Seanad debates

Wednesday, 24 October 2012

Social Protection: Statements (Resumed)

 

12:05 pm

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I welcome the Minister to the House. We are all very acutely aware of the facts and reminded on a daily basis of the serious financial difficulty we have and the shortfall of ¤16 billion. There are also requirements under the terms of the EU-IMF bailout agreement to reduce our borrowing for 2013 by ¤3.5 billion. The Minister's Department has a budget of ¤20.5 billion, accounting for 40% of overall Government expenditure, and I am very aware she is required to reduce the budget by ¤540 million in 2013. I appreciate the difficult decisions that have to be taken and cuts that must be made.

To build on the comments of my colleague, Senator Zappone, in the first part of this debate last week, there is a question about how these cuts are made and against whom they are directed. These are ultimately political decisions. There is nothing more disheartening as a Senator than to feel my interventions about any budgetary cuts are futile in the face of a done deal, so I welcome the Minister's reassurance that no decisions have been finalised in respect of the 2013 budget.

We need to stop plugging the dam and looking for immediate savings, which are ultimately bankrupting us of our moral fibre. As a Government and society we must firmly establish our red lines, or the values and principles that we are unwilling to yield. An example of this was aptly articulated yesterday in the audiovisual room by the community and voluntary pillar, when it presented an alternative budget for 2013, with values such as dignity, sustainability, equality, human rights and working for the common good. Such values inherently seek to protect children, the elderly, disabled, weak, vulnerable and marginalised, it makes for a value system that I support and endorse.

We must articulate a vision for the Ireland we want in ten years, developing strategies that are necessary to achieve this vision by incorporating values and aligning them with national policies. We can do this and I do not agree that Ireland is bound by the current policies for achieving the ¤3.5 billion reduction in borrowing as set out in the letter of intent, memorandum of economic and financial policies, and the technical memorandum of understanding. Within the document I note the paragraph following the proposed revenue measures and expenditure reduction in the memorandum, which states:

Without prejudice to the minimum consolidation amount referred to in the previous paragraph and to the requirements to achieve the agreed fiscal targets, the Government may, in consultation with the staff of the European Commission, the IMF and the ECB, replace one or more of the above measures with others of equally good quality based on the options identified in the comprehensive review of expenditure.
I am not alone in reading this to mean that Ireland is free to change the method through which the requisite saving is made, once it is made.

It is interesting to note that Social Justice Ireland agreed with 130 of the 131 recommendations made by the Commission on Taxation report from 2009 on tax breaks. The exception was the recommendation on child benefit. Lists of savings are possible, and I strongly encourage the Government to consider the proposals. I do this on behalf of the more than 700,000 people in Ireland, of which 200,000 are children, at risk of poverty, and the more than one in four children between age 12 and 17 already living in poverty. The Oireachtas Library and Research Service gave a good presentation earlier this morning on the survey on income and living conditions, SILC, demonstrating that households with children are at more of a disadvantage and are more likely to enter poverty. Our current policy is not working, although it may satisfy the troika and meet international requirements. It is not working for the raft of Irish people bearing the brunt of the cuts.

In preparing for today's discussion I pondered how we have a multi-annual plan for the troika and education officials are considering school infrastructure, responding to change in demographics with a multi-annual plan. The action plan for jobs brings us up to 2016. The plan for the country's people, however, is missing. Where is that plan? I have spoken with friends who are holding on to savings despite being encouraged to spend. When there is no plan for the people, it is an issue.

Those living in extremely marginalised and vulnerable conditions do not know where the safety net is and feel it keeps moving. They are walking on this tightrope and are asking where the safety net is because it has moved again.

We need to look not only at one budget - all the focus now is on budget 2013 - but at things much more in advance. The programme for Government referred to working across Departments. If one looks solely at the issue of child benefit, the question is whether we tax or means test it rather the Minister's Department looking outside itself and asking why we are giving child benefit and the purpose of it. Is there a better way to achieve the outcomes we wish other than by purely looking at cash transfers? I suppose I am trying to encourage the Minister and her colleagues in Cabinet not to look simplistically at cash savings but to have a plan for the people to say this is where we are going. We can do it for jobs and for the troika but can we do it for the people?

Photo of John KellyJohn Kelly (Labour)
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I welcome the Minister. I did not get an opportunity on the previous occasion she was in the House to speak on matters relating to social welfare and I am glad I have the opportunity to do so now. I was in the Mansion House today where the Free Legal Advice Centres, FLAC, introduced a proposal to reform the social welfare appeals system, which was launched by the Ombudsman, Ms Emily O'Reilly. It is looking for it to be independent of the social welfare staff who run it currently. I agree with much of what I heard. Presentations were also made by people from Northern Ireland where the appeals system is totally independent.

