Social Welfare Bill, 1987: Second Stage.

Friday, 3 April 1987

Seanad Eireann Debate
Vol. 115 No. 15

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Question proposed: “That the Bill be now read a Second Time.”

An Cathaoirleach: Information on Patrick J. Reynolds  Zoom on Patrick J. Reynolds  Before I call on the Minister I would like to take this opportunity on my behalf and on behalf of the other Members of the House to congratulate him and wish him well in his appointment as Minister for Social Welfare.

Minister for Social Welfare (Dr. Woods): Information on Michael J. Woods  Zoom on Michael J. Woods  At the outset I would like to thank you for your good wishes. I would like to return my good wishes to you and any of the Senators who are contesting the current Seanad election. I believe that it is the most arduous and difficult of all election campaigns. I would like at the outset to thank the House for its cooperation in having this Bill to implement the budget changes in social welfare services, debated at short notice. I appreciate the pressures Senators must be under at the present time in the run-up to the Seanad elections and I would like to place on record my appreciation for their cooperation in considering this Bill today. As the House will know a number of provisions in the Bill are due to come into effect from next Monday and it is essential to have this legislation enacted this week. It is a consequence of the budget being so late this year that there [2088] is not more opportunity to consider the Bill.

Many of the provisions in the Bill have already been the subject of much debate during the long run-up to the General Election so Senators will be quite familiar with them. We all know that difficult decisions must be taken in the interests of stimulating employment and creating a new base from which we can further improve our social services. However, I am confident that, even in the present difficult situation we have succeeded in maintaining the real value of the basic social welfare payments protecting the interests of those most in need. I hope that Senators will accept my assurances in this regard and look forward to constructive and favourable consideration of the Bill.

The general framework of this Bill was already more or less fixed by the previous Government. The following measures aimed at reducing social welfare expenditure in line with the estimates prepared by the previous Government were contained in their budget proposals:

1. The 3 per cent of living increase in the value of social welfare payments to be delayed until November this year;

2. Pay-related benefit for new claimants to be reduced to 12 per cent.

3. The duration of unemployment benefit to be reduced from 15 months to 12 months with a consequent loss of pay-related benefit also.

4. More restrictive conditions to be introduced for unemployment benefit, disability benefit and maternity allowances——

(a) increase the number of waiting days for which a PRSI contributor does not get disability benefit, when out sick, from three to six days;

(b) introduce six waiting days for disability benefit claims which follow a period of maternity;

(c) increase the number of contributions required to qualify for disability benefit beyond 12 months and [2089] for invalidity pension from 156 (three years) to 260 (five years);

(d) increase the number of contributions required to qualify for benefit from 26 to 39.

The previous Government were taking all the above measures to effect savings contained in the abridged Estimates for 1987. The present Fianna Fáil Government, while accepting the need to contain the growth of social welfare expenditure considered some of these measures too harsh. We could not accept the reduction in unemployment benefit from 15 months to 12 months or the increase in waiting days for sick PRSI contributors from three to six days. We considered that the increase to five years in the contributions required to qualify for disability benefit beyond 12 months and for invalidity pension was too severe and we decided to increase this requirement to four years.

In keeping with our commitments during the general election we decided that the witholding of the 3 per cent cost of living increase until November would involve undue hardship for widows, old age pensioners, the sick, the disadvantaged and the unemployed. Accordingly, we have brought this increase forward to July. Before I discuss these measures in detail, together with the improvements in the family income supplement and the extension in treatment benefits to dependent spouses of insured workers, I would like to outline the general context in which the social welfare provisions in the budget must be considered.

First, the need to address the economic problems which the country now faces is a priority for this Government. There is a broad consensus on the strategy which must be adopted to tackle these problems. However, the achievement of the country's economic objectives in the years ahead will undoubtedly require sacrifices from all sectors of society. We have to look very closely at all elements of Government expenditure to ensure that the resources available are directed in the most effective way. At the same time it is of paramount importance that the [2090] burden of attaining our economic objective is not borne by disadvantaged groups in our society and we must have regard at all times to the need to protect these groups. I believe that the measures contained in this Bill indicate this Government's commitment and determination in this regard.

In relation to social welfare specifically, there are major issues to be addressed in the years ahead. Many of those issues have been highlighted very clearly in the report of the Commission on Social Welfare published last year. These affect both the structure and the operation of the social welfare system. The extent to which we are able to address these issues will naturally be affected by the financial constraints under which we have to operate, but it is my intention to address them and to introduce such reforms as are necessary and feasible. We must accept that there are limits to what it is possible to achieve in a given period and we will have to be realistic in setting our priorities.

More than 27 per cent of our total social security budget is spent on unemployment payments. This is an intolerable burden for the nation to bear and seriously reduces our capacity to improve and develop the social services we have. The problem in the short term is one of how to maintain income support schemes from a depleted pool of contributors. Not only is this pool diminished because of our high levels of unemployment, but our high dependency ratio contributes also to our financial problems. The level of unemployment is, however, the greatest single problem facing us as a nation and we as a Government are determined to come to grips with it. In doing so we must find solutions within our own resources. By tackling our economic problems in a vigorous and effective way, we are laying the necessary groundwork for developments in the social policy area, developments which we all agree are urgent and necessary in a caring society.

As Senators will be aware, the Government have decided to launch an immediate national job search programme to assist the long term unemployed in their [2091] efforts to seek training and employment. This programme, which will involve the interviewing of some 150,000 unemployed persons this year, will be spearheaded by my Department in cooperation with the National Manpower Service and AnCO. The necessary resources are being made available and over 40,000 National Manpower Service scheme opportunities have been earmarked for consideration by unemployed people this year. In addition, some 12,000 job search places will be made available during the rest of the year.

The job search programme is aimed at helping the unemployed to find jobs by giving them intensive coaching in job seeking techniques. It is a feature of the process of selection for job search that participants receive an intensive counselling interview with a National Manpower Service placement officer at which the participant's skills and strengths are assessed and a range of possibilities discussed. Among the possibilities considered are the availability of suitable jobs, the chance of starting work on the enterprise allowance scheme, the possibility of a place on the social employment scheme, or on a suitable AnCO training scheme or, finally a place on the job search programme. The job search programme itself involves intensive training in job-seeking skills and the provision of assistance and facilities to participants in the practical application of these skills in actually seeking jobs.

To date six job search courses have been run in each of the pilot locations at Letterkenny, Limerick and Tallaght. Results to date show that the courses have been successful in helping the long term unemployed. It is well known that the most damaging psychological effects of unemployment are, apart from loss of income, the lack of structure to one's day, the loss of self-respect and of a sense of identity. The job search course is designed to help unemployed persons take a more active and better supported part in seeking employment and new skills and for that reason it deserves and [2092] will receive our fullest support and commitment. The programme can also have an indirect impact in helping to identify those who are not genuinely seeking employment.

Moving on to the Bill now before us, the general thrust of my approach is to ensure that the position of people dependent on social welfare payments and schemes is protected and maintained to the greatest possible extent. With this in mind, Fianna Fáil could not agree to the provision contained in the previous Government's budget for deferring the 3 per cent cost of living increase in social welfare payments to November 1987 rather than July. I am glad to be able to bring forward these increases to July 1987. The additional cost involved is £18.4 million over and above the previous Government's proposal. Including health allowances the total additional cost is £19 million in 1987.

The other restrictive and cost-cutting measures proposed by the previous Government have been closely examined and, having regard to the overall budgetary situation, a number of them have been adopted either wholly or partially on the grounds that as well as achieving a needed saving, they also bring about a greater streamlining of the system. I will be outlining these in greater detail later in this speech.

There were a number of other restrictions, however, which in the Government's view would have involved severe reductions in entitlements to groups in need. I would refer in particular to the proposal to reduce the period of entitlement to unemployment benefit from 15 months to 12 months. This was, in the Government's view, a retrograde step which runs counter to most current thinking and one to which we could not subscribe given the present levels of unemployment. The duration of unemployment benefit was, in fact, increased from 12 to 15 months in the seventies at a time when recession was only beginning to deepen. Given current circumstances there is an even stronger case for maintaining the duration of payment of this benefit. In fact, the Commission on [2093] Social Welfare recommended that the duration of unemployment benefit be extended for certain categories.

Also, we are not proceeding with the proposal to increase from three to six the waiting days for disability benefit. Apart from the very severe hardship it would cause to the many thousands of employees who form a majority of the workforce in the private sector and who are not covered by occupational pension schemes, this proposal would also be in breach of ILO and Council of Europe Conventions which set minimum standards and which were ratified by this country.

The previous Government's proposal to pay a living alone allowance to long term recipients of unemployment assistance over age 45 is not being adopted. While I fully appreciate the problems faced by people in this category I do not see that the proposal in its present form is justified as it would create anomalies vis-à-vis other categories of recipients. In contrast, the Commission on Social Welfare were in favour of abolishing anomalies rather than creating new ones.

I would like now, to discuss the individual items of this Bill in some detail.

The Bill provides for a 3 per cent increase in the weekly personal, adult and child dependent rates of social insurance and assistance payments effective from July 1987. Bringing forward the date to July ensures that the increase in social welfare payments will match the increase in inflation and meets our election commitment. While accepting that 3 per cent is a modest increase, I would emphasise that it would always be the Government's wish to provide an additional increase over and above the cost of living where this is possible. Given the current very difficult situation, I am glad that it has been possible to bring the general increases forward in the way we have.

Under the provisions, for example, old age contributory and retirement pensions are increased by £1.65 with an additional £1 for adult dependants and 80p in the amount of the increase payable for a prescribed relative giving full-time care and attention to a pensioner. A married [2094] couple with two children on disability or unemployment benefit will receive £90.20, as against £87.60 at present. The rates of both long and short-term assistance are each being increased by over £1, and the rate for old age non-contributory pension goes from £45.75 to £47.10. In providing for the general increase in rates, I have taken the opportunity in this Bill to make provision for the rounding to the nearest 10p of each of the weekly social insurance and assistance personal rates and increases for adult and child dependants. This measure is desirable in view of the large number of payments now made and the difficulties in making computations of amounts less than 10p.

Section 9 of the Bill provides for a similar measure in relation to payments of unemployment and disability benefit in respect of partial weeks. Regulations will also be made to provide for the rounding of pay-related benefit and section 10 is designed to remove a restriction under the Social Welfare (Consolidation) Act which would prevent this from being done.

Regarding changes in social insurance conditions, the Bill provides for the imposition of stricter conditions for entitlement to certain social welfare benefits which formed part of the previous Government's budget. A person will now be required to have a total of 39 weeks contributions paid at any time instead of 26 as at present for entitlement to unemployment, disability and maternity benefits. The additional requirement for 26 contributions to be paid or credited in a particular year prior to the claim is also being raised to 39. This latter provision will be made by regulation.

The Bill also provides for a change in the contribution conditions affecting entitlement to long duration disability benefit and invalidity pension. The contribution condition requiring three years of paid contributions (156) is being increased to four (208) — the previous Government had proposed to increase this to five years (260 contributions).

Section 5 of the Bill provides that the earnings ceiling for PRSI contribution [2095] purposes be raised from £14,700 to £15,500 with effect from 6 April, 1987.

