Social Welfare (Miscellaneous Provisions) Bill 2003: Second Stage.

Tuesday, 25 March 2003

Seanad Eireann Debate
Vol. 172 No. 3

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

Minister for Social and Family Affairs (Mary Coughlan): Information on Mary Coughlan  Zoom on Mary Coughlan  Tá luachair orm bheith ar ais arís sa Seanad le Bille eile a chur os a chomhair. I am pleased to bring the Social Welfare (Miscellaneous Provisions) Bill 2003 before Seanad Éireann. This is the second of two Bills to implement the €530 million social welfare package of budget 2003 which, for the first time, brings the projected level of social welfare expenditure in 2003 to over €10 billion. Senators will recall that a separate Bill was enacted in December last to give effect to the increases in weekly social welfare payments from the beginning of January. This Bill implements a number of key improvements in social welfare schemes such as increases in child benefit, improvements in the carer's respite care grant and the extension of the payment of increases in respect of qualified children as announced in the budget, in addition to a range of other measures.

I am proud that the Government continues its commitment to building an inclusive society as reiterated in the programme for Government in June 2002. Tangible evidence of delivering on this commitment includes: a massive increase in spending on social welfare from the equivalent of €5.7 billion in 1997 to over €10 billion this year; significant increases in child benefit rates resulting in the rates of payment being more than three times that payable in 1997; and real increases in social welfare pensions with old age contributory pensioners now receiving €157.30 per week compared to the equivalent of €99 in 1997.

I wish to outline the provisions contained in the Bill. As Senators will already have considered it in detail, I will focus on a number of key provisions. Child benefit is a universal payment made directly to families and as such is the most efficient and effective way in which the Government can channel support to children. The rate for the first two children is being increased by €8 per month and for third and subsequent children by €10 per month. These increases, provided under section 3, will bring the monthly rates to €125.60 and €157.30 respectively. From April next, a family with three children will receive €408.50 compared to €382.50 at present – an increase of €26 per month.

These increases will mean that, since the year 2000, child benefit rates will have risen by €71.64 per month for each of the first two children and by €86.20 per month for third and subsequent children. These measures will mark the beginning of the final phase of the child benefit investment package initiated in budget 2001 which, on completion, will see Government investment in the scheme rise by an additional €1.27 billion annually. An estimated 530,000 families with over one million children will benefit from these increases in 2003.

Furthermore, in supporting the ongoing programme of modernisation in the General Registry Office and to improve service delivery to customers, section 11 allows for certain awards of child benefit to be made in defined circumstances without recourse to a deciding officer. This provision will facilitate the automation of payments of child benefit for second and subsequent children where a claim is already in payment.

The Government, over successive budgets, has introduced measures to develop the types of services and supports which provide practical assistance for carers. In section 4 we continue to honour our commitment to supporting the valuable work undertaken by carers by increasing the respite care grant by €100, from €635 to €735, with carers looking after more than one person receiving a grant of €1,470 – an increase of €200. These increases take effect from June next. This measure, which is highly valued by carers, will benefit 24,700 carers and cost an additional €2.5 million per annum.

[269]I am also introducing changes in the arrangements for entitlement to increases in respect of qualified children. Section 5 provides that, from September next, entitlement to an increase for a qualified child between the ages of 18 and 22 years and in full-time education is extended to recipients of certain short-term benefits. Specifically, these are disability benefit, injury benefit, health and safety benefit, unemployment benefit and assistance and supplementary welfare allowance, where the claimant has been in receipt of the relevant payment for more than 26 weeks. This measure, contained in the Programme for Prosperity and Fairness, implements the commitment to increasing the qualifying child age limit to 22 years in line with the current arrangements for long-term payments.

Section 6 of the Bill, provides for the extension of the island allowance, currently €12.70 weekly, to pensioners over 66 years of age and in receipt of invalidity pension, disability allowance and unemployability supplement from April next.

The six weeks after-death payment arrangements are designed to provide transitional financial support immediately following the death of a pensioner. There are a number of anomalies within the scheme which section 7 aims to address. From June, where a person in receipt of disability benefit, unemployment benefit, invalidity pension, unemployment assistance, unemployability supplement, supplementary welfare allowance, pre-retirement allowance, disability allowance or farm assist dies and his or her spouse is in receipt of certain benefits in his or her own right, the payment of the deceased person's benefit shall continue to be made for a period of six weeks after death. Section 8 provides for a number of changes in the means test for social assistance schemes.

