with an individual in the company on a continuous basis. The Department and the Citizens Information Board have worked well with him, but the bank is forcing him to get bank statements, etc., all of which comes at a cost. He cannot deal with a faceless company. I mention this as an example of the bureaucracy that people in distress are having to deal with. The man in question managed to get into an agreement, but the bank keeps breaking it and then blames him for breaking it. If he was one of the individuals we have discussed, through no fault of his own he would not be able to get mortgage interest supplement in the future because of the chaos in the bank.
There has to be something in this. If more time had been available, I would have tabled amendments to close this off. This amendment is very conditional. It sets out what the person has to do. No provision is being made to allow the Department to consider offering mortgage interest supplement to a person who can prove or show that the bank has refused to engage or enter into an agreement with him or her. Such a provision would offer some relief to those who are engaged in a process. I have major problems with the requirement for a person to come up with a certain sum for 12 months. As I have said, such people could be in total distress. People whose short-term contracts are not renewed do not receive redundancy. They do not receive the limited pot of gold that allows some people to survive their financial problems for a number of months. Their distress is immediate because they are living from hand to mouth. They do not have the luxury of entering into an agreement to be implemented over 12 months. The way the redundancy issue is now dealt with in this country — people who have worked for many years are not getting what they should be due — means that most of those who are laid off need somebody to step in within weeks of being made redundant or moving into mortgage distress.
I appeal to the Minister to withdraw the amendment she has thrown in at this stage and to revisit this complicated matter at some future time. Another social welfare Bill will be introduced in October and a further one will be introduced after the budget. This is a cost-cutting measure because some savings are being made as a consequence of the decision to delay the payment of mortgage interest supplement to new applicants for 12 months. The savings element of this measure is not so substantial that it cannot be delayed until its consequences have been properly reviewed, thrashed out and analysed.
Deputy Joan Collins: I will be brief because much of the debate yesterday and today focused on why many of us in the Opposition are opposed to this amendment. I appeal to the Minister again to listen to what we are saying. Any person who takes out a mortgage is told repayment is a priority. One can cut one’s private health insurance or cut down on going to the dentist, doctor, etc., but one must pay one’s mortgage. This view has been instilled in many people and they pay their mortgages in full for as long as they can. This leads to the question about distressed mortgages. The banks will deal with one only if one does not pay in full for over three months. Thereafter, the alarm bells ring and the banks try to arrange a meeting with the mortgagor.
The first thing those seeking support on foot of losing a job, through a company going bust or otherwise, or suffering from a long-term medical condition, such as a broken leg, and who are planning to return to work eventually are told in my office in Crumlin is that they are entitled to apply for mortgage interest supplement to support them over their period of difficulty, or to keep them out of difficulty. The legislation implies one will not get mortgage interest supplement until one is in dire circumstances. Even at this late stage, the Minister should ensure those who apply for mortgage interest supplement are requested to negotiate with their banks regarding repayments and securing an interest-only mortgage for a period, for example. Families’ or individuals’ need of mortgage interest supplement would be a signal to the banks that they must be dealt with. At least there would then be early intervention.
The point has been made that those who took out mortgages and who pay every month without ever going near the bank are nervous about approaching banks. When trying to renegotiate, one may have three or four bank officials in front of one, and when one is given a form to fill out, one must go to MABS or elsewhere for help filling it out. When one submits the form, it is checked along with one’s income and other loans, and this is quite intimidating. This legislation does not assist those affected in any way. A provision to address the problem should be linked to a bank resolution or insolvency Bill in which every provision is put in place for one to be assisted. Thus, one would not be left on one’s own to sort out one’s mortgage debt with the banks. Only when such a system is in place should a provision such as that proposed by the Minister be considered. While one is entitled to mortgage interest supplement if one is in distress in the short term, the legislation should be linked to insolvency legislation. The banks are not even obliged to do as I describe at present. The Government cannot tell them what to do; they do not listen to the Government half the time. Therefore, the amendment should be rejected.