Turning to charges in the Pay-Related Benefit Scheme, section 7 of the Bill provides for an increase from £58 to £62 in the earnings disregard, or “floor” for pay-related benefit purposes. This change, which is a continuation of the policy adopted over the last number of years of progressively raising the “floor”, will affect only new claims from 6 April, where entitlement to pay-related benefit is involved.

Another change which I am proposing in relation to the pay-related benefit scheme is the introduction of a single rate of 12 per cent instead of the current rates of PRB of 25 per cent for the first six months and 20 per cent for the following nine months approximately. This will save £13 million this year and some £28 million in a full year. This measure was also included in the budget of the previous Government. The pay-related benefit scheme has now been in operation for some 13 years. It was introduced as a supplement to a number of social insurance payments, including unemployment and disability benefit. Since its introduction, the scheme has been subject to a considerable number of alterations in the limits and rates. This further adjustment is being made at a time when any room for manoeuvre within the social welfare system is marginal and there is a vital and urgent need to ensure that resources are targeted to those who are most in need. It must be remembered here that pay-related benefit is a supplement paid in addition to flat rate benefit payments which are already being increased to a level which compensates for inflation.

With regard to improvements in the family income supplement, this supplement is a weekly cash allowance to help families on low incomes and to maintain the incentive to work for the breadwinners of those families.

Section 4 of the Bill provides for a more favourable method of calculating the amount of the family income supplement. Under these new arrangements [2096] the supplement is being increased to half of the difference between the family income and the prescribed upper limit instead of one-third as heretofore. These changes will take effect from next July.

The upper family income limit for eligibility for the family income supplement is being increased to £104 for a family with one child. For a family with five children the upper income limit will be £192. The maximum weekly supplement is being increased from £10 to £16 in the case of a family with one child and from £26 to £44 in the case of a family with five or more children. This represents a real and practical increase in the level of assistance given to low income families. I might add that this proposal was also included in the previous Government's proposals.

The effect of the increases is that from July the family income supplement scheme will make up 50 per cent of the difference between family income and:

£104 in the case of a family with one child.

£126 in the case of a family with two children.

£148 in the case of a family with three children.

£170 in the case of a family with four children and

£192 in the case of a family with five or more children.

There are limits on the maximum payments which can be made under the scheme but it will be possible to receive up to:

£16 a week in the case of a family with one child.

£23 a week in the case of a family with two children.

£30 a week in the case of a family with three children.

£37 a week in the case of a family with four children and

£44 a week in the case of a family with five or more children.

In our Programme for National Recovery we stated that we would review the workings of the family income supplement, which is availed of by only a limited [2097] number of people at present and while these new measures may serve to broaden the scope of the scheme somewhat, I am still anxious to press ahead with an examination of this scheme which might yield some clearer definitions as to the relevant target group and their particular income needs.

I am also pleased to announce the extension of the treatment benefits scheme — that is free dental, optical and aural care — to the dependent spouses of insured workers. October 1987 is the easliest date possible for the introduction of this measure, given the necessary preparations which have to be made in advance of its commencement. I have been very conscious of the need for this measure for some years and I was very pleased when the Fianna Fáil Party included it in their policy programme. It has often been put forward that women who work in the home had specific needs in this area given that, in many cases, they had no significant income of their own and that, where the family income was limited, the priority for treatment in these areas usually went to the children or to the major earner. This inclusion of the dependent spouse of the PRSI insured worker in this scheme will mark a major advance for Irish families and will be a bonus to the PRSI full rate contributor. I would also like to point out that the extension will apply to any dependent spouse, including a husband who is dependent on an insured wife.

Regarding pilot schemes for the unemployed section 11 of the Bill provides that a participant in the part time job allowance scheme or the educational opportunities scheme will be able to resume his or her previous entitlement to unemployment payments without serving the usual waiting days in cases where the part time job does not work out or where they find themselves in a position that they have to back on to full time unemployment payments after a spell in the educational opportunities scheme. These are two of three schemes aimed at helping the long term unemployed; I have already referred to the third scheme, the jobs search programme.

[2098] The part-time job allowance scheme allows people who have been long term unemployed to take up part time work for up to 24 hours a week and to receive a flat rate allowance of £25 (single person) £40 (married) while doing so. Earnings from the job will not affect the allowance. The scheme originally operated in five pilot locations and was extended to a further 12 locations before Christmas. While the numbers participating in it are as yet still small — some 50 persons — I am hopeful that as knowledge of the scheme spreads the numbers will increase.

The educational opportunities scheme which is operating in Limerick and Tallaght allows long term unemployed persons who are over 25 years of age to attend a leaving certificate type course organised by the VEC. Three classes have been organised and there are some 50 participants in this scheme. An independent evaluation of the scheme is being carried out and I will be looking at the results of the scheme in all its aspects with a view to seeing whether an extension is worthwhile and feasible.

Another initiative in the job creation area provided for in this Bill is the employer's PRSI exemption scheme. Under this scheme employers in the private sector who took on additional employees on a full time basis between mid-December 1986 and the end of January 1987, resulting in a net increase in their workforce, are exempt from their portion of the PRSI contribution for those employees for each week in the 1987-88 income tax year in which an increase in the workforce is maintained. Section 6 of this Bill makes the necessary provision to enable this to be done.

Regarding the abolition of the provision of investment return, section 12 of the Bill is designed to do away with an anachronistic accounting procedure arising from the provisions of section 123 of the Social Welfare Consolidation Act, 1981. Each year the Exchequer is required to make payment to the social insurance fund of amounts due in respect of interest on expenditure incurred by the fund and its predecessor, the national [2099] health insurance fund in the building and equipping of Aras Mhic Dhiarmada. The amount involved is in the region of £50,000 to £60,000 and the need for this separate provision is no longer relevant, having regard to the fact that the Exchequer in any event makes good each year the deficit of the social insurance fund.

I would like to say a few words at this point about a subject which has received much publicity in recent times, namely, social welfare fraud. It is important to keep the issue of fraud in perspective in relation to the hundreds of thousands of families and individuals throughout the country who are in genuine need of the services of the Department. At the same time, it is essential to strike a balance between providing a speedy and accessible service on the one hand and ensuring that the service is not open to abuse on the other. That balance will have to be constantly adjusted in the light of ongoing experience.

The only quantifiable indicators currently available of the extent of social welfare fraud relate to the actual statistics of fraud uncovered and recorded in my Department. In 1985, the most recent year for which complete statistics are available, overpayments of benefit and assistance made by my Department amounted to £5.7 million of total expenditure of £2,291 million in that year. Of that amount, £4.07 million of total expenditure is attributed to fraud on the part of recipients. I have no doubt that many people believe that this does not represent the true extent of fraud in the system. However, any other figures put forward must be viewed as speculative.

To obtain an independent assessment of the extent of fraud in the social welfare system, a firm of international consultants have been engaged to carry out a security review of my Department's payment system and the level of fraud. Their findings will be a major input into further review of the controls and systems in operation in the Department to prevent fraud. In addition to the work of the consultants, my Department will, on [2100] their own account, continue to develop measures aimed at preventing abuse and fraud. Over the past number of years, various measures have been taken to tackle the problem. Additional staff have been assigned specifically to anti-fraud work, new control procedures have been introduced, legislative changes have been effected and new improved computer facilities have been developed. I am determined to do everything possible to improve the system of control on social welfare payments to ensure that the possibilities of fraud are minimised. I will be taking whatever measures are necessary arising from the work of the consultants and my examination of the problem.

I am also examining the question of fraud in its broadest sense in other areas. The State is paying out about £40 million in 1987 in respect of benefits and allowances for deserted wives. I propose to examine the extent to which some of this cost could be offset by pursuing husbands who might be in a position to make some payments to meet their obligations. The reality for many women who are receiving maintenance, under a separation agreement or a court order, is that payment of maintenance is often irregular and uncertain. The NESC have recommended that the State should have power in such cases to award a deserted wife's benefit or allowance and itself pursue outstanding maintenance claims. I am having my Department examine how arrangements can be made to pursue deserting husbands for the maintenance they should have been paying to their wives. The Commission on Social Welfare endorsed this recommendation and I am having this matter examined.

I would like to refer to an area in which I will be taking a special interest over the next few years. This is the work of the Combat Poverty Agency which was established in September 1986. When the legislation to establish the agency was being debated in the Dáil I was very critical of the delay. I pointed out then the Bill was for all intents and purposes a replica of the National Community Development Agency Bill which I had [2101] introduced nearly five years previously. I still maintain this view. Indeed it has been confirmed by what I have learned about the agency since I assumed office. As far as I am concerned, however, the important thing now is that the agency should get down to the work which it was set up to do.

The new agency has now submitted to me a strategic plan of its activities over the next three years, as it was required to do under the terms of the Act. From my examination of the plan, however, it is clear that the agency sees itself primarily as promoting community development as an approach to tackling poverty. This is in line with my views on the best way to make progress in this area. I have always believed that an agency such as this, small as it is, can make a significant contribution to the elimination of poverty from Irish society by fostering and supporting the many activities which are already going on at local community level and by making available the results and experience coming from those activities.

The provision which we are making for the Anti-Poverty Programme in 1987 is £1.3 million. I will be concerned to ensure that these limited funds are spent in the best and most effective way. I am pleased to see that the agency is approaching its task in an orderly and logical fashion by setting out in its strategic plan the areas in which it intends to concentrate its efforts over the next three years.

I would also like to refer to the provision for grants to voluntary organisations in the social services area for once-off projects. This scheme has been in operation since 1983 and provides worthwhile assistance to many voluntary organisations in the valuable work which they do with deprived and disadvantaged groups. Up to the end of 1986 grants totalling some £2.5 million had been paid to some 470 voluntary organisations. The sum of £750,000 has been made available for the scheme this year. This is entirely separate from the allocation of £1.3 million for the Anti-Poverty Agency which will also be providing support and assistance to local groups and organisations.

The report of the Commission on [2102] Social Welfare, since its publication in August 1986, has been the subject of considerable discussion and analysis. I have the considered views on the report of many organisations and individuals who have a direct interest in social welfare. I will be taking the report of the commission and all the views I have received on it fully into account in planning the reform and development of the social welfare system.

I will be giving particular attention in this regard to the views of the social partners as expressed in the report of the NESC A Strategy for Development 1986-1990. The financial constraints on future social welfare developments in the period up to 1990 are clearly spelled out in that report. These show that, given the projected demographic changes, an increase in expenditure of at least 14.3 per cent will be required in the next four years just to maintain real social welfare payments levels. This Government have given a clear commitment in its Programme for National Recovery to maintain social welfare payments in real terms. Therefore, the degree of progress that can be made in relation to further general improvements in social welfare payment levels will, to a great extent, be determined by our success in generating real economic growth and, in particular, reducing the level of unemployment.

However, this does not mean that real social welfare reform will have to be tied exclusively to extra revenue becoming available from the benefits of economic growth. We can start the process of remedying serious deficiencies, which have been identified, in the present social welfare system without necessarily incurring significant extra expenditure. The Commission on Social Welfare have recommended that the present payment structure should be simplified, in particular, the rates payable to the various categories of social welfare recipients should be equalised. This aim has been endorsed by the NESC and, within the present financial constraints, I will be looking at ways of achieving some convergence of social welfare rates in the coming years.

