Oireachtas Joint and Select Committees
Wednesday, 25 September 2013
Joint Oireachtas Committee on Education and Social Protection
Pre-Budget Submissions: Discussion
I welcome our guests to the committee.
I advise the witnesses that, by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. I also advise the witnesses that the opening statements that they have submitted to the committee will be published on the committee website after this meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or any official by name or in such a way as to make him or her identifiable.
We will first hear presentations on the forthcoming budget, followed by a separate presentation on equality budgeting. The Society of St. Vincent de Paul is represented by Audrey Dean, Caroline Fahey and John Mark McCafferty, and the Union of Students in Ireland is represented by Joe O'Connor, president, and Laura Harmon, vice president for equality and citizenship. I invite Mr. McCafferty to make the presentation on behalf of the Society of St. Vincent de Paul.
Mr. John Mark McCafferty:
I thank the committee for giving the Society of St. Vincent de Paul the opportunity to input into the budget discussions. We made a submission to the Joint Committee on Finance, Public Expenditure and Reform a couple of weeks ago and the message that we conveyed then will be similar to the one that we convey today, based on the views of our 10,000 members and on the services they provide across the State. We spent €40 million in direct assistance to households in 2011, of which €10 million was for energy costs, between €3 million and €4 million on education costs and most of the remainder was spent on overall household costs, including food costs. That paints a picture of poverty not only among people who have come to us over a long period, but people who have come to us for the first time in recent years. There is an entrenched level of hopelessness and suffering, which is borne out by the volunteers who work for us. We assisted people through the boom and we continue to assist people, but the intensity in which we do so has been exacerbated during the past five to six years in this climate of austerity.
As Members well know, the timescale of this year's budget is different but so, too, is our approach. Like many non-governmental organisations, NGOs, our normal practice was to produce a pre-budget submission, launch it in Buswells and have the usual following in attendance. However, that approach has become tired and the issue facing households, families and individuals have become so critical that-----
Mr. John Mark McCafferty:
I apologise because I may have been the offender.
We have done things differently this year because we realise the strength of feeling behind the membership in telling us what the issues are, the need to connect with the general public on those issues and the need to say "no" to further austerity measures. Clearly, Government needs to balance its books over the medium term, but given the level of need and the suffering that our volunteers and services see day in, day out, we have no option but to say "no" to further austerity and to ask that the 2014 budget marks an end to the austerity budgets.
We are buoyed up this morning by what the former IMF staffer Ashoka Mody stated and by Deputy Stephen Donnelly's underlining of some of the points we are trying to make to those in power and in decision-making positions on the need to protect the individuals and families we assist. Committee members may know that the vast majority of those we assist are families, and the largest single group consists of lone parents. We are at pains to assist families and individuals with the costs of energy and education, general household costs and debt, which is a growing issue.
Today we have been asked to discuss social protection and education. We have a number of overall social protection policy objectives for this year. We want a living income, in and out of work, and this is with regard to protecting an adult social welfare rate, protecting eligibility for these working age payments, and protecting the family income supplement, which we see as a key support for families in work but on low pay.
With regard to our other objectives, we seek the elimination of child poverty and the development of child well-being. In this regard, child income support is relevant, as are supports at school and preschool level, which is why we advocate the protection and augmentation of the early childhood care and education scheme with regard to the number of weeks and its quality and, over the longer term, extension to a second year.
School meals are a key component of tackling disadvantage and deprivation as they help children focus on their work and help their overall development. We seek stronger co-ordination between the Departments and a more cohesive approach to get better outcomes in this regard. After-school care