Social Welfare Bill 2011: Committee Stage

Thursday, 15 December 2011

Seanad Éireann Debate
Vol. 212 No. 7

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Question proposed: “That section 1 stand part of the Bill.”

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  I welcome the Minister for Social Protection, Deputy Joan Burton.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Cuirim fáilte roimh an Aire. Despite all the difficulties facing the Government and the Department of Social Protection, I would be failing in my duty were I not to express the opinion of my party that the severe cutbacks proposed in the Social Welfare Bill and the consequences thereof will hit the most vulnerable in society, namely, the elderly, the poor, children and young disabled people. Mothers are also disproportionately affected by the cuts. Fianna Fáil is opposed to these deeply unfair cuts and highlights the series of broken promises made by the Government. It has argued that savings in the Department should be targeted through labour activation measures, control measures and changes to rent supplement as part of a fundamental overhaul of local authority housing lists. It believes the Government has gone for the low-hanging fruit and, notwithstanding my sympathy and understanding for any Minister in the current economic climate, sufficient submissions have been made, particularly by Dr. Seán Healy, to indicate a different direction could have been taken with the budget. While the Minister, by her own account, has had an extremely difficult number of months in attempting to fight her case at the Cabinet table, I shudder to think how she will cope with taking another couple of billion euro out of the national economy this time next year.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  I ask Senators to confine themselves to the section rather than making broad statements.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  Ba mhaith liom fáilte a chur roimh an Aire freisin. Tá sé tábhachtach go bhfuil an tAire anseo agus nach bhfuil aon teorann ama ar an díospóireacht ar maidin agus ceapaim gur mar sin an cás.

Like my colleague, I acknowledge the difficult job the Minister has and all our contributions are made with this in mind. Members appreciate that this is one of the most difficult jobs anyone in Ireland could be asked to do, but they still have fundamental difficulties with the Bill. When my party was in government and the former Minister for Finance, the late Deputy Brian Lenihan, who often was praised, introduced cuts and taxes, they appeared to hit everyone [442]across the board and those who could least afford it paid less, while those who could afford it most paid most. However, Fianna Fáil’s fundamental difficulty with the Government’s budget and the Social Welfare Bill, in particular, is that they appear to have targeted particular sections of society and recipients of social welfare payments for particularly harsh cuts. This is most unfortunate, is not the way to go and will be absolutely opposed by Fianna Fáil Members.

Minister for Social Protection (Deputy Joan Burton): Information on Joan Burton  Zoom on Joan Burton  In the context of a general discussion on the points raised by the two Senators, I agree the framing of the social welfare budget for 2012 has been exceptionally difficult. Ultimately, however, I had been left with a framework of cuts proposed by Fianna Fáil that ran between €622 million and well over €800 million. I do not suggest Fianna Fáil found implementing such measures to be pleasant either because in each of the preceding two years the cuts made by Fianna Fáil to social welfare payments had amounted to more than €800 million. This had meant a loss over two years of €27 a week for a married couple and a loss of more than €16 a week for a single person. Fianna Fáil had favoured across the board cuts which had resulted in highly significant drops in income for everyone in receipt of social welfare benefits.

During the Second Stage debate I told Members that I had made a conscious decision to maintain the primary social welfare rates for two reasons. First, those in receipt of social welfare payments had already suffered significant cuts to weekly payments in the previous two years. There had been across the board cuts to child benefit. Members should recall that I chose to defend basic rates and the overall consequence of so doing is clear. The overall cut in social welfare expenditure is €475 million, leaving overall expenditure at €20.5 billion. Consequently, the reduction next year is approximately 2.2%. Given the enormous difficulties and deep recession facing the country, this was as low as I could get the reduction.

The second reason I opted for this approach is, as I stated in my Second Stage contribution, social welfare expenditure is extremely important from an economic stimulus point of view in each town and village. Maintaining core social welfare rates will have the most beneficial effect on the economy in terms of maintaining purchasing power. Against much advice, I have been able to maintain the core pension payment for all pensioners, as well as payments to carers either on a full-time or half-rate basis. Managing to achieve this for carers and pensioners, given their importance in Irish society and the contribution they had made and continue to make, constitutes a significant achievement.

  12 o’clock

I understand Fianna Fáil’s concerns, but that party left a menu or parting note on my desk in the Department of specified cuts of between €622 million and €822 million. I was obliged to negotiate on what had been left as my legacy by Fianna Fáil in extremely difficult circumstances. In that regard, I have sought to protect core payments. In addition, I have negotiated successfully with my partners and the other members of the Government to reduce the overall figure in respect of what Fianna Fáil left behind to €475 million. I acknowledge a cut of €475 million is still deeply painful and not something I would have wished for. However, it emphasises the prospects for reform to further improve the possibilities for people in receipt of social welfare payments, particularly those who are unemployed, to return to employment.

Senator Paschal Mooney has suggested all of the savings should be made through activation measures. I am sure he is aware that to create a good activation system under which people would have good prospects, one must spend money to get people back into education and training.

We will also be obliged to spend a great deal of money in assisting people to obtain jobs. It is not always possible to persuade employers, large or small, to give job opportunities to some [443]of the 400,000 plus individuals who are on the live register. Vacancies are sometimes being filled by those who are not on the register. This is a major issue. Activation is not cost free. We need a major discussion on this matter, not just with those who are unemployed — and who require access to pathways and options — but, in the context of job opportunities that become available, with employers. Some 125,000 people left the live register during the year. These individuals replaced those who had retired, they filled new vacancies and so on. It is a matter of concern that sufficient numbers of people on the live register did not obtain an adequate proportion of the total quantum of jobs available. That is an issue to which we may return at a later date.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  I appreciate the position in which the Minister finds herself. I speak as an independent Senator and I understand that she is being obliged to honour arrangements that were made before she came to office. That is a very complicating factor. I spoke out and voted against all of those arrangements, including the bank guarantee. I saw this difficulty coming down the tracks and I knew what would happen. The Minister will be sympathetic to the fact that at the very time these cutbacks are being made, a further €1 billion will be paid to secure the liabilities of a defunct financial institution, namely, the former Anglo Irish Bank. That is extraordinarily galling for people who are losing access to services. The section with which we are dealing refers to percentages of disability. There is something almost Dickensian about measuring disability and disadvantage in percentages. I am not sure that disability easily lends itself to this type of quantification. In that context, I speak as someone who experiences robust and rude good health.

Until a few minutes ago, the Minister was wearing a nice, warm scarf. We are in one of the Houses of the Oireachtas but despite the central heating, there is something of a chill in the air. Imagine what will be the impact of some of these proposed cuts on people, particularly that which relates to the fuel allowance. The latter is the most appalling of cuts.

If we want to move forward and get people into employment, then guidance counsellors are essential.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  We are discussing the Social Welfare Bill.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  Yes, I know. However, the Minister framed some of her comments in a general context. I am sure the Senator would not wish to usurp the role of the Leas-Chathaoirleach in this matter. I will stand to be reproved by him but not — even though I have great respect for her — by the Senator.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  I apologise to Senator Norris. He is correct.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  Most of my comments to date have related directly to the section.

It is rather a pity — perhaps this is due to the fact that we are dealing with the usual cascade of work at the very end of the session — that the list of amendments is filled almost entirely with recurrences of the term “Section opposed”. I suppose this indicates, to a degree, principled opposition to the entire Bill, which I will certainly vote against. It might have been more constructive if those parties which have the capacity to secure expert assistance and advice had tabled reasoned amendments rather than just using the blunt instrument of opposing various sections. I accept that this is one way of operating and of securing a discussion. As already stated, it may reflect principled——

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  Amendments such as those to which the Senator refers would have been ruled out of order.

[444]Senator Jillian van Turnhout: Information on Jillian van Turnhout  Zoom on Jillian van Turnhout  This is the Social Welfare Bill we are discussing.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  The penny has dropped with me.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  Such amendments would have financial implications.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  Therefore, opposing sections is the only instrument available to us.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  Yes.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  I see. That is a great pity.

I have always been of the view that we were walked into a financial disaster by the Lower House. Yesterday, Senator Barrett, who is new to the House, produced a very remarkable Bill that has been accepted, in principle, by the relevant Minister. His is clear and concise legislation which addresses an extraordinarily complicated fiscal matter.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  We are dealing with the Social Welfare Bill now.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  Yes, but my remarks relate to the fact that we are merely opposing sections. I should have spotted that we are precluded from tabling amendments because of the financial constraints involved. It is a pity that the Seanad is restricted——

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  That restriction is enshrined in the Constitution.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  I know. I am merely expressing the view that it is regrettable that we are not in a position to table constructive amendments. That may be one reason the debate has tended to be somewhat wide-ranging in scope. Perhaps it is why the Minister referred to more general matters during her initial contribution.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  I wish to inform Senator Norris that I did not intend to reprimand him earlier. The Bill is so wide-ranging in nature and so important that we will require all the time available to us to discuss it. If it were eventually necessary to apply a guillotine to the debate, Senators would complain. We should, therefore, adhere to discussing the Bill itself. As Senator Norris correctly pointed out, it is the Leas-Chathaoirleach’s job to guide Members and not mine. In that context, I apologise for my earlier intervention.

The Minister has an extremely difficult job. Senators must be realistic — social welfare comprises 40% of the Exchequer budget and cuts are required. I would not like to have been in the Minister’s shoes and to have been obliged to identify where cuts should be made. I do not know where I would have started in that regard. Senator Mooney referred to low-hanging fruit. Unfortunately, there was no such fruit left. Such fruit was removed in previous budgets. Consequently, any cuts the Government would be obliged to make would be deep.

When considering the legislation last night, I asked myself what would have happened if we had reduced social welfare rates and retained the secondary benefits referred to. To her credit, the Minister has been able to restrict the cut to social welfare to just over 2%. If such a cut had been applied across the board, a single person on jobseeker’s benefit would have lost approximately €200 per year while a person on an old age pension would have lost €230 to €240. For someone in receipt of social welfare who is being paid in respect of an adult dependant, the loss would have been €364. Such a cut would have caused more hurt than that to which the reductions introduced by the Minister will give rise.

I ask Senators to bear with the Minister, who has done a good job. People will be hurt but that is the nature of what occurs when social welfare payments are reduced. Unfortunately, the [445]Minister has been obliged to cut social welfare but she has done the very best job she could in the circumstances. I ask Senators to give her as much support as possible.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  I remind everyone that we are still on section 1. I understand that sections 1 and 2 are not generally being opposed. I do not wish to curtail the debate but we must be realistic. Senator Moloney referred to a guillotine and that option may have to be employed later in the day.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  I will not oppose sections 1, 2 or 5. Unfortunately, matters go downhill from there because I will oppose all other sections.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  Perhaps, then, the Senator could hold fire until we reach the sections he opposes.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  I could do so but I must make a number of brief points because I wish to ensure that all of the sections will be discussed.

A number of Senators referred to the difficult job the Minister is obliged to do. They are correct in that regard and everyone accepts that she has a difficult job. This matter comes down to the political and economic choices a Government is obliged to make. Unfortunately, the current Government has made the wrong choices economically and politically. Targeting people who are in receipt of social welfare payments will have the effect of driving more people into poverty, on the one hand, and impacting on the quality of life of some of the most vulnerable individuals in the State, on the other.