Our system is not transparent. If one applies for a social welfare payment, one does not know who is dealing with it. The deciding officer may not be the person who dealt with the case. One does not know the doctors dealing with it and, as I often say, doctors differ and patients die. There are many medical referees and they would all have varying opinions, but one does not have access to the file. If a person wants to appeal a decision of a deciding officer, he or she does not get access to the full file, something of which the Ombudsman, Ms Emily O'Reilly, was critical. She was also critical of some of the deciding officers' decisions. An interesting statistic was that where people got the benefit of an oral hearing, 49% of cases were overturned because people were able to present their cases. Social welfare application forms are very confusing for ordinary people to complete. Many of the 30 to 40 pages are nonsense and do not apply to them.

There was also a presentation by the chief appeals officer and, listening to her, it would seem there is no problem in the Department. There are problems and I know the Minister has been fundamental in bringing about a change in the scanning system in the Department, but there are historical cases which are just left there, as it were. I have been dealing with a case since last January and I do not know how many telephones calls I have made to the invalidity pension section. I telephoned it two weeks ago, said I was frustrated and that I needed someone to deal with the case. I happened to talk to a nice lady and it was like as if she had a box of files beside her. She told me to hold on for a second. She came straight back to me and said she had the file, that it had been there for a while and that she would get it sent on for a medical re-evaluation. I telephoned again today to find out at what stage the medical re-evaluation was. The girl said it had been sent on but that she did not know when it would be dealt with. I asked her to give me an indication as to whether it would be one month, two months, six months or a year. She said she had no idea. I am frustrated by what people must go through. I am going through it too because I am taking all the telephone calls on this. The Minister needs to talk to the chief appeals officer and to question this. I can give her examples of historical cases in respect of which nothing has happened for 12 to 14 months.

Rent caps were adjusted some time ago but it seems they were just slashed by 25% across the board. There was nothing scientific about the way the new rent caps were devised. In Roscommon town, where there is a shortage of houses, because it did not benefit from the tax incentive scheme and oceans of houses were not built with landlords crying out to rent them, the rent cap for a single person is ¤69 per week. If one heads south from Roscommon and in the direction of County Galway, one will come to a little village called Creggs on the Galway-Roscommon border. If one happens to live outside the village of Creggs in the middle of nowhere, the rent cap is ¤103 per week because it is in County Galway. We must look realistically at rent caps and at the likes of Roscommon town.

I refer to an issue which is not specific to the Minister but which I raised with the Minister for Health and other Ministers, namely, the proposed cuts to home help hours. I have made a proposal to the Minister for Health that he should consider opening it up to the community employment schemes to replace the hours proposed to be cut. At a minimum cost of ¤750,000, we could replace the necessary home help hours which are proposed to be cut.

Photo of Marc MacSharryMarc MacSharry (Fianna Fail)
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I welcome the Minister and the opportunity to make a few brief points. Everyone appreciates the Minister is in a very difficult position. She is more used to being in my position than that which she is in now and she will know that whatever she does, she will be wrong. That is the difficulty the Minister for Social Protection faces at this time.

Senator Kelly made a point I was thinking about in the context of appeals processes and representations made in regard to invalidity pension in particular. The analogy I was thinking about was not so much the box. When I telephone the Department I sometimes feel it is as elusive as my ticket being drawn on "Winning Streak" because at times one wonders if there is a filing system at all because of the length of time it takes.

This is a serious issue. We are dealing with the most vulnerable who are in the most difficulty. It is hand to mouth survival stuff as opposed to looking after people. Notwithstanding that the people in the relevant Departments are working hard, are there enough people? Do we need overtime? Does more time need to be put in? Indeed, Senator Kelly made a very good suggestion in regard to CE schemes. Let us use the JobBridge programme, bring people in, give them administrative experience, give them the extra ¤50 per week and get them to work through this.

One of the criticisms I would have of the public service generally is that, in the main, the culture is that one works from 9 a.m. to 5 p.m. In the private sector and in the political world, it is a bit different in that one works until the job is done. I know that might not be quite realistic in the context of so many applications, files and so on but one thing is certain: we cannot, with credibility, stand over the system in operation and say everyone is doing all he or she can. We are failing miserably in that regard. I am sure all Members of this House and the other would say the most frequent requests with which they must deal relate to invalidity pensions and delays with appeals, along with medical cards.

