Oireachtas Joint and Select Committees

Wednesday, 26 September 2012

Joint Oireachtas Committee on Education and Social Protection

Budget 2013: Discussion with Minister for Social Protection

11:20 am

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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The reduction for the next two years is approximately €1 billion. Given current projections for economic growth and so on, I am pessimistic about where we are going to get the money for the youth guarantee scheme, regardless of how much co-funding is provided by the EU. I was struck by the figure mentioned by the Minister in her speech in regard to the cost of pensions, which is currently in excess of €6 billion. I would have thought that the best approach for a country faced with a situation like this is to encourage people to provide for themselves. Rather than introducing pension levies and threatening reductions in tax relief for people who put money aside for pensions in order to look after themselves when, clearly, if the statistics are correct, the State will not be able to look after them in 20 or 30 years because the resources will not be available, the Government should be moving in the opposite direction in terms of encouraging people to provide for themselves.

I note what the Minister had to say about the Social Insurance Fund. I regret I missed the briefing last week on the fund, which I am sure was very interesting. I am a little confused as to the reason there is so much concern about the Social Insurance Fund. It seems to me to be a bit of an accounting exercise. The fact is that 60% of social welfare benefits are paid from outside the Social Insurance Fund. The only time the Social Insurance Fund washed its own face was during the period of high economic growth. I sincerely hope what the Minister said - she might give the committee some reassurance in this regard - was not code for saying PRSI will have to be increased. If the Social Insurance Fund is to wash its own face then the only way that can be done is for more people to get jobs. It appears ludicrous to be trying to balance the Social Insurance Fund through the introduction of measures which will increase the cost of creating those jobs.

I thank the departmental officials for their detailed brief, which I read last night. I was struck by a number of issues in it, especially the scale of the overall spend on social welfare and the key role it plays in the economy generally, including as a method of redistributing resources, as mentioned on page 5. It is also stated on that page that expenditure on social protection can play an important role in stabilising the economy by supporting the overall demand for goods and services in the domestic economy and mitigating the societal consequences of the recession. The Minister emphasised in her concluding remarks the benefit to the economy and demand in the economy of the amount of money being distributed through the social welfare system. The Minister will be aware that the Taoiseach and Tánaiste have given a commitment that social welfare rates will not be cut. I take it , in view of the importance of social welfare as a redistribution mechanism and its importance to the economy, where domestic demand is on the floor, that that commitment stands and social welfare rates will not be cut in the forthcoming budget.

The Pathways to Work scheme is referred to in the official brief. I understand it is being piloted in Arklow, Parnell Street in Dublin, Sligo and Tallaght. Does the Minister have feedback on how well it is working in practice? She referred to an evaluation report but surely the Department has received some feedback on whether it is working. I have spoken to people employed by the Department of Social Protection in the vicinity of the four places mentioned and they have told me they have not noticed any significant difference.

I do not know how many hundreds of thousands of social welfare officers are in the country but the pilot scheme is going on in four areas that will be extended to ten. How long will this take to function in the entire country? Is it making a difference on the ground where it is being piloted? What is being done about establishing links between employers and training providers?

There is an announcement on page 11 of the brief relating to rent allowance. This indicates that the Department currently provides rent supplement to housing authorities; it will begin using a new housing assistance payment, with the commencement date for the new arrangement being 1 January 2013. This means the current system of rent allowance will be replaced by a new housing assistance payment administered by local authorities. How realistic is the target of 1 January next, as it is approaching quickly? If we are talking about transferring this responsibility to the local authorities, there must be some idea of how it will work in practice. Are we still talking about houses in the private sector and will the local authority agree the rent? Will the rent instead be agreed by landlord and tenant, with the local authority charging what is deemed a differential rent?

The rent allowance scheme has caused mayhem from one end of the country to the other, particularly in urban areas, and I could spend the rest of the day citing instances of trouble. I even had e-mails related to the issue this morning from people in estates in Limerick. Will people go to the local authorities if there is a complaint about the conduct of somebody going into rented accommodation using rent allowance or the friends they tend to bring, who are often more troublesome? What role will the Private Residential Tenancies Board, PRTB, have in future? If somebody cannot get satisfaction from the local authority, will that person be forced to take a case to the Private Residential Tenancies Board, and against whom will the case be taken? Will it be taken against a landlord or a local authority?

What gets under my skin is the blatant lack of transparency. Some years ago there was a great deal of agitation in the Dáil and outside it because the EU Commission decided that farmers who got grants from the EU had to have their names and the amounts paid on a website. Perhaps Members recall that happening. According to a parliamentary question I asked recently, last year the Minister's Department paid €436 million in rent allowance to landlords whose identity we cannot get. By law, these people remain anonymous. If somebody came to me in the morning and told me a neighbouring house was rented to an undesirable person, with terrible trouble in the estate - this is not an imaginary example by any means - I could try to contact the HSE. Depending on whom I speak to, the person in the HSE might be very reluctant to say even if the renter is receiving rent supplement, and I will definitely not be told the name of the landlord.

This appears daft. The EU pays a certain amount to farmers and there must be transparency in that regard. Irish taxpayers are paying the guts of €500 million to landlords but there is no right to find out who are the people who receive the money. Some of the taxpayers are the people affected by anti-social behaviour, yet they have no right to find out the name of the person they are supporting through rent supplement coming from their taxes. It is ludicrous. Will we have transparency and will there be some arrangement to publish the names and addresses of landlords?

I can give a practical example. A person may not want to go to the PRTB - there are many reasons for this in Limerick - and let his or her name go public. It would be preferable if the landlord could be approached for a deal but this is impossible because we cannot get the names of landlords. Will the Minister address that?