In a previous debate in this House I called on the Government to begin poverty-proofing policies. There is no doubt that if any objective, independent anti-poverty group in the State was to poverty-proof this Bill, it would not support it because it will drive more people into poverty. It is wrong to say the rates have not been cut and that, as Senator Marie Moloney said, the Minister could have opted for a 2% cut across the board. If we consider the impact of some of the cumulative cuts on families, whether it be child benefit, fuel allowance, rent supplement or the lone parent’s allowance, the figure will amount to more than 2%.

The Minister spoke about the €475 million adjustment to the social welfare budget, but the full year cost is €811 million. There are choices. For example, in the past the Minister’s party supported a third rate of tax of 48% on all incomes in excess of €100,000. That would have brought in enough money to negate the need to make the changes the Minister has introduced.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  The Senator is broadening the debate again.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  I am trying to speak to the section. The Minister was very good in opposition, as was her party leader, the Tánaiste, Deputy Eamon Gilmore, at pointing to the madness of paying back bondholders and speculators, yet in November the Government paid a bond of €750 million and it will pay another of €1.2 billion in January. A number of weeks ago it extended the bank guarantee in a measure taken in this House and the Dáil to include an additional €38 billion of unsecured senior debt. It is bizarre that a party and a Minister who made a name for themselves for being opposed to the bank guarantee and paying back bondholders are now paying them back——

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  The Senator is generalising again.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  ——even those not covered under the bank guarantee scheme.

[446]Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  I will reserve most of my comments for the debate on the various sections. The Minister for Social Protection, Deputy Joan Burton, had a rotten job but someone had to do it.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  It is one of the best jobs in government.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  I mean it in the sense that——

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  We have already said that.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  It might not last too long.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  I try to acknowledge the Minister’s achievements.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  I would like to say a few words, if I may.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  The Senator should confine her remarks to the section.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  It is a difficult job, but I will hang on to what the Minister said recently, namely, that she wanted to steer the Department of Social Protection towards a culture of enablement. That is a fine principle, one I would like to see us have. As such, we need to take practical steps to achieve it. Given the criticism levelled at the Bill, it might have been easier for the Minister to cut every programme by 2% or 5%, but I understand she was trying to achieve structural change, on which I compliment her because she is trying to move people away from dependency towards enablement.

We must compliment the Minister on adhering to the principle of maintaining primary rates and examining supplementary rates. However, the devil is in the detail and as such, I would like to tease out a number of the sections, but we should proceed with the debate on the Bill, section by section, because that is the only way we will help people. We should examine the sections that may be harsher than others because we want to make sure we do not push anyone into poverty. I checked some of these measures with Social Justice Ireland because I had some concerns, but I have had them allayed. Therefore, I encourage everyone to proceed with the debate on the Bill, section by section.

Senator Katherine Zappone: Information on Katherine Zappone  Zoom on Katherine Zappone  While I agree we should proceed, I want to make some brief comments. I welcome the Minister and acknowledge her systematic and diligent approach to the reform of the social protection system. I am aware it is grounded in her extensive experience of the varied and complex schemes that are part of the system. I acknowledge her protection of a substantial sum of the safety net that was not cut from budget 2012. That is a serious achievement. However, I agree with my colleagues in opposing a number of sections of the Bill. Senator Jillian Van Turnhout and I will oppose sections 8 and 11, in particular, on which we will comment, but I, first, wish to make two general observations.

Of the top 20 budget hits of 2012, the No. 1 hit is the increase in the VAT rate which will bring an estimated saving of €670 million, about which we spoke in our statements on the budget. Changes made to the one-parent family payment rules in respect of children over seven years of age and the earnings disregard effectively constitute the sixth biggest hit in terms of savings which will amount to €112 million. I realise that we are only discussing one aspect of the earnings disregard, but, as the Minister is aware and I am aware from representations made to my office by OPEN and other organisations, the overall impact of the changes in payments for children is being felt by parents now.

[447]I note that the independent think tank, TASC, on the basis of well worked-out evidence, has judged that the budget will disproportionately affect the poorest income groups in society, of which one-parent families are one. I will save my additional remarks for later.

Question put and agreed to.

Section 2 agreed to.

Question proposed: “That section 3 stand part of the Bill.”

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  On section 3, I highlight again the difficulty any Minister for Social Protection would have but which the Minister, in particular, had in framing the budget. Anybody who has worked in the Third World could not but have been scarred by the experience and this obviously influences her entire philosophy in trying to help those who are most vulnerable in society, but the point has been made and will be made throughout this debate that there are alternatives available. This remains an exceptionally wealthy country. I seek clarification and perhaps a reasoning as to why the Minister saw fit to change and redefine the criteria applied to disability allowance. My colleague will elaborate on this issue, but I understand there is a change from the broader definition of “substantially restricted”. The changes appear to remove a gradient pay scale. Department estimates that some 1,000 people per annum will not qualify under the changed system. The changes will affect new applicants. The Minister might clarify why it was considered necessary to seek these changes. How much will be saved?

I will make three brief points. First, I concede that one of the mistakes — I am qualifying the use of the word “mistakes”— made by previous Fianna Fáil Administrations from 2002 to 2009 was that as the Celtic tiger roared — the Minister quoted a figure which the former Minister for Social Protection, Deputy Eamon Ó Cuív, quoted to us at party level and publicly during his time as Minister and subsequent to the general election — the social welfare spend increased by almost 300%, at a time when the rate of inflation was running at only 30%. I thought it was only 13%, but I read that it was actually 30%.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  Due to house price inflation.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Whether the figure is 13% or 30%, it puts in context the level of spending in the social welfare system. In retrospect, we should have been much more Calvinist in our approach. That is not in any way to suggest that those increases were not merited. In that context, the Government was then faced with what happened following the economic meltdown.

My colleague, Deputy Barry Cowen, commented in the Dáil that the outgoing Government made available to then finance spokespersons all relevant accounts and finances of the State for their inspection. Not only that, Department of Finance officials briefed the spokespersons, including Deputy Burton of the Labour Party, who was then the finance spokesperson.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  It was four sheets of paper.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Some of us feel that she should have been appointed Minister for Finance, but that is another day’s work.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  I thank the Senator.

[448]Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  The press reported at the time how ashen faced Deputies Burton and Noonan were, having emerged from these briefings and having been faced with the full reality. However, they just opposed vehemently — as was their right — the last budget and the subsequent Finance Bill. Allegations were also made that the nation was “banjaxed”. I am not quite sure who said that, but in deference to the Minister, I will not name the person. Allegations of economic treason were made against people. It is a little disingenuous for the Minister to throw political charges at our side of the House on the legacy left to her. My problem, and the problem with much of the electorate and increasingly within my party, was that being fully aware of what we were facing, she and her colleagues went out and collectively over-egged the pudding. The people were looking for change and they would have got it without many of the misplaced promises made by both the Labour Party and Fine Gael.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  The election is over.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  The Minister raised the issue, and I only feel that it is right that I should respond to a political charge.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  Political charges have no place on Committee Stage.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Political charges are accepted within Standing Orders, as you well know.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  My indulgence is wearing thin.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  The disablement benefit change is not the biggest change in this case, but it is the type of change that worries me because we might end up cutting people out of the welfare system entirely. Is it correct that the effect of this is that up to now, people who lost an index finger were rated at 14% disability, and that by raising this threshold to 15%, the Minister is just excluding the fingerless? All the people who lose a finger due to occupational injuries are at 14%. As the Minister is raising the threshold to 15%, she is cutting that group out.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  Generally, they remain in employment and are working full time. These are not people on disability benefit. They are people in work who are getting an additional pension while working.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  They previously had a benefit under the system and there are other categories of disability——

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  It does not affect existing people on the benefit.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  That category of people who previously had a benefit under the system were categorised at 14%, but the Minister has now come in at 15% and the benefit is gone. It is a little worrying that the financial exigencies of the country would be used to reform the system, because the reform should have happened a long time ago and the welfare bill was too high in the boom times. There is no question about that, but who was telling us it was not enough and that we were stingy?

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  The finances vary——

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  The fact is that we were steering the ship——

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  The Senator’s Government was telling us that we were awash with money.

[449]Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  ——and there was huge electoral pressure as to why we were not spending enough. It was claimed we were spending too little because we were greedy. Fr. Seán Healy criticised us even after he visited my colleagues in County Cork, claiming that we were not spending enough. However, according to our learned colleague, Senator Barrett, had we saved double what we actually saved in the national pension fund over the years of the boom, we probably would not find ourselves in as much difficulty. Even the Labour Party criticised the setting up of the National Pension Reserve Fund in the first place.

This thing is more complicated than it just being a result of Fianna Fáil. Our problem with the welfare system, to paraphrase a more important person than me, is that we love not wisely but too well. We looked after the people on social welfare not wisely, but too well, as it turns out, given the necessity for cuts.

It seems that the effect of this benefit cut is that people who have lost their index finger are just gone as a particular category. It is the wrong way to go about things.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  The Minister has provided some clarity and when she comes back, she will probably give us more clarity. The explanatory memorandum, which has been circulated to us by the Department, states that section 3 provides for the abolition of the entitlement to payment of disablement benefit in the case of assessments of loss of faculty amounting to less than 15%. It does not apply to existing applicants——

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  It is for new applicants.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  That is my understanding. The problem we have is that people pay PRSI, which is a social insurance, such that if they are victims of an accident, they can rely on it and can be covered. A number of advocacy organisations have made the point that this potentially could be a slippery slope, or a move towards a more graded scale of disability. While the section states “amounting to 15%”, could a future Minister insert a section that states “amounting to 25%”, or “amounting to 30%”, in order that only very disabled people will get the payment?

People pay PRSI for a reason. I assume that this section deals with people who are victims of an accident at work.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  Or incidents within the Irish Prison Service.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  Something like that. However, people who are somewhat incapacitated need time to recover. That is the reality if they are victims of accidents at work.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  The section does not affect their sick pay.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  Yes, but the disablement benefit is being cut and they will not be able to avail of it if the loss of faculty is less than 15%. It is 15% now, but can the Minister give us a guarantee that in future budgets, that figure will not become 20%, 30%, or 40%? How is this figure assessed? Does an independent medical doctor assess it? I look forward to the Minister’s response.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  In the interests of the economy of time, my comments in a previous contribution should apply to this section. I was looking at the amendments and addressed what I thought was the first amendment.

History will be reasonably kind to this Minister, because I think we all accept that she has fought a very sterling battle, but the circumstances are awful and it is appropriate for this House to try to defend the most vulnerable people. I am not going to say anymore because [450]everything I said in the previous contribution was related to this section on disablement and percentages and so on.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  Some people are under the misapprehension that disablement benefit is disability benefit. It certainly is not. A person qualifies for disablement benefit if he or she has an accident on the way to work, during work or on the way home from work, without taking a break. This is in addition to the occupational injuries benefit and is in addition to disability, and a person can work with it. Until now, there has been no change in the way it has been assessed because it has always been assessed in percentages. This is not new.

I have dealt with people in the last 17 years in respect of accidents. They might have a scar and the disablement will be assessed at 1% to 2%, just because it does not look good. I see what the Minister is trying to do. A lump sum can be paid to somebody who has a scar on his or her finger, or whatever. I have dealt with this for 17 years, and I have never seen a percentage set for the loss of a finger. I do not know where the Senator is getting that from. Perhaps he is right, but I have seen people who lost a finger getting rated at 19% or 20% disablement.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  Was it an index finger?