[2103] I consider also that a review of all social welfare schemes is necessary to see how effective these schemes are in meeting their objectives. The schemes will be looked at to see how they interact with other social welfare schemes, with schemes administered by other State agencies and how they meet the overall needs of the individuals and families whom they are intended to serve. Also, I expect such reviews to highlight where the conditions for entitlement give rise to anomalies or where these conditions can lead to abuse. In particular, the reviews will be focusing on the various schemes for those incapable of work, for the unemployed, for one parent families and for children. The overall outcome will be proposals for changes in the coming years that will make social welfare schemes as a whole more effective in meeting their objectives.

In addition to the more effective use of existing resources there will be a need to look at ways of generating extra revenue that will not have a negative impact on the potential for economic growth. The NESC laid particular emphasis in this regard on broadening the social insurance base. The Commission on Social Welfare also considered this to be a priority. I will, therefore, be examining the implications of extending social insurance not just with the aim of generating extra revenue but also to bring Ireland into line with other developed countries, where all persons engaged in economic activity are covered by social insurance. Such a development should lead in time to a decline in the numbers requiring means-tested social assistance payments. Reliance on such payments as a form of social security can have the negative effect of penalising enterprise and thrift.

There is also considerable scope for reforms in the administration and delivery of social welfare services that will not have significant cost implications but will, at the same time, be of considerable benefit to social welfare beneficiaries. There is a clear commitment in our Programme for National Recovery to make the administration of the social welfare system [2104] more fair and efficient. The major computerisation programme currently underway in my Department will be of central importance in achieving this aim. I intend to ensure that sufficient resources are provided to enable this programme to proceed as quickly as possible.

Computerisation speeds up considerably the processing of claims and the provision of information to claimants on their entitlements and on the progress of their claims. It also makes possible more efficient, secure and flexible methods for making payments as well as facilitating the localisation of services.

I intend to introduce and develop one-stop-shops for social welfare services so that, as far as possible, all the social welfare needs of clients can be met in one centre at local level. This would include current information and advice on jobs, placements and courses which are available through the Manpower services together with social welfare information. It would also include on the spot assessment for qualification certificates for unemployment assistance. Computerisation will make this feasible and this approach will be of enormous benefit to clients and will at the same time reduce significantly the cost of administering the social welfare services.

In this connection I would like to mention a project that has been in operation in my Department for some time now and one which I intend to develop and expand in the future. Last year a project was initiated where the work of the various people involved at local level in putting unemployment assistance entitlements into payment was brought together in a more integrated manner. The exchange manager who is responsible for making payments, the social welfare officer who investigates means and the community welfare officer who may have to decide on entitlements to supplementary welfare allowance in the interim, all operate as a team with the consequence that the average time taken to put unemployment assistance into payment has been reduced from weeks to days and, of course, this has reduced the cost of delivering the service. It has also [2105] resulted in savings in payments of supplementry welfare allowance where these would be paid pending the processing of a claim. Following the success of the initial project similar arrangements have been made in two further offices. I intend to extend this to other offices where this is feasible and as suitable accommodation and facilities, including computer links, become available.

I should also mention that this approach to the delivery of services is in keeping with the recommendation of the Commission on Social Welfare on the need to provide a comprehensive local service to social welfare clients.

We also made a commitment in our election programme to simplifying the appeals machinery. The commission in their report made a number of recommendations in this regard including the setting up of a separate executive office for appeals. This matter was in the fairly recent past the subject of detailed debate in this House in Private Members' Time. Proposals for reform of the appeals system are under active consideration at present and I hope to be in a position to bring forward firm proposals on this matter in the near future.

There is no doubt in my mind that in planning the major social welfare reforms to be introduced over the coming years the priority will be maintaining in real terms the level of social welfare benefits. At the same time I will be reviewing all social welfare schemes with a view to ensuring that the enormous resources both in terms of money and staff devoted to these schemes are used as effectively and efficiently as possible. I am confident that the end result will be a social welfare system that will cater in a fair, efficient, and, above all, sensitive and caring way for the one million plus persons who rely on social welfare services.

I have outlined what I see as the main priorities now facing me as Minister for Social Welfare. As far as the provisions in the Bill are concerned I feel that those provisions illustrate the Government's commitment to people on social welfare [2106] and represent a considerable achievement in the light of the difficulties facing the Government at the present time.

Mr. O'Brien: Information on Andy OBrien  Zoom on Andy OBrien  I join in the congratulations to the Minister on his appointment and I wish him every success.

The Fine Gael group will not be opposing this Bill. There are many measures here which we are glad to see being introduced. It is a matter of some satisfaction that even in very difficult times this Government and the previous Government made a genuine effort to alleviate the problems of the most under-privileged in our community. We are all aware of the difficulties that confront the Government and the Minister because of high service charges on borrowed money, because of growing numbers of unemployed who have to be assisted and because of the recognised fact that the taxpayer is already contributing more than a fair share to the running of the State. Taking all these things into account, it is with a good deal of satisfaction that I note that there are many measures in this Bill which show a caring approach to the problems of the social welfare classes. Many people would like to see more being done but in our economic circumstances it is difficult to make a claim to have more done. For that reason the Fine Gael group here will not oppose the Bill.

A 3 per cent increase in a number of these payments would not measure up to what many caring people would like to see done but we have to see this against our economic background. I understand from the tone of the Minister's speech that if conditions were better these payments would be higher.

I thank the Minister for the comprehensive speech he has made, for the detailed way in which he covered different sections in the Bill and for his indications of a further examination of the problems and of how to expedite claims.

It would be satisfactory from the point of view of the taxpayer and the community in general if fraud could be totally eliminated from these schemes. It may [2107] not be as serious as some people claim but while it exists it gives rise to dissatisfaction. It encourages attempts at fraud by people who are convinced that their neighbours are benefiting from fraudulent practices and it creates dissatisfaction among taxpayers who believe they are contributing to the upkeep of people who are getting far too much and who could quite well do without any assistance under the social welfare schemes. As long as that kind of thinking prevails and as long as there appears to be justification for that kind of thinking it will create dissatisfaction among the paying sections of our community.

The approach to this Bill in providing for social welfare recipients was more humane than the approach to hospital charges and housing grants. In the circumstances the Minister has done a good job. For that reason I welcome the Bill and would clearly indicate to the Minister that it is not the intention of the Fine Gael group to oppose it.

Mr. Fallon: Information on Sean Fallon  Zoom on Sean Fallon  Like the previous speaker I welcome the Minister to the House and congratulate him on his appointment as Minister for Social Welfare. It is a daunting task but I know the Minister will be confident and capable in his role. Talking generally about social welfare, over the years I have found that in many ways the developments and the progress in social welfare have proved to be a barometer of progress and development. For example, there were few, if any, new developments in the depressed conditions of the fifties. Economic growth abounded during the sixties and seventies and this proved conducive to developments in social welfare. In the difficult economic climate of the eighties it is difficult to be innovative; the opposite is the case. We tend to cut back for the obvious reason that social welfare is the highest capital programme of all the Government's portfolios. In excess of £2.5 billion per annum is spent on social welfare. Something in the region of 40 per cent of the population are getting [2108] some form of social welfare. As the Minister said, there are a million plus people availing of some social welfare scheme.

The Minister referred briefly to the report of the Commission on Social Welfare. One of the saddest aspects of that report was the admission that unemployment will continue at a high level for quite some time. If that is the case, obviously providing funding for unfortunate people who are joining the dole queues will be much more difficult. Hopefully, the policies and attitude the Government have adopted since they took office on 10 March 1987 will work and jobs will be there for young people and for people generally in the years ahead.

The Minister referred to the anomalies in the social welfare scheme. We all accept that the social welfare scheme is riddled with anomalies. The Minister knows what is happening and he will be examining it in the period ahead. The full extent of the abuse of the system through fraud has not been fully determined. I am not talking about a person who, for example, might spend a few hours digging a garden. I am talking about a person who collects money from exchanges in Dublin, Athlone and Galway. We know this has happened in the past. If large fraud situations exist they should be eliminated as quickly as possible.

The Minister referred to the computerisation of the Department. They have been criticised over the years for late payments and so on. Hopefully the computerisation system, if adopted, will help to improve that position. The Government's social welfare portfolio is wide open for decentralisation on a pretty large scale. I like to think that decentralisation and some form of computerisation will reduce the cost of the administration of the social welfare services.

I am very pleased that the starting date for the 3 per cent increase is July rather than November. The Minister made the point that this will cost an extra £80 million but I feel it is necessary to match the increase in inflation which we agreed and [2109] which was promised as part of our election commitment in February. The job search courses have proved successful in Limerick, Letterkenny and Tallaght and I am pleased that there is general agreement and approval for an extension of these courses. We hope they will be successful and we await details with interest and concern.

We were critical in the past of the failure of the Government to operate an extension of the free dental, optical and aural care to the dependent spouses of insured workers. These have now become part and parcel of this Bill. The Minister said that for administrative reasons October 1987 is the earliest day this can be introduced. The Minister rightly pointed out that in many cases women who work at home have no significant income of their own. They are now getting priority. This measure will be welcomed by everybody, and most of all by the people who will benefit from it.

I would like to pay tribute as the Minister did, to the various voluntary organisations for the great work they are doing in helping many deprived and disadvantaged groups. In my own town, as in other towns in Ireland, young men and women in groups like the St. Vincent de Paul Society, the Round Table and the Lions Club, work in their spare time to help unfortunate people who are poor, deprived and disadvantaged. The Minister is right to put on record his support for and tribute to them for the work they are doing.

How to raise revenue must always be at the back of one's mind with regard to any social welfare system. Having read the report on social welfare and from what I know about social welfare, there is great scope for raising revenue through the broadening of the social insurance base. The report makes the point that the total revenue accruing from the inclusion of the self-employed, the extension of the full PRSI to modified rate contributors and the abolition of the income ceiling contribution would be in the region of £226 million. That is a sizeable figure. Can we abolish the ceiling? When the [2110] Minister replies perhaps he might give us his thoughts in that area. This has to be looked at and there have to be areas from which additional revenue can be brought into the social welfare system. Doing what I suggest would not just mean extra finance for the Department. The system would be seen to operate in a more equitable manner for all sections of the community.

There are a few general points on social welfare which I should like to mention. I will not be long because I know the Minister is anxious to have the Bill passed. The occupational injury scheme was started in 1967 and replaced the Work-mens Compensation Act, 1867. This is a compulsory insurance scheme for employees who are in insurable employment. This scheme needs to be reviewed. It no longer seems to be attractive. Claims are made under a common law scheme rather than under the occupational injuries scheme. The Minister may argue that this is the best way for the Department of Social Welfare but if we could get extra money and extra benefits it would be a worthwhile exercise to examine it further.

The free fuel scheme has been the subject of a court action but it is a scheme which may be of interest in the future. The criterion used should have regard to the needs of the recipient rather than what social welfare grouping he or she belongs to. I am throwing this out to the Minister in the hope that he might investigate it in the future.

The idea of a benefit in kind rather than a cash payment should be further explored — for example, the travel scheme, the TV licence scheme and the telephone rental scheme. The free travel scheme is rightly described as a model of a positive State response to the needs of the elderly. This kind of concept should be further examined by the Minister and his Department.

