Social Welfare Bill, 1997: Committee Stage (Resumed) and Final Stages.

Tuesday, 25 March 1997

Seanad Éireann Debate
Vol. 150 No. 13

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Debate resumed on amendment No. 3:

In page 6, before section 4, to insert the following new section:

“4. The recommendation of the Commission on Social Welfare in relation to a common basic payment or minimally adequate payment shall be reviewed in the context of the projected growth in the economy, and the Minister will consider whether the payments are adequate for the needs of pensioners and he shall place a report on this matter on the table of both Houses of the Oireachtas within six months.”

Minister for Social Welfare (Proinsias de Rossa):  Senator Kelleher mentioned a new commission in his contribution. The amendment does not refer to a commission but to, presumably, the 1985 Commission on Social Welfare's recommendation in relation to basic minimum payments. He went on to say that there should be a report to both Houses of the Oireachtas within six months.

The Commission on Social Welfare ranged far and wide on the question of social welfare rates. It made major recommendations; many have been implemented while others have not. Attention has been focused on the rates. When coming into Government in December 1994, Fine Gael, Democratic Left and Labour agreed to review the commission's recommendations. My Department commissioned the Economic and Social Research Institute to review the minimum adequate payment rates and to bring a report forward on that. The report was launched last January, along with another ESRI report on poverty in the 1990s. I strongly recommend discussion of both reports to Senators.

They raise a lot of issues relating to poverty in Irish society and the question of rates. What is an adequate income and how does one measure the rate of money a person should have? Should it be 60 per cent, 50 per cent or 40 per cent of an average industrial wage? It is a major document I hope to discuss with the Social Affairs Committee soon.

We also have the report of the expert group on the integration of tax and social welfare. One cannot ignore the matter of income and tax, especially the latter's impact on social welfare. In reality, there are people who are paying tax on very low incomes; if they were on social welfare they would not be paying tax. There appear to be anomalies here that need to be addressed.

[1109] My Department also published a social insurance discussion document which is a major review of the social insurance system. That report, the ESRI's reports on social welfare reports and poverty in Ireland in the 1990s, the report on the integration of tax and social welfare and the national antipoverty strategy being developed are all major initiatives by this Government that seek to ensure that every person in this society has an adequate income to live on.

That income should not be adequate just to buy barely enough food or schoolbooks, or to barely pay the rent. An income that will give a good quality of life should be the objective. There may be a need for a new Commission on Social Welfare in the future, but now it would put decisions on the long finger. We must put our national anti-poverty strategy, which is about to be agreed by Government, in place. We also need to take on board the ESRI's recommendations on social welfare rates and the survey on poverty in Ireland. This research must be ongoing; it should not happen every ten years. My Department is heavily involved in seeking to ensure that that is the case. There is no need for the amendment because what is recommended is already being done.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  If that is the case, what were the findings of the ESRI report on payments to social welfare recipients? Are the payments enough or should there be increases to the rates struck by the Commission on Social Welfare?

Proinsias de Rossa:  As the cliché goes, I am glad the Senator asked that question. The Commission on Social Welfare addressed the question of income in two ways, coming up with £50 and £60. Many people thought they could not come to a conclusion on whether it should be £50 or £60 and felt that a figure between those two should be taken. In fact, those recommendations derived from two different ways of measuring what the income ought to be. The ESRI report, which is available in the Library, examined the matter of adequate income using the two measurements employed by the commission. The ESRI brought them up to date and found the way the rates were being raised — in accordance with the consumer price index — was keeping them ahead of inflation. However, because living standards were growing faster than the consumer price index or inflation, there was a growing gap in living standards between those on social welfare and those who were not. It draws attention to the fact that if we want to close the gap and provide an adequate income relative to living standards, as distinct from the capacity to buy the bare necessities of life, we have to find a mechanism for raising social welfare rates in a way that links them to living standards and not inflation. There are a range of mechanisms in the report, any one of which could be implemented by the Government. Clearly there are political choices involved that [1110] relate to how we want to expend our resources and I hope those decisions will derive from the debate on those reports. I have never pretended to have all the answers or that my choice would be the correct one. The value of the system in the Oireachtas is that there is an interaction of ideas out of which comes a clear decision. I recommend that the Seanad examine this report and, if feasible, I would be happy to discuss it further.

Amendment, by leave, withdrawn.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 4:

In page 6, before section 4, to insert the following new section:

“4. The Minister shall prepare a report on the position of self-employed people who became insured for the first time when social insurance was extended to the self-employed in 1988 and who were then 56 or over, including their eligibility for a pro rata rate of old age contributory pension, and he shall place this report on the table of both Houses of the Oireachtas within six months.”

Proinsias de Rossa:  I do not propose to accept amendment No. 4.

Amendment put and declared lost.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 5:

In page 6, before section 4, to insert the following new section:

“4. The Minister shall, within six months of the passing of this Act, lay before both Houses of the Oireachtas a detailed report on the implications of the extension of the Family Income Supplement to the families of persons who are self-employed.”

This amendment is self-explanatory.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  I spoke at some length on family income supplement on Second Stage and I do not propose to take up much more of the House's time in connection with it. A number of improvements to family income supplement were introduced over the past three budgets. I already indicated that there are questions about the take-up of the supplement which must be considered. I am aware that the Revenue Commissioners give notice to everyone who receives a tax free allowance form of the availability of family income supplement.