Minister for Social Protection (Deputy Joan Burton): I appreciate the concerns expressed by Deputies. However, one must bear in mind the interests of those who have unfortunately found themselves without a job or, as in many cases, with a job but who have difficulty repaying their mortgages.
As Minister, I am very conscious that the Department of Social Protection will pay more than €50 million this year addressing mortgage interest arrears on behalf of approximately 18,000 people. The money goes to the banks, not to the people. The object of public policy is to ensure people stay in their homes, even though they may have financial or employment difficulties. For the €50 million, are we getting what we want from the banks? Deputies have described the difficult circumstances people face. Are the people involved and the taxpayers getting a good deal on foot of the banks’ activities?
The code of conduct on mortgage arrears requires all licensed and registered banks and financial entities that give mortgages to subscribe thereto. My Department spends approximately €47 million employing professional advisers in the Citizens Information Board and financial advisers in MABS. The Department, therefore, is spending a lot of money on offering advice and information. I was not clear on what Deputy Collins was suggesting. Was she saying the services are an irritant to people in that they must fill out forms and talk to MABS?
I reiterate what I said yesterday, namely, one must get the lenders and those who are heavily indebted together. Ultimately, they must be in a position to strike a deal. The Government is developing a series of alternatives, on the basis of the Keane report and its predecessor, the Cooney report. These include the mortgage-to-rent option. In some cases, unfortunately, people may not be able to sustain their mortgages. The object is to keep these people in the family home. There is considerable work taking place to develop alternative mechanisms of resolution that ensure people can stay in the family home. To date, only a mortgage interest rate supplement is paid over. If this does not work out, however, there is not necessarily a resolution for the family. It is meant as a short-term support.
One must try to establish a core relationship between the lender and borrower and determine realistically and genuinely what a lender can do, and what the borrower can pay. The lender ultimately must be realistic about what the borrower can pay. If the Deputies are suggesting that the Department of Social Protection should step in without bringing together the lender and the borrower to work seriously towards a settlement and ascertain the best outcome, they are misguided. The first desired outcome is to keep the family in the home. The second is to find the best mechanism by which to do so. As I stated, the Government is working on new mechanisms.
The code of conduct on mortgage arrears is not an option for the lenders; they must sign up to it. Many of these lenders are being kept alive by the Irish taxpayer and have been for a long time. The people who signed the bank guarantee ensured the Irish taxpayer took responsibility for all these lenders, so I invite the Deputies to think about this and about how we get the best outcomes. The best outcomes may not be the fastest ones or simply what was done before because over the period of the crisis, the Department has been spending an increasing amount of money —€50 million this year — on this area. I would like to say all of the people ended up very happy but they are in a very serious financial position, in particular if their loss of income, loss of wealth or loss of employment is long term or if they went onto the mortgage interest supplement and cannot get out of it. That is why the Government is arranging alternative products which give people an alternative route, such as mortgage to rent for a period of time. People who were on local authorities will remember that years ago. There were other ways to buy a house rather than by taking out a mortgage, such as co-ownership and shared ownership.
I invite colleagues to think about it in a creative way because this is another €50 million — I know we talk in terms of billions of euro — which is just going to the banks. I would like to see us genuinely getting as much comfort and security for as many families out of those scarce resources. Why, for instance, are we paying all the interest without let or hindrance just because it was done when the numbers were very small? What interest rates are paid? Is it just whatever interest rate the bank has decreed? Much serious examination and thought needs to go into this.
The code of conduct sets out how lenders must treat borrowers who are in, or facing, mortgage arrears with due regard to the fact that each case is unique and that it needs to be considered on its own merits. The lenders have to set out and use a framework when dealing with borrowers in mortgage arrear or pre-arrears and all cases must be handled sympathetically and positively with the objective of assisting the borrower to meet his or her obligations or, as we develop new mechanisms, to perhaps enter into different arrangements which allow them to keep his or her family home. A lender must explore all the options for alternative repayment arrangements.