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  It depends on the severity of the injury and whether the loss of the finger stops the person carrying out the job he or she was doing before the accident. It is not just 14%.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  It is on the website.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  It can be set at any amount——

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  A Kerry footballer might also have trouble with his fingers.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  Senator Moloney to continue, without interruption.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  Are we putting percentages on our body parts? A person could lose a finger and be rated 25% disabled. A pianist who loses a finger and cannot play the piano could be rated at 50%. I do not think the percentages were set in respect of just losing the finger. It is about the extent of a person’s injury and how it impedes the person from carrying out his or her job.

I can see where the Minister is coming from. We were paying out up to €16,000 in lump sums for a very small injury. She is just bringing things into line. If the disablement injury was rated at over 20%, the person would be offered a pension. I hope the Minister will not increase that percentage any more in the coming years. I agree that 15% is still a relatively small injury and will not be a huge disablement.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  My concern was very like that of the Opposition initially. I was looking at this as disability as opposed to disablement. I now know that is not the case. Is there a reference or guide to body parts which if lost——

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  Yes, it is on the Department of Social Protection website.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  I do not claim to know much about it. I am happy with the clarifications, particularly those offered by my colleague, Senator Moloney. On that basis I am happy to support the measure.

[451]Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  I thank Senators for their remarks. The disablement benefit applicants who satisfy the occupational injury criteria are referred for an in-person assessment by a medical assessor of the Department. That assessor would determine the percentage loss of faculty and would be governed in the first place by the physical level of disablement suffered by a person. As an occupational benefit, there would also be a relationship with the capacity to carry on with an occupation. I stress that this is a medical assessment and it is not done by administrative officials.

The rate of benefit payable depends on the percentage loss of faculty assessed. Disablement benefit may be paid, as Senator Moloney, who is clearly an expert, would know, as a once-off gratuity or lump sum or in the form of a pension. Those payments may be made regardless of the fact that the person could return to work and take up the full-time employment which the person had before the accident. It does not require that a person would in any way stop working, and people frequently go back to work. I understand this may apply to many people in public service employment who may be prone to receive an injury in the course of their occupation. Certain public service obligations would carry that risk.

We are indicating that with 1% to 9% disablement that there is an option of a gratuity and with 10% to 14% there is an option of gratuity or pension. With the change, if the level of disablement is between 15% and 19%, the option from next year will be a gratuity or pension but from 1% to 14%, there will not be any payment. The saving to the Department next year will be approximately €2.5 million and just under €5 million in a full year. For anybody above 20% disablement, the existing process allows for a pension and that will continue next year.

Other countries have been mentioned. In the UK the disablement level is 14%; therefore, essentially, we are moving to the UK norm. In Denmark the level is 15%; in Germany it is 20%; in Lithuania and Portugal it is 30%; in the Czech Republic and Spain it is 33%; in the Netherlands it is 35%; and in Austria, Bulgaria, Greece and Hungary it is 50%. The EU norm tends to be somewhat higher than ours as with people who receive this kind of injury in association with their work or going to and from work, the expectation is that when they recover they will return in full to the previous occupation. The disablement benefit, as Senator Byrne stated, is to compensate for an injury suffered. It is not like disability, where a person would be prevented in some way from working. People may be in a public service occupation where there is full sick pay in the context of injury, and on returning to work they would generally resume their occupation in full. It would not affect ultimate retirement benefits. One could say that we are moving to a European norm.

Senator Mooney spoke about the history of social protection in Ireland, with people in various Governments trying to enable people to get more payments from social welfare. There are some areas in which payments are much larger than the equivalent in other European countries with which we would identify and that have very strong social welfare systems. As a Minister I am anxious to get cross-party support on the idea that whatever the level of difficulty and deep the recession, as we move through these very painful cuts we should retain the notion of a welfare state for people. In the context of existing pressures we must also look at maintaining the welfare state in a way that is more cost-effective and targeted. I put it to Senators that this change is in that category.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  I got the 14% figure from the Department of Social Protection website. There was a reference to the loss of an index finger as a 14% disablement. A finger loss for a pianist is different from a finger loss for a clerk.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  That was an example.

[452]Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  Is it with a view to those figures that 15% was used to exclude people who might be considered to have a minor occupational injury, although it could be devastating for certain people? These changes apply to new claimants of the benefit, which is paid for by PRSI. It is not a change to new entrants to PRSI. If the general insurance companies which provide similar schemes to people came up with a cut for existing members, there would be holy war. People would argue that they have paid into a system——

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  It is paid on a very reduced rate stamp and not even on the A stamp. It is paid on the J stamp.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  It is not appropriate to have——

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  I am happy to have it clarified.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  The PRSI is very——

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  I am trying to tease this out in order to fully understand the matter before we decide on it. I certainly never claimed this was the disability allowance.

An Leas-Chathaoirleach: Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  If I allowed such interventions I would soon lose control.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  That would be terrible.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  I am worried that such changes will be introduced to the disability allowance next year.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  It does not apply.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  I know, and I am not trying to confuse the issue. I know what disablement benefit is and it is different from the disability allowance. We are clear on that but there are fears that in future the Government will try to do what I describe. There were leaks in the run-up to the budget that the criteria for schemes such as disability allowance would be changed. That was speculated upon in the media and I thought it a regressive way of reforming the system. The British are now telling people who were previously told they could not work to begin working again. I accept that is a separate issue but I am worried that this issue will set a precedent. The 14% figure comes from the Department website and it seems those injuries are relatively serious. I am not sure that the comparison with other European countries is appropriate for those who pay into the benefit system. People pay their benefits with the expectation of getting paid back. This is not a gratuity from the Government but rather a system into which people pay as a social insurance. They are entitled to benefits as a result. We are not cutting the rate but rather the qualification criteria to avail of the benefit for which people have paid, which is regressive.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  I am grateful to the Minister for the clarification and indicating there is a €2.5 million saving. Is there any indication of a potential fault in this area? Is the system so well defined — the Minister described an independent medical examiner — that there could be no fault? I am thinking of people who return to full-time employment. We are all aware of bad back syndrome and one cannot come up with a conclusion for a bad back. I am not saying that people would not have such a condition, and I have suffered it myself on occasion. That is the context in which I made the suggestion.

This will be a recurring theme throughout the debate and the Minister is very much aware of it. I will be relying to a large extent in my comments on Fr. Seán Healy, with whom I have worked at the National Economic and Social Forum for many years and for whom I have [453]tremendous respect. In the context of what others and I have said about the budget, its framing and priorities, he has said the better-off will continue to dodge their responsibilities and thrive, while the gap between them and Ireland’s poorest will continue to widen dramatically. He has also said many transnational corporations will continue to pay no tax whatsoever on their substantial profits, while small and medium-sized enterprises will see no real improvement in their limited access to credit. This will be a recurring theme and I am sure the Minister will have an opportunity to indicate her own thinking in this regard as we proceed. I do not suggest it be done on this section. I am grateful to her for her clarity in that regard.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  A couple of points were raised. Senator Thomas Byrne has referred to an existing benefit to which people have contributed as being limited. The problem with the social welfare system from a structural point of view is that the deficit in the social insurance fund for 2011 is approximately €1.9 billion. Even after taking these very difficult measures, next year the gap is likely to be €1.5 billion. One of the difficulties for the country is that, compared to other jurisdictions, we have very low rates of PRSI contributions. It might be argued that some of our taxes such as the universal social charge and part of income tax ought to be designated to provide for more PRSI benefits, but according to the OECD figures we are about the third lowest contributor in terms of both employee PRSI and, very importantly, employer PRSI contributions. During the boom the Government relied on a big wall of taxes — in the same way as people now talk about walls of money — from the construction industry and property development. Once this had receded, we were back to relying much more on the social insurance fund. The problem is that the deficit in the fund is very large. One can address it in a couple of ways. The first is to borrow money to meet the deficit, which clearly we are doing, this year and next year. The second is to limit some of the benefits payable. In this case, we are limiting a benefit for new entrants who apply. Third, one could seek an increase in the contribution base of the fund on a gradual basis for a number of years.

Senator Paschal Mooney raised the issue of disability. Disablement has nothing to do with disability. The UK system is different from ours because under that system and in the North, with which I am sure Sinn Féin Senators are familiar, going back a number of years, there has been a focus on every person — no matter what is his or her level of disability — being available for work and their ability to work. Next year the cuts in social welfare in the North, for instance, will amount to approximately €700 million, compared to cuts of €475 million in the Republic which has a much larger population. Some of the cuts made in the North in regard to persons with a disability will be, unfortunately, far more severe than anything that will happen in the Republic. People in the North, from all political parties, are deeply concerned about this.

To be clear, many of the people who receive disablement benefit are in full-time employment, very often in the public service. I have never heard of fraud being mentioned in that regard.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  One cannot defraud on a finger.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  That is not what I was inferring. I only asked the question.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  They generally have access to a full sick pay system. If they have an accident and are out of work, they are paid. They then go back to work on full pay. This is recognition of their disability. A scar may have an emotional as well as a physical significance. That is for the medical assessor, the doctor reviewing the case, to determine. The decision is not made by administrators. In this case, we are moving towards the European norm.

Question put.

[454]Senators: Vótáil.

The Seanad divided by electronic means.

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  In the absence of one of the Tellers, we will have to take the vote manually.

Question again put.

The Committee divided: Tá, 32; Níl, 16.

Information on Ivana Bacik  Zoom on Ivana Bacik  Bacik, Ivana. Information on Paul Bradford  Zoom on Paul Bradford  Bradford, Paul.
Information on Terry Brennan  Zoom on Terry Brennan  Brennan, Terry. Information on Colm Burke  Zoom on Colm Burke  Burke, Colm.
Information on Deirdre Clune  Zoom on Deirdre Clune  Clune, Deirdre. Information on Eamonn Coghlan  Zoom on Eamonn Coghlan  Coghlan, Eamonn.
Information on Paul Coghlan  Zoom on Paul Coghlan  Coghlan, Paul. Information on Michael Comiskey  Zoom on Michael Comiskey  Comiskey, Michael.
Information on Martin Conway  Zoom on Martin Conway  Conway, Martin. Information on Maurice Cummins  Zoom on Maurice Cummins  Cummins, Maurice.
Information on Jim Darcy  Zoom on Jim Darcy  D’Arcy, Jim. Information on Michael D'Arcy  Zoom on Michael D'Arcy  D’Arcy, Michael.
Information on John Gilroy  Zoom on John Gilroy  Gilroy, John. Information on Jimmy Harte  Zoom on Jimmy Harte  Harte, Jimmy.
Information on Aideen Hayden  Zoom on Aideen Hayden  Hayden, Aideen. Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  Healy Eames, Fidelma.
Information on James Heffernan  Zoom on James Heffernan  Heffernan, James. Information on Imelda Henry  Zoom on Imelda Henry  Henry, Imelda.
Information on Lorraine Higgins  Zoom on Lorraine Higgins  Higgins, Lorraine. Information on John Kelly  Zoom on John Kelly  Kelly, John.
Information on Denis Landy  Zoom on Denis Landy  Landy, Denis. Information on Marie Moloney  Zoom on Marie Moloney  Moloney, Marie.
Information on Mary Moran  Zoom on Mary Moran  Moran, Mary. Information on Tony Mulcahy  Zoom on Tony Mulcahy  Mulcahy, Tony.
Information on Michael Mullins  Zoom on Michael Mullins  Mullins, Michael. Information on Catherine Noone  Zoom on Catherine Noone  Noone, Catherine.
Information on Susan O'Keeffe  Zoom on Susan O'Keeffe  O’Keeffe, Susan. Information on Pat O'Neill  Zoom on Pat O'Neill  O’Neill, Pat.
Information on Tom Sheahan  Zoom on Tom Sheahan  Sheahan, Tom. Information on Jillian van Turnhout  Zoom on Jillian van Turnhout  van Turnhout, Jillian.
Information on John Whelan  Zoom on John Whelan  Whelan, John. Information on Katherine Zappone  Zoom on Katherine Zappone  Zappone, Katherine.