The process of converting the assessment of family income supplement from a gross basis to a net basis has already begun. This year people's income will be assessed on the amount remaining following the deduction of PRSI and other levies. In future budgets it is hoped that we will be able to move toward a net basis for assessment, in other words, income after tax will be considered to be people's basic income. That would mean a substantial increase in the numbers of people [1111] eligible to claim family income supplement. It is estimated that those claiming the supplement would double to approximately 26,000 with that kind of change. This would also mean a doubling of the expenditure involved. It is a costly initiative but one to which the Government gave a commitment in Partnership 2000 and I do not see the necessity for the amendment.

I must inform Senator Kelleher that the ESRI carried out research on FIS and it would be worthwhile to consider its findings. These schemes are not perfect in any sense. Regardless of the type of scheme put in place to assist families with children, anomalies arise at various stages. There are American and British systems designed to deal with this problem; but we have chosen the family income supplement system, which works reasonably well, although not as well as I would like.

As the leader of Democratic Left, I have reservations about how far we can go toward subsidising low pay before realising that there is a need to introduce a minimum rate of pay. This would mean that an employer could not exploit an employee to the point where most of their income originates from family income supplement, not their work. This matter must be addressed. I am aware that reference to minimum wages can send some parties running for the front or back door. However, when discussing family income supplement and subsidising people in employment, we must address the question of at what point we decide to establish a basic minimum wage below which a person in employment will not be subsidised. It must also be recognised that, in addition to the State, employers have an obligation to ensure that people are paid adequate incomes.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  The amendment is relevant to a point I wish to make on section 8, so I will raise it at this time. The Minister stated that over 75 per cent of people are aware of the existence of the family income supplement but only 13,000 avail of it at present. However, as he stated on Second Stage, there are over 13,000 people employed in low income jobs who do not avail of the supplement.

We are discussing ensuring that the State should not always be obliged to subsidise low paid workers or give the impression that they should remain in their present income bracket. However, female spouses are provided with the family income supplement, which they are obliged to collect at their local post office each Friday. I made this argument on previous occasions and I will continue to do so. How can the Department of Social Welfare or the Revenue Commissioners state that a person should pay tax and PRSI on Thursday while receiving an income supplement the next day? I am mystified by this. Why is the State taxing people's wages and paying supplements to their spouses? That is an insult and it is one of the reasons only 13,000 people claim FIS.

[1112] The Minister admitted that more people should claim family income supplement, but they do not want to give the impression that they are collecting social welfare benefits while in employment. It is correct that we should encourage pride in those who wish to work, but we should not give the impression that we like the way the system works. The structure and the system can be changed and we should not be afraid to do so. The Minister amended several sections of the Bill and former Ministers, such as Deputy Woods, changed preceding legislation. However, we should not sit back and simply state that 26,000 people may avail of family income supplement. We should not state that people should not remain on low incomes while such individuals are reluctant to apply for family income supplement. They should receive this money in their wage packets and their spouses should not be obliged to collect it at post offices. Why should employers and employees pay PRSI and tax when this money is paid back at the end of the week? There is no logic in that. Will the Minister explain the position?

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  I do not know how early the Senator wishes to conclude business this evening but it would take a long time to explain this matter. He acknowledged that I am willing to make the necessary changes. I made the point that the system in place is not perfect and indicated the reasons that, to some extent, there is a low take-up of family income supplement. I accept that people's pride prevents their wanting to be in receipt of a social welfare payment and they also do not want their employers to know that they are applying for such benefits. We must take account of these issues.

With regard to the Department's taking with one hand what it gives with the other, that is a feature of virtually every social welfare scheme. There are many schemes where one member of a family may be paying tax while another may be in receipt of a medical card from the health board. Under other schemes, people may have paid tax while in employment and are now seeking a third level grant from their local authority. The theory is that the State collects taxes on the basis of people's ability to pay and reallocates some of these moneys to those who are not in a position to pay tax or whose income is below a certain level. There are no clear cut divisions, overlaps occur and people may pay PRSI while receiving a family income supplement. That will not be the case from this point on.

This year, family income supplement will be assessed on——

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  On net income.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  ——on a net figure for PRSI and levies. People will continue to pay PRSI and levies, but the income on which FIS will be assessed will be the net figure for those payments. Hopefully, in the near future the figure [1113] will also take account of net tax paid. People will continue to pay tax but their supplement will be assessed on the net, not the gross, amount.

Mr. Daly: Information on Brendan Daly  Zoom on Brendan Daly  I intended to raise this matter later but perhaps we can conclude the debate on family income supplement now. My point relates to self-employed small farmers who are in receipt of social welfare assistance. I raised this issue on Second Stage and I endeavoured to have last year's Social Welfare Bill amended, but I was unsuccessful. A later amendment intended to deal with this matter will be ruled out of order as acceptance would involve the provision of additional finance.

The case of self-employed small farmers has been exacerbated by the current situation obtaining in the dairy industry. Small dairy producers are being constrained and confined by the system. They have been in receipt of unemployment assistance and have used it well, as I indicated on Second Stage. Self-employed farmers — not large farmers but those who qualify for unemployment assistance — constantly ask to be brought into the system and I ask the Minister to keep that in mind in any review of its operation. I agree with Senator Cregan that it is cumbersome and bureaucratic that people should pay tax while receiving an income supplement, although I appreciate it is a difficult matter to tackle. Perhaps the Minister could take small farmer's assistance into account or at least keep the matter on the agenda.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  My experience of family income supplement in Cork North-Central is similar to that of other Senators from urban areas. Families do not claim the supplement because, if the husband is working and the wife collects it, other people feel they are finding the system. Is there any way we can get around this unwieldy structure? The vast majority of people entitled to the supplement do not claim it because of the perception which would be created; the husband is working, yet the family is drawing the dole and if someone is collecting social welfare, other people wonder why. As Senator Cregan says every year — I hope he does not have to say it next year — it is cumbersome to take money from a person on a Thursday and ask them to collect a similar sum in the post office on a Friday. The family income supplement has great benefits but it is awkward as it stands and we must ask why it is not claimed by the people who are entitled to it.

