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

I thank the Chairman for his words of sympathy to the Fine Gael party on the death of former Taoiseach, John Bruton. I would like to be associated with the comments that he made. I will speak later on in the Dáil on the matter. I am thinking of his family, in particular his wife, Finola; his children, Matthew, Juliana, Emily and Mary-Elizabeth; and of course, his brother, Richard, and sister, Mary, during these difficult few days. I thank the Chairman for that.

I also thank the Chairman and the members of the committee for the invitation to attend today to discuss the 2024 Revised Estimates for the Department of Social Protection. As we look forward to another new year in 2024, it is timely to recap on the significant challenges that Ireland has faced over the past 12 months. During 2023, we saw significant continued inflationary pressures, exacerbated by the ongoing war in Ukraine. While it is welcome that the two most recent Central Statistics Office, CSO, monthly bulletins have reported a decrease in inflation below 5%, we will all agree that inflation had a significant impact on households and the cost of living during 2023. My Department has been front and centre in the delivery of the Government’s response in this area, supporting our families through budget 2024, which is the largest social protection budget in the history of the State.

We have also seen continued supports delivered for Ukrainian people arriving in Ireland who are fleeing the horrific war in their home country. We will continue to support these people, albeit with amended approaches, in 2024. Last September, the EU Council agreed to extend the period of temporary protection to March 2025. It is, therefore, necessary to consider the arrangements required across Government to support this longer-term implementation of the temporary protection directive. As members will be aware, Ireland is changing its approach to the provision of accommodation and supports to beneficiaries of temporary protection in order to be more sustainable and more closely aligned to other member states, while continuing to meet our obligations under the temporary protection directive.

In framing the financial Estimates position for 2024, and comparing it with the outturn for 2023, my officials have sought to provide the committee with a like-for-like comparison between the two years by isolating not only Estimates for the cost of the Christmas bonus, but also the January bonus that was paid last week and the cost of temporary protection measures to support Ukrainians.

All of this is outlined in the extensive briefing document before the committee. Projected spending for the Department in 2024 is €25.6 billion, compared with an estimated outturn for 2023 of €24.9 billion. It should be borne in mind that spending in 2023 was boosted by the inclusion of almost €1.3 billion in once-off cost-of-living supports.

As members will be aware, the work of the Department is broad in scope, supporting people throughout the life cycle, from the payment of child benefit to the provision of income support when people reach pension age. The Department's expenditure, at €24.9 billion for 2023, is the largest of any Department, representing more than one third of gross current Government expenditure. With this level of expenditure, we must ensure our social protection system is properly structured and provides support when people need it most. As demonstrated over the past two years, I hope the committee will join me in thanking the staff of the Department, particularly those working on the front lines, who have tirelessly worked through Covid and the various other challenging periods our country has faced. Our people, our systems and our schemes have all shown huge flexibility in responding so well and so quickly to these unprecedented challenges. The work continues into 2024 as we continue to refine our responses to ongoing issues, such as support for Ukraine, aligning Ireland’s position more closely with other EU member states, while continuing to meet our obligations under the directive.

The projected 2024 expenditure of €25.6 billion hopefully represents a normalisation of the pattern of social protection spending, but it also represents a new normal of a higher level of expenditure incorporating budget 2024 measures of more than €1 billion. I am proud, for the second year in succession, to have again delivered the largest social welfare budget package in the history of the State. It is a package that provides a targeted mixture of once-off and ongoing measures, which the ESRI’s post-budget analysis has shown will be effective in protecting most households from rising prices, especially the most vulnerable in our society.

In 2023, we provided lump sum supports in two phases. The first was part of a €402 million spring package, which had a particular focus on supports for children, with child benefit and back to school, clothing and footwear allowance measures prominent. Second, as part of the budget 2024 package, we provided a €867 million package of once-off measures in quarter 4 of 2023, supporting a wide range of social protection recipients, including pensioners, people with disabilities and those of working age.

Moving into 2024, further budget 2024 supports are becoming available, funded as part of the Revised Estimates. From the start of January, we have seen a wide range of social protection increases come into effect, which were announced as part of budget 2024. This includes a €12 across-the-board increase to weekly rates, meaning that core weekly payments have been increased by €24 over the past two years. A January double week bonus, paid at the higher 2024 weekly rate and on the same basis as the Christmas bonus, to support people with additional winter costs, was paid last week at a cost of €342 million. These measures are reflected in the expenditure subheads presented today.

The biggest single block of expenditure in 2024 will be on pensions, which will amount to more than €10.7 billion or just under 42% of overall expenditure. This is up by almost €543 million from the 2023 outturn, with €238 million of this increase linked to additional recipient numbers, a fact which reflects the ever-increasing demographic challenges unfolding for this programme. Thankfully, people are living longer lives but that, of course, means an increasing proportion of the Department's expenditure is now providing income support for people in their older years.

Expenditure on illness, disability and carer's payments amount to €5.6 billion in 2024. That represents 21.9% of expenditure and is up by 1.5% on 2023’s provisional outturn. Working-age income supports will account for just over 16% of expenditure in 2024 at €4.1 billion. This includes payments for jobseeker's, one-parent families, maternity and paternity payments, and supplementary welfare allowance. Expenditure on employment supportsis estimated at €655 million or 2.6% of total expenditure. This will provide significant support to community employment, back to education allowance, Tús, the rural social scheme and the various employment and activation programmes, which will be again important in 2024, a year when the Irish economy and the labour market face risks on the downside.

Expenditure on children and families will account for more than 11% of expenditure, over €2.8 billion, of which more than €2.1 billion will be spent on child benefit and €375 million on the working family payment. Expenditure on supplementary payments is €927 million, or 4% of 2024 expenditure.

In conclusion, the broad overview I have presented of social protection expenditure is developed in detail in the briefing material provided to the committee. I am sure the committee will agree it is a comprehensive analysis of 2024 expenditure on the largest and, potentially, most complex Estimates.

There is little doubt that 2024 will bring challenges for social protection spending, including evaluating how changes in the economy are impacting those who are most at risk of poverty. My Department has demonstrated its ability and flexibility to effectively support the most vulnerable, as evidenced in the last few years, in particular. Along with the Minister of State, Deputy Joe O'Brien, I look forward to hearing the committee's views and welcome any questions members have.