Níl
Information on Thomas Byrne  Zoom on Thomas Byrne  Byrne, Thomas. Information on John Crown  Zoom on John Crown  Crown, John.
Information on David Cullinane  Zoom on David Cullinane  Cullinane, David. Information on Mark Daly  Zoom on Mark Daly  Daly, Mark.
Information on Marc MacSharry  Zoom on Marc MacSharry  MacSharry, Marc. Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Mooney, Paschal.
Information on Ronan Mullen  Zoom on Ronan Mullen  Mullen, Rónán. Information on David P.B. Norris  Zoom on David P.B. Norris  Norris, David.
Information on Trevor Ó Clochartaigh  Zoom on Trevor Ó Clochartaigh  Ó Clochartaigh, Trevor. Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  Ó Domhnaill, Brian.
Information on Darragh O'Brien  Zoom on Darragh O'Brien  O’Brien, Darragh. Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  O’Donovan, Denis.
Information on Averil Power  Zoom on Averil Power  Power, Averil. Information on Fergal Quinn  Zoom on Fergal Quinn  Quinn, Feargal.
Information on Mary M. White  Zoom on Mary M. White  White, Mary M. Information on Diarmuid Wilson  Zoom on Diarmuid Wilson  Wilson, Diarmuid.

Tellers: Tá, Senators Paul Coghlan and Susan O’Keeffe; Níl, Senators Trevor Ó Clochartaigh and Diarmuid Wilson.

Question declared carried.

Question proposed: “That section 4 stand part of the Bill.”

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Section 4 provides for the discontinuation of the current entitlement to the payment of a half rate qualified child increase where the spouse, civil partner or cohabitant of the beneficiary has weekly income in excess of a prescribed amount. This applies to new claimants and also extends the reference to the spouse of the beneficiary.

I am sure the Minister will clarify or confirm that the reason for the change in language relates to the consequences of the civil partnership Act in which reference is made to a civil partner or a cohabitant. She might remember that I raised an issue before about the ESRI and this new legislation. I am curious to know whether this section will have an impact. The message conveyed by the ESRI report is that those who are cohabiting may not be aware that as a [455]result of these legal changes, they may find themselves in difficulty when it comes to the division of assets. The first part, or core, of the section is about the reduction in entitlement.

  1 o’clock

I would be grateful to hear the Minister’s comments on the suggestion that the abolition of the temporary half rate payment will act as a disincentive for those trying to return to employment. Because there are so many other hits to vulnerable families this seems like another which particularly affects one-parent families in which there may not be sufficient money in the household. I am thinking, for example, of a one-parent family in which the child is currently receiving child care outside the home in order to allow the mother — most lone parents are mothers — to work. She may find herself in difficulty if there is a reduction in the half rate payment and a cap on the entitlement because she will not be able to pay for child care. I am not talking so much about State child care services or a privately run child care facility, rather I am thinking of a person who, perhaps, pays a neighbour a few euro to look after a child for a few hours while she is working. This assumes the lone parent is working. Statistics indicate that unemployment has hit lone parents disproportionately.

What does the Minister see as the impact of this measure? What savings does she expect to make as a result?

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  Section 4(2)(b)(i) amends the 2010 Social Welfare Act by inserting the following subsection (3A):

A similar amendment is made in the case of disablement pension.

I would like to hear the Minister clarify the position on the qualified child. The section, effectively, introduces means testing of the qualified child payment. There is no entitlement to it should there be an income of €400 a week coming into the household. Is that correct?

In many instances, where a person is in receipt of a State pension and has a dependent child with a disability, the household will have an income of more than €400 a week, as a couple. Therefore, this change is significant. Such a household will have no entitlement to the qualified child additional payment. What savings has the Department projected for this measure? Can there be any leeway if someone is over the €400 limit? What exemptions are envisaged?

Section 4(2)(c)(ii) states no increase will be payable “where the weekly income of that spouse, civil partner or cohabitant, calculated or estimated in the manner that may be prescribed, exceeds the amount that may be prescribed”. Am I correct in thinking that where the household income is more than €400 a week, the qualified child payment will not be paid? That is a serious step. It is a significant hit to the income of a household where there is more than one qualified child. Will the Minister explain the Government’s rationale for introducing this measure? Will exemptions be allowed for a child or young adult still living with parents who are in receipt of a disablement pension, carer’s allowance, contributory or non-contributory State pension, transitionary pension or invalidity pension? This measure is the most significant part of the section and I would like to hear the Minister’s views on it.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  The only part of this section with which I can agree is the change in the definition of “spouse” to include “civil partner or cohabitant”. Apart from this, I must oppose the thrust of what the Minister is trying to do. The section cuts the half rate qualified [456]child increase for people on invalidity pension or contributory pension or in receipt of carer’s benefit.

The Minister has said that in the budget the Government has protected carers. Many carers are concerned about this cut. Senator Paschal Mooney has observed that this measure could act as a disincentive for people to go to work. Ministers talk all the time about the need to change the social welfare system to remove poverty traps which cause people to lose benefits if they take a low-paid job that pays €400 or €450 a week and act as a disincentive to seeking work. This measure could have that impact.

Will the Minister clarify the following point? If a person is in receipt of carer’s benefit, his or her spouse is earning €420 or €430 a week and the couple have two or three children, will the discontinuation of the half rate qualified child increase apply to all children? If so, it will be approximately €15 per child. In such a household with three children the cut will amount to €45 a week. In this way, the measure could force many more families into poverty. It could also, as previous speakers said, act as a disincentive for people to go to work. In that sense, this is a regressive measure.

Senator David Norris: Information on David P.B. Norris  Zoom on David P.B. Norris  I find it interesting to observe the ricochets of the passage of the civil partnership Act, particularly as they emerge in this legislation. The most reprehensible and disgraceful aspect of the civil partnership Act which I supported in principle was the total absence of concern for or a reference to children which left them exposed. Although it is possible for a same sex partner to adopt, that person adopts as an individual. If the adopting partner dies, the child is left exposed and vulnerable. That is a horrible position to be in. I ask the Minister, taking into account that this is mentioned in the Bill and that her title is Minister for Social Protection, to use her undoubted skills to urge her Government colleagues to provide protection for children in same sex relationships. It is a remarkable irony that whereas children are excluded from the civil partnership Act which would have given them some degree of right or advantage, it is possible to include them in any situation where they could be disadvantaged. That is most regrettable. I ask the Minister to consider this irony. These citizens can be disadvantaged again, having been refused a degree of recognition in the civil partnership Act. I hope the Government will address this issue which is one of the issues outstanding in this area.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  I am happy to limit my comments and wait for the Minister’s reply, at which stage I may have to come back in.

This is a cut to a basic payment. When the people concerned receive their money every week, it is their basic income. The State calls it a basic payment. This is spin and propaganda to be able to say we have protected the basic rates when there is a specific cut for any new claimant in receipt of carer’s benefit. The Minister talks so much about carers and protecting pensioners. The measure proposed will affect transition pensioners who cannot earn extra income, although those in receipt of a contributory pension can go out to work. Invalidity pensions will be cut if those invalided have children and come within the ambit of this section. Carers will also suffer a cut. The worst cut of all is on people in a family with carers and FIS, a cut of €160 a week. These people are being cut. It is pure propaganda to state that the basic rates of social welfare have been protected when cuts are being made here, there and everywhere that will have a regressive impact on the lives of certain families. The Government should take a broad brush approach which tries to make every member of society pay according to what he or she can afford. One would think that would be the socialist left wing ideology, but in this country the socialist left wing ideology is to target those who will not vote at all and to protect the voting masses. That policy is wrong and will come a cropper next year and the year after when the Minister’s difficult job continues.

[457]Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  This section concerns new applicants. We should also realise that it only applies to someone whose spouse earns over €400. Where this is the case, the household gets a benefit and there is a household income per week of €600 — the benefit and the earnings of the spouse. If the spouse earns less than €400, this does not apply and there is no loss. Therefore, there is a minimum income of €600 coming into the house. This provision is already in place where jobseeker’s allowance is sought, so it is not new. All it does is bring these benefits into line.

Senator Cullinane said this would hurt someone on a very low income. If the person is on a very low income, the person claiming benefit can claim for a qualified adult. If the spouse is on a very low income the person can claim the graduated rate. If the spouse is earning less than €100, the claimant can claim the full amount. The graduated rate goes up to something like €346. If the person is on very low pay, there will be an extra benefit payment for that adult. Also, if the pay of a person with two or three children is reduced, the FIS will increase. Therefore, the cut may not be as frightening as the Senator thinks. There are ways of working around it. As I mentioned, as this provision is already in place for allowances, the Minister is only bringing this payment into line.

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  I am concerned about the cutbacks affecting one-parent families. I was shocked by this socially regressive budget and am still in a state of shock. I am sure the Minister is aware the CSO produced statistics on 13 November that show the increase in inequality of income between the better-off and the least well-off. There is no question but that anybody in a one-parent family is more likely to be in poverty than anyone in a two-parent family. The reduction of payments for children of single parents on a phased basis from age 14 to age seven is a brutal cut. This cut will have a brutal effect on child care for these families if the parent does not get the full benefit for the child up to the age of 14.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  That is not relevant to this section. The Senator may raise it when we are on the relevant section.

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  I will just finish this point. There are 90,000 families in receipt of the one-parent family payment.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  That is in section 7.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  We are not on section 7 yet. The Senator may raise that issue when we come to the relevant section.

Senator Ivana Bacik: Information on Ivana Bacik  Zoom on Ivana Bacik  I support what Senator Norris said about the need for recognition of children of civil partnerships. This is an issue I, Senator Norris and a number of others made at various times during the civil partnership Bill debate. I am aware it is not directly concerned with this issue, but I want to mention it.

I am hugely impressed by the detailed knowledge Senator Moloney has of social welfare schemes and entitlements. She has brought a great deal of knowledge and expertise to bear on this debate and I could not possibly come near that.

It is very hard to sit and listen to Fianna Fáil Members attacking the Minister, Deputy Burton, for what has been an incredible achievement in protecting the social protection budget and in reducing the level of cuts that has been applied to far less than the level applied by the Fianna Fáil Government in its last budget last year. We should also remember the budget in which the Christmas bonus was abolished. It is very difficult to listen to Fianna Fáil talk about cuts and attack the Government.

