Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I welcome the Minister to the committee and thank him for his presentation. There are a number of matters I would like to advert to. In regard to the self-employed, I welcome the Minister's statement that this area is a personal priority for him. It is an area Fianna Fáil has been concerned with and in respect of which it has put forward specific proposals over the past couple of years, as the Minister will be aware. The Minister mentioned that the cost to the State of providing a jobseeker's benefit scheme in respect of the self-employed would be €87 million and the cost in that regard in terms of invalidity pension would by €78 million. What is the position in relation to illness benefit? I am aware that the advisory committee dealt with the issue of long-term illness. However, people who are self-employed can become ill on a short term basis also.

On the advisory group report on tax and social welfare, I do not agree with the group's conclusions on jobseeker's benefit. However, as that is not central to what we are discussing today I do not propose to state my objections in that regard. On illness benefit, Fianna Fáil has always envisaged that any extension of social insurance to the self-employed would be done on a gradual basis, starting with people who become ill. The issue with which the advisory group wrestled is whether this could be done on a voluntary or a compulsory basis. It came down in favour of it being done on a compulsory basis because, it states, if it was done on a voluntary basis this could lead to the selection of bad risks. There is no guarantee that it would but it could lead to a selection of bad risks.

If my interpretation of the group's conclusions is correct it is also of the view that this cannot be done because it has not been done before. In other words, we never do things like this and so we cannot start now despite the fact that a wholly or partially voluntary system is in place in other developed countries of the European Union, including France, Germany, Spain, Finland, etc. If all of those countries have managed to do this on a voluntary basis, why can it not be done in Ireland? There is much talk about a system of auto-enrolment, whereby people would contribute extra to protect their State pensions, with people being opted in and also in a position to opt out if they so choose. If one can have a system of auto-enrolment for employees I do not see why it is not possible to have a system of auto-enrolment for the self-employed.

An issue raised towards the end of the Minister's contribution on the social insurance system for the self-employed is the possibility of the income limit for entitlements being raised from €38 per week to, I think, €70 per week. I fail to see the logic of that. For example, if the limit was raised to €70 it would save employers 8.5% of the difference between €38 and €70 per week, which is approximately €2.60 per week. As I said, I do not see the logic in that.

I take the Minister's point that the bulk of expenditure on the social protection side is on pensions. There is a democratic imperative here. If we decide to pay people a pension at a particular age then we have no choice but to pay them that pension when they reach that age, whether they have sufficient contributions to make it a contributory pension or whether it is a non-contributory pension.

They are entitled to it.

I note that in some reports that have been issued, some learned people have come to the conclusion that the impact of the recession has fallen least hard on pensioners. Of course, that depends on how one juggles the figures and what one takes into account. Learned reports saying that the recession has impacted pensioners less than anybody else is of cold comfort to people who are living their lives - I know many of them and I am sure that other members of the committee know them as well - in a state of abject misery because of the extra expenses they are incurring because of their growing old. There are medical expenses, heating, etc. I know people who stay in bed half the day in bad weather to save on heating. Social welfare working age payments were reduced and, admittedly, pensions were not. However, they were frozen until last year. Even with the increase last year, it is estimated that pensioners are about 5% worse off now than in 2010. They have 5% less purchasing power. That is only on the basic pension alone and does not take into account the loss of the free telephone rental allowance, the reduction in the fuel allowance, the reduction in the household benefits package and things like the abolition of the bereavement grant. There have been many changes in the overall system such as prescription charges, the introduction of property tax, water charges, restrictions on tax relief for medical expenses, the reduction in home help hours and the reduction in housing adaptability and mobility grants, all of which have particularly and disproportionately affected pensioners. I do not think that any of the bodies that compile those figures has taken that into account.

Pensioners are on a fixed income. They do not have the opportunity to get a job or to be re-educated to become nuclear physicists or something like that. They are retired people who have lived all their lives in the country contributing to it. The least we can do, now that the economy is improving, is to ensure that they can live out their declining years with some measure of dignity. That was recognised in all of the election manifestos, both our own manifesto and the Minister's party's manifesto, in which there was a commitment to increase pensions by €25 per week by 2021 on the assumption that the Government would last for five years. That is €5 a year. For people living alone, I noticed that the increase would be €30, which is €6 per year for five years, if the Government lasts five years. In its wisdom, the electorate has thrown up result which makes it less likely - if I can put it like that - that the Government will last five years. Therefore, I believe it is imperative that we begin this process immediately.

I do not want to go on for too long. We had many debates with the Minister's predecessor, particularly myself and the then Sinn Féin spokesperson, Deputy Ó Snodaigh, about the changes to the lone parent's allowance. If the Minister goes back and studies the debates, the warnings we issued at the time have unfortunately come to pass. Lone parents are now less well off when they go to work as a result of changes made in the provisions relating to them. That was cushioned to a certain extent by the introduction of a thing called the family dividend. However, I could read the Minister letters and e-mails from lone parents until 12 o'clock tonight telling me that things are beginning to bite again now because the family dividend goes down 50% at the end of the first year and it will be completely gone next year. It is only a two-year cushion that goes down by 50% after the first year. If one looks at the poverty statistics, lone parents are the highest in relation to consistent poverty, risk of poverty and deprivation. Some of the figures are truly appalling there.

I want to give other people a chance to come in and I do not want to hog the time of the committee. The Minister said that he wanted a short shopping list. His own shopping list is fairly long because I noticed in the programme for Government that every possible area is covered. However, I take his point that not everything can be done in one budget and he wants to know where we should prioritise.

The social insurance scheme for the self-employed, pensioners, lone parents - possibly carers - and those in receipt of disability benefits should be our priorities in the context of the forthcoming budget.