The Ombudsman, Ms Emily O'Reilly, and FLAC are correct, and I am thinking of the mortgage arrears resolution process, the code of conduct and the inadequate way we are dealing with that problem. The banks adjudicate on the appeals process where a person feels he or she has not been treated fairly. The appeals process in the Department of Social Protection is adjudicated on by people in that Department. I can think of no justification where a plaintiff or a defendant would preside over an appeal in a court of law.

This should and must be examined.

The Minister can make no cut or saving that anybody on this side of the House will welcome and she knows all about that from her time in opposition. I appeal to her to be as fair as she can. She should be careful with child benefit. People have gone to the media to say they do not need child benefit or they can survive without it because they have a high salary. I am thinking of someone in the entertainment world particularly who made a statement in this regard lately. A book should not be judged by its cover. As when trade unionists talk about core income being what others might call allowances, the child benefit payment is probably used to pay essential bills such as light and heating rather than contributing to the needs of children, for which the payment was envisaged, and, therefore, it forms part of the core income to run the family home in many instances. It will be difficult to deal with that issue. Means testing would be the ideal way to go but the cost of administration makes that difficult. I do not know how the Minister will deal with it. If I had a solution, I would give it to her but I appeal to her to be careful about it. I wish her well in her deliberations over the coming weeks.

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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I compliment the Minister on the many reforms she has introduced in the social welfare system over the past 18 months. Significant amounts have been taken in as a result of tackling fraud in the system and I am sure the Minister will agree there is a long road to go and more to be done in that regard. I compliment her on the JobBridge programme and she should be complimented in many other areas. However, we all dwell on the problems in the system. I will relay many of the issues raised on the Order of Business over the past number of weeks. The issue of FLAC and the independent appeals system has been raised. I thought the entire system was independent but the Minister will address that in her reply.

The long delays in processing various allowances is a problem. The delay in processing carer's allowance and invalidity applications is almost 12 months. Additional staff have been taken on and community welfare officers are now under the ambit of Social Protection but I agree that if there is need to take more staff in that area, it should be done to address the delays because the vast majority applying for these benefits are bona fide applicants and they should be dealt with speedily.

I also compliment the Minister on the report she commissioned on pensions. She is seeking suggestions in this area over the next three months. Many Members raised this on the Order of Business earlier and they would like an input into that. I hope, therefore, that the Minister will come to the House to address the issue at a later date.

The Minister for Health has received proposals from Senator Kelly, which he also sent to me, to use people on community employment schemes to provide home help services but I doubt there will be a rush of people on social welfare benefits to take up community employment schemes for an additional ¤25 a week.

I finally refer to the old chestnut of children's allowances. The reason they could not be taxed previously was the incompatibility of the IT systems in the Department with those of Revenue and other Departments. Has this been rectified? Is there light at the end of the tunnel? What is the situation in this regard? I wish the Minister well.

Photo of Pat O'NeillPat O'Neill (Fine Gael)
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I welcome the Minister. While the Department of Social Protection has a role in the protection of the most needy in our society, it also has a duty of care to people in employment because people feel there is inequality in regard to the benefits some claimants get under the social welfare system which they cannot access in employment. Many Members referred to children's allowance and the fact that the most wealthy people in the country are in receipt of it. The problem has been the inability to means test because computer systems were not linked. Would the Minister consider a basic rate of ¤70, ¤80 or ¤100 a week with people having to apply for a top up in order that they receive the payment automatically from the Government? If, for example, a claimant's income is below a certain threshold, he or she could be entitled to an additional payment for children. It would be worth considering because the administration of that would not be as onerous as means testing and taxing the benefit.

I refer to the social welfare culture in the country. There was a great article in The Times a few months ago about the establishment of the social welfare system in England. In cities in England, three generations of some families have never worked in their lives and rely on social welfare. That is down to education and to administrators such as us making sure these people have proper opportunities to access education and training schemes. Will the Minister consider a cap on the amount of social welfare that goes into certain houses? This issue has been raised with me when I meet people on the street. They say they have neighbours with five people in the house who are all on social welfare while they are out working. A man who works in the public service said to me, "I have educated my family and sent them through university. For me to gain the equivalent of somebody down the road from me who is on social welfare and married with four children, I would have to earn ¤62,000 because of the benefits these people can claim". That is an example of the inequalities in the social protection system. People feel it is not beneficial to work.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I will return to some of the issues raised last week as well. With regard to the issues relating to applications for demand-led schemes such as illness and disability benefit and invalidity pension, we do not appreciate in this country that 300,000 people and their families are on these three schemes, which comprises 16% of the working age population. It is a high figure.

Photo of Fidelma Healy EamesFidelma Healy Eames (Fine Gael)
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Is that 300,000 people on the schemes?