The options, with which Members will be familiar, are an interest only arrangement for a specified period of time; an arrangement to pay interest on part of normal capital element for a specified period of time; deferring payment of all or part of the instalment repayment for a period of time; extending the term of the mortgage; changing the type of the mortgage, except in the case of tracker mortgages; capitalising the arrears and interest; and any voluntary scheme to which the lender has signed up, for instance, a deferred interest scheme. There is a series of options which the lender is obliged to offer to the borrower. Members must bear in mind that many of the people who present to MABS have very complex debt problems with not just mortgage interest debts, but car loans, credit union loans, credit card bills and perhaps other secondary loans. We are trying to deal with a complicated issue. We should not just hand over €50 million to the banks, because that is where it is going. Some of the banks complain that some people who get the money do not pay it to them but that is a separate issue and involves a small number of people.
The case to which Deputy Ó Snodaigh referred is somebody who has been in difficulties for two years and is getting mortgage interest supplement. That kind of proves the point. That bank is actually being paid the mortgage interest supplement for that individual by the State. It is getting its money and yet it is not treating the customer with the respect, sympathy or understanding required. We are actually paying the bank. I am not saying I have a solution to that but, to some extent, perhaps it has been a bit too easy for those financial institutions that the State will just pay and they can still continue to be not terribly nice to the poor unfortunate person who has got into financial difficulties.
I do not know if Deputy Ó Snodaigh has a view. The bank is getting its interest. What does it want? Does it think the person has other sources of money or is it that it simply wants to repossess the house?
Deputy Joan Burton: The State, the Department of Social Protection and MABS cannot engage in detail in everything, but what we can do is work to a better framework. Perhaps the person is semi-permanently in difficulty and that, hopefully, he or she will eventually get work. I do not know what the circumstances are. However, if he or she is two years in this process, perhaps he or she needs a better long-term process. That is one of things which is being worked on. Unfortunately, it is a much slower process from a legal point of view than any of us involved in government would like but then our Constitution is legally very detailed, very prescriptive and very strong on property rights, so the lender has many rights in regard to the mortgage.
If the Deputy gives me the details, I will ask the people in the Central Bank about it because with my Department paying the mortgage interest supplement, why should that individual be harassed in the manner he described? If our hardworking taxpayers’ money is going to pay the mortgage interest supplement, why is that institution apparently in breach of the code of conduct in regard to mortgage arrears? It might be interesting if we try to explore why that has happened.
It goes to show that banks believe they can get large volumes of money, through the mortgage interest supplement, without any work being done by them. It is €50 million, on which there are a lot of calls, for 18,000 people. However, it was always meant to be short term. Given the way the difficulties in regard to mortgages have evolved, we need other mechanisms as well as the mechanism of the Department of Social Protection. I will keep this area under review. There seems to be an automatic expectation on the part of banks and lenders that the Department of Social Protection will pay out money willy-nilly without ever demanding that they go through the code in detail. This is what we are trying to do so that we can get better value for the many tens of millions of taxpayers’ money. We must explore many questions about how the code operates in respect of mortgage interest supplement. Deputies should bear in mind that community welfare officers, CWOs, who take part in this matter, joined the Department in recent times. We have been able to get a great deal of regional and county data on the number of mortgages that are in difficulty and being assisted. These data have been published in newspapers.
Although lenders may be robust when seeking their money, they must engage and treat people with dignity. Most lenders assert that they have structures in place in this regard. The supplement of €50 million to them is a valuable resource. If they want it, they must engage with borrowers. I am not satisfied that the existing relationship has served the general interests of people, specifically borrowers, well, particularly in the type of cases cited by Deputy Ó Snodaigh. In those cases, lenders who have been paid mortgage interest supplement by the State are not responding appropriately. The Deputy’s examples show that this matter must be re-examined.
Deputy Jonathan O’Brien: No one is suggesting that the borrower and lender should not engage. They should. If someone gets into mortgage difficulty, the first port of call should be to engage with the lender.