[458]Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  Did the Labour Party not say it would reinstate the Christmas bonus? Should we not discuss the cuts at all? Is that right?

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  This section has nothing to do with lone parent families and does not affect them at all.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  We are aware of that.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  This provision brings into line an arrangement that already replies with regard to people on jobseeker’s payments or illness or injury benefit. The section brings the arrangements that apply already with regard to jobseekers into the areas I have mentioned and it only applies where somebody who has one of the benefits mentioned has a spouse or civil partner who has earnings in excess of €400 a week. If the spouse or civil partner has earnings of less than €400 a week, the claimant continues to get the half-rate qualified child allowance. If the spouse or the civil partner has earnings just slightly above €400 a week, there are a variety of alternatives which may allow them get additional income support through the Department of Social Protection. Senators should remember there is no upper limit to the amount that may be earned by the spouse or partner. In practice, we have seen from the profiles that where the spouse or the partner has a full-time job, he or she often has earnings very much in excess of the €400 per week.

One of the difficulties previous Ministers and I have been faced with is that the structure of social welfare here means we have between 40 and 60 basic systems. What we are trying to do is to introduce a basic level of uniformity across the systems to make them more understandable and to ensure that people in similar categories are treated in a similar way.

Comments have been made with regard to carers who are on a carer’s benefit. In many cases, the parent who is a carer is more than likely to be caring for a child of the family, the spouse or the civil partner and in that case is receiving, in addition, the domiciliary care allowance up to the age of 16. The child, in his or her own right, will also more than likely get the disability allowance.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  They could be caring for anybody. There is no rule implying they should be caring for a child.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  I just want to explain. I understand the Senator’s concern that we should limit, as far as possible, the impact of changes in arrangements for people who are very vulnerable. However, the complexity of the social welfare system is such that where we have somebody whose spouse has earnings in excess of €400, particularly where the partner is a carer, it is very likely there will be additional income in the house. If the person is caring for a child of the family, there will be other payments going to that family, either the domiciliary care allowance or the disability allowance from the age of 16. I wish to make that point to the Senators.

Senator Mooney spoke about the ESRI study, which was mentioned on Second Stage. I have not had an opportunity to study it in detail. I said to him that when the pressure of debate is less difficult, it would be interesting to have a look at that report. The report makes a number of interesting observations on lone parent families and the reasons they have not had better outcomes, given our structure of income supports.

Senator Mooney and others raised the issue of the ESRI study, which queried whether people living in informal, cohabiting partnerships were aware that, under legislative changes, they may have incurred relationship responsibilities even though they were not in formal civil partnerships or marriages. This is a valid observation, but I am not a lawyer. As with the issue [459]of the adoption of children in civil partnerships, I hope we will have an opportunity to revisit this debate further down the road in order that we can consider its impact on families, irrespective of whether the parents in those families are married or in civil partnerships. For example, what are the implications for children if a parent in a civil partnership dies? Unfortunately, we do not have the time to discuss these questions now.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  The spin from the Government side has been mentioned, in that its representatives have stated that the people affected by this cut are entitled to secondary benefits.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  They may be.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  We are aware of that. In some situations, they may qualify for an increase in family income supplement, FIS, but that will not compensate for this cut. The Minister is trying to put everyone on a par with the jobseeker’s allowance, but not everyone should be. How can carers be on a par with jobseekers? There is a clear difference. The half-rate qualified child increase is granted for a reason.

No amount of spin from a Government representative or anyone else can counter the example of two parents in a family, one of whom is a carer and in receipt of carer’s benefit while the other is working with a salary of €450 per week. We all understand that someone earning less than €400 per week will continue to receive the payment, but the amendment will abolish it completely for anyone earning in excess of €400. A cut will be made to people earning €420 or €430 per week. Perhaps discretion will be used in the case of a person earning €403, €404 or €405, but a difference of €10 or €20 is a small amount of money.

The Minister missed the Opposition’s point. We are cutting the number of incentives to go to work. In the hypothetical situation that I outlined, the family will lose approximately €15 per each of its two, three or four children. This will impact on the family’s quality of life. No amount of spin can take away from the fact that this is a cut.

The Minister should examine the disincentives for people in receipt of jobseeker’s allowance to return to work. She should ensure that incentives are built into the social welfare system so that someone earning €450 per week at work does not lose all of his or her benefits. We should be moving towards this approach, not cutting people’s entitlements. Those currently in receipt of this payment will be covered, but new applicants will not.

The Minister laboured this point — pardon the pun — for many years while in opposition. She was correct, in that we need to tackle some of the traps in the social welfare system that act as disincentives to work. The removal of this payment is one such disincentive and will affect the types of family described in my example. Irrespective of any FIS increase, there will be a net cut in their incomes. It is regressive and wrong.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  I thank the Minister for her clarification. The Opposition is entitled to raise any query or make any comment that is valid. I have spent nine months listening to certain Members on the Government side, Senator Bacik in particular, claiming that we have no such entitlement. It is rubbish. We are trying to pick through the Social Welfare Bill in a constructive manner with the Minister in order that she can answer our questions. She is endeavouring to do so. We will decide how to vote on each amendment and section. This is the start of a debate on important legislation and I will not take such claims from Senator Bacik, the leader of the Labour Party group.

[460]Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  The Senator should comment on the Bill.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  Through the Chair, neither my colleagues nor I will accept it. I do not want the debate to disintegrate into political muck-throwing across the floor, given the fact that people outside the Houses will be affected by these cuts. I understand that the Minister has a difficult job. I understood the same of all previous Ministers for Social Protection, but less understanding was given to them by our esteemed colleagues in the Labour Party while the latter were in opposition. I could cite the Labour Party’s election manifesto, the programme for Government or an entire book of quotes from the previous Dáil and Seanad, but what benefit would it be to people whose rates have been cut? The programme for Government reads, “We will maintain social welfare rates”.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  We have.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  The Government has not.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  One at a time, please.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  The Government has not maintained them. It is better to be upfront with people. The Government could not meet the promises it made in its election manifestos or the programme for Government. Of course savings must be made in social welfare. It is an issue with which the previous Government tried to grapple without the support of Fine Gael or the Labour Party.

The Minister was correct to refer to the deficit in the Social Insurance Fund, an issue that needs to be tackled. In the previous Dáil, I was a member of the Committee of Public Accounts alongside the Minister’s colleague, the Minister of State, Deputy Shortall, who consistently raised this point as well. How will we replenish the fund if the Government reduces employers’ PRSI as part of the jobs budget-initiative which the past six months have proved does not work? The Government needs to revisit the jobs initiative and to stop taking money out of private pension funds.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  We are on section 4.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  I appreciated the Minister’s contribution to this debate. She stated that she was facing a difficult situation, namely, the deficit in the social insurance fund. I agree with her in this regard, but the deficit will worsen if she allows employers to pay less into the fund.

If Senator Bacik wishes to continue an argument that is irrelevant to this section — if she wanted to grand stand, she should have made her argument on Second Stage — I will oppose every single question.

Senator Ivana Bacik: Information on Ivana Bacik  Zoom on Ivana Bacik  I object to that remark. I did not start the political posturing.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  Order, please.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  The Minister will agree that my party is taking the Bill seriously. Our spokesman, Senator Mooney, is going through each section, we are affording the Minister an opportunity to respond, as we should, and we are listening to her. I will watch for the next [461]few hours. I will not allow this debate to disintegrate into the usual rubbish thrown across the floor by Senator Bacik.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  Let us not be provocative.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  My party is perfectly entitled to raise any issue or question. We produced an alternative, costed budget. We will stand over our decisions in this Chamber. I will not listen to criticism from the Senator.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  Point taken.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  There has been a lot of guff about equality.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  Senator Byrne should stick to section 4.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  I am on section 4. We have heard a great deal of guff today. While it is great to hear civil partnership mentioned, it has nothing to do with the measure before us. Civil partners have been dragged into the net, as they always have been under the social welfare system. Irrespective of with whom one lived and whether one was married or single, income has always been taken into account. The cuts experienced by carers, old people and those with children cannot be dressed up as some type of pro-gay rights or equality initiative. They are cuts for the must vulnerable people in society.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  The Senator should stick to——

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  This is how the cut is being dressed up.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  The Senator is being unfair. We are not dressing it up.

Acting Chairman (Senator Paul Coghlan): Information on Paul Coghlan  Zoom on Paul Coghlan  We will hear Senators one at a time. Senator Marie Moloney may speak later.

Senator Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  The use of the term “civil partner” and the fact that a partner’s income will be taken into account when the cut takes effect do not make it a major equality initiative. It is wrong to use this argument in defence of cuts for the most vulnerable. Senator David Cullinane made a highly relevant point in this regard. Job seekers were always treated differently from other social welfare recipients because, in theory, they could secure employment, although I accept this theory has been strongly undermined by the high unemployment rate. Carers are treated differently because they cannot go out to work on the grounds that they must look after someone else. Similarly, older people are treated differently because they cannot go out to work. One class of people affected, transitional pensioners, do not have the option of going to work because they would lose their benefit were they do so. Perhaps they are the only ones who should be equated to job seekers.

We have always looked after particularly vulnerable groups through the social welfare system. We have provided carers with a household benefits package which is not available to job seekers. Distinctions have been made during the years because, in theory, at least people of working age can try to get a job. That is the difference and it is wrong to bring benefits of different groups into line because doing so breaches the fundamental principle of fairness.

I accept that my party in government may, on a smaller scale and on one or two occasions, have introduced different entitlements for new claimants. When the measure proposed takes effect and people start to notice they are receiving less than their neighbour, there will be uproar and we will hear the type of revolutionary language we are hearing at the meeting [462]taking place in the hotel across the road on the household charge. People will not accept their neighbour having more money simply because he or she entered the system a little earlier. This will be a major challenge for the Government in the next few years. I am not trying to predict what it will or will not do, but it will come under pressure because it is consistently targeting new entrants to the social welfare system. It is not sustainable to continue this approach.

Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  It is important that we use this session to unpick the Social Welfare Bill. That is our job and there is no need for charges to be levelled by either side of the House. Let me get to the nitty-gritty of the issue. If a person is receiving a pension or benefit, for example, carer’s allowance or invalidity benefit of approximately €200 a week, and his or her spouse is earning €400, the income of the household will be €600 a week. In such circumstances, the person will no longer qualify for the half-rate qualified child increase. Has this figure been poverty-proofed? As the Minister stated, the persons affected may be entitled to other welfare supports.

This brings me back to a written question I submitted to the Minister and the commission when I asked whether the latter had deliberated on total household income. What is the threshold for total household income below which other measures will kick in? We are only looking at part of the picture. A household in which one spouse is in receipt carer’s allowance and the other earns €300 a week may also be in receipt of family income support. Until we assess the total income of a household, it is difficult to decide what is fair and unfair. I ask the Minister to respond on that point.

On a more general point, as many Senators have noted, the provision will apply to new rather than existing recipients of the payments in question. Does this approach make fish of one and flesh of another? While I am aware that we are living in difficult times, will new applicants not make the case that a transition period should have been introduced to move existing recipients to the new rate? We must be equitable on this issue.