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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On illness and disability benefits and invalidity pension. A total of 300,000 people are on one form of illness support payment or other and they may have dependants and children. That equates to 16% of adults of working age.

That is a very high figure. Countries that we recognise as having good social welfare systems and that have reformed social welfare, such as Denmark, Holland and the Scandinavian countries, have changed from a passive system, where one qualifies for payment and is left alone forever, to an active system where we try to encourage people back to work. This applies in particular to illness benefits. The best international medical evidence and occupational health evidence is that, where people have had an illness and have been able to physically recover, what most helps their recovery is to get back to work and to be in an active environment with work colleagues. They may not be able to do so on a full-time basis but the evidence from doctors in recent years points this way. We have not had that in our system. Much of my focus is to say that the social contract in Ireland is that people will be supported if they lose their jobs, fall ill or have a disability. Taxpayers and citizens want to see a solid system of social support but it is a two-way contract. Equally, the other side of the contract is that the people receiving income support are obliged, on behalf of their fellow citizens and taxpayers, to do their best to get themselves back to work and to become financially independent. That is a cultural change we require.

Regarding Senator MacSharry's point, I was astonished to see that, at the height of the Celtic tiger, some 100,000 extra people went onto various illness benefit payments. No one has explained to me-----

Photo of Fidelma Healy EamesFidelma Healy Eames (Fine Gael)
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Was this 100,000 new people?

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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During the years of the Celtic tiger it rose from 200,000 to 300,000. We could all work out different elements of the explanation and, when people talk about reform, it is a significant number.

Senator van Turnhout referred to children. The worst poverty outcome for children is to be in jobless households. The most important thing for a child to be successful, in terms of being financially independent and self-sustaining, is that the child is in a household where there is some work. The worst outcomes for children are in jobless households and, unfortunately in terms of our problem at the moment, we have many jobless households. In terms of any reform programme, the employment situation, which was referred to by many Senators, is absolutely vital.

Members asked questions about carers, the half-rate carer's allowance and delays. The delays occur because of the enormous volume of applications. There are 52,000 people in receipt of a carer's allowance, which is an enormous increase on the position a number of years ago. Some 22,000 of those people receive the half rate carer's allowance. In the budget strategy and the budget outcome last year, the carer's allowance was protected because carers are providing full-time care and are doing a very important job. It is a priority of the Government to acknowledge it, recognise it and support it in terms of income.

Senator Norris asked whether the carer's allowance could be extended and whether fuel allowances could be frontloaded to allow people to buy oil in bulk. We have a winter fuel allowance for five months. We do not have the capacity to prepay. It is possibly not the best idea in all circumstances. Senator Norris referred to people getting a fill of oil but most oil suppliers will accept a weekly or monthly budget plan. I would be wary of handing out the money in one lump sum. The experience of the Department in large lump sum handouts is not universally great. In some cases, the money might not be directed to the purpose for which it is intended. We need to study Senator Norris's proposal very carefully.

Senators Thomas Byrne and John Kelly referred to delays in applications for carer's allowance. The problem is the numbers. We are changing the computer systems. Many of the computer processes in the Department go back to the 1980s, when they were top of the range, but it is several decades later and they need to be substantially overhauled. One of the things I regret about the boom period is that more was not done to update the ICT systems. It is a slow process that is under way. Senators will find that, in the case of invalidity, there is a significant advance in completing the new systems. Current applications are being dealt with much more quickly. I meet regularly with officials with a view to prioritising the clearance of the backlog.

Senator Mullins referred to the abuse of the free travel pass and suggested a charge for the travel pass and getting holders to register every year to confirm an entitlement. The number in receipt of a travel pass has increased and it is a significant issue. Some 750,000 pensioners and those with a disability have a free travel pass but there are another 300,000 companion passes. There is a concern among a number of operators that some people are using the pass even though they are not entitled to it. Our pensioners are not the problem in respect of the travel pass. The review group was brought together to examine the matter.

This year, we have produced 40,000 PPS cards with photographic identity. This will be rolled out next year and it will greatly help in cutting out abuse. It is important because people next door and up and down the road are aware of abuse and they are consenting, as taxpayers, to pay for a good social welfare system but they are not consenting to people who abuse it. I was in the Seanad Chamber last year and I asked for powers for social welfare inspectors to ask questions at the airport of people coming in and out. Those powers are being significantly used and a number of prosecutions have taken place.

Members have asked about not having cuts to certain areas but no decisions have been made on the budget. The Department must find savings of over ¤500 million. We will do so in the best way possible but the best way is to get more people back to work. At that point, the cost to the State decreases by at least ¤200 per week and maybe more and the person gradually pays tax, pays PRSI and purchases more. We rebalance the system by getting people back to work.