Members of the House could talk at length on this Bill, but the Minister is anxious, as we all are, that the measure be passed as quickly as possible. We must make sure our basic priorities are correct, that is to improve the level of payment [2111] for those on the lowest level who are dependent on social welfare, improve the family support schemes ensuring that the family and individuals are protected, and ensure that schemes are maintained to the greatest possible extent. This is to be welcomed. I am sure this is the Minister's intention. As Senator Ryan stated, despite the tough economic climate, the Minister has introduced a humane touch as far as the disadvantaged, the poor and the people in need of social welfare are concerned. I wish the Minister well in his portfolio, and I know that he will be a very big success.

An Cathaoirleach: Information on Patrick J. Reynolds  Zoom on Patrick J. Reynolds  I am calling on Senator Robinson.

Mr. Ferris: Information on Michael Ferris  Zoom on Michael Ferris  Before Senator Robinson contributes, would the Government Whip indicate if the House will have a 30 minute break for tea when Senator Robinson has concluded? Many Senators want to contribute to the debate and it would be appropriate to have this break, if the House agrees.

Mr. W. Ryan: Information on William Ryan  Zoom on William Ryan  I would prefer if we could finish Second Stage and then have a break because Senators may want to put down amendments on Committe Stage.

An Cathaoirleach: Information on Patrick J. Reynolds  Zoom on Patrick J. Reynolds  I am in your hands.

Mr. W. Ryan: Information on William Ryan  Zoom on William Ryan  I would prefer to have Second Stage completed and then take a break for 30 minutes.

An Cathaoirleach: Information on Patrick J. Reynolds  Zoom on Patrick J. Reynolds  Are there many speakers? There are five. I am calling Senator Robinson.

Mrs. Robinson: Information on Mary Robinson  Zoom on Mary Robinson  I welcome the fact that the Minister has made quite a wide-ranging speech in introducing the Bill. It is appropriate that he would do so because of the importance of the social welfare code to an increasing proportion of the population. I also welcome some specific proposals in the Bill in comparison, with, for example, the proposals put forward by Fine Gael during the recent election. [2112] Overall I am disappointed that the Minister has not given firm commitments to accept the main recommendations of the report of the Commission on Social Welfare. I will address some of the issues he raised on that front.

The Minister's initial response is worringly vague and worrying in that it is linking any real reform to considerations of overall economic policy. He must be prepared to lead with the significance of the main recommendations of the Commission on Social Welfare. It is important that a Minister for Social Welfare should understand and accept the values in that report and push those values in competition with other lobbies and other pressing interests but do so with great conviction as the Minister with responsibility in this area.

At the commencement of my contribution — which I assure the Members of the House will not be long — I wish to refer to what I regard as a notable omission from the Minister's speech, which also worries me. The Minister made no reference to any steps which his Department propose to take to redress the unlawful discrimination against married women in entitlements to, and in payments of unemployment, disability and other benefits during 1985 and 1986. The recent judgment of the Court of Justice of the European Communities in the McDermott and Cotter case made it clear that as and from 23 December 1984, married women were legally entitled to the same benefits as married men. Even though there was no provision in Irish law to that effect, they could rely on the Third Directive. I should like to ask the Minister when replying to the Second Stage debate to indicate what steps his Department are going to take to redress this situation.

Presumably the Department have records of women who would have been in receipt of unemployment or disability benefits. They would be in a position to make a calculation in relation to the default, to what the income and entitlement to those married women would have been in the years 1985 and 1986, up to the implementation in May 1986 in [2113] relation to unemployment benefit and disability of equality of treatment, and up to November 1986 in relation to entitlement to apply for unemployment assistance and also the adjustment of the adult and child allowances. The Minister has a responsibility here. It is clear that the thrust of the judgment of the court was that married women were legally entitled to those payments and, therefore, have been wrongly deprived of them. Although individual women may seek to take certain steps in their own case, it is a clear situation where there is ministerial responsibility. I believe I am correct in referring to the fact that the Netherlands Government, which had not initially provided for implementation of the directive in time, ensured that there was full retrospection to the women claimants who had been discriminated against contrary to the provisions of the directive.

I hope that the Minister when replying to the debate will outline the kind of steps which the Department will take. They are uniquely in a position to do so because they have the records. They are in a position to contact every woman and tell her she had been paid £5, approximately, less as and from 23 December 1984 until whatever date the shorter period for payment ran out, that the Department will pay her £5 more for those months, that she is also entitled to be paid for the full 390 days, and that therefore she is entitled to an additional 78 days payment. That is a clear responsibility on the Government, and in particular on the Minister. He is in a position to know from the records. The easiest cases are those women who are unlawfully and wrongly deprived of the same rate as other categories of recipients for unemployment benefit and unemployment assistance.

It may be more difficult, but not impossible, to seek to redress the situation of the women who are signing on for credits, for example, in relation to their entitlement to unemployment assistance, and also ensure they get equal treatment with regard to the benefits which were available in comparable circumstances to married men. This is a very [2114] glaring and worrying omission from the Minister's speech since he ranged over a number of broader issues in the area of social welfare which do not, strictly speaking, arise under the provisions of the Social Welfare Bill, 1987.

I welcome some of the specific proposals in the Bill. I welcome in particular the decision of the Government to introduce the 3 per cent increase in social welfare allowances and benefits in July this year, as opposed to the proposal of the Fine Gael Party to do so in November. I would like the Minister to respond to the point: the increase is to be 3 per cent but, as I understand it, the cost of living is already exceeding that. I would welcome some guarantee or assurance from the Minister that a further adjustment will be made if, as appeared to be the case, the cost of living index continues to rise because that would have the effect that the 3 per cent increase would not ensure the maintenance of what are already in many cases very low rates of benefit and allowances. While I welcome the fact that the date of July has been agreed and acceded to by the Government, I would like some assurance from the Minister that he will monitor the rate of inflation for this year to ensure that the level is maintained.

I welcome the Government's rejection of the proposal to shorten the period of unemployment benefit, which would also have had an effect on pay-related benefit, from 15 months to 12 months. That, again, was a proposal of the Fine Gael Party. I am glad the Government have not adopted this course and have maintained the period of 15 months.

Another specific proposal in the Bill which I would like to refer to is the extension of the free dental, optical, and aural care to dependent spouses of insured workers. It may only be a small point, but I welcome the fact that, as the Minister pointed out, this will apply to dependent spouses of whichever sex, as appropriate. For most of us, this raises the very serious question of the lack of access to those services down through the years for dependent married women. I warmly [2115] welcome the fact that the Government have introduced this provision.

I hope the Minister will clarify the basis for the very strict changes in the social insurance conditions and the stricter conditions for entitlement to social welfare benefits. These will require higher level of contributions. These are set out in detail by the Minister in relation to entitlement to unemployment, disability and maternity benefits and also in relation to long duration disability benefit and invalidity pensions. What is very worrying is that the threshold is being raised at a time when it is more difficult for people to remain in employment, when the jobs market is shrinking. It seems to be a very harsh and unfair provision to be upping the threshold and imposing stricter conditions at a time when it is more difficult to remain in secure insured employment.

Let me turn to the reference in the Minister's speech in regard to the improvements in the family income supplement. The Minister expressed surprise that the family income supplement was availed of only by a very limited number of people. I sensed from what he said that the view of the Department is that there is an under take-up of this supplement. I hope the Minister will reflect on his own surprise in that regard. Why is that the family income supplement does not have a greater take-up? Why is it not more widely availed of by low income families? Part of the reason is that it has not been well-publicised and explained to people. The social welfare code is becoming increasingly complex. Low income families in particular are unlikely to have access to private advice. Those who have the benefit and help of a social worker or a community care worker who will sort out their problems for them may become aware of their entitlements but too many low income families simply do not know that this is something which they should consider, something they might be entitled to. I would welcome some concentration of attention on ensuring that this supplement is availed of in the kinds of case for which it was [2116] introduced. The Minister's proposals will help a little towards increasing the relevance of the supplement and its accessibility for some families.

The Minister referred to the various schemes for the unemployed, particularly the job search programme. It is difficult until we have more evidence of how this works to assess what its impact will be. I prefer to reserve my position and perhaps in the broader context of a debate on unemployment or on the provision of jobs we can come back to it when there is a longer track record to assess. I do have certain doubts but I prefer to wait and see what the position may be.

I now want to turn to the Minister's reference to the Combat Poverty Agency. I welcome the fact that the Minister has not tried to score political points. For instance, he did not mention that it was similar to the agency set up by a previous Government. I sensed in his contribution a strong endorsement of the work of the Combat Poverty Agency and I hope that is the case. It is extremely important that the work of the agency is not only supported but understood because it is an agency which can help to create much more radical change on the ground in these areas if it receives the support. In that regard, I am not satisfied that a budget of £1.3 million is the kind of support the agency should be receiving. Obviously, there are budgetary constraints, in all areas but that figure does seem to be a very small allocation, given the Minister's endorsement of the work of the agency, his recognition of their importance and the need on the ground for the work which is involved.

There are two other matters in the Minister's speech which I want to refer to. The first is the highlighting of the problem of social welfare fraud. There is a tendency in any discussion on social welfare to focus at a fairly early stage on the problem of social welfare fraud. In the area of social welfare, as in the area of taxation and as in most areas of Irish life, we have a problem. Any of us who can get away with anything are probably three-quarters of the way, if not the full way, towards getting away with it. There [2117] is an undue focus on social welfare recipients as though somehow they are the only people who are involved in any way in trying to fiddle things their own way. Very few of us can look into our hearts and say that we do not in one way or another try to take advantage of the situation in which we find ourselves.

In so far as there is a problem, it is of course one which should be redressed but I would like to make a comment on the step which is being taken. Yet again, the Minister is employing a firm of international consultants. At least the House should be made aware of all the details. How much are the international consultants to be paid by the Department to carry out the task allocated to them? Will we get a copy of their report? Will it be published? It is important when international consultants are brought in in this way that we should know what the result is and that the House has an opportunity to comment on it.

One of the areas the Minister focused on was the payment of benefits and allowances to deserted wives. He pointed out that the State will be paying out about £40 million in 1987 in respect of benefits and allowances for deserted wives and he proposes to examine the extent to which some of the costs could be offset by pursuing husbands. He referred to the NESC recommendation, that the burden of pursuing husbands should not be undertaken by the deserted wife who normally has a combination of cumulative problems arising from the desertion, from emotional, financial and other problems, but by the Department. That has been put forward for a number of years by many people who are close to the ground and aware of the problems. I recall having the then Minister for Health, Deputy Haughey, in here on a motion on that point and he declined to accept the recommendation. However, I am encouraged that the Minister appears to be prepared to examine seriously how this could be done. It is the approach adopted in a number of other jurisdictions, in Northern Ireland and in England, to payments of this kind. The pursuit of the husband is carried out not [2118] primarily or in many cases by the wife but at the behest of the agency making the social welfare payment to the deserted wife.

I welcome the Minister's comments to the effect that he accepts the need for reform in the administration and delivery of social welfare services, the need for overall improvement in the delivery of the services. The Minister referred specifically to the introduction and development of what he called “one stop shops” so that all the social welfare needs of applicants can be met in one centre at local level. He said this approach will be developed. As well as improving and reforming the administration and delivery of social welfare services, there should be consideration of the fact that in relation to these services we are talking about people's legal entitlements. It does not always seem that the Department are aware of the need for standards of fair procedures, proper access to information in relation to entitlements or to any reports on people. It is not simply a question of providing for needs; it is a question of providing legal entitlements for people. As the Minister, and his advisers are aware, increasingly cases are coming before the courts because proper standards have not been maintained. It probably does not figure largely in any approach or consideration by the Department although it should. The Department should consider taking legal advice on ensuring that any improvements in the delivery of services also comply with standards of fair procedures and with the rules of natural and constitutional justice because we are talking about legal entitlements.