I ask the Minister for a response to the two issues I have raised.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  Senator Thomas Byrne who has left the Chamber presented an argument on behalf of new applicants. Times were better when people applied for the benefit in the past and we must be realistic. More money was available and we were able to help such individuals. If we make a big issue about new and existing recipients, it may result in existing recipients losing their benefit. When people used to come to my office to ask why they could not receive a benefit that so and so down the road was receiving, I used to tell them that if they complained about so and so, he or she would lose the benefit if he or she was not entitled to it and the person making the complaint would still not receive it. I ask Senators not to make a big issue about current and new applicants. Times were better when people received approval for benefits in the past.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  A question was asked about total household income. We do not have the capacity to look at total household income. In some countries, notably Austria, the social welfare system is built around total household income. This means one includes in the income calculation payments that people in farming receive, which would be a significant amount in this country in some cases. One also includes university fees for those who receive a grant. Sometimes people think of total household income as being only income from social welfare payments when, in fact, households can receive income from a wide variety of sources. We do not have a system such as that in place in Austria and our social welfare system will not have the capacity to operate in that manner for a long time.

[463]Senator Fidelma Healy Eames: Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  Why not?

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  The reason is that we did not build the system in that way. Instead, we built 50 or 60 separate schemes, disregards and conditionalities which vary according to the status of the individual, for example, his or her relationship, the age of children, older people and so on. What we are moving towards is a system of five parts relating to five conditions of one’s life. We have the period of childhood and the period after a person reaches retirement age. Then we have three stages for people of working age, that is, the period between finishing education and retirement. In the case of the latter, we have three streams of payments. First, we have jobseeker’s benefits for those who are out of work and seeking employment. Second, we have disability payments for persons with a certain incapacity, invalidity payments for persons with a higher level of incapacity and illness benefits. Third, we have lone parent payments which are based on relationship status. The general reform is to try to bring the three working age streams into line with each other. In the specific case under discussion, the measure already applies to job seekers and has been extended to others of working age and people who have retired on various pension structures.

I reiterate that the provision applies to people whose spouse or civil partner has an income in excess of €400 a week. The individual will receive the individual rate which is, in general, a minimum of €188 a week and his or her partner will have an income of at least €400. This is an income of €588 which would be augmented by child benefit in the case of households with children. While the income level of such a household is not enormous, it is significant. One of the principles in the Social Welfare Bill is to try to maintain the basic rates of payment for those on a basic rate of social welfare. Carers who rely on their carer’s allowance for all of their income and older people who rely on the contributory or non-contributory old age pension, as is the case for the vast majority of pensioners, are not affected and their income is protected.

In the context of all the cuts made, Members from all sides will welcome this protection. Moreover, the basic income of carers has been protected.

Question put.

The Committee divided: Tá, 30; Níl, 15.

Information on Ivana Bacik  Zoom on Ivana Bacik  Bacik, Ivana. Information on Paul Bradford  Zoom on Paul Bradford  Bradford, Paul.
Information on Terry Brennan  Zoom on Terry Brennan  Brennan, Terry. Information on Colm Burke  Zoom on Colm Burke  Burke, Colm.
Information on Deirdre Clune  Zoom on Deirdre Clune  Clune, Deirdre. Information on Eamonn Coghlan  Zoom on Eamonn Coghlan  Coghlan, Eamonn.
Information on Paul Coghlan  Zoom on Paul Coghlan  Coghlan, Paul. Information on Michael Comiskey  Zoom on Michael Comiskey  Comiskey, Michael.
Information on Martin Conway  Zoom on Martin Conway  Conway, Martin. Information on Maurice Cummins  Zoom on Maurice Cummins  Cummins, Maurice.
Information on Michael D'Arcy  Zoom on Michael D'Arcy  D’Arcy, Michael. Information on John Gilroy  Zoom on John Gilroy  Gilroy, John.
Information on Aideen Hayden  Zoom on Aideen Hayden  Hayden, Aideen. Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  Healy Eames, Fidelma.
Information on Imelda Henry  Zoom on Imelda Henry  Henry, Imelda. Information on Lorraine Higgins  Zoom on Lorraine Higgins  Higgins, Lorraine.
Information on Cáit Keane  Zoom on Cáit Keane  Keane, Cáit. Information on John Kelly  Zoom on John Kelly  Kelly, John.
Information on Denis Landy  Zoom on Denis Landy  Landy, Denis. Information on Marie Moloney  Zoom on Marie Moloney  Moloney, Marie.
Information on Mary Moran  Zoom on Mary Moran  Moran, Mary. Information on Tony Mulcahy  Zoom on Tony Mulcahy  Mulcahy, Tony.
Information on Michael Mullins  Zoom on Michael Mullins  Mullins, Michael. Information on Catherine Noone  Zoom on Catherine Noone  Noone, Catherine.
Information on Susan O'Keeffe  Zoom on Susan O'Keeffe  O’Keeffe, Susan. Information on Pat O'Neill  Zoom on Pat O'Neill  O’Neill, Pat.
Information on Tom Sheahan  Zoom on Tom Sheahan  Sheahan, Tom. Information on Jillian van Turnhout  Zoom on Jillian van Turnhout  van Turnhout, Jillian.
Information on John Whelan  Zoom on John Whelan  Whelan, John. Information on Katherine Zappone  Zoom on Katherine Zappone  Zappone, Katherine.



Níl
Information on Thomas Byrne  Zoom on Thomas Byrne  Byrne, Thomas. Information on David Cullinane  Zoom on David Cullinane  Cullinane, David.
Information on Mark Daly  Zoom on Mark Daly  Daly, Mark. Information on Marc MacSharry  Zoom on Marc MacSharry  MacSharry, Marc.
Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Mooney, Paschal. Information on Ronan Mullen  Zoom on Ronan Mullen  Mullen, Rónán.
Information on David P.B. Norris  Zoom on David P.B. Norris  Norris, David. Information on Trevor Ó Clochartaigh  Zoom on Trevor Ó Clochartaigh  Ó Clochartaigh, Trevor.
Information on Darragh O'Brien  Zoom on Darragh O'Brien  O'Brien, Darragh. Information on Dennis O'Donovan  Zoom on Dennis O'Donovan  O'Donovan, Denis.
Information on Averil Power  Zoom on Averil Power  Power, Averil. Information on Fergal Quinn  Zoom on Fergal Quinn  Quinn, Feargal.
Information on Mary M. White  Zoom on Mary M. White  White, Mary M. Information on Diarmuid Wilson  Zoom on Diarmuid Wilson  Wilson, Diarmuid.

Tellers: Tá, Senators Paul Coghlan and Susan O’Keeffe; Níl, Senators Paschal Mooney and Diarmuid Wilson.

Question declared carried.

Question proposed: “That section 5 stand part of the Bill.”

  2 o’clock

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Section 5 provides for the implementation of certain provisions of Schedule 6 of the 2005 act relating to changes in the entitlement conditions for the State pension contributory and transition. It will mean in effect that there will be an increase in contributions from the current 260 weeks. Currently a person with an average of 20 to 47 PRSI contributions per year over his or her working life receives a weekly State pension of only €4.50 less than a person with a yearly average of 48 or more PRSI contributions. A lower pension will be paid to new applicants for State pension with a yearly average of less than 48 PRSI contributions which better relates to their PRSI record. The total number of paid contributions needed to qualify for widow’s contributory pension and surviving civil partner’s contributory pension will increase — correct me if I am wrong — from 156 to 520.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  It is 260.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  I thank the Minister. It will go to 260 with effect from July 2013. This will directly impact on women who have left the workforce to rear children. As a result of taking parental leave they have a lower number of PRSI contributions. Combined with reductions in child benefit, back to school allowance and one-parent family allowance, there is very much of an anti-mother bias at play. I do not suggest that the Minister is anti-mother, but we are talking about the economics of the situation and whom it will affect.

I understand that approximately 115,000 people currently claim the pension and that these changes will increase by a considerable amount the payments needed to qualify. It is a major additional criterion for new applicants to satisfy and will disproportionately affect women who live longer than their partners. There seems to be a great deal of opposition to this provision.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  On a point of order, are we dealing with section 6 or section 5?

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Section 5.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  Section 5.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  It is section 5, pension contribution change.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  I apologise; I thought the Senator was discussing section 6.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  There is a raison d’être for everything the Minister proposes which is why we question these things. I would be interested to know the context for this matter. When the decision was taken, was it anticipated that this would have a particular effect on [465]women who had left the workplace? Would it have been seen as somewhat discriminatory towards those who had voluntarily left the workplace to rear their children? While it is not down to the Government necessarily, in the past decade or 15 years there has been a trend towards getting women out of the home for purely economic reasons when the support should have been to provide the options rather than economically forcing or encouraging them out. It goes back to Charlie McCreevy’s tax individualisation which may have started that trend. We are now in a new place and perhaps those women who left the workplace in good times to rear their children may now find themselves with a lower level of pay.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  On Committee Stage in the Dáil the section was amended to reduce it from 520 weeks. As my colleague has said, the Minister is introducing a two-year increase in contributions, which is significant.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  That is not until section 6.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  I am looking at section 5.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  We are on section 5.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  Section 5 states, “that the claimant has qualifying contributions in respect of not less than 260 contribution weeks” and the section is called “State pension (contributory) and State pension (transition) — conditions for receipt.”

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  It is a safeguard to protect people on existing pensions.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  When the Cathaoirleach calls me I can explain it.

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Senator Darragh O’Brien to continue, without interruption.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  Perhaps to save time, I might let Senator Cullinane in and I can come in after.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  There is some confusion because I was minded to support section 5——

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  That would be very sensible.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  ——because I saw section 5 supporting an anomaly in the system.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  Exactly.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  However, the explanatory memorandum may cause some confusion. It states: “Section 5 provides that the implementation of certain provisions of Schedule 6 to the Social Welfare Consolidation Act 2005, relating to changes in the entitlement conditions for State Pension (Contributory) and State Pension (Transition) with effect from 6 April 2012, will not apply to existing recipients of those pensions.”

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  That is right.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  That was the first part of it. I understood that because there was some difficulty with the timeframe that was inserted into the Act——

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  No.

[466]Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  The purpose of this is to exclude those recipients because overnight their payments could be ceased if this was not changed.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  Senator Cullinane should listen to the resident social welfare expert and she will explain.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  On a point of order——

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  Senator Cullinane is correct.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  I apologise if I misled the Minister and misled the House in this regard. I was of course arguing on section 6, not section 5.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  However, the Minister might be able to explain the second part of the explanatory memorandum: “Paragraph 3 of Schedule 6 provides for the increase in the minimum number of paid employment or self-employment contributions required to qualify for the State Pension (Contributory) and the State Pension (Transition) from 260 to 520 with effect from 6 April 2012.” Perhaps that is where the confusion arises.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  I think we are now all on the same sheet. In 1997 this was brought in and the Minister is only introducing legislation to safeguard people with fewer paid contributions and ensure their pensions will not be reduced. It is only regulating something which is a good measure and I hope all Members can support it.

Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  Persons with a yearly average of between 20 and 47 PRSI contributions during their working lives receive a weekly State pension that is only €4.50 less than that paid to those with a yearly average of 48 or more contributions. If I read this provision correctly, the changes proposed mean that a lower pension will be payable to new applicants for a State pension with a yearly average of less than 48 contributions. This section, if approved, will give legislative effect to this measure which will have implications for new applicants for State pensions.