Amendment put and declared lost.

Section 4 agreed to.

Acting Chairman (Mr. Mooney): Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Amendments Nos. 6 and 7 are related and may be discussed together.

[1114]Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 6:

In page 6, before section 5, to insert the following new section:

“5. The Minister shall establish a register of women working full-time in the home who wish to return to the workforce, to be known as the back to work register.”.

The related amendment would insert another new section:

The Minister shall reserve 10 per cent. of the educational, training and other back to work options for women in the home whose names are included in the back to work register.

Amendment No. 6 is a positive amendment because it legitimises a woman who currently works in the home but is interested in furthering her education and possibly finding work at a later stage. At present, when a woman's youngest child enters second level and no longer has to be cared for full time, she finds herself completely on her own. She may have been out of work and out of the social scene surrounding work and training programmes for many years. If we had a register of women working full-time in the home who express a wish to further their education or return to the workplace, we could furnish them with information and channel opportunities their way, once they have time on their hands following their years of child-rearing.

Amendment No. 7 is even better. It provides that 10 per cent of educational, training and back to work option places shall be reserved for women on the register. It is positive discrimination which would provide many women with opportunities. Women will have families reared at an earlier stage in their lives than used to be the case because they now have fewer children and, therefore, have many more years in which to contribute through education and work. I ask the Minister to accept these amendments and provide a register for women so that they could be furnished with information on the various training schemes and opportunities available to them when they have time after rearing their children.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  It is not generally known that the most recent labour force survey found that 70 per cent of new jobs created by the Government last year were taken up by women. Most of the jobs were full time and most of the women were not on the live register and did not have a previous attachment to the labour force. That is not to say women do not have difficulties taking up paid employment. The CE schemes require participants to be on the live register, in receipt of a lone parent's allowance or on the NRV register. These criteria were established not by the Department of Social Welfare but by the Department of Enterprise and Employment, for the good reason that the CE scheme is intended to encourage the long term unemployed on the live register into employment.

[1115] I have taken a number of steps. The spouses of the unemployed have been actively encouraged to avail of their entitlement to sign on the live register when they are unemployed. This would also give them access to CE and other opportunities in their own right. I have made available, to all those who wish to sign on the live register, an explanatory leaflet entitled Signing on the Live Register which details the various entitlements. I have allowed for full access to the job facilitation service to all who wish to inquire about the various options available to them — that is done through the job facilitation programme run by my Department. I promoted what is inelegantly referred to as the “spouse swap”, a facility under which a person with a CE entitlement can swap that place with a spouse if he or she does not have that entitlement.

As part of our enhanced programme of social inclusion, the Government aims to develop a strategy which enhances equality and counters discrimination in employment and unemployment alike. Equity in access to labour market opportunities requires that women should not be penalised when it comes to the availability of employment supports, including training. On foot of my recommendation the Government agreed in December 1996 that the issue of women's participation in mainstream vocational education, training and employment programmes should be reviewed. Both social partners, IBEC and ICTU, the National Women's Council and the INOU have been invited to participate in this review. A specific commitment in this regard was included in Partnership 2000. It should be evident, therefore, that the difficulties faced by women who wish to take up paid employment are already being tackled in a direct way and in ongoing consultation with all relevant parties. I hope to have the review group established in the not too distant future.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I appreciate the Minister's remarks, particularly the reference to the number of women now entering the workforce. However, these amendments are directed at women who would find it difficult to enter the workforce regardless of how many jobs are available, because they might not be knowledgeable about the training programmes and opportunities available to them. A register of women working full-time in the home would provide a database and a means of channelling information to them about the available educational and training schemes. They could then advance their education when they finish working full-time in the home. The women currently taking up employment are not those at whom I aim this amendment. They are aware of training programmes, have been involved in the past, entered the workforce and found work. If these amendments were accepted, the Minister would have a register of women who would find it difficult to gain employment [1116] no matter how many jobs there are. They have been out of the workplace for a long time and they have often been in the home without any social contact or work experience. I urge the Minister to accept amendment No. 6 and we can then discuss the percentage indicated in amendment No. 7.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  I have put in place proposals to deal with the issues raised by the Senator. The review group I mentioned will be in operation soon and it will involve the social partners, the INOU and the National Women's Council, all of whom have campaigned on this issue. There are large numbers of women working in the home who do not have a right to sign on the live register and, therefore, are excluded from community employment schemes. To accept the Senator's proposal would be to pre-empt the work the group will do. I do not know what the group's recommendations will be but their recommendations will have the consensus of my Department, the Department of Enterprise and Employment, IBEC, INOU, ICTU and the National Women's Council. It will be worth waiting for that group's conclusions before considering the action the Senator proposes.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  We must recognise the work of the person in the home. We are taking account of those who want to go into the workplace but we must recognise the men and women who work in the home. We should consider introducing a benefit for those who work in the home; they are the backbone of society. It is important to society that as many people as possible work in the home. That is not to say that women who want to work outside the home should not do so — everybody is entitled to do so if they wish. However, it is important that people work in the home if we want to ensure that we have a proper society in which our young people are looked after. It is mostly women who work in the home and their role is very important.