In that regard, in a further extension of this area, I also welcome the commitment of the Minister to reform and simplify the appeals machinery. The Minister referred to the fact that there was a detailed debate in this House on the matter and said it was a debate in Private Members' time. It was a debate on a Private Members' Bill, proposed by Senator Brendan Ryan, which is still on the Order Paper and will, if Senator Ryan is re-elected, be reintroduced. I hope [2119] there will be an opportunity to hear the Minister on the specifics of either a Government Bill or a re-vitalised and revised Private Members' Bill to actually reform and structure the social welfare appeals system. There was considerable support in this House for a proposal of that kind as there was in the report of the Commission on Social Welfare. That is a very important point.

I welcome this opportunity to hear the new Minister for Social Welfare because his is an extremely important brief and Ministry, and I look forward to hearing him in reply. I should like to thank my colleagues, in particular my Labour colleagues, for facilitating me in making my contribution.

Mr. Ferris: Information on Michael Ferris  Zoom on Michael Ferris  I should like to welcome the Minister for Social Welfare on this his first visit to the House. In my dealings with him in the past when he was Minister for Health I had a working relationship with him. The Minister has brought before us a Bill which contains some of the proposals of the outgoing Fine Gael Government. He has changed some of them slightly but the Labour Party proposals have not been adopted. It has things that are good but not good enough and things that are bad but not as bad as they could have been. In other words the Bill is a combination of all sorts, shapes and sizes of fundamental changes, particularly in the area of pay-related benefits which the Labour Party are very concerned about. We will be unable to support the Bill on Second Stage and some sections of it on Committee Stage.

In his opening statement the Minister said he was anxious to have the Bill enacted as quickly as possible because he wants some of the changes to come into force early in April. Unfortunately, most of the changes he wants to bring in in April are changes we do not agree with because they alter the concept of pay-related insurance. The good parts of the Bill, which are not good enough for us, would not normally come into force until July. For that reason we suggest the postponement of the Bill as a protest at the [2120] way the Minister has played around with the social welfare code. The provisions will not come into operation until July and that will give the Government ample opportunity to take the necessary steps to ensure that any benefits that arise will be paid on time.

Like Senator Robinson I am surprised at the lack of comment on the recent decision of the European Court on entitlements for women in the period of office of the previous Government, particularly in regard to their failure to bring in equality payments in the area of social welfare. I am amazed that the Government have not said what will happen later on in the year in regard to the balance of the EC equality measures which caused some trauma before Christmas. I am glad the Labour Party members in that Government ensured that interim payments were made in specific cases of up to £20 per week to ensure that grave losses did not occur. However, no provision is made in this legislation in spite of the Minister's protests about this issue when he was in Opposition.

I am surprised to note that in the Social Welfare Bill, 1987 no provision has been made reflecting the views expressed by Fianna Fáil when in Opposition. Bearing in mind the attitude adopted by Fianna Fáil in the other House on the Christmas bonus issue — we all agree this is a very sensitive issue for people who are sick or unemployed and who do not know from one end of the year to the next whether the Government will pay a bonus at Christmas time — I hoped the Minister would have shown a little bit of imagination and made provision for a payment at Christmas 1987 in line with the commitments he gave when in Opposition. I look forward to his comments on that. People want to know if this Government are prepared to do what they wanted to do when they were in Opposition, particularly in the very sensitive area of social welfare which has a total overall expenditure of £2 billion. It is an area to which the Department of Finance will always look to effect economies and create efficiency.

Senator Magner, in a contribution on [2121] an earlier motion, referred to fraud. It is particularly relevant in the area of social welfare. There is a feeling among people who are working that people commit fraud. There are people in receipt of social welfare who are also working. I assure the Minister that there is nobody on this side of the House or in the Labour Party who will condone in any way any evidence of fraud in this area. I suggest, however, that the concept of bringing in outsiders from abroad to investigate an Irish system dealing with Irish people would be a major waste of money.

There are two simple ways to ensure that fraud does not occur in this area. They were suggested by Fianna Fáil when in Opposition and by us. One relates to unemployment benefit or assistance being paid to people who may be gainfully employed. I suggest that the Minister should insist that the employers of such people sign a certificate to say that they were working for them, particularly when they have been found to be working by one of the departmental officers. If somebody is found by one of the officers working and drawing unemployment assistance and if the employer of that person is not prepared to state he was working for him, from receiving social welfare payment, no action can be taken. All one can do under the existing regulations is to debar the person for that one day. I doubt that there is very much fraud because, from my experience as a public representative, the vast majority of people I meet who are unemployed, and they are many, want to work. This has been proven by the operation of the social employment scheme referred to in the Minister's speech.

As regards fraud that might be perpetrated by people in receipt of disability benefit, I would make the employers responsible for the payment of disability benefit to their employees while they are still out sick. They, in turn, could recoup it from the Department of Social Welfare. This would ensure that the person was sick, that the employer knew the person was sick, that a certificate was received by the employer confirming the sickness and that the employer was [2122] making the necessary contribution to the State to protect the employee in the event of sickness. If it is felt that there is fraud in these areas, the Minister should apply himself to correcting it. He will be agreeably surprised at the number of people who do not defraud the system. There is a figure in the Estimates of over £4 million in savings as a result of the Minister's action in this area. The Minister will be disappointed because he will find that people are not defrauding the system. In a way we are all to blame for this misconception.

I compliment Deputy Quinn, the previous Minister for Labour, who initiated the concept of paying people to do useful work through employment schemes, community welfare schemes, and other projects. Many were given work by local communities, local authorities, county councils, urban councils and sporting organisations. They were taken off the live register and were paid £70 per week if they were single and £85 per week if they were married. I was amazed to find that the Minister for Finance intended arbitrarily to reduce this payment to £60. I do not know anybody who would accept a drop in their income. I do not think it reflects any great credit on us to say that people who are employed under the social employment scheme will be able to go back onto the unemployment register. I would hope that if they did not obtain employment from the experience they gained under the social employment scheme, they would be allowed to sign on and not be penalised. If they are penalised there will be no incentive for them to come off the live register and work under the social employment scheme. We know of many thousands of people who forfeited money to avail of that scheme. They found a new way of life that they liked. It also allowed them some time to spend working at home or doing other jobs on their week off without being penalised.

The Minister has placed much emphasis on the Commission on Social Welfare. I am disappointed that the Minister has accepted the Fine Gael Government's [2123] changes. Just because Fine Gael suggested them or the Minister accepts them, does not necessarily mean they are right. We left Government because we considered this to be the wrong way to go about it. Some of the recommendations contained in the report of the Commission on Social Welfare were advocated by some Government spokesmen during the election. It was stated that if elected, they would be implemented and the people would have a tremendous increase in their benefits.

The one item which Fine Gael confirmed they were about to concede was in relation to single people on the dole over a certain age and living alone. They do not qualify for anything. Even that little concession was not accepted by this Government. That was most unfair and is something which my former colleague, Mr. Joe Bermingham, would not agree with if he were still an elected Member of the House. He made that issue the price of a vote at one stage because he felt so strongly about it and many of us joined with him at that time in trying to have that category of people taken into account. Many of them are in low cost housing with no fires provided by local authorities. They find it really very difficult to survive on the pittance they receive from the Department of Social Welfare.

The Minister spoke about changing the floor for pay-related purposes. He said previous Governments had raised the floor. There was opposition to it at the time. The reason given was that there was no incentive to work and that the time had almost arrived when it paid somebody to stay at home. The only reason the floor was altered was to ensure that an incentive was given to people to work. This floor has reduced the amount payable from 25 per cent and 20 per cent to the new uniform rate of 12 per cent, a saving of £13 million in this year.

The Minister has written off for the first time the whole concept of the insurance element of pay-related benefit. Employees contribute to PRSI on the basis that, if they are unfortunate enough [2124] to lose their jobs or get sick while they are at work, in some way the income they receive from the Department will be related to their pay in the previous contribution year. That whole concept was promoted by the trade union movement and accepted by the Labour Party. The Labour Party felt it was a good concept because it acted as a buffer for families subjected to the trauma of being out of work or being sick. Their income was related to the income they received up to the day they lost their job or got sick. The Minister's comment on section 7 of the Bill, which reduces the income floor was made by the Minister in his budget speech. Although that proposal was made by a previous Fine Gael Government it has been accepted by this Government.

The whole concept of pay-related benefit has been thrown out the window forever. There is absolutely no justification for it now because it does not benefit recipients when they are in difficulty. After all, that is what an insurance scheme is all about, and that is why we changed from the concept of the old flat rate insurance stamp which were stuck on cards because at that time everybody got the same amount of benefit, irrespective of what they were earning. Then there was a real disincentive for people in lower incomes to go back to work.

I welcome the changes in the family income supplement scheme which was initiated by the Government's predecessors. For some reason it has not been taken up to the extent that it could have and should have been taken up. Senator Robinson mentioned that people are not aware of their entitlements in this area. For that reason I welcome the Community Service Information Week during which people will be told of their entitlements under various schemes. The Minister agrees with us that social welfare legislation and all its consolidation Acts are highly complicated. Advertising on television or in the newspapers, whether the national dailies, the evening papers, or the provincial papers, does not get to the people at which it is directed. Health Education Bureau research shows that [2125] most of the information they give, which is of vital importance to people, never reaches people that it is aimed at because they have no access to and no interest in the media. It is a major job to try to convince people about their entitlements in this area.

Of all the schemes this is the closest to the socialist view of an income related benefit from the State for the people who are at work, especially with large numbers of dependants. People doing similar jobs get the same wages irrespective of their family demands. The whole concept of the family income supplement was an attempt by the State to face the fact that some employers were unable to meet the greater demands of some of their employees, particularly those with five children or more. I welcome the slight changes made. They will be welcomed generally. I hope the Minister will use his good offices and all the means at his disposal to ensure that people who do not know they are entitled to it will get the supplement. The Minister will know from the computerised information at his disposal the type of people who are entitled to the FIS and this could be paid through their employers. He has information from the employer under the pay-related insurance system and the tax system which are both linked together. The Department know people's family commitments and their wages from the tax deduction card.

I do not see why the Department should not be in a position to advise employers that employee X, Y or Z is entitled to a family income supplement, based on the wages information available from the employer.

I have one comment to make on the job search programme which has been highlighted in the budget and carried by the media as being an obvious answer to our unemployment problems. I wish it well and hope it addresses some of the problems. I ask the Minister through the Chair to outline the type of interviews to be held by the Manpower offices. When people go to register with Manpower, they give their name, address, age, education and qualifications, where they are [2126] working, if the are working, what work they would like to do and what jobs they want to be considered for.