I am particularly pleased to be in a position to tackle one of the remaining outstanding recommendations of the report by the Commission on Social Welfare. I refer to the inclusion of “benefit and privilege” in the assessment of means for unemployment assistance and pre-retirement allowance for claimants residing in the parental home. The commission recommended its abolition for persons aged over 25 years and I have taken an initial step towards achieving this by providing for the removal of this assessment for persons aged 29 years and over.

The section further provides for standardising the assessment of maintenance payments on the lines currently in place for one parent family payment to other social assistance payments such as disability allowance, old age and widow's and widower's non-contributory pensions, unemployment assistance and farm assist. This section also provides for the assessment of certain non-cash benefits, to be prescribed by regulations, in the case of persons claiming unemployment assistance, disability allowance, pre-retirement allowance, supplementary welfare allowance and farm assist.

[270]At present, orphan's payments in respect of children in foster care are made by my Department directly to the relevant health board which then combines the payment with the foster care allowance to make a total payment to the foster carer of €281.50 in respect of a child under 12 years and €308.50 in respect of a child aged 12 or over. A working group, which included officials from my Department and the Department of Health and Children, was established to examine payments to orphans and the foster care allowance. In line with the group's recommendations, section 9, in effect, ensures that while foster carers will continue to receive the same level of payment, this payment will be made by one agency only – the relevant health board. Health boards will now have full financial responsibility for supporting children in foster care and orphan's contributory allowance and orphan's non-contributory pension shall no longer be payable to children in respect of whom foster care allowance is being paid. However, orphan's payments will continue to be made by my Department where entitlement to such payments is established and where a foster care allowance is not in payment.

In An Action Programme for Government we promised to modernise public services to make them more relevant to the citizen. We committed to improving access to public services by providing them electronically. Progressing the use of the personal public service, or PPS, number as a public service identifier is a key element of our e-government strategy. Section 10 provides for five new agencies to be added to the list of specified bodies authorised by legislation to use the PPS number. The section further allows for including in this listing bodies established by the Minister for Education and Science under section 54 of the Education Act 1998, and provides for the sharing of information with an t-Údaras um Ard-Oideachas, the Higher Education Authority. This measure will lead to improved administrative efficiency and effectiveness across public service agencies and help to reduce bureaucracy and continue the process of eliminating red tape.

Sections 13 to 15 provide for amending the rules governing entitlement to supplementary welfare allowance basic payments and rent supplements. Section 13 provides that, where new claims for rent supplement are submitted after the proposal comes into force, a supplement will only be payable where the claimant is lawfully in the State. This measure is being introduced for consistency. It removes the anomaly whereby a person could be in breach of their obligations to the State's immigration service while at the same time having their housing costs subsidised by the community welfare service. Following the enactment of this section, rent supplement will only be payable on receipt of a new claim from an asylum seeker if he or she is granted refugee status or leave to remain in the State on humanitarian grounds by the Minister for Justice, Equality and Law Reform. This measure is being implemented following discussions with the Department of Jus[271]tice, Equality and Law Reform and the Office of the Attorney General.

The Government is committed to ensuring that the needs of asylum seekers are addressed in an appropriate manner. It has decided, therefore, that the accommodation needs of such people will be met exclusively through the system of direct provision operated by the Department of Justice, Equality and Law Reform. The system has been in place for three years and the Department's reception and integration agency has built up considerable experience and expertise in that time. The backlog of claims for asylum that had built up has been reduced to much more manageable levels and a person claiming asylum in this country can expect to have his or her case dealt with within a few months. Given that the Department has a full range of suitable accommodation available to it to meet the needs of asylum seekers, as well as the fact that individuals are spending much less time in the asylum process before their claims are finalised, it is no longer necessary for asylum seekers to have access to rent supplement.

Section 14 amends the conditions for receipt of supplementary welfare allowance in certain cases to align them with the entitlement conditions that apply to unemployment assistance. Under current legislation, a health board may require an applicant for supplementary welfare allowance to register for employment by signing on for unemployment assistance. The purpose of this provision is to require a person in such circumstances to seek work while receiving the allowance, pending finalisation of the claim for unemployment assistance. The proposal gives health boards the power to require a person to comply with the conditions – being capable of work, available for employment and genuinely seeking employment – that apply to persons in receipt of unemployment assistance.

These discretionary conditions will be applied on a selective basis if a health board considers that the circumstances of a particular case warrant such application. Those who will be affected by this provision are people for whom unemployment assistance or benefit is the appropriate social welfare payment, but who may have intended to claim supplementary welfare allowance indefinitely as an alternative to complying with the terms for receipt of unemployment assistance or benefit.

Legislation provides that three categories of people are excluded from entitlement to supplementary welfare allowance, namely, those in full-time employment or full-time education and people engaged in industrial disputes. Health boards have always had the discretion to pay the allowance in urgent cases, even if the applicant is in one of the excluded categories. It is rare that payments are made in such circumstances, but it is important that health boards can deal appropriately with such eventualities.

