Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I wish the Chairman and members of the committee a good morning. Before we start, I wish to take this opportunity to pay tribute to the bravery of the two members of An Garda Síochána who were shot and injured yesterday evening in Blanchardstown. This shocking event reminds us all of the dangers in which members of An Garda Síochána put themselves every day to protect us. I also pay tribute to the other members of An Garda Síochána who responded to the incident without any further injuries. I acknowledge the full support and co-operation they received from the other first responders. I wish both gardaí a swift recovery and thank them and all those who responded last night to what was a very difficult and dangerous situation.

I thank the committee for the invitation to attend to discuss the 2021 Further Revised Estimates for the Department of Social Protection. Almost exactly a year ago, this committee considered the first ever Social Protection Estimate to include spending related to income supports introduced to provide assistance to people whose jobs and livelihoods were impacted by the pandemic. I am here today, one year later, to discuss the continuation of that support as we thankfully begin to work our way out of what has been a very dark time for our economy and society. As we all know, Covid-19 has presented many diverse and complex challenges for society, for the economy and for the Government in supporting our people who are dealing with these challenges daily. The speed of reaction required to deal with the ever-changing nature of the pandemic required decisions to be made quickly, and that is what the Government did. Across all branches of the Government, services and supports were galvanised to develop and deliver innovative measures designed to mitigate as far as possible the impact of Covid on the lives of our people. One of the critical challenges has been how to support workers who are suddenly without the means to support themselves and their families. This is why we have a social protection system and why it is important to secure the resources that allow us to respond efficiently and effectively in real time. The roll-out of the pandemic unemployment payment, PUP, in a very short space of time proved my Department's capacity to be responsive in providing invaluable income supports. The scope and range of other supports such as an enhanced Covid illness benefit and the flexibility introduced to rent supplement contributed to easing the financial impact of the virus on the most vulnerable in our society.

The Further Revised Estimate which the committee is to consider today reflects an ongoing commitment to supporting those who continue to be affected by the pandemic and all the Department's customers who need our support on an ongoing basis. When the 2021 Estimate was originally compiled in October 2020, parts of the country were at either level 2 or level 3 of the public health restrictions. That Estimate envisaged expenditure in 2021 of €25.13 billion based on Government decisions that had been made at the time, including that pandemic supports such as the PUP and employment wage subsidy scheme would close at the end of March. The resurgence of the virus in the weeks and months which followed led to the Government deciding to extend payment of and access to the PUP until the end of June 2021. The employment wage subsidy scheme, EWSS, was similarly extended to the end of June 2021. These decisions, as well as the extension of other Covid-related spending, mean that further funding is required in 2021 to meet these new commitments.

An additional €4.1 billion in funding is required, bringing the Estimate for the Department’s spending to €29.14 billion.

The primary drivers of the increase in social protection spending in 2021 are the schemes which provide support to the parts of the economy that continue to suffer the consequences of the Covid crisis. Nearly 20% or €5.75 billion of the total departmental spending of €29.14 billion is attributable to Covid-related schemes. PUP expenditure is estimated at €3.3 billion or more than 11% of the total 2021 expenditure. The funding of Revenue’s employment wage subsidy scheme, EWSS, is estimated to be €2.36 billion, representing 8.1% of the 2021 Estimate. The Estimate also reflects the fact that the Social Insurance Fund, SIF, from which PUP is funded, is now in deficit. The €453 million surplus in the fund at the beginning of 2021 has now been eliminated. SIF expenditure for the year is projected to be €15.34 billion. With SIF income projections of €11.13 billion, the deficit for the year is projected to be €4.22 billion. Taking account of the 2020 surplus carried forward, the deficit, which will be funded by the Exchequer through the Department’s Vote, will be €3.76 billion in 2021.

As Minister for Social Protection, I never lose sight of the fact that our core business is the provision of income support throughout the course of people’s lives. Pension expenditure continues to be the biggest element of social protection spending. It represents more than 30% of total expenditure and amounts to €8.8 billion in 2021. Working age income supports, with projected expenditure of €7.9 billion, account for 27% of projected expenditure. This includes €3.3 billion for PUP expenditure up to the end of June 2021. It also includes €3.2 billion on jobseeker payments for the year. Illness, disability and carers payments, with expenditure of €4.9 billion, make a significant contribution towards supporting the most vulnerable in society and represents 16.8% of overall 2021 spending. Working age employment supports cater for a range of schemes aimed at helping people get or retain employment and have a projected spend of €3.3 billion or 11.3% of 2021 expenditure. Included in this figure is a €2.36 billion provision for the EWSS. Expenditure on children is nearly €2.7 billion in 2021 or 9.1% of overall social protection spending. The supplementary payments programme funds are a range of household benefits, free travel, fuel allowance and other schemes. It represents 3% of the projected 2021 spend at €878 million.

Currently, the live register records the number of unemployed as 173,293. This does not, however, include those on the PUP. To provide an assessment of the cost of supporting those not in employment throughout the year, the Estimate applied the unemployment rates underpinning the April 2021 stability programme update. Based on these quarterly unemployment rates, the numbers unemployed in each quarter, whether on PUP or jobseeker payments in the first two quarters, or jobseeker payments for the second half of the year, were determined. The Estimate is, therefore, based on a robust foundation of the 2021 unemployment costs, which is not revealed by live register numbers alone.

The broad overview I have presented to members of Vote 37 expenditure, is developed in greater detail in the comprehensive briefing material provided to the committee last week. It is, however, important to note that the expenditure underpinning this further Revised Estimate is based on decisions made at a point in time in a constantly evolving environment. The Government is actively considering how we continue to provide supports beyond June as we enter a new phase of the pandemic, where many people have returned to their jobs and people gain back the freedoms that were curtailed due to public health restrictions.

It is encouraging that, in recent weeks, we have seen in excess of 100,000 people leave the PUP and return to employment and self-employment. The coming weeks will see that progress continuing. Research from the ESRI and others has shown that the Department’s response to the pandemic cushioned the financial shock for people throughout the State as the crisis hit, particularly for those in the lower income deciles. In excess of €7.6 billion has been spent on PUP alone. Some 23 million payments have been issued, with 865,000 people receiving at least one payment. More than 10 million calls have been answered. I acknowledge committee members and the Chairman have acknowledged the huge efforts by staff of the Department in every county to ensure people got the support they needed, when they needed it, during what has been a hugely challenging period for our country. I look forward to hearing members' views and answering their questions over the next few hours.