When the National Manpower Agency was first set up the concept was to allow people to change from one job to another. Now it is used by the Department as proof that somebody is looking for work. The fact that they are signing for unemployment is not sufficient evidence for the Department. If they are not registered with Manpower, I hope this is not a sinister move to try to flush out people who are not genuinely seeking employment, because it would be fraudulent to suggest that. If the Department want to get that information there are other ways of doing it. I hope the 150,000 people who will be interviewed over a period of years will not be misled into believing there are jobs available out there. We understand there are 40,000 jobs waiting for these people.

Could the Minister say what kind of jobs they are? Are 40,000 people or 12,000 people — a figure mentioned in another category — to be assisted to find their own jobs or to start up their own projects? This is the philosophy behind the pilot schemes referred to. We did not suggest that there are magic wands in the Manpower office. Interview people and direct them to a job. I hope this is not a sinister move and that people will not be under the illusion that because they are interviewed there are jobs at the end of the road. If there are jobs the Minister should tell us what type of jobs they are. This is separate from social employment work, or Teamwork projects. About 150,000 unemployed people will be brought into Manpower offices and interviewed with a view to getting work. We are concerned about the quarter of a million people out there. If this Government have a niche for these people, we want to hear about it. We commend the Government if that is the case. Since this budget was introduced people have been asking me daily about these jobs. They are looking forward to them and I sincerely hope they can look forward to them.

My final comments are in the area of [2127] appeal. This was dealt with by Senator Robbinson and was dealt with in a Private Members' Bill by Senator Brendan Ryan. It is an area in which we have had many problems in the past under Governments in which the Labour Party were involved, and under previous Fianna Fáil Governments. It seems to be a never-ending problem particularly in regard to married women who are unemployed but who had been previously in employment and had made contributions. In spite of the EC equality directive and the implementation of the Act, those women have had to go to the most extraordinary lengths to prove they were available for work. The appeals process has been anything but helpful to these people who believed that the EC and the Government who brought in the legislation were concerned about them. When they were married, we produced evidence to show they had somebody to mind their children. We produced documentary evidence to say that employers who had been approached said they had no work for them, yet some of the officers in the Department gave an opinion that they were not genuinely seeking work. We almost had to have the managing director of a company leave his job and go with the social welfare applicant to prove that the person had come to him. That is an example of the lengths people have to go to legitimately prove they were genuinely available for and genuinely seeking employment and had made contributions.

I ask the Minister to look seriously at the appeals system. People are well aware that they have paid into this insurance scheme and they are entitled to their legal entitlements. I join Senator Robinson in saying that many of these entitlements are legal entitlements contributed to by the people concerned. The State is only an agency to protect them. The State took the contributions in the beginning and, it should pass on the benefits to the people who are in need.

For the reasons I have set out many have reservations about this Social Welfare Bill. I welcome the fact that the Minister brought forward the payments [2128] to July as opposed to the Fine Gael proposals to introduce them in November. I do not feel the 3 per cent will meet the increased costs to which these people had been subjected. I suggest that the Minister take on board the suggestions of the Labour Party that should be a minimum of 4 per cent from July which would take into account some of the increases in the cost of living since the last increase.

In the previous budget debate and on the previous Social Welfare Bill Fianna Fáil moved an amendment that all social welfare payments be made from April. Perhaps we might still see some light at the end of the tunnel, that the kind of philosophy the Minister had in Opposition might emerge now that he is in Government. We would certainly be very supportive of the Minister if he adopted that attitude. We had set up alternative projects for budgeting and financing. We have not been reckless in our suggestions but we have been concerned about people in the lower income bracket. We want to ensure that there are other moneys available which would help to fund social welfare schemes, a matter of concern to all of us, and particularly to the Labour Party.

Dr. O'Donoghue: Information on Martin O'Donoghue  Zoom on Martin O'Donoghue  I should like to welcome the Minister to the House and I wish him well on his appoinment. I hope he will have the opportunity to become immersed in the work of the Department of Social Welfare and to undertake a number of reforms which I think all of us would agree are necessary even through we would not all agree on the particular scale or direction of some of the precise reforms. My contribution will be brief because a number of the points have already been dealt with and I am aware that other Senators wish to contribute to the debate. There are a few points which I think are relevant. I welcome the fact that payment of the 3 per cent increase is being brought forward to July. That is a proper move. Whatever about being able in some later year to advance the date of payment to April, certainly it would have been unfortunate had it been [2129] necessary to postpone payment of any increase until November.

The family income supplement is to be welcomed. Because of the higgledy-piggledy nature of our tax and welfare system improvements have to be carried out. Earlier when I was speaking on the Health Contributions Bill I made the point that that system is a tax and it should be regarded as such. We should not cod ourselves that we are talking about insurance or anything else. I have to say to Senator Ferris that all of the contributions in the social welfare area are effectively taxes. It is not an insurance system. It would stretch the meaning of insurance to incredible lengths to pretend to ourselves that we are operating a social insurance system. We are not. The vast bulk of the money comes from general taxation or, in so far as it comes through the PRSI system, is by way of a contribution from the employer and a small proportion from the employee. Essentially in both cases it is a straightforward tax. There is no obvious relationship between the contributions made by the people and the nature of the benefits they derive.

The family income supplement is one of the few ways in which we can try to cope with some of the poverty traps our system creates. The Minister in his speech listed the way in which the improvement would work out, that you pay 50 per cent of the difference between the actual income and the limit which in the case of a family with children, would be £148. In the case of a married man with three children who is working and earning £120 a week, under this improved arrangement he will now be entitled to a family income supplement of £14 a week. This will help to improve the family position. At the same time, the PRSI system is going to take away £9 a week by way of his contribution and if he has no other deductions under the income tax code the income tax system will take away £7 a week. With one hand the Minister is giving £14 and on the other hand the Minister is taking away £16. Let us take another case of a married man with five children who is earning £160 a week. [2130] With the limit he could get half the difference up to £192; in other words he would get £16 a week. Again, his PRSI contribution could be £12 and his income tax could be as much as £20 a week. In his case the Minister thinks he needs a family income supplement and gives him £16 but the two tax measures take away £32. This illustrates the nature of the mess we have created down through the years by going at all of these spending and revenue-generating programmes on an individual departmental or activity basis.

I urge the Minister and his colleagues now that they are embarking on a fresh term of Government to stand back from and consider many of these schemes. If they are going to talk about reforms and introduce measures, would they please sit down and look at the way in which the whole set of tax and spending programmes affect families. If the Minister is trying to take account of different families circumstances perhaps it could be done on a generalised basis and not have one part of the tax system contradicting other parts. In that context it would be important to have regard to the effect of many of the housing programmes on social welfare, health and income tax and so on.

Incidentally, I am always fascinated to try to arrive at why you can end up with quite different numbers. Earlier today we discussed at length why the contribution ceiling should go up from £14,000 a year to £15,000 and we are a couple of hours later solemnly discussing why the PRSI ceiling should go up from £14,700 to £15,500. Could we not just pick one figure if we must run these different systems?

Senator Fallon inquired of the Minister what would be the effect of abolishing the ceiling altogether. The effect is quite simple. Why not call it income tax and say that you want to raise the top rate of income tax from 58 per cent to 65.5 per cent? Effectively that is what we would be doing if we abolished the ceiling. If you are going to have an income tax system that is geared in some sense to people's ability to pay, use the income [2131] tax system and use it along for that purpose. Do not have three or four different Departments of State all finding around with their various attempts to take account of different personal or family circumstances. That is the essential point I want to emphasise and to ask the Minister to take into account when he is seeing where we should go from here in the area of social welfare reform.

A number of people keep referring to this report of the Commission on Social Welfare as a sort of blueprint for reform. I suggest strongly to the Minister that he be very cautious in using it as his guide or his model. I regard it as a very unsatisfactory report. It is very woolly and contradictory in places. It treats some issues in the social welfare area very superficially and it goes into other issues in greater detail but in a rather selective way.

Let me illustrate two of the basic problems on which they appeared unable to make up their minds. At some places they appear to be arguing in favour of universal, straightforward access and entitlement to benefits, with no sort of means tests or other indignities. That is fine, but then they recognise the need and the importance, especially when money is scarce as we know it is, of targeting programmes so that they really reach those who are in need. That is great. Now let the commission make-up their mind as to which of those two horses they want to back. They cannot have both. I say to the Minister that I have no doubt in the prevailing circumstances, and what I imagine will be the circumstances for a number of years to come, we should be targeting. We cannot pretend we can afford the luxury of some sort of universal treatment such as given elsewhere in the examples. There was talk about having no means tests, there was the pretence it was an insurance matter where a person had an automatic entitlement, where people with quite large incomes were entitled to three or four sets of pensions or benefits and so on, while people very much lower down the income scale genuinely find themselves in extremely [2132] restricted or impoverised circumstances. Therefore I suggest that when the Minister is looking at the basic direction in which to go he should put the money on targeting rather than on universality.

When it comes to the revenue side of it the commission at some points appear to be endorsing the idea of income tax as a very satisfactory source of revenue because it takes account of ability to pay, that you can give tax free allowances, you can distinguish between single and married and so forth. When they get on to how to finance social welfare, for some peculiar reason they appear to accept the idea of the straightforward proportional PRSI. If memory serves me correctly, they say that this is an expression of social solidarity or something like that. I have forgotten the precise expression but it struck me as an extraordinary way of apparently endorsing something but not, apparently, recognising that there was a fundamental conflict between putting your money on a proportion of taxes and putting your money on progressive taxes.

I give those two illustrations in order to let the Minister know that, while individual bits in that report may well be worth introducing, he should be extremely careful in regarding it as a satisfactory basis. I suggest to him, especially knowing of his interest and involvement in many welfare activities and so forth over the years, that he bring his own approach to it and feel free to start from first principles and take whatever advice, guidance and expert support he needs in the matter and arrive at his own programme for reform. I am confident that at the end of the day that will be a more satisfactory set of arrangements than those contained in that rather lengthy, detailed but ultimately very unsatisfactory document.

Mr. Magner: Information on Patrick Magner  Zoom on Patrick Magner  This is day four of the phoney war. Nobody in his wildest dreams could classify this as a budget debate because nobody is debating. Fine Gael are gone, and the Government are missing. Yet, an impression seems to be abroad that a real hard-line debate is [2133] taking place in the Houses of the Oireachtas on this draconian budget, and everybody insists upon running around firing blanks. One set of players are taking part: a junior Minister who preceded the Minister today here gave us a lecture about a strong, determined Fianna Fáil Government, a brave minority Government who are going to take on everybody. Yet, for the first time in the history of the State the Government had a budget underwritten by the Opposition, not just by one Opposition party but by two Opposition parties. We have a minority Government but they have the biggest majority in the history of the State because nobody wants to fight them and they give a pretence of bravery. From what my spies tell me, I understand the Cabinet are having strong second thoughts about the construction grants, so we may well see some of the worst features of this Ministers legislation overturned in the next couple of weeks also. We would welcome that.

This budget debate indicates that we are the closest thing to a national Government we will ever see; we have Fianna Fáil in Government and we also have Fine Gael and the contest is to see who can inflict the most pain. One thing we can be sure of its that the Government will get away with it. It is laughable when we are talking about social welfare fraud and bringing in international consultants — I was watching the Minister when Senator Ferris referred to these foreign consultants——

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  I did not bring them in.