The Minister asked whether we were getting value for the €50 million. We have invested billions of euro in banks to pay bondholders and have received no value in return. At least this €50 million has a visible value, in that it keeps roofs over the heads of 18,000 families. It is not fair to argue that we are investing €50 million in the banks without any evident benefit. It has a tangible benefit, unlike the tens of billions of euro previously invested in banks. The question of whether we are getting good value for money should be asked. Under the Minister’s proposals, however, the onus is on the borrower to enter into an arrangement. Otherwise, he or she will be excluded from applying for mortgage interest supplement for 12 months.
The Government has made much of its labour activation measures. If someone loses a job, he or she might not receive a large redundancy package, if any. A number of people are on short-term contracts that roll over continually, which means they will never be in a position to receive large redundancy payments. I will cite an example of a person who loses a job and gets into mortgage difficulties. The person engages with his or her lender and arranges to repay the interest only, which is the usual arrangement. After waiting for 12 months, the person applies for and receives mortgage interest supplement. A couple of months down the line, the person is offered three or six months work on a short-term contract. Does the Minister believe that there is any incentive for those people to take up employment for such a short period knowing that, in three or six months time, they will be back to being unable to repay their mortgages and will need to go through the process again? It is not reasonable for someone who is offered a short-term contract, summer work, etc. The Government has stated that the nature of work is changing to something more transitional and seasonable. If someone is offered three months work in the hotel trade, there is no incentive to accept the offer because he or she would be back to square one afterwards. The amendment makes no provision for a suspension of the supplement during a short work period.
The Minister’s proposal is flawed and I ask her to withdraw it to allow for further consultation. As Deputy Ó Snodaigh stated, we can revisit the issue when we debate the social welfare Bill next October, but trying to introduce such a far-reaching amendment on Monday without an accompanying impact analysis is wrong. It will only serve to create more problems for people who are already struggling, increase the likelihood of mortgage arrears among people who are in desperate need of the mortgage interest supplement and increase the possibility of family homes being lost. There is no other way to view it. It is shameful, disgraceful and short-sighted and should be withdrawn and reconsidered.
I will put the €50 million that the Minister mentioned in context without commenting on it, good, bad or indifferent. On average, the €50 million equates to approximately €3,000 per each of the 18,000 households. For that amount, a roof is kept over a family’s head and the family owns the house. According to the briefing note that we received from the Department on Monday, the estimated cost of the rent supplement this year is €437 million, which works out at approximately €4,500 for each of its 95,000 recipients. The cost of mortgage interest supplement is much cheaper per claimant. I suspect that the majority of mortgage interest supplement claims are not made by individuals, but by families who bought houses, whereas many rent supplement claimants are individuals. The number of people benefiting through the mortgage interest supplement is higher per €1 million spent. The Minister wants to reduce the rent supplement as well, but that is another day’s work. Under the mortgage interest supplement scheme, less money is provided to keep a person’s own roof over his or her head than is paid to landlords to provide rented accommodation. I wanted to put these figures in context.
I am utterly opposed to this proposal. Even the Taoiseach has announced a few times recently that people with mortgage arrears are the Government’s priority. I am unsure, but it seems that the Government’s first Bill on mortgage arrears will cut mortgage interest supplement or, to use the Minister’s word, curtail it. That word was used several times in her Department’s briefing notes. I understand what the Minister means when she refers to giving the banks €50 million, in that they must do something for it. However, if the Minister is introducing legal curtailments of mortgage interest supplement, she should also impose legal curtailments on the banks as regards how they deal with their customers.
We are still stuck with the idea of changing the law to get the small person while genuflecting to the banks and asking them to introduce a voluntary code of conduct, if they do not mind. They voluntarily signed up to the code of conduct but they have made it clear that they do not want it to be put on a statutory basis in case it affects the rights they believe they possess to enforce mortgages. The Minister referred to the constitutional rights of the lender on several occasions over the course of this debate but I did not hear her mention the constitutional right of the poor householder. Is the Government’s sole legal contribution to dealing with the mortgage interest arrears the curtailment mortgage interest supplement? Those who suffered income reductions and are caught with mortgages are the first category everyone wants to help but the people who are at the bottom of the economic pile are those in receipt of mortgage interest supplement because they are on the lowest incomes.
