Regina Doherty (Meath East, Fine Gael) | Oireachtas source

I thank members for the invitation to be meet the committee to discuss the Revised Estimates for my Department. Department officials have provided detailed briefing material for the use of the committee at this meeting, which includes comprehensive financial and recipient data. This briefing also provides updates on the Department’s performance on its output targets for 2017.

Members know that, while the scale of the Department’s expenditure is larger than any other Department, the services it provides are also hugely important. It is important for the people who receive payments or services weekly or monthly, but it is also very important for society generally. The Department’s work impacts positively on people throughout their lives, from the payment of child benefit to provision of the State pension. It also provides much-needed support when it is required at various stages in between.

Each week, more than 1.3 million people - pensioners, people with disabilities, people on maternity or sick leave, carers and jobseekers - receive a payment from my Department. In addition, more than 625,000 families receive child benefit each month in respect of 1.2 million children. An allocation of slightly more than €20 billion was provided for the Department this year, which represents 36% of gross current Government expenditure and is €155 million more than was provided in the further Revised Estimate for 2017.

This level of expenditure is obviously significant. It represents not only the level of service that we aim to provide, as a country, to our citizens when they are in need. In addition, our social protection system is one of the key cornerstones in our social fabric, whereby tax and social insurance income is redirected to people when they are in need at different periods during their lives. Without these social transfers we would see a society where poverty and social exclusion become more extreme and acute. Through policy and legislative change, through this Estimates process and through our annual budget cycle, we seek to improve the system, to alleviate poverty further and to support families, children and older people while seeking to ensure that our spending is efficient, which means getting it to the people who need it most.

As I said, €20 billion represents 36% of gross current Government expenditure and it is useful for a moment to consider the areas in which this money is to be spent. The biggest single block of expenditure in 2018 will be on pensions, which will amount to almost €7.6 billion, or 38% of overall spend. Expenditure on illness, disability and carer payments will amount to €4.2 billion in 2018, representing 21% of expenditure. It is interesting to note that these two programmes alone account for almost 60% of total expenditure between them. Working age income support schemes account for 17% of expenditure, at €3.4 billion this year. This includes payments for jobseekers, one-parent families, maternity and paternity leave and supplementary welfare allowance. In parallel, expenditure on employment services, including community employment, the back to education allowance, Tús, the rural social scheme and various employment and activation programmes, amounts to €823 million this year, or 4.1% of the Department’s overall expenditure.

Thankfully, we are seeing expenditure on working age income and employment supports decreasing, both in financial terms and as a proportion of overall expenditure, reflecting the ongoing improvements in the labour market in terms of reducing unemployment and rising employment levels. We still have a lot to do in this space and we are aiming to reach those furthest from the labour market to ensure that we provide people with as much assistance as possible to get back into either work or education and upskilling. Expenditure on children and families will account for more than 13% of expenditure at €2.6 billion, of which more than €2 billion is spent on child benefit and €430 million on the working family payment. Expenditure on supplementary payments like rent supplement, and on agencies like the Citizens Information Board and miscellaneous services, accounts for €814 million, or slightly more than 4% of expenditure.

To a large extent, the Department anticipates and responds to emerging issues in the economy and society. The schemes it provides are demand led and expenditure is largely driven by demographic trends and economic factors, including changes in the labour market. I have mentioned that we have seen welcome and significant improvements in the labour market over recent years. These improvements have occurred at a rapid pace. Results from the latest labour force survey show that there are now more than 2.23 million people in employment, an increase of almost 67,000 in 2017. Reflecting the survey results, the seasonally adjusted unemployment rate for February this year stands at 6.1%. Significantly, long-term unemployment reduced from 3.7% to 2.5% during 2017. These trends in unemployment are reflected in reducing the live register. At the end of February, there were almost 40,000 fewer people on the live register than the same time last year and 84,000 fewer people than this time two years ago. The live register peaked at 470,000 in mid-2011 and is now around 230,000, which is a reduction of more than 50%. The CSO will have new figures on Friday.

JobPath is one of the initiatives introduced by the Department which seeks to improve the employment outcomes for the long-term unemployed. Since it commenced in July 2015, 151,000 people have engaged with the service and we have had notification of 30,900 job starts. This is good news for all involved but JobPath is about more than that. It is about assisting those who get employment to remain in that employment. That is why even when a jobseeker has gained employment, he or she is offered a further 52 weeks of in-work support designed to assist those who have been out of the work place longest to stay in it once they have returned. The statistics are published regularly showing how many jobs are sustained and for how long. It is a positive service because customer satisfaction is very high. Overall satisfaction has improved from a mean score of 4.05 in 2016 to 4.26 in 2017 out of a total score of 5.0. Scores across the key areas of offices, staff, service and processes are very strong and all scores have improved significantly. Out of 151,000 people who have engaged with the service, there have been complaints in just one third of 1% of cases. In my humble opinion, this is incredibly impressive. This is remarkable and is the synopsis of the real story concerning JobPath, which is not perhaps what one would see in some fora.