Any report should consider giving a financial contribution in some form to those who work in the home. A tax credit system was considered in the past and such a system might allow those who are really looking for work to get it because, unfortunately, many women have to go out to work because of financial circumstances. They should not have to work out of the home to have a proper standard of living. We must recognise their importance because those who work full time in the home are vital to society and we should not undermine them.

Amendment put and declared lost.

Amendment No. 7 not moved.

Sections 5 and 6 agreed to.

Acting Chairman:  Amendment No. 8 is out of order as it involves a potential charge on the Revenue.

Amendment No. 8 not moved.

Section 7 agreed to.

Acting Chairman:  Amendment No. 9 is out of order as it involves a potential charge on the Revenue.

Amendment No. 9 not moved.

Question proposed: “That section 8 stand part of the Bill.”

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  Is it still the case that young people who are in temporary employment pay contributions? It is hard to understand why young people engaged in temporary jobs should be forced to pay PRSI and levies. We should this to encourage young people into employment rather than penalise them. It is more than likely that many of them will receive no benefits for their contributions.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  There are many ways to encourage young people to take up available employment. We have taken steps to make the PRSI system more flexible — the first £80 of income is no longer liable to PRSI, we have reduced the employee's contribution from 5.5 per cent to 4.5 per cent, we have reduced the employer's contribution from 12.2 per cent to 12 per cent and there is a new rate of 8.5 per cent for low income employments. We have also provided a two year exemption from PRSI for employers to encourage job creation. We are providing for an exemption for seafarers to encourage the development of an Irish shipping fleet and the employment of Irish seafarers on ships plying routes in Irish waters and using Irish ports. We have taken a range of measures related to PRSI which have improved flexibility.

The bottom line is that we must retain the integrity of the social insurance system. We must balance whatever flexibility is introduced with a commitment to the underlying need to have a system based on an employer's contribution, an employee's contribution and a contribution from the taxpayer to top up what is required to pay pensions and other payments. It is simplistic to identify PRSI as a source of funds we can do away with to provide an incentive to employment.

Despite the incentives we have introduced through PRSI, the take up for PRSI exemption for employers is pitiful — they are simply not interested in it. One would imagine that a two year exemption from PRSI would have them queueing up in their thousands to avail of it yet [1118] there has been virtually no interest in it. I have attended a number of EU Social Affairs Council meetings at which the contribution social insurance contributions can make to the maintenance and creation of jobs was raised. There is no research or evidence from EU states which supports the thesis that cutting back significantly on PRSI assists job creation or maintenance. One must look at other incentives.

The most important incentive for young people starting work is to be offered a good job and a good income with training and prospects of advancement. We must try to reach a point where such jobs are on offer to them. Many young people will not take jobs serving hamburgers; there is no future in it so why should they do it? Will they be able to rear a family on the income they will get from frying hamburgers? I am not suggesting that nobody should take up such jobs, but if we really want to provide an incentive for young people we must ensure they stay in school as long as is possible. We must also ensure the provision of decent jobs with good wages and prospects and a tax system which does not penalise them to the extent that it is not worth their while working. This is what the Government is doing. Fiddling around with a few pence here or a few pence there or with PRSI is not going to solve the problem.

Mr. Daly: Information on Brendan Daly  Zoom on Brendan Daly  The Minister may have misunderstood the purpose of the amendment. He is aware that the most difficult time for young people is the initial period of transition from school to work. There should be a relaxation of the system for those taking up temporary employment to supplement the funding of their education. This is particularly aimed at young people who would come within the definition of the young persons' employment legislation and who may be in low paid, temporary jobs endeavouring to put a few pounds together to finish their education in order to qualify for meaningful employment. We should provide an incentive for those young people. Can the Minister give an indication of the amount of revenue deducted from the salaries of these people?

I agree with the Minister that the reduction in PRSI in the hope of creating employment did not have the desired result. However, we are talking here about young people who take up temporary or summer jobs to supplement their incomes and enable them to continue their education. Can special provision be made for them until such time as they cease to come under the young persons' employment legislation?

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  Section 8 provides for a general reduction of 1 per cent from 5.5 per cent to 4.5 per cent in employees PRSI contribution. This is a significant decrease. The first £80 of everybody's income is already exempt from PRSI and the employer will have to pay only 8.5 per cent PRSI in the case of those earning less that £260 per week compared to 12 per cent for those [1119] earning over that. It is likely that summer work will be remunerated at a level where the lower rate applies. In addition, those earning less than £197 per week will be exempt from health contributions and the employment levy. Therefore, there are a range of incentives for low paid employment.

We have to balance these incentives with the need to generate support for the concept of social insurance and solidarity between the employer, employee and the State, which that system depends upon. Rather than arguing that social insurance is a tax, we should be pointing out that it is insurance. By building up contributions, even if it is only 100, young people will benefit in later years if they seek sick benefit, unemployment benefit, maternity benefit or old age pension. There are many people who are just outside the contribution criteria for an old age contributory pension who would be delighted if they could have earned 100 contributions in the summer of 1961 or 1962.