I cannot understand why the Minister is passing legislation to put the boot in the little person without dealing similarly with the banks. We have had the Cooney report and the Keane report but no legislation. We could be considering this Bill in conjunction with legislation to force the banks to act responsibly. The idea of leaving it to the cosy cartel of the banks is not good enough.
I will not rehash what I said earlier about the role of local authorities. They are not part of the bank scheme even though they also lent money to people to buy houses. They generally loaned to those on the lowest incomes because one of their requirements was for a borrower to have two refusals from the banks. My local authority has obtained more evictions in County Laois than the banks because the latter have agreed to forbearance. I tabled several parliamentary questions on this issue but I have not yet received a satisfactory answer. Local authorities have been told to join the scheme but they are not legally required to do so. Certain local authorities are making use of the courts with more frequency than the banks. If county managers were asked the number of court cases they are pursuing over mortgage arrears, the Minister would be shocked at the answer. Some local authorities may have signed up to the code in spirit but others are certainly not following it in practice.
Where are the laws to deal with the banks on foot of the Keane and Cooney reports? The only legislation I can see impacts on the little person. I am shocked that a Labour Party Minister is introducing these measures. Curtailing the lone parent payment from 14 years to seven years is an awful attack on people.
Deputy Sean Fleming: The Labour Party opposed the change but now it is reducing the age limit to seven years. Somewhere along the line that party will have to accept responsibility for being in government rather than harking to the past.
Deputy Sean Fleming: We did not reduce the age limit to seven years. We brought it to 14 years. The Minister cannot hang that on anyone else. She is also curtailing mortgage interest supplement for the most financially disadvantaged people in this country.
Deputy Sean Fleming: She can deny it all she likes but she is cutting benefits for lone parents, those in receipt of mortgage interest supplement and those on jobseeker’s benefit. That is the essence of this Bill in one sentence. Shame on her as a Labour Party Minister for those cuts.
Deputy Joan Burton: Poor Fianna Fáil is like the Bourbons. It remembers everything but learns nothing. As Deputy Fleming was on the backbenches when Fianna Fáil was in government, perhaps the actions of the former Taoiseach from his own constituency escaped his attention. The reason we have a problem is because Fianna Fáil decided to guarantee the banks, with the support of Sinn Féin, as the cheap alternative. We are still trying to unravel the unholy mess created by the bank guarantee. Unfortunately, it is difficult to undo what Fianna Fáil and the people who voted for the bank guarantee have done.
Deputy Joan Burton: I have never come across a Sinn Féin representative, in government or otherwise, who objected to the age of seven. However, when we propose to introduce an arrangement which has been in place in the North for a number of years, Sinn Féin objects even though child benefits and lone parent payments in the Republic are much higher than anything that party provides 90 miles to the north.
The Government’s objective is to keep people in their homes. Deputy Ó Snodaigh raised a worrying case of an individual who has been receiving mortgage interest supplement for two years but is being treated badly by the banks. I want to see a change which makes the banks engage with their customers. We have devoted more time to protecting people’s family homes than any other issue. Thus far we have created a number of new products, including mortgage to rent, which will allow people to rent their family homes where their capacity to repay their original mortgage is not sustainable. As the Constitution, which was designed by Fianna Fáil, offers strong protections for property rights, this issue is taking time to resolve. The object of the exercise is to protect the family home.
Deputy Ó Snodaigh referred to a problem with the mortgage interest supplement. Almost 60% of people in receipt of mortgage interest supplement receive it for 12 to 24 months and up to 72 months. It is becoming apparent that in many cases it is very hard for people to go back to work because they do not have an alternative structure that would give them long-term security regarding their family home. They fear that if they leave the mortgage interest supplement scheme they will actually lose that and therefore they will not be able to go back to work. That is a problem we are trying to address by developing other longer-term products such as mortgage to rent and others that help people keep their homes.
The Fianna Fáil Deputy wants the code of conduct on mortgage arrears to be put on a legislative footing. It is a pity that he never addressed that issue before. He is a member of the Committee on Public Accounts and he will know that all of the financial institutions have signed up to the code of conduct on mortgage arrears. If the Deputy is now suggesting as seems to be the case that the financial institutions are ignoring it, refusing it or denying it, he should state which institutions are doing so.
