Oireachtas Joint and Select Committees

Thursday, 22 November 2018

Select Committee on Social Protection

Social Welfare, Pensions and Civil Registration Bill 2018: Committee Stage

10:00 am

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

Every summer, and this predates my time as Minster, the Department holds a pre-budget forum in Dublin Castle where it listens to views of 45 different representatives of community, voluntary and employer representatives. They discuss their priorities and wishes for the budget the following year. The priorities that emerged in this year’s consultation included a higher rate of payment for dependent children aged 12 years and over. That message came through loud and clear and we were happy to examine it. Establishing a benchmarking of social welfare rates was an area that emerged from several people at that meeting. The budget 2019 €5 increase in the maximum weekly rate of social welfare payments to pensioners, lone parents, people with disabilities, workers on maternity or paternity leave and jobseekers are all above an inflation-rate increase, which is for the third year in a row.

As I said in my speech on budget day, now that the core rates have been restored in the main, it is time to fundamentally examine how we approach how they are set annually. The Deputy might be surprised, therefore, to find that I very much agree with him.

Other countries have shown that by doing this and instituting a process of benchmarking welfare rates typically use a system where the core rates are fixed each year, with reference to either market earnings, particular prices levels and indices, and this works very well. On a very snowy day in March this year, we launched the roadmap for pension reform. The Government had already committed to adopted benchmarking for pensions. I indicated that day that we would develop proposals to develop this commitment before the end of this year and we are on target to do this. My view, as I said on budget day, is that we should extend this to all core welfare rates. If a system was implemented, it would provide the context and the framework and it would be informed, measurable and evidence-based as to why a determination is reached on what a new social welfare rate should look like.

There are some concerns that we would have both an evidence-based determination of welfare rates and an additional political input, and that rather than having one new system there might be an amalgamation of the two. However, the system of the Low Pay Commission which was established several years ago works very well. I refer to its establishment and its composition of employers, employees and independent people. How the Oireachtas respects and carries out its wishes each year is a very good model that we could use in the future. I am very happy to say that while this amendment does not fulfil what I think the Deputy wants me to do, namely, to consult, which we already do. I do not need to be told in legislation to do what I already do, but it would be very worthwhile if we moved towards establishing a body which would do a proper analysis annually on what welfare rates should be and to be mindful of it. Therefore, I am happy to accept the amendment.

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