The reduction in the live register is freeing up the resources we need to meet demands emerging from demographic changes. In addition, it provided the basis on which I could take steps in budget 2018 to ensure that everyone could begin to see the benefits accruing from our sustained economic recovery. In budget 2018, I sought to ensure that people dependent upon fixed incomes saw some improvements. I ensured that people receiving weekly social welfare payments saw an increase in their rates. We all acknowledge that they are coming into force this week. I placed a particular focus on families and children, particularly children living in poverty. These increases will benefit our pensioners, people with disabilities, carers and jobseekers and will take effect from this week.

Focusing on families and children, the payment for qualified children on social welfare payments was increased to €31.80 per week, or an increase of €104 per annum per child, the first increase in these payments since 2010. I also increased the weekly income thresholds in the working family payment for families of up to three children, ensuring that these families get a better return from their earnings. This change increases the after-tax income of families by €312 per annum. In addition, I also introduced changes to improve the financial benefit of work for lone parents who take up some employment. The income disregards for the one-parent family payment and jobseeker's transition payment increased by €20 from €110 to €130 per week. This change improves the level of take-home earnings of lone parents by up to €520 per annum. I also removed the sunset clause for the back to work family dividend payment. These changes, excluding the changes in the underlying basic rates of payment, amount to expenditure of an additional €66 million per annum for working families on low incomes.

I am also conscious of our most vulnerable citizens and increased the fuel season by one week from 26 weeks to 27 weeks.

In the light of Storm Emma and the recent severe cold snap - the beast from the east - I also ensured persons in receipt of the fuel allowance received an additional fuel payment this year to assist with the cost of higher domestic fuel bills. Furthermore, budget 2018 provided for the introduction of a new telephone support allowance, which will be paid to social welfare customers in receipt of both the fuel allowance and the living alone increase - people who are living on their own and of limited means.

I was also pleased to be able to increase the number of places on the rural social scheme by a further 250 this year. This was announced last week.

While the level of youth unemployment continues to fall, it still remains unacceptably high. That is why I also announced in budget 2018 the introduction of a new youth employment support scheme later this year.

A Christmas bonus of 85% was paid to over 1.2 million long-term social welfare recipients such as pensioners, people with disabilities, carers, lone parents and long-term unemployed jobseekers, at a cost of almost €220 million.

The Department has also provided a briefing on claims processing last year. For many of my Department’s schemes, claims are processed within, or close to, the Department’s processing time standards. However, for some schemes, the processing time standards were not achieved in 2017. This was particularly the case for schemes such as the carer’s allowance and domiciliary care allowance schemes. While the targets have not been met under these schemes, there have been underlying improvements. For example, under the carer’s allowance scheme, the average number of weeks taken to award a claim fell from 19 weeks in 2016 to 14 in 2017. Under the domiciliary care allowance scheme, the number of claims in hand was 40% lower at the end of 2017 compared to at the start of the year. My Department is committed to ensuring claims are processed as quickly as possible and that delays are kept to a minimum. It is worth mentioning that anyone who is awaiting a decision on a claim for a social welfare payment can apply for a means-tested supplementary welfare allowance payment pending the outcome of his or her social welfare application.

I want to make some comments on the position for pensioners who qualified for the contributory State pension in reduced rate bands since 2012. Committee members will be aware of the efforts we have made to provide a solution for these pensioners. I have discussed the matter several times with the committee. I would like pensioners to feel we have listened and worked on a solution. In January I was delighted to announce very significant changes in the pension system. These changes will benefit tens of thousands of pensioners, the majority of whom are women, who spent time out of the workforce caring for their families. The early availability of a total contributions approach, with substantial home caring credits, will deliver more equitable pension outcomes. The changes are an indication of the value that we, as a Government and society, place on the women and men, now of pension age, who have worked both outside and inside the home throughout their lives. The new total contributions approach for pensioners assessed under the 2012 rate band changes will come into effect from the end of this week. Following the passing of the necessary legislation, my Department will invite over 40,000 pensioners, currently assessed under the 2012 rate band changes, to have their pensions recalculated under the total contributions approach to determine if they qualify for a higher rate of payment. The first payments will be made from the first quarter of 2019, with payments backdated to 30 March 2018.

In comparing the Department’s expenditure in 2017 with the allocation for 2018 it is important to note that variances in expenditure on most social welfare schemes are typically explained by a combination of factors which include trends, including downwards, in recipient numbers; changes in average weekly payment values, and differences in the number of paydays in any given year. In addition, comparisons between 2017 and 2018 expenditure figures are further impacted on by the measures introduced in budget 2018, including the increases in the weekly rates of payment, and the payment of an 85% Christmas bonus in 2017, at a cost of almost €220 million. Provision for such bonuses is made, subject to the financial position of the State in October each year as part of the budgetary process, and is not included in the Revised Estimates at this time.

We have come through a difficult time for the country, n economic crisis that lasted for too many years. As the economy continues to recover, we can now begin to see the benefits of more jobs and lower unemployment and ensure everyone in society will gain from this progress.

Recent budgets have allowed us to look at the social protection system and provide for improvements in the lives of the most vulnerable people who do not see an immediate benefit from the economic recovery but who are seeing improvements in their income.

My statement has sought to provide the select committee with an overview of the scale and scope of the Department's expenditure and how the significant improvements in the budget are reflected in the Estimates for 2018. I look forward to hearing the views of Deputies and responding to their questions.