Mr. Magner: Information on Patrick Magner  Zoom on Patrick Magner  I suspect they are the Irish-based section of a foreign consultancy firm. There is a reality the Minister should consider here in terms of fraud. If £500,000 goes missing in social welfare fraud it is a crime, and nobody should stand over crimes of that nature. However, it strikes me as rather odd that so much attention is being paid to this, particularly when we look across the water. We have similar systems here in terms of company law, the Stock Exchange and so on and we see that one [2134] guy in Britain can walk away with £5 million on his own. One guy in the city of London ran away with more money than the entire amount lost in social welfare fraud in this country. In that regard if Senator Ross were present perhaps he could enlighten me as to what happens on the Stock Exchange and other financial circles in Dublin. We set up a special task force, an international team of consultants, to do what? To find out what? If the Minister's officials on the ground cannot tell him who is ripping off the system and how they do it then he should get rid of them. There are not very many ways in which the system can be ripped off.

This continuous emphasis on social welfare fraud does one thing. It puts up a smokescreen suggesting that the rest of society is lily white. Everybody goes to great paints to make a fine distinction between tax avoidance and tax evasion. Tax avoidance happens when you have enough money to pay £10,000 a year to a high flyer accountant who can keep you one millimetre inside the law. Tax evasion is when you cannot afford the advice, you are too poor to seek advice, so you become a criminal. The line is very thin. I did not hear the Minister for Finance talking about bringing in a high powered team of consultants to check on every doctor to ensure that he puts down every £10 as part of his income instead of into his hip pocket to be forgotten about and on any lawyer who made a secret deal with a client, like 10 per cent of the compensationary sum, and did not declare that. Where are the international team of consultants looking at those professions or at the engineers? No, it does not happen. There is one target in this Bill, the poor. It is as simple and as basic as that.

This ministerial speech is also dishonest to some extent. The Minister says: “Many of the provisions in the Bill have already been the subject of much debate during the run up to the general election”. Some of my colleagues here are on the Seanad trail and very familiar with the phrase “We will look after that”. In fairness to the Fine Gael crowd, they [2135] put up the hard options, but where was the debate? All Fianna Fáil ever said when they were asked what they would do about social welfare or employment was “We will look after that.” They did not say how. Now it is known exactly how they will look after that. Now the people know in great detail, indeed. Now the construction industry knows that promises are not alone made to be broken, but that they will be broken within 24 hours of taking office.

Among the many provisions in this Bill there is one called job search. Senator Ferris asked an interesting question in this sense. What new information will they seek? Will they measure you, or weigh you? Where is the new angle here? What is happening here of course — and Deputy Woods will be aware of it because there are many cries against his predecessor in the House, Deputy Desmond, about monetarism, Thatcherism and so on — is that job search is like a scheme that was run in England. The whole idea is to frighten the life out of you so that you will sign off if you are doing any little jiggery-pokery. As we all know, some of the people defrauding social welfare would quality for the family income supplement if they only knew how to apply. It struck me very much that if the job search programme was a genuine attempt to talk to people who were actively seeking work, why not ask people to volunteer? Why look to interview 150,000 because the Government have not 150,000 jobs. The most the Government can offer is 40,000 jobs, so why not ask for 40,000 volunteers and then if they did not get them, I would support the Government in bringing them all in.

The philosophy behind this is quite different from job placement. This is finding out in what places they are working. The reality is that if the scheme were designed for job placement, you would first of all ask people to come in and have such discussion. The interviewing of 150,000 will not happen in the lifetime of this Government, I can tell the House — even if the Government last for a full [2136] year — because it is not possible. The staff would have to interview about 4,000 people a week. I understand there is a Public Service recruitment embargo as well. So if a man or woman employee in a Manpower office goes sick, things come to a standstill. The thing is not ill-thought out; it is a bit of a scab and the great scandal is that Fine Gael are part of this scab. Their very actions demonstrate that.

With regard to deserted wives, there is a sound rationale behind ensuring that people with responsibilities live up to them. The reality for a deserted wife is that if the husband disappears the marriage has been such, particularly where violence is concerned, that she hopes to God nobody will ever find him. In many cases, local authorities try to assist people like that by moving them from their address in order to protect them from their husbands. The wife is now going to have the Minister for Social Welfare producing the husband whom she does not want.

I would ask the Minister to give this very careful consideration, in conjunction with the Department of Justice. There is a very laid-back approach by many of the gardaí in relation to the enforcement of barring orders, which is the first line of protection. If the Minister is intent on finding the husband she does not want to be found because of fear, then the Minister will want to make absolutely sure his counterpart in Justice gives full cognisance to the fact that people need to be protected. That is a point I hope will be taken on board. It will be a very difficult job. There were occasions in the Dáil when the then Minister, Deputy Desmond, could have done with his active assistance and it was not forthcoming but I am sure that Deputy Desmond, being a generous man, will afford that backing and support to the Minister Deputy Woods, in regard to good legislation.

Mr. O'Mahony: Information on  OMahony  Zoom on  OMahony  As most of the speakers have said so far, there is no doubt that the provisions contained in this Bill are an improvement on the provisions [2137] suggested by the Fine Gael Party in their budget prior to the last election. In that sense, and in that sense only, the Bill before us can be given some degree of welcome. The bottom line about the Bill — and it is a bottom line which is shared by Fine Gael with Fianna Fáil — is that it constitutes a radical attack on the social welfare system as it has been constructed under pressure from the Labour movement over many generations.

This Bill will not increase flat rate benefits in line with inflation in the current year. The decision to cut pay-related benefit from the present rates of 20 and 25 per cent to an average rate of 12 per cent is a radical undermining of the whole pay-related concept as introduced in the mid-seventies. The provision whereby the contribution conditions for a number of benefits have been increased, seems to suggest that we are witnessing the beginning of the dismantlement of the welfare system as we have known it.

All of these things have been proposed now at a time when neither Fianna Fáil nor Fine Gael appear to be prepared to do other things which are obviously and self-evidently necessary; that is, they do not appear to be prepared to widen the tax base, as has been suggested over many years by all of us who understand and believe in the notion of social equity. In the area of social insurance alone, they do not appear to be prepared to go any further than indicating that they are looking into the prospect of bringing into social insurance those categories of the workforce at present outside the scheme.

The Bill constitutes a direct attack on welfare recipients, indeed on the system itself. The Minister referred to fraud in the social welfare system. As Senator Ferris and others have said, none of us condones the fraudulent taking of benefits from that system. Let me point to the real fraud in this provision. The real fraud is that at a time when pay-related benefits are being radically curtailed there is no indication of an intention on the part of the Government to radically reduce pay-related social insurance contributions. When pay-related benefit was [2138] introduced here in the mid seventies pay-related social insurance contributions were also introduced to pay for it. Now that the Government are in the process of dismantling the pay-related benefit side of that equation they could have had the decency to set about reducing the pay-related social insurance contributions workers at present pay into the system.

In what is taking place it seems to me there is a very significant political lesson to be learned and it is this: the centre right parties in this country through their economic policies over the past ten years have brought the country virtually to a halt, certainly to the point of major financial crisis. When it comes to sorting out that crisis there is no way they will look at those things I have mentioned, such as widening the tax base or extending the social insurance system, both of which could be done forthwith if the will were there. Instead they zone in on the weakest in society and on those services designed to help and protect them.

The measures I have indicated which appear to me to constitute the beginning of the dismantlement of the social welfare system today must be viewed in conjunction with other measures before us, such as taxing the sick at out-patient clinics, taxing the sick if they have to remain in hospital overnight, measures of that kind, and failing to extend the tax base. Sooner or later what working people will have to realise is that they are now being asked to bear the brunt of the failure of policies over which they have had no control for the past ten years and which have put this country in its present state.

I should like to mention two further matters. In relation to the job search programme, perhaps the Minister would indicate whether the 40,000 National Manpower Service opportunities, to which he referred in the course of his remarks, are new opportunities in new services or schemes or whether they represent an accumulation of existing Teamwork schemes, social employment schemes and work experience schemes of one kind or another. Are they the same schemes about which we are talking or [2139] are they new schemes, new jobs, new opportunities? Senator Magner is correct, this job search concept is designed to do two things only, to frighten off the live register people who may be abusing the scheme to some extent. Many of us are aware that it is impossible to live on existing social welfare payments, particularly families, on a flat rate benefit of one kind or another. Undoubtedly there are some people who take up the odd piece of extra work in order to survive financially. No doubt this measure is designed to terrify them, get them off the live register. Beyond that, unless there is something in it the Minister has not yet indicated, the scheme is a major con job on young people in particular and indeed on the unemployed generally.

As I am sure the Minister will know from his constituency — which is close to the one in which I happen to be involved — anybody who is now unemployed, certainly in the city of Dublin — and I am sure the position cannot be all that different outside it — is doing everything he or she can possibly do to find employment. They are signing on at Manpower offices, being interviewed by Manpower staff, are applying for AnCO courses and getting on such courses whenever they can and are taking up work experience programmes. They are doing all of these things already without the need for interviews by social welfare staff or staff of the National Manpower service. This is the only specific question I wanted to ask the Minister this evening: can he tell us in what way the job search programme will be different from the combination of existing services being widely utilised? As we know, certainly in Dublin, the difficulty is that there are not sufficient social employment schemes or Teamwork schemes available. Therefore, in what way is this new system different from that obtaining? Can the Minister indicate precisely how it is intended to interview 150,000 unemployed people this year? What kinds of interviews are involved? What will be their purpose and where will such people be interviewed?

The substantive point I want to make [2140] basically is a political one, which is that the centre right economic strategy pursued here over the past ten to 15 years has been a failure. We are in the most serious economic crisis of any European country. Yet, when the crisis finally arises, when those same parties which brought about that failure, must face some form of reality at the end of the day, the burden of resolving that crisis is automatically, almost without thinking, directed at welfare recipients, at the unemployed, at the sick, precisely those people who cannot take anymore.

While the measures in this Bill are better than those proposed by Fine Gael in their budget strategy, and in that sense are to be welcomed, nonetheless they constitute an attack on the welfare system and on those for whom that system was designed.

Minister for Social Welfare (Dr. Woods): Information on Michael J. Woods  Zoom on Michael J. Woods  I should like to thank Senators for a wide-ranging, interesting and, in many respects, informative and searching debate this afternoon. We could spend much time discussing the points raised. Indeed, I could see quite a convergence of views on the issues raised. We can tease out many of those questions on another occasion when I am sure we will find much common ground in our approach to them.

In examining this Bill and its provisions one must remember the position in which the Government found themselves. For example, bringing forward the 3 per cent increase to July cost an extra £19 million. That amount had to be found and it was provided. It would have been nice to have brought the increase forward to April but that would have cost an additional £20 million which was not feasible in the circumstances prevailing.

Several Senators referred to the family income supplement, a very important scheme which has not been sufficiently publicised. I agree entirely with what was said about it. This Bill involves a 69 per cent increase in the supplement at the maximum level for a family with five or more children. A family on £5,400 would get a supplement of £2,200 and it reduces [2141] down to a family on £10,000 getting nothing. This is a very important measure. I am surprised that many of the people who comment on poverty outside this House are not saying more clearly that this is a good thing, that it will substantially help the people on low incomes if it is taken up. I will do my best to ensure that it is taken up.