Moreover, I understand the section also includes a change in respect of late claims for certain contributory pensions. They can be backdated on a reduced scale up to five years, but the period of such backdating will now be reduced to a maximum of six months. If that is the case, the section obviously will have a serious negative impact on new applicants.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  That is provided for in a different section.

Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  If this measure is contained in a different section, Members can deal with it then.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  It is contained in section 9.

Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  Very well. However, I seek clarity from the Minister on the reductions for new applicants for State pensions based on the changes in respect of PRSI contributions contained in this section.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  This provision is what is called a saver clause. It ensures people on existing pensions will not be affected by the increase in the requirement for contributions. Were the section not to be included, pensioners in receipt of both contributory and non-contributory pensions, but for the most part the former, would find they would need 520 contributions. The increase in the number of contributions required was legislated for in 1997 and again in 2005. Consequently, the reference to Schedule 6 is to the Social Welfare Consolidation Act 2005. It [467]is coincidental that the next section is section 6. While they are two different legislative items, I can understand the confusion caused.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  That is fine.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  Essentially, because of the deficit in the social insurance fund and, more particularly, because we have more older people who thankfully are living longer, all Governments of all parties, dating back to the early 1990s, have sought to have people make increased levels of contributions to contributory pensions in the social insurance system. This is in order that when they become older, there will be enough money in place to provide for their pensions. I do not believe any party in either House of the Oireachtas has disagreed with this principle. This is a long-term measure which first appeared in legislation in 1997.

There was a reference to people who might have left the workforce to become involved in caring duties in the home. Members should also bear in mind that we have built up, again with all-party agreement, a comprehensive system of carer’s and household credits for those in the home. If they are not working, they can apply for credits. I reiterate that if someone for some reason is working in the home, he or she should always be careful to apply for credits because, together with paid contributions such as those under discussion, ultimately, they build their entitlement to the maximum State contributory pension. The Government is introducing this clause in the legislation to ensure the existing cohort of pensioners currently in receipt of the State pension who have less than 520 paid contributions are protected.

In essence, the Government will move to the new structure next April, for which, as I stated, the framework has been in train since 1997. It will mean, for instance, to revert to Senator Brian Ó Domhnaill’s point, that people who have built a full set of contributions will receive slightly more than those with fewer contributions. However, this has always been part of the structure towards which the entire Oireachtas has been moving. Members should bear in mind that in our system someone who has no contributions and lacks means may apply for a non-contributory pension. Ireland’s system, compared with many others, is relatively generous and, thankfully, the level for both contributory and non-contributory pensions is relatively high. While I understand the sentiments expressed by many Senators to the effect they would wish to see it higher, so would I, but the Government does not have the financial means to provide for this. Many have even been calling for cuts to the basic level of pensions and I have been happy to state I have been able to resist this in respect of both contributory and non-contributory pensions. However, I understand this does not go as far as many Members of the House might wish.

Question put and agreed to.

Question proposed: “That section 6 stand part of the Bill.”

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  This section deals with an increase in the number of contributions that will be necessary to avail of a widow’s pension or a surviving civil partner’s pension. Judging from the Bill, the threshold will increase next year from 156 contributions to 260 and in the following year from 260 to 520.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  No. I will explain when the Senator has concluded.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  Certainly in 2012, an increase from 156 contributions to 260 is envisaged. This is an increase from three years’ contributions to five years’. This is similar to the debate that took place earlier on the disablement allowance payment in that Sinn Féin is [468]concerned that this, again, could be a slippery slope, as the threshold appears to be increasing all the time. The number of contributions necessary to qualify for a widow’s pension appears to be increasing all the time. Moreover, as Sinn Féin, in principle, believes people should be entitled to such pensions, it cannot support the incremental increase that appears to be built into the section.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  While the necessary number of contributions will increase next year, it certainly will not rise to 520.

Senator David Cullinane: Information on David Cullinane  Zoom on David Cullinane  Very good.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  The Minister has made provision that it will not increase to 520 contributions which would equate to ten years’ work. Applicants for widow’s pension have always been assessed very generously when compared with those applying for old age pensions. There is no yearly average or anything like it, as it simply depends on the number of contributions paid in the year before the death occurred or over one’s lifetime. I have only one concern in this regard which the Minister might consider in due course. It pertains to young widows or widowers, as, although everyone refers to this benefit as widow’s pension, it is also payable to widowers and as such, applies to both men and women. My concern is that someone in his or her early 20s could be widowed and left with children. I acknowledge such persons may be able to claim lone parent’s allowance or other payment if they do not have five years’ contributions. In due course the Minister might consider graduating such contribution thresholds by age. In such a scenario, it might not be necessary for a widow or widower aged under 25 years or his or her deceased spouse to have five years’ contributions. Consideration should be given to the possibility of deciding that such individuals might not have had the chance to build up contributions. Certainly, as people now emerge from college later in life, they might not have had the chance to have five years’ contributions. I, therefore, ask the Minister to revisit this issue at some stage.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  I add to the concerns expressed. I assume what is happening is that the provision will align the rate of pension paid with the contributions made, while increasing the number of paid PRSI contributions needed to qualify for both widow’s and widower’s pension. In addition, I understand it will take effect from July 2013.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  Yes, from 27 December.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Apart from the financial impact, there is a concern that the long-term unemployed and those who have taken early retirement will be among the most vulnerable. I would be grateful for an explanation on this issue.

Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  This section increases the widow’s, widower’s and surviving civil partner’s contribution from three years to five years and takes effect from July 2012, if I am correct.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  No, December 2013.

Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  Obviously the explanatory notes have changed. There have been a few changes since the budget announcement. I understand there are 115,000 individuals in receipt of a widower’s contributory pension. Is it correct to say that those in receipt of a contributory pension will not be affected by these changes?

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  No.

[469]Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  Therefore, we are only looking at new applicants. Because people have lost a partner, husband or wife, they will find it more difficult to obtain a contributory pension. This is the wrong group of people to target. There are other areas within the social welfare budget where savings could be made without going after surviving spouses. In many cases these people, young mothers and young fathers, have to provide for families without additional income. If the breadwinner in the house passes away the wife will not be entitled to a contributory pension because of the changes proposed. This will affect the vulnerable, those who have lost husbands, wives or civil partners. Given that the Minister is targeting the wrong group, in conscience I could not support the proposals in section 6.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  A fundamental problem is that these are some of the changes in eligibility for contributory pension which the public does not fully understand. I note the death must occur after 27 December 2013. To give an example, a new male or female applicant at home who has worked for a period may have qualifying contributions of less than 260. The Minister mentioned the importance for those working in the home and rearing their families of signing on for their own credits. What provision will be made for that in so far as eligibility is concerned?

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  They will keep signing on.

Senator Brian Ó Domhnaill: Information on Brian Ó Domhnaill  Zoom on Brian Ó Domhnaill  They will just keep signing on. While there are many other headline items in the budget that get far more prominence, what provision is made for public information in regard to the eligibility changes? We all have met people in our constituencies who are working from the home who do not continue to sign on. Obviously this Bill will be passed and become an Act of the Oireachtas. Given the substantial number of eligibility changes in the Bill, it is incumbent on the Department to embark on an information campaign in respect of those changes. Senator Marie Moloney is correct that it is mainly widows and widowers who will be affected who in many instances may not have been in the workplace but have worked at home over a period of years, who would not get the information easily and would not interact with the Department. We will be opposing the section. Our spokesperson, Senator Paschal Mooney, and Senator Brian Ó Domhnaill gave the reasons. Assuming the Bill will be passed, I ask the Minister’s Department to consider embarking on an information campaign on entitlements, particularly how an individual working at home would go about continuing their credits to ensure they get their entitlements.

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  As I said earlier, in my political career, this is the most socially regressive budget we have ever had. I am not being personal when I say that Senator Marie Moloney seems from her tone of voice to be happy with it. She is so informed that she feels relaxed about it. She is not irate——

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  That is a personal remark.

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  I am just giving the Senator my honest opinion.

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Senator White——

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  That is a spurious and personal remark.

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  The Senator appears to be very up to date with all the information, but she is too peaceful in her heart. She should be robust in——

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  I ask Senator White to speak on section 6.

[470]Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  The total number of paid PRSI contributions needed to qualify for widow’s, widower’s and surviving civil partner’s contributory pension will increase from 156 to 520 contributions with effect from July 2013.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  No, that is wrong. The number is 260 with effect from 27 December 2013.

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  I accept it was changed on Committee Stage. The change in eligibility is a penalty on the vulnerable young men or woman rearing young families. The latest survey on income and living conditions published by the Central Statistics Office shows an increasing income inequality between those at the highest level of income and those at the lower level. When a family loses one parent, that is a severe blow, but to impose a financial penalty on them is something we on this side of the House cannot support.

Senator Cáit Keane: Information on Cáit Keane  Zoom on Cáit Keane  I wish to make a brief contribution. I am standing in for our spokesperson, Senator Fidelma Healy Eames. I congratulate the Minister, who has a difficult job. The entire House has recognised that she has probably one of the most difficult portfolios and is one of the best people to deal with it. As I said when speaking on another issue, her heart is in the right place. Due to the difficult budgetary situation, it is hard to find money. My colleague was castigated for being informed. Being informed is one of the best attributes one can get. There was also a reference to her tone of voice. She is a very relaxed person and I would not take her tone of voice to take into consideration——

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Will Senator Keane speak to the section, please?

Senator Cáit Keane: Information on Cáit Keane  Zoom on Cáit Keane  No, I think the Senator——

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Will the Senator please speak to section 6?

Senator Cáit Keane: Information on Cáit Keane  Zoom on Cáit Keane  Yes. The requirement is not for 520 contributions but 260. Either Senator White took that up wrong or she was reading from an old script. I appreciate it has been corrected. It is important for everyone to be informed, myself included. In respect of section 6, at a time when changes are being introduced to State pensions, such as the new rate, which reflects the level of contributions paid over a working life, it is essential that a consistent approach is applied to all relevant schemes across the social welfare code. Everybody would like if individuals qualified for the State pension with zero contributions.

Senator Darragh O’Brien: Information on Darragh O'Brien  Zoom on Darragh O'Brien  No, I would not agree with zero contributions.

Senator Cáit Keane: Information on Cáit Keane  Zoom on Cáit Keane  That would be an ideal, Utopian world. However, a consistent approach must be applied. It is difficult for people to know their entitlements. Senator Ó Domhnaill’s recommendation that people be informed of the new regulations is a valuable one which I hope the Minister will take on board.

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  The Minister will be aware that I am a fan. However, there is something radically wrong in the partnership in government between Fine Gael and the Labour Party. Of the 15 people at the Cabinet, only two are women. I really think the Minister should give a kick in the shins——

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Will the Senator please speak to section 6?

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  ——to some of the men to prevent them from adopting these regressive measures.

[471]An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  Senator White, we are dealing with section 6.

Senator Mary M. White: Information on Mary M. White  Zoom on Mary M. White  There are only two women in the Cabinet. That is the reason this budget is so severe socially.

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  We are on section 6.

Senator Cáit Keane: Information on Cáit Keane  Zoom on Cáit Keane  I agree this time with Senator White.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  I just have to respond to the remarks by Senator White.