An Leas-Cheann Comhairle: As it is now 3.42 p.m., I am required to put the following question in accordance with an order of the Dáil of this day: “That the amendments set down by the Minister for Social Protection and not disposed of are hereby made to the Bill; in respect of each of the sections undisposed of, the section or as appropriate the section as amended is hereby agreed to in committee; the Title is hereby agreed to in committee; the Bill, as amended, is accordingly reported to the House; Fourth Stage is hereby completed; and the Bill is hereby passed.”
|Barry, Tom.||Breen, Pat.|
|Bruton, Richard.||Burton, Joan.|
|Butler, Ray.||Buttimer, Jerry.|
|Byrne, Catherine.||Byrne, Eric.|
|Cannon, Ciarán.||Carey, Joe.|
|Coffey, Paudie.||Collins, Áine.|
|Conaghan, Michael.||Conlan, Seán.|
|Connaughton, Paul J.||Conway, Ciara.|
|Coonan, Noel.||Corcoran Kennedy, Marcella.|
|Costello, Joe.||Deenihan, Jimmy.|
|Doherty, Regina.||Donohoe, Paschal.|
|Dowds, Robert.||Doyle, Andrew.|
|English, Damien.||Farrell, Alan.|
|Feighan, Frank.||Fitzpatrick, Peter.|
|Flanagan, Charles.||Flanagan, Terence.|
|Griffin, Brendan.||Hannigan, Dominic.|
|Harrington, Noel.||Harris, Simon.|
|Hayes, Tom.||Hogan, Phil.|
|Howlin, Brendan.||Humphreys, Kevin.|
|Keating, Derek.||Keaveney, Colm.|
|Kelly, Alan.||Kenny, Seán.|
|Kyne, Seán.||Lynch, Ciarán.|
|Lynch, Kathleen.||Lyons, John.|
|McFadden, Nicky.||McHugh, Joe.|
|McLoughlin, Tony.||Mathews, Peter.|
|Mitchell, Olivia.||Mitchell O’Connor, Mary.|
|Mulherin, Michelle.||Murphy, Dara.|
|Murphy, Eoghan.||Nash, Gerald.|
|Neville, Dan.||Nolan, Derek.|
|Ó Ríordáin, Aodhán.||O’Donnell, Kieran.|
|O’Dowd, Fergus.||O’Mahony, John.|
|Perry, John.||Phelan, Ann.|
|Rabbitte, Pat.||Reilly, James.|
|Ring, Michael.||Ryan, Brendan.|
|Spring, Arthur.||Timmins, Billy.|
|Tuffy, Joanna.||Walsh, Brian.|
|Adams, Gerry.||Boyd Barrett, Richard.|
|Broughan, Thomas P.||Calleary, Dara.|
|Collins, Joan.||Collins, Niall.|
|Colreavy, Michael.||Crowe, Seán.|
|Daly, Clare.||Donnelly, Stephen S.|
|Dooley, Timmy.||Ellis, Dessie.|
|Ferris, Martin.||Flanagan, Luke ‘Ming’.|
|Fleming, Sean.||Fleming, Tom.|
|Halligan, John.||Healy-Rae, Michael.|
|Kirk, Seamus.||Kitt, Michael P.|
|Mac Lochlainn, Pádraig.||McConalogue, Charlie.|
|McDonald, Mary Lou.||McGrath, Finian.|
|McGrath, Mattie.||McGrath, Michael.|
|McLellan, Sandra.||Murphy, Catherine.|
|Nulty, Patrick.||Ó Fearghaíl, Seán.|
|Ó Snodaigh, Aengus.||O’Brien, Jonathan.|
|O’Dea, Willie.||Pringle, Thomas.|
|Ross, Shane.||Smith, Brendan.|
|Stanley, Brian.||Tóibín, Peadar.|
|Troy, Robert.||Wallace, Mick.|
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