The social welfare appeals office is independent of the social welfare offices. Many people, including Senator Kelly, do not feel that is the case but it is independent. I will convey what has been said here to the people in the social welfare appeals office.

Senator Van Turnhout and others raised the question of child benefit. I have spoken here before on this. One of our problems is that at the moment minimum direct cash payments to a family completely dependent on social welfare amount to ¤30 per week in direct payment for a qualified child and ¤140 per month in child benefit. That is equivalent to ¤65 per week per child. It is a significant amount.

Are there better ways to target that? That is the issue. Could there be a universal payment at a high level that retains the principle of universality, which is of benefit to women in particular? I certainly benefited from it, as did many of the other women here. Perhaps some of the men did but it generally goes to the caring parent, the mother. What would be a better way than a universal payment at a certain level and then targeting the balance?

In Finland, when the banking system collapsed, the Finnish Government decided it needed to invest in education and started with pre-school. If we could have more pre-school and after-school care, although we would not get it immediately on the Finnish scale, it would pay a dividend throughout the school system. The late Brian Lenihan converted the early childhood payment into a free year of child care, which saved about half the amount and I can see the benefit of that scheme every day. I see children gaining from it and parents broadly approving of it.

We could do more there. The Department spends ¤35 million on the hot meals schemes in disadvantaged schools. That is some of the best spent money by the Department and I would love to see that service expanded. A child who comes into school may not suffer from a lack of money in the home but a lack of organisation. There could be parental disorganisation or failure. Not everyone is up to speed. Children come into school and if they can sit down to a hot meal in a social space with their friends before the start of the school day, it is a great addition.

Photo of Marie MoloneyMarie Moloney (Labour)
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What about the family resource centres?

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The Senator mentioned that to me and it merits consideration. Sometimes the objectives in the budget are like the loaves and fishes, where I try to do all these good things, and I am grateful for people's support, on a limited budget.

There was a question about caps on social welfare payments. In the context of the structure of the Irish system, that would be difficult. At the moment there might be a family with payments for themselves and their children, some of those payments as carers, some as payments for disability, some as payments from the HSE. In countries like Austria, people have an account so we can see the flows of support. Some of those supports, however, are not counted by the Department, such as education, in the same way as other countries. This should be considered but it would be difficult in the current situation.

We are, however, constantly writing to recipients of child benefit to check they are still in the State and at the address that was given when the claim was made. A case was widely publicised last week of the actor who was stealing to support his children. From what I read, he had moved and had received at least two letters from the Department asking him to respond to demonstrate he was still entitled to child benefit. Unfortunately he did not respond. Had he known, he could have gone that morning to his nearest social welfare office, his payment would have been restored and he would not have found himself in such a difficult position.

It is important to say the staff in social welfare offices - there has been a lot of criticism of the staff - are very considerate and caring and try to provide the best and most professional service to people who attend in a situation where the volume of people applying for various supports has grown enormously.

Photo of Fidelma Healy EamesFidelma Healy Eames (Fine Gael)
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Is it the computer system or a lack of willingness to tackle the issue?

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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It is the way the systems are arranged. There could be a series of payments from different sources. An inspector can review particular cases and he would collate the information but the information is not there automatically.

Photo of Fidelma Healy EamesFidelma Healy Eames (Fine Gael)
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Does the Minister agree with the principle that there should be a cap on the amount of welfare one family receives?

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I am not in favour of some of the changes being made in Britain; some of them are extremely difficult. I prefer to encourage and provide people with the supports and capacity to re-engage in work and education. We do not have the technical resources to do it anyway. If we suspect someone of fraud, and members of the public telephone us all the time when they feel something is wrong about particular payments in a particular house, an inspector can have a look at all the different payments but the computer system will not bring that up automatically because there are different structures and headings for structures. There is no account, which is what the Senator is talking about.

Photo of Fidelma Healy EamesFidelma Healy Eames (Fine Gael)
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I would strongly urge the Minister to consider that.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I thank the Senator. I will be happy to come back and talk about pensions. I commissioned a study on pensions to see if we would work out what the charges were and I will be happy to talk to the Senator and hear her proposals.

Photo of Marie MoloneyMarie Moloney (Labour)
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Will the Minister take on board the proposal about the credits, where there may be a small charge?

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I will find out about that and come back to the Senator.

Photo of Susan O'KeeffeSusan O'Keeffe (Labour)
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That concludes the statements on social protection. When it is proposed to sit again?

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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Ag 10.30 a.m. maidin amárach.