We must balance incentives with maintaining the very good system of social insurance which we have and continue to guarantee that that system ensures nobody is without sick benefit, unemployment benefit, maternity benefit, widows pension, etc. These are critical services which are only appreciated when people get older. I do not expect an 18 or 19 year old to appreciate the value of social insurance, but we should maintain the line in terms of the value of social insurance contributions. We should cultivate the view among young people that this system is important rather than saying it is a burden which should be abolished.

Question put and agreed to.

Sections 9 to 11, inclusive, agreed to.

Question proposed: “That section 12 stand part of the Bill”.

Mr. Burke: Information on Paddy Burke  Zoom on Paddy Burke  I have two queries on section 12. What happens to the contributions of persons who were employed and paid contributions for eight or nine years and subsequently established their own business, which did not provide enough for their personal pension? Do they qualify for a reduced pension and, if not, what would they have to do to ensure qualification?

It is unfair, if both spouses qualify for a non-contributory pension and one dies, that the other is not entitled to the six weeks pension. The Minister should introduce legislation to change this.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  I will examine the six weeks pension. I will not address the matter in this Bill but we will do whatever is possible to modify the present situation. I have no idea of the cost of such modification. I will return to the [1120] House following my investigations into the matter.

The Senator raised the issue of an employee who makes contributions for eight or nine years and then becomes self-employed. Much depends on the length of time on which those eight or nine years are averaged out. For example, eight years would mean 416 contributions and would therefore meet the criteria of a minimum of 260 contributions. To qualify for a pension there would have to be a minimum of ten years contributions, so two years contributions would have to be added to the original eight years. If the person had eight years contributions as an employee and two years as a self-employed contributor they would qualify for the minimum 50 per cent pension.

Mr. Burke: Information on Paddy Burke  Zoom on Paddy Burke  Could he get the extra two years any time before he reaches 66 years of age?

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  Yes, as a self employed person. At this point in time, he would have been obliged to make self-employed contributions since 1986. He can certainly make contributions before he reaches 66 years of age.

Question put and agreed to.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 10:

In page 20, before section 13, to insert the following new section:

“13. The Minister shall make every possible effort and take all steps open to him to ensure that the EU subsidised butter scheme is restored to its pre-December, 1996 level.”.

The reason I tabled this amendment was to bring to the attention of the House the fact that the scheme has effectively been halved since December 1996. I am at a loss to see how the Minister for Agriculture, Food and Forestry could have agreed to the halving of the subsidised butter scheme. The scheme was a very successful one, in spite of the talk about the levels of consumption of butter. Many people are now worse off, regardless of the social welfare increases implemented by the Minister, because of the halving of this scheme. We are talking about a 52p loss per month per person in some cases. That is a substantial amount of money to people who are already living in difficult circumstances. As far as I am aware, there was no cost on the Exchequer for the scheme as the cost was borne by the EU.

The scheme was administered by the Department of Social Welfare even thought it was the Council of Agriculture Ministers who introduced the scheme. The halving of the scheme was a deplorable act for which there was no necessity. The scheme had been complimented and praised as a great method of keeping butter consumption at a reasonable level and encouraging people to [1121] eat a natural food product. Health experts are now advertising the fact that butter is good for a person's health. Yet, here we have a Government Minister allowing a decision to be taken which reduces the level of butter vouchers by one half — 52p per person per month is being lost. That is an unacceptable situation. I know this is not exactly in the Minister for Social Welfare's remit but the amendment is intended to draw attention to the issue. Perhaps the Minister will talk to his colleague and seek to ensure that the Council of Ministers reverse this appalling decision. While 52 p per month might sound paltry, it may be a severe financial setback to a person who is already on a meagre income.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  The butter voucher scheme is administered on behalf of the EU by the Department of Agriculture, Food and Forestry. The Department of Social Welfare acts as an agent for that Department in distributing the vouchers to social welfare recipients. The scheme is provided for in regulations of the European Union which provide for the sale of butter at a subsidised rate to social assistance beneficiaries. Therefore, it operates as a market intervention mechanism under the Common Agricultural Policy. The scheme benefits 450,000 social assistance beneficiaries and their 405,000 dependants. Ireland is the only member state still operating the scheme, which was due to expire in December of 1996.

Senator Kelleher should consult with his senior party colleagues to find out why Minister Joe Walsh agreed some years ago that the scheme would be abolished in December 1996. Minister Yates successfully negotiated the retention of the scheme, albeit at half the rate. Given that the former Fianna Fáil Minister for Agriculture agreed to the abolition of the scheme, it seems to me ironic for any Fianna Fáil Member of the Oireachtas to criticise me or Minister Yates for saving the scheme and ensuring that the EU continues to provide butter vouchers for people in receipt of social assistance in Ireland. It takes a hard neck to do that.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  It might take a hard neck to raise this issue but it would take a lot of hard neck to ensure that the scheme would be restored to its former level. It is a little disingenuous for the Minister to suggest that a Fianna Fáil Minister decided — given that we have been in opposition for the past two and a half years — that the scheme should be scrapped. The Council of Ministers negotiate on a yearly basis, we are all aware of that. The reality is that the scheme has been halved at a time when people were taking it up in great numbers. The Minister's Department was praised by EU officials for the manner in which it handled the application of the butter voucher scheme. The scheme is a tragic loss to the people, who were availing of it in large numbers. The [1122] scheme costs the EU only £6 or £7 million. I am sure the Minister for Agriculture would have been able to reverse the decision.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  I appreciate the Senator's confidence in the Minister for Agriculture, Food and Forestry. The Senator clearly does not have the same level of confidence in the former Fianna Fáil Minister who agreed to the abolition of the scheme shortly before this Government came into office. The scheme was due to cease in December 1996, but Minister Yates negotiated with the EU Council of Ministers and the Commission and managed to ensure its continuance for a further two years. That is a success, not a failure.