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  We are on section 6. We cannot be——

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  I will try to keep my tone of voice civil. Anybody who knows me knows that is the way I always speak. I always try to be of a happy disposition. Nobody can argue that. As a Labour Party Senator, it is very hard to stand over the cuts that are being made and it does hurt, but I know it has to be done, as I know most of the Opposition——

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  On the section, please. We have to get through the Bill.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  I wish to reply to the comment levelled at me by a Senator who said: “She seems to be happy with it, [the budget] in her tone of voice.” If I must change the tone of my voice, I will. When I listen to what is played back on radio, I run, as I have never thought my voice is that nice.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Will the Minister comment on the concerns expressed about the provisions of this section, that it will force parents to look at full-time employment once a child reaches seven years of age, without providing the necessary child care supports? I welcome the Government’s continuing commitment, under the Minister for Children and Youth Affairs, Deputy Frances Fitzgerald, to supporting child care services across the country, particularly in the State sector. I am pleased to learn, therefore, that there has been no cut in the budget this year for the statutory child care committees. I am chairman of Leitrim child care committee and a meeting was held earlier today in the IFSC with departmental officials.

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  That matter is dealt with in a different section.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  In the context of the provision of further child care supports, I ask the Minister to comment on the impact of the proposals contained in this section. While no provision of additional child care supports is mentioned, I acknowledge the budgetary position. Will the Minister comment on the concerns expressed that in practice the provisions of the Bill close community employment schemes to lone parents and will stop them accessing employment, and that in reducing income disregards——

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  On a point of information, the Senator has moved to another section.

Senator Paschal Mooney: Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  I will bow to the Senator’s greater wisdom.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  I will deal with the changes to the numbers of contributions required for widow’s, widower’s and civil partner’s contributory pension. There are 113,860 people in receipt of a contributory pension at a cost of €1.3 billion to the State. There are about 2,000 people receiving non-contributory widow’s, widower’s or civil partner’s pension at a cost of [472]€19 million. We spend a relatively large amount of money on widow’s, widower’s and surviving civil partner’s pensions.

The issue relates to demographics and ageing. Thankfully, for those who lose a husband, wife or partner, this happens when they are older. Under our system, to qualify for an old age pension, one needs to have ten years’ contributions. However, to receive widow’s, widower’s or surviving civil partner’s pension, one needs to have three years’ contributions. It is important to bear in mind that these may be the contributions either of the surviving or deceased spouse. I point out to Senator Mary White that the entitlement to a pension is not limited to the survivor’s contributions but extends to the contribtuions of the deceased person.

In the case of a widow, whose husband was at work, it is generally highly likely that her deceased husband would have had at least three years’ contributions. From the end of 2013, there will be a requirement to have five years’ contributions. However, a person seeking to receive old age pension will be required to have ten years’ contributions. We are very much taking into account the shock to the surviving spouse of the death of his or her spouse in making the contributions requirement significantly lower than for contributory old age pension. That has been a feature of the social welfare system that has been supported by all parties in the House and it should continue to be supported, as it is a great shock for a married person when his or her spouse dies. Many are aware of people in their own families and the difficulties losing a spouse poses.

Where a younger person loses a spouse, he or she may be still in work. Under the system that person will receive widow’s or widower’s pension. We are increasing the required number of contributions from the end of 2013 by two years. As Senator Paschal Mooney was concerned about a wife who worked in the home and whose deceased husband had lost his job, provided that she has built up by 2013 either five years of paid contributions or a mixture of paid contributions and credits, she will qualify for widow’s pension.

The threshold is very generous. The reason it has increased is that the population is larger. It is not appreciated that for the past ten years a significant percentage of the increased cost of social welfare under all the headings has to do with the increase in population. We are blessed to have more children and that more older people are living longer, but the consequence for the social welfare bill, leaving aside all other events, is that, based on population statistics, it continues to go up and up. We must design the structure of the system in a way that we will have sufficient contributions going into the fund during the working lives of people in order that when there are difficult events such as the bereavement of a spouse, we will have enough money to provide for a decent level of widow’s and widower’s pension.

To return to Senator Brian Ó Domhnaill’s point, it is important to communicate that anyone currently out of work or working in the home should sign on for credits. I will take into account the comments made on conducting an information campaign. The Department funds the Irish National Organisation of the Unemployed to produce a very fine booklet every year on the social welfare changes made. We also do this with a number of other organisations, including the MABS and the Citizens Information Board which also give information to individuals. It is important that people be fully aware that they are entitled to sign on for credits.

Senator Mary White asked about the most difficult points for women and children in the history of introducing budgets. One of the most difficult was the change to individualisation because the basis of the system was changed. The traditional two-parent family, with one parent engaged full-time in work and the other working in the home, was treated differently. We are discussing those in receipt of social welfare payments, but we must bear in mind that many low [473]income workers in single income families do not rely on such payments. The individualisation model was adopted by the former Minister for Finance, Charlie McCreevy, and such families would normally only be in receipt of child benefit. Hence, its universality is important to them to give them a leg up. I have, therefore, asked a working group to consider these issues. It is probably a question of aligning the IT used in Revenue with that used in the social welfare system in order that we can move to using a universal credit system, as championed by Dr. Seán Healy for a long time. If benefits were provided through the tax system, they would be refundable if one’s income was low and counted for tax purposes if one’s income was high. Our systems are not yet there.

An Cathaoirleach: Information on Paddy Burke  Zoom on Paddy Burke  I welcome to the Visitors Gallery a former Member of the House, Dr. Trevor West.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  Senator Darragh O’Brien’s proposal on informing people was a good one. It is easy to refer to the Money Advice and Budgeting Service, MABS, and Citizens Information, but one might not be up to speed on social welfare provisions if one is at home looking after kids. Unless a spouse is terminally ill, no one knows when he or she will become a widower or a widow. It could be me or any other Senator tomorrow morning. Homemaker’s credits are important, as they are provided for women who give up work to look after children. They should ensure they receive them, as they will be invaluable later in life. Could we embark on an information campaign to this end?

I seek clarification on the widowed parent’s grant. I presume the qualifying criteria will increase in line with those for survivor’s pension. Younger people might not have made the necessary contributions and, as such, must opt for non-contributory survivor’s pension, despite the fact that they have young children. The grant is invaluable to such parents. Owing to the goalposts being moved, some might lose out on receiving a contributory pension. Irrespective of whether one has made contributions, being widowed hurts and the widowed parent’s grant is invaluable to many young parents.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  The conditions applying to the widowed parent’s grant which amounts to €6,000 on the death of a spouse are unaffected by this measure and will continue as they are.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  To qualify for a widowed parent’s grant, one must qualify for contributory survivor’s pension. Will the qualifying criteria move in line with the requirement to have made 260 contributions?

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  They stay the same.

Senator Marie Moloney: Information on Marie Moloney  Zoom on Marie Moloney  They will move.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  To qualify for widow’s, widower’s and surviving civil partner’s pension, the spouse or civil partner must have made 156 contributions by the date of death or before reaching 66 years of age, whichever is the earlier, and have an average of 39 paid or credited contributions in either the three or five years before the death of the spouse or civil partner or before reaching 66 years of age, or an average annual figure of at least 24 paid or credited contributions from the year of first entry into insurance until the year of death or before reaching pension age. If this average is used, it will give an entitlement to receive a minimum pension. An average of 48 contributions per year is required before one receive the maximum pension.

[474]Question put.

The Committee divided: Tá, 28; Níl, 14.

Information on Ivana Bacik  Zoom on Ivana Bacik  Bacik, Ivana. Information on Paul Bradford  Zoom on Paul Bradford  Bradford, Paul.
Information on Terry Brennan  Zoom on Terry Brennan  Brennan, Terry. Information on Colm Burke  Zoom on Colm Burke  Burke, Colm.
Information on Deirdre Clune  Zoom on Deirdre Clune  Clune, Deirdre. Information on Paul Coghlan  Zoom on Paul Coghlan  Coghlan, Paul.
Information on Michael Comiskey  Zoom on Michael Comiskey  Comiskey, Michael. Information on Martin Conway  Zoom on Martin Conway  Conway, Martin.
Information on Maurice Cummins  Zoom on Maurice Cummins  Cummins, Maurice. Information on Michael D'Arcy  Zoom on Michael D'Arcy  D’Arcy, Michael.
Information on John Gilroy  Zoom on John Gilroy  Gilroy, John. Information on Aideen Hayden  Zoom on Aideen Hayden  Hayden, Aideen.
Information on Fidelma Healy Eames  Zoom on Fidelma Healy Eames  Healy Eames, Fidelma. Information on James Heffernan  Zoom on James Heffernan  Heffernan, James.
Information on Imelda Henry  Zoom on Imelda Henry  Henry, Imelda. Information on Lorraine Higgins  Zoom on Lorraine Higgins  Higgins, Lorraine.
Information on Cáit Keane  Zoom on Cáit Keane  Keane, Cáit. Information on John Kelly  Zoom on John Kelly  Kelly, John.
Information on Denis Landy  Zoom on Denis Landy  Landy, Denis. Information on Marie Moloney  Zoom on Marie Moloney  Moloney, Marie.
Information on Michael Mullins  Zoom on Michael Mullins  Mullins, Michael. Information on Catherine Noone  Zoom on Catherine Noone  Noone, Catherine.
Information on Susan O'Keeffe  Zoom on Susan O'Keeffe  O’Keeffe, Susan. Information on Pat O'Neill  Zoom on Pat O'Neill  O’Neill, Pat.
Information on Tom Sheahan  Zoom on Tom Sheahan  Sheahan, Tom. Information on Jillian van Turnhout  Zoom on Jillian van Turnhout  van Turnhout, Jillian.
Information on John Whelan  Zoom on John Whelan  Whelan, John. Information on Katherine Zappone  Zoom on Katherine Zappone  Zappone, Katherine.



Níl
Information on David Cullinane  Zoom on David Cullinane  Cullinane, David. Information on Mark Daly  Zoom on Mark Daly  Daly, Mark.
Information on Terry Leyden  Zoom on Terry Leyden  Leyden, Terry. Information on Marc MacSharry  Zoom on Marc MacSharry  MacSharry, Marc.
Information on Paschal Canice Mooney  Zoom on Paschal Canice Mooney  Mooney, Paschal. Information on Ronan Mullen  Zoom on Ronan Mullen  Mullen, Rónán.
Information on David P.B. Norris  Zoom on David P.B. Norris  Norris, David. Information on Trevor Ó Clochartaigh  Zoom on Trevor Ó Clochartaigh  Ó Clochartaigh, Trevor.
Information on Labhrás Ó Murchú  Zoom on Labhrás Ó Murchú  Ó Murchú, Labhrás. Information on Darragh O'Brien  Zoom on Darragh O'Brien  O’Brien, Darragh.
Information on Averil Power  Zoom on Averil Power  Power, Averil. Information on Fergal Quinn  Zoom on Fergal Quinn  Quinn, Feargal.
Information on Mary M. White  Zoom on Mary M. White  White, Mary M. Information on Diarmuid Wilson  Zoom on Diarmuid Wilson  Wilson, Diarmuid.

Tellers: Tá, Senators Paul Coghlan and Susan O’Keeffe; Níl, Senators Paschal Mooney and Diarmuid Wilson.

Question declared carried.

Progress reported; Committee to sit again.


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