Section 15 now provides health boards with the [272]discretion to make payments in urgent cases in relation to claims for rent supplement from asylum seekers and those who are not lawfully in the State. This will ensure consistency with existing provisions in respect of other excluded categories, so that a health board will not be prevented from paying rent supplement as a result of the restrictions imposed by section 13 in circumstances which, in the opinion of the health board, are so urgent in nature that rent supplement should be paid. I emphasise that this section does not provide for exceptions that could result in payments being made in any individual case on an ongoing basis. It merely provides discretion to respond in an urgent case that will not remain urgent over time. I expect that very few, if any, payments will be made under this provision.

The operation of the social insurance fund is an important expression of solidarity in society. The fund represents the collective contributions of employers, employees and the self-employed to provide for pensions and short-term income support needs, when contingencies such as unemployment and illness arise. The most recent budget proposed that PRSI should be applied to benefits-in-kind granted to employees, with effect from 1 January 2004. This provision is important in enhancing overall equity, as well as improving the coherence between the PAYE and the PRSI systems. Sections 16 to 18 are designed to facilitate the assessment of such non-cash remuneration in relation to PRSI.

Section 19 is designed to ensure that agency workers who are neither employees working under a contract of service nor self-employed under a contract for the provision of services are properly insurable. Agency employment has been recognised and addressed in other employment legislation to ensure that agency workers may avail of legislative protection. This section contains two amendments designed to clarify the position of agency workers under the social welfare code. The first amendment states that individuals employed through an employment agency are insurably employed and the second amendment indicates that the person who is liable to pay the wages or salary of the individual in respect of the work or service performed will be deemed to be the employer.

While most individuals are paid by agencies, the client company makes the payment in a small number of instances and the second amendment will cater for both eventualities. The amendments will resolve any ambiguity that may exist in relation to the insurability of agency workers. Given that many such workers tend to work in the more exposed sectors of the economy, the provisions will ensure that they are afforded the protection of the social insurance system. Questions of insurability of employment which arise will be examined and decided on by the insurability of employment unit in my Department.

Section 24 provides for changes to the Pensions Act 1990 that are designed to make some technical amendments consequential on the implemen[273]tation of the Pensions (Amendment) Act 2002. One such amendment is designed to ensure that a person whose life assurance policy is designed to provide for a pension will be advised of the financial consequences of cancelling or reducing it in favour of taking out a PRSA. This is standard practice when an insurance policy replaces in part or in whole another insurance policy and is designed to avoid any potential for misselling. The broad powers vested in the Pensions Board under the existing legislation will be replaced with more specific powers. These will establish clear policies and principles which the board will use to respond to the current pension funding challenges facing defined benefit occupational pension schemes in the current investment climate of declining asset values and will give flexibility to pension scheme trustees in relation to submission dates for actuarial funding certificates.

Following discussions involving the Pensions Board and the social partners, as well as consideration in my Department, it has been decided that the decline in the equities market warrants a flexible approach in relation to the funding requirements of the Pensions Act. The Pensions Board wants to avoid a situation where regulatory requirements would cause pensions schemes that are viable on a long-term basis to close or change from their existing defined benefit basis. The precise details of this approach are a matter for the Pensions Board, which is the statutory regulator. I understand that the funding requirement, on a case-by-case basis and in certain circumstances, will be set at 85% – compared to 100% at present – and that the funding proposal can refer to a period of up to ten years, rather than the current three and a half years. The board must consider that these modifications are necessary, are related to the performance of investment markets and are not contrary to members' interests.

The adoption of such an approach is intended to give trustees of pension schemes and sponsoring employers financial breathing space in relation to the funding of defined benefit occupational pension schemes. The long-term position in relation to funding is being examined by the Pensions Board and I look forward to receiving its report shortly. The trustees of the scheme may be unable to meet the statutory deadline for actuarial funding certificates if the actuary to the scheme is ill, has been replaced or if other administrative difficulties have arisen outside the control of the trustees. In such circumstances and where it would not be contrary to members' interests, it is considered reasonable to allow some flexibility if the Pensions Board is satisfied of the bona fides of the situation and section 24 allows for this.

The Social Welfare (Miscellaneous Provisions) Bill 2003 builds on the progress made in the social inclusion area by the Government. It is based on objectives contained in the programme for Government and the PPF and reflects the prin[274]ciples of the revised national anti-poverty strategy. I hope Senators have benefited from this outline of the Bill's key provisions and, in commending it to the Seanad, I look forward to a very constructive debate.

Debate adjourned.


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