We have to face reality. No matter how tough a negotiator one is, the fact is that the level of butter consumption in Ireland over the past 15 years has collapsed. People no longer eat butter to the same extent they used to in the past. I myself use spreads. The scheme was introduced in the first place to shift the butter mountain. The EU were not particularly bothered about whether people needed butter or not, or whether butter was good or bad for one's health. The simple fact was the EU wanted to get rid of the butter mountain, which was costing thousands of millions of pounds to store. It was better to give it away free to European member states. Ireland is the only member state which still has the scheme; it has been abolished everywhere else.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I agree with the Minister that the level of butter consumption has fallen over the past 15 years. Potato consumption levels have also fallen over the past 150 years in this country, but that does not make it right to drop a scheme.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  We do not have a free potato scheme in Ireland; the Senator is under a misapprehension.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  The consumption of butter has been stable since 1991, so there is no reason to suggest that the decrease has occurred because of a drop in consumption levels. Consumption levels dropped dramatically until 1991 but they have been reasonably stable since.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  The Senator should ask his party colleague, Deputy Walsh, to come in and argue this case.

Amendment put and declared lost.

Section 13 agreed to.

Acting Chairman:  Amendment No. 11 is out of order as it involves a potential charge on the Revenue.

Amendment No. 11 not moved.

Section 14 agreed to.

[1123] Sections 15 to 18, inclusive, agreed to.

Acting Chairman:  Amendment No. 12 is out of order as it involves a potential charge on the Revenue.

Amendment No. 12 not moved.

Section 19 agreed to.

Sections 20 to 24, inclusive agreed to.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 13:

In page 30, before section 25, to insert the following new section:

“25. The Minister shall consider the feasibility of a scheme of travel vouchers, or where possible private transport, to ensure that those who live in rural areas or in isolated urban areas can benefit from the Free Travel Scheme, and he shall, within six months of the passing of this Act, lay before both Houses of the Oireachtas a detailed report on this matter.”

I have tabled another amendment along similar lines to this one. One of the major problems with people who require medical attention — this was pointed out on Second Stage — is that they are obliged to avail of private transport or make alternative arrangements to travel to hospitals, physiotherapists, chiropodists and so on. Unfortunately, many of these people are incurring the cost. For that reason, this is a timely amendment. This is a big problem. I have come across several cases — and I am sure many Senators have also — where people must travel to a hospital but since no bus route passes their house, they are unable to travel by public transport. That is placing a huge financial burden on many individuals.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  As the Senator will know, the free travel scheme is available to all people living in the State aged 66 years or over as well as to incapacitated people under that age who are in receipt of certain social welfare payments. The purpose of the scheme is to encourage such people to remain active in the community by providing them with access to spare capacity on a range to services provided by the CIÉ group of companies as well as by 56 private transport operators who also participate in the scheme. My Department is willing to consider further applications from licensed private operators who may wish to participate in the free travel scheme and, indeed, the number of new private transport operators participating in the scheme has grown significantly in recent years, but I have no plans [1124] to widen the scheme along the lines suggested by the Senator.

Amendment, by leave, withdrawn.

An Leas-Chathaoirleach:  Amendment No. 14 is out of order as it involves a potential charge on the Revenue.

Amendment No. 14 not moved.

Sections 25 to 29, inclusive, agreed to.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 15:

In page 40, to delete lines 35 to 43.

Section 30 states:

... the Minister shall make regulations specifying the circumstances in which a person is or is not to be regarded as being available for or genuinely seeking employment and these circumstances may vary in relation to—

(a) the person's previous work experience,

(b) the period for which he has been unemployed, and

(c) the prevailing employment conditions.

The Minister went to great lengths to develop that in his speech on Second Stage and he voiced the INOU's concern that if we did not have such a caring, considerate, decent Minister for Social Welfare and somebody else was making the regulations, there could be problems because they could be interpreted in a different manner. That is the concern of the INOU and I am of that opinion also.

We may not always have caring people in the Department of Social Welfare and they may make a regulation which could have a drastic effect on what would deem a person to be available for work. While 90 per cent of the people might fall into that category and it would not create a problem, a small percentage of people could be in breach of the regulations and that could have disastrous consequences for them. The words to be deleted could be included elsewhere after a little more thought. The Minister should be obliged to discuss and negotiate the matter with the social partners, who are tied into Programme 2000, for example. This matter concerns the INOU and ordinary people, who are on the live register at present and actively seeking work and who are afraid that the regulations could jeopardise their position with regard to social assistance.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  The Senator made the point that I have dealt with this issue to some extent in my Second Stage reply. The criteria applied to being capable of, available for and genuinely seeking work are not covered by regulation [1125] at present. They are fairly vague and they are governed by guidelines which have been developed by the Department over the years taking account of prevailing economic and social conditions and a range of other factors. It is felt that clear, up front regulations are needed which will make the law clear to everybody concerned, that is, the deciding officer who must make a decision and the claimant who will be governed by that decision. We are seeking to clarify a person's situation and it has always been the case in law that it is for the claimant to prove that he or she is capable of, available for and actively seeking work. The proposal to bring forward regulations is to clarify that and not to make it more draconian.