Senators will know that over the years a number of us have been keen to have dental and other benefits extended to the spouses of the full rate PRSI contributors. That is included in the proposals which we have here and is a considerable achievement in our economic circumstances. It represents approximately a .2 per cent bonus for the PRSI contributor. We are inclined to forget that. I looked at this in 1982 and I was anxious to achieve it. It represents the equivalent of a .2 per cent bonus, or 40p a week at the £200 a week level, which is the level of the average industrial wage. That was not achieved when there was a lot of money about and it should have been.

On the question of unemployment benefit, the reality is that the abridged Estimates and the budget took credit for the reduction in unemployment benefit to 12 months. We are extending it back to 15 months and that costs money. That is important. About one million workers are affected by it. That is something I have achieved for them under the present negotiations.

There was also the proposed extension from three to six days in the sickness benefit waiting period. This year that would have affected 144,000 people going on sickness benefit but it would have affected over 500,000 people who would have lost benefit if it had gone through, because the majority of workers are not covered by other schemes. Senator Ferris suggested that there should be compulsory schemes to cover everybody but there are not, and the reality I had to face as Minister was that if that measure went through more than 50 per cent of employees would not be covered if they became ill. That proposal [2142] would have been in breach of the minimum international standards as set out by the ILO and the Council of Europe to which we are signatories.

The other question is that of the increasing contribution conditions. The only paid contributions are the 26, now increased to 39 contributions, when one is originally entering the scheme. They can be accumulated over a period. The subsequent contributions are paid or credited so the only people affected by this are people going out of the scheme completely who do not have paid or credited contributions in the previous year. If they were unemployed for part of the year they would get credited contributions and that keeps them fully involved for any of the benefits. It is important to make that point.

This was a very interesting debate. Senator O'Brien very magnanimously welcomed many of the measures in the Bill and was glad to see a genuine effort to protect the position of those dependent on social welfare. The Senator was particularly concerned about fraud, as were other Senators. In that connection, the consultancy work has been going on since the middle of last year. One Senator was correct in saying that these consultants, whom I did not bring in, were an Irish firm with an international wing. They have been working in two phases. The cost of the first phase was £50,000 but the cost of the second phase is another matter about which I would rather not talk at this time. I was asked if we would report the findings. I will make the findings available to both Houses in the normal way as far as I can.

Senator Fallon asked about broadening the base, bringing in the self-employed and abolishing the upper ceiling. Senator O'Donoghue mentioned that this would effectively turn it into a tax, but 92 per cent of all income is currently included at the £15,500 level. If we abolished the ceiling completely this year we would get an extra £13 million.

I was also asked about the free fuel scheme. I will be reviewing that out of necessity because of some of the problems that have arisen there.

[2143] Senator Robinson expressed surprise and amazement that I did not refer to the McDermott and Cotter case and give the Department's views. I am sure Senator Robinson knows that that matter is sub judice. There was a finding going back to the High Court, and the Department naturally will not pre-empt the findings or investigations of the High Court and will await the results of the High Court deliberations. Senator Robinson said it was a glaring and very worrying omission, but I find that very strange language from a Senator who is very much aware of the sub judice rule.

Senators referred to the cost of living index and asked whether the 3 per cent increase was adequate. On an estimate the 3 per cent to July 1987 and to July 1988 matches inflation. By bringing this increase back to July it matches inflation but had we left it at November, it would have been equivalent to only a 2 per cent increase this year rising to 3 per cent thereafter. Various people asked about the Combat Poverty Scheme. Senator Robinson suggested that £1.3 million was not enough. I was very glad to come out of the deliberations with the £1.3 million intact. If Senators look all around they might find that perhaps I did very well to keep that intact.

Senator Robinson mentioned the question of deserted wives and welcomed the pursuit of the husbands. Senator Magner referred to this also and I want to make it clear that it is not a question in any way of the involvement of a wife. Basically, when a deserted wife's benefit or allowance has been awarded, subsequently the wife is not in a position to pursue the husband for many reasons, some of which Senator Robinson mentioned. That should be taken up by the State.

The growth in the cost in this area has been considerable. It is approximately £41 million this year. In 1982 there were 6,698 beneficiaries of deserted wife's benefit and allowance costing £16.6 million; in 1986 there were 10,600 beneficiaries costing £38.5 million and the estimate for 1987 is £41.8 million. Senators will realise [2144] that the figure is a worrying one in relation to the total funds available to the Department of Social Welfare. This is one aspect which I hope to pursue. I want to make it quite clear that I am talking about the pursuit of the husband.

Senator Ferris said he would prefer postponement to July so as to get everything right. The first problem with this is that income is postponed. If I postpone the income of the Department of Social Welfare, I will be in much more serious trouble when I get to July. The figures are based on the income from 6 April as against the expenditure increases from July. I am sure when the Senator reflects on that he will realise the position in which I would find myself.

Senator Ferris also mentioned the Christmas bonus and said that as Minister I had shown no imagination and made no comment on this. I should like to point out to the Senator that I was the Minister who introduced the Christmas bonus originally. Naturally, I would have been very happy to be in a position to include the commitment and the financing for it at this stage but it will be considered later in the year, as has been the case each year.

Mr. Ferris: Information on Michael Ferris  Zoom on Michael Ferris  Is that a promise?

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  Yes, that will be considered. I dealt with the single over 45 allowance in my speech. This would have created another anomaly. Senator Ferris mentioned that it was a pet subject of the former Deputy Bermingham. It would have created an anomaly, the kind of anomaly the Commission has suggested should not be created. There might be cases which would take precedence if you were to do that.

Senator Ferris spoke at great length about pay-related benefit and the 12 per cent rate. I understand his concern in this area. He felt that this was a very unusual step and that the whole concept of the benefit was being affected. In the 1983 Coalition Government, in which the Labour Party were fully immersed at that stage, reduced the rate from 40 per cent to 25 per cent, then to 20 per cent the [2145] level at which it is at now, because the cost was too high and it could not be met. That was the reality at that time. Senator Ferris will be aware that in the United Kingdom pay-related benefit has been abolished. He will realise that as Minister for Social Welfare I will have to face this option because it is one that will be raised.

Senator Ferris also talked about the floor level. In January 1982 the floor was £25; in January 1983, £32; in April 1983, £36; in April 1984, £43; in April 1985, £45; in April 1986, £58; and in April 1987, £62. The Senator will realise that in effect only a minimal increase in the floor is taking place. What I stated in my speech is true; it has been raised consistently each year, particularly in recent years.

I should like to make it clear that this is an insurance scheme and to that extent I differ from Senator O'Donoghue. The employee, the employer and the State all contribute to it. The figures for this year are that the employee will be contributing £310 million, which is 23 per cent; the employers £640 million, which is 47 per cent; and the Exchequer £417 million, which is 30 per cent. It has always been on the basis of the employer paying roughly twice what the employee pays and the Exchequer contributing 20 to 25 per cent. One can see the difficulty for the Exchequer in having to find 30 per cent at this stage. There are a reduced number of contributors and there is an increased burden to be met. This is the position in relation to pay-related social insurance.

Several Senators referred to the job search programme. Senator Ferris wanted to know what sort of interviews would be carried out and what was going on in this area. I have already appointed a job search supremo — an assistant secretary who has moved to my Department. He will be heading up our efforts in this area. I am also getting a number of other high level staff. The job search programme is new and there is a large commitment of resources to it. Senators would want to change gear in relation to the job search programme. It is not a question of going back to the same staff [2146] and the same situation; it is being undertaken on a large scale.

I fully accept what the Senators said in relation to this but they may not fully appreciate the extent to which resources and staff are being committed to it. The resources and staff of Manpower, AnCO and my Department are being directed towards the people on the live register to give the maximum support and attention in efforts to place them in jobs, schemes, and Manpower placement areas. This is the nature of the job search programme. These people will receive priority in Manpower placements.

As Senators may be aware, an additional 1,500 Manpower placements are being created in the social employment scheme. Manpower will give priority to 40,000 placements. There will be genuine placements for those people. I will ensure that that will be the case. I accept fully that an indirect effect may be to discover people who were not genuinely available for work and who may not want to go onto these schemes or take up a job. This is an indirect aspect of the job search programme. As Minister for Social Welfare I will be directing the whole operation. I will have high level staff looking after it specifically and I will ensure it is used as an aid to those on the live register rather than as a means to hassle them or raise difficulties for them. From that experience I hope we will build new systems and improve our approach.

The interviews will be longer than the interviews which take place at present. Some of the 12,000 job search places will be on specific programmes of three to four weeks duration in AnCO centres. In the Department we have carried out pilot studies which have shown us the way to go. It is important to note that this Government are committing many resources to the programme.

Mr. O'Mahony: Information on  OMahony  Zoom on  OMahony  Would they be back to work programmes?

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  The 12,000 job search places? The job search programmes would be for three to four weeks; the [2147] first two weeks would be a back-to-work programme, teaching skills and so on——

Mr. O'Mahony: Information on  OMahony  Zoom on  OMahony  The same as the present programme?

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  It is a distinct programme, although it is of a similar nature, building up skills to seek employment and so on. The second period would be spent seeking employment and we will make resources available to them — funds, postage and so on. As I said, 12,000 extra job search places are being provided.

I appreciate that when Senators look at a measure like this and hear of pilot studies being carried out they may ask how this can lead to such a large undertaking, but as Minister for Social Welfare I could not have reached that stage if the Taoiseach and the Government had not supported me because it meant bringing resources from different agencies together to help those on the live register. In that sense, this is a particularly interesting development.

Various comments were made on the [2148] report of the Commission on Social Welfare. I have not had much time to deal with this up to now, but I will give it my attention when these matters are cleared. Senator Magner raised the question of consultants and I have already covered that, point. Senators mentioned the overemphasis on social welfare fraud and I tried to put that into perspective. Senator O'Mahony suggested there should be reduced contributions from workers because of the decision to reduce pay-related benefit. I have mentioned the financial problem which exists in this area and the bonus of approximately .2 per cent on the benefits. That too can be taken into consideration. I mentioned the contribution levels and the fact that the State will contribute 30 per cent towards the fund this year.

I hope I have answered a reasonable number of the Senators' queries. I have found the discussion very interesting and searching. I have kept exentisve notes of the points they raised and I will refer to them in the future.

Question put.

Cassidy, Donie.
de Brún, Séamus.
Fallon, Sean.
Fitzsimons, Jack.
Hanafin, Des.
Hillery, Brian.
Hussey, Thomas.
Kiely, Rory.
Killilea, Mark.
Lanigan, Mick.
Mullooly, Brian.
O'Toole, Martin J.
Ryan, Eoin.
Ryan, William.

Ferris, Michael.
Harte, John.
McGonagle, Stephen.
Magner, Pat.
O'Mahony, Flor.

Question declared carried.

An Cathaoirleach: Information on Patrick J. Reynolds  Zoom on Patrick J. Reynolds  When is it proposed to take the next Stage?

Mr. Lanigan: Information on Mick Lanigan  Zoom on Mick Lanigan  Now, in normal circumstances it would not be my wish that all Stages be taken now but we must do so in view of the fact it is necessary to get this Bill through and because the staff [2149] have spent a long time in the House today and they need to get off early this evening. I apologise to anyone who may think there should have been a break between the Stages but I feel we should take all Stages now.

An Cathaoirleach: Information on Patrick J. Reynolds  Zoom on Patrick J. Reynolds  Is that agreed? Agreed.

Agreed to take remaining Stages today.


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