It can be argued that a different Minister might take a different approach. All he would have to do is write a letter changing the guidelines and nobody need be any the wiser. When there are regulations in place, the Minister, the deciding officer and the claimant are bound by them. I have already given an undertaking to arrange for my officials to sit down and talk with the INOU to make sure its fears and concerns are taken into account. This is not an attempt to apply draconian tests to people who are genuinely unemployed. It is simply to provide for clarity in how these conditions are applied to people who are unemployed.

We must also take into account the fact that this is not the 1980s; this is the 1990s. In the three years this Government will have been in office, we will have created 150,000 new jobs, there will be more people at work here than ever and we will have ended emigration. I can go through the whole shebang for the Senator but the fact is that it is not the 1980s when jobs were being lost faster than they could be created. We now have employers crying out that they cannot get enough workers to fill vacancies. There are many reasons for that, questions of skills, wages, distance and travel, but conditions are not the same as in the 1980s. People are not being denied unemployment assistance when there are no jobs available. That is the reality.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I approve of the Minister's commitment to take on board the views of the INOU and other groups which may voice a concern and I will withdraw the amendment.

I would remind the Minister that he is in Government with the two parties which were in power during the 1980s so I am delighted he is taking all the credit for all the good work of the 1990s without giving credit to Fine Gael or the Labour Party.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  I, like others, received details from the INOU about this problem. The unemployed now have discussions with people at Government level. The Minister has admitted that he will not implement regulations without further discussions between his officials and the INOU. [1126] However, we must never give the INOU the impression that it has a divine right.

There were only three applicants for jobs advertised in a boutique window in the middle of Patrick's Street in Cork before Christmas and there are more than 10,000 unemployed in Cork. The job paid more that £180 per week so it surprises me that there were only three applicants, two of whom were women. Let us get our priorities right. Let us ask why and not why not.

Amendment, by leave, withdrawn.

Question proposed: “That section 30 stand part of the Bill.”

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  I suppose I should not say this, but I know that in the past a person was required to ask employers for letters to show they were seeking employment. Is that not right? Does the “period for which he has been unemployed” referred to in subsection (b) apply to the feminine gender as well as the masculine?

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  It does.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  Should that not be clearly stated?

Question put and agreed to.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 16:

In page 41, between lines 34 and 35, to insert the following new subsection:

“(2) the person may pay any amount due by instalment or by deduction from any social welfare entitlement.”.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  What the Senator is seeking, as I understand it, is an instalment procedure. I might draw the Senator's attention to the code of practice on the recovery of overpayments — which is available to Senators from the Department if they wish to get copies — and also a leaflet which provides information on recovery of social welfare payments. An instalment arrangement is almost always available and no one will be obliged to pay an instalment which brings them below the supplementary welfare rate of payment; we are obliged by law not to bring them below the supplementary welfare allowance rate. If someone wants to pay more than that, if they have more income, that is fine. However, there is already an arrangement whereby instalments can be deducted and it seems a fair system. I have been criticised by members of the Senator's party for being too lenient on the matter.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  One of the reasons I tabled this amendment concerns equality payments. Several hundred thousand pounds were overpaid and letters demanding immediate repayment were sent out by the Department of Social Welfare, which [1127] put the fear of God into some women who received the payments. I brought one case in particular to the attention of the Minister who responded. It concerned a demand for immediate payment of over £3,000. Where would someone on an old age contributory pension get £3,000? After receiving the payments a long time ago they invested the money in their house. That is why I wanted to clarify the point.

There are circumstances where the Department sends out threatening letters. I understand that we cannot be throwing out money willy nilly and I would not suggest that someone who has been overpaid should not repay the money. However, intimidating letters have been sent out by the Department, particularly to women whose equality arrears were overpaid. That should have been acknowledged. I brought the matter to the Minister's attention and it was aired publicly at the time. I am glad to say it has been resolved.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  I would strongly dispute that the Department of Social Welfare ever sends intimidating letters to anybody. It does not. A person who is not used to receiving a claim for an overpayment may be frightened by it, but that does not mean my Department is attempting to intimidate anybody.

The Senator said equality payments were the basis of the issue he has raised. This Government, and my Department, undertook to pay out close to £300 million to 70,000 married women who had been denied equal treatment under the social welfare code by successive Administrations going back to 1983. We undertook to do it within a matter of 18 months. It was inevitable that some errors would occur as a result of trying to process that number of applications, bearing in mind that the vast majority of those claims had to be traced back to the 1984-86 period. The conditions of receipt of payments of the time had to be applied and they are not the same conditions that apply now. Therefore, people had to be trained and close to 300 staff had to be brought in to process the claims. Errors were inevitable but I am happy to say that, as far as I know, there are no unhappy social welfare customers out there at this point. All the women who were entitled to payments have now received them. In many cases they have received substantial amounts of money. I am happy to have been part of a Government that was willing to face up to its responsibilities in dealing with these payments.

I regret any discomfort that may have been caused to any women who may have received a request to refund overpayments, but all those matters were dealt with in a humane and fair way. The criteria we have in relation to overpayment recovery applies in all cases. Anybody who reads it will see that it is a fair and humane approach to a situation which we recognise in the vast majority of cases can be due to human error, sometimes on the part of the Department and more often on the part of the individual.

[1128] Unfortunately, we have to deal with serious cases of fraud as well, which in some cases have to be brought to court. However, for the vast majority of people we apply the code of practice which is published and available to whoever wants to look at it. It is part of the openness, transparency and accountability for which this Government is proud to be responsible.

Amendment, by leave, withdrawn.

Section 31 agreed to.

An Leas-Chathaoirleach:  Amendment No. 17 is out of order as it involves a potential charge on the Revenue.

Amendment No. 17 not moved.

Section 32 agreed to.

Section 33 agreed to.

An Leas-Chathaoirleach:  Amendments Nos. 19, 20 and 21 are cognate to Amendment No. 18, and all may be discussed together.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 18:

In page 44, line 27, to delete “Circuit” and substitute “District”.

The amendment is self-explanatory. If a person is to appeal a decision they must go to the Circuit Court which involves much expense. That provision should be examined. I wonder how a person who is appealing a decision can afford to take that particular measure on board. If it was in the District Court it would not cost as much and one would not require as much legal representation.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  The Attorney General looked closely at this proposal and is of the opinion that the Circuit Court is a better option than the District Court for a number of reasons. First, the Circuit Court is a court of record while a District Court is not. In other words, all decisions made in the Circuit Court are recorded whereas they are not necessarily recorded in the District Court. In addition, the proof required for or against is not as stringent as in the Circuit Court. It may well be in the interests of the person who is appealing to have a Circuit Court hearing rather than a District Court one.

Second, there is no reason it should be any more costly than going to the appeals office itself. Currently, a person may employ a solicitor or a representative of some kind in an appeal to the appeals office if they wish. There is no reason for them to do so if they do not want to and there will be no reason for them to do so in the Circuit Court situation either if they do not want to. The [1129] nature of the decisions and the evidence presented on either side will be exactly the same as if it was before an appeals officer. In any event, only in exceptional circumstances will the chief appeals officer refer cases to the Circuit Court.

For those reasons it is better to leave the proposal in the Bill as it stands. If we find the matter is not working as well as it ought, we will come back to it. However, at this point it seems that, having looked at all the options, this is the one which best serves the interests both of the person who seeks to make an appeal and of the Department who will seek to present their side of the case as well.

Question, “That the words proposed to be deleted stand”, put and declared carried.

Amendment declared lost.

Amendments Nos. 19 to 21, inclusive, not moved.

Section 34 agreed to.

Sections 35 and 36 agreed to.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I move amendment No. 22:

In page 45, between lines 12 and 13, to insert the following new paragraph:

“(b) to consult with voluntary bodies in the social services area and take into account their views in preparation of any advice for the Minister,”.

This amendment seeks to bring the National Social Services Board into contact with those who work in community and social services. It should consult with those at the coalface about social welfare issues so that everyone has an input. This means the Minister would have the best possible advice. It would give statutory recognition to social services and voluntary groups which make great efforts on behalf of the State to ensure that people know their rights and are receiving proper education through training programmes, etc. I ask the Minister to accept this amendment.

Proinsias De Rossa: Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  I will not accept the amendment because it is gilding the lily. The National Social Services Board is now under the aegis of my Department following negotiations with the Department of Health. It was more appropriate to transfer it to my Department because of the services it provides. This Bill gives me the opportunity to formally provide for that transfer and to review the functions and operations of the National Social Services Board. The board will be committed to co-operating and working with the voluntary sector and providing information.

Although the Senator's proposal is well meant, it is superfluous in the context of the functions I [1130] am confirming and the new functions I am providing for the NSSB, which have been developed in consultation with it. Its existence and operation depend on a close relationship with the voluntary sector. The community information centres could not exist without the voluntary organisers who do the work. They will inevitably provide a feedback for the NSSB in terms of any advice they might give me as a Minister. This is provided for in the functions. The amendment is well meant but it is superfluous in view of what I am already proposing to do in that area.

Amendment, by leave, withdrawn.

Section 37 agreed to.

Sections 38 to 40, inclusive, agreed to.

Schedules A to H, inclusive, agreed to.

Title agreed to.

Bill reported without amendment and received for final consideration.

Question proposed: “That the Bill do now pass.”

Minister for Social Welfare (Proinsias De Rossa): Information on Prionsias De Rossa  Zoom on Prionsias De Rossa  I thank all Senators, particularly those who were not present, for the expeditious passing of the Bill. It is generally recognised, even by the Opposition parties, that this is a good Bill.

Mr. Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  I thank everyone who discussed this Bill. In the words of a high profile media commentator, it is a good Bill but not a great one.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  I thank the Minister and his officials. Although the social welfare system is more complicated from a financial point of view, the application process has been simplified. I thank the Minister for his commitment, dedication and interest. We have been lucky in that every Minister for Social Welfare, including Deputy Woods, has been able to get money for those most in need even during difficult times. The Minister has done an excellent job and long may it continue.

Mr. Wall: Information on Jack Wall  Zoom on Jack Wall  I compliment the Minister for introducing this excellent Bill. Long may he continue to produce such legislation which will be of benefit to those who need it.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  I join with other Members in thanking the Minister and his officials for introducing an effective Bill. Anomalies in the social welfare system will be eliminated once we focus in the right direction. One anomaly, which must be brought to the attention of the Minister for Finance, relates to a couple who are cohabiting. If one partner is employed, the other is not entitled to unemployment benefit or unemployment assistance. Yet, they have no tax allowance. [1131] That anomaly must be rectified. The sooner this Bill is implemented the better.

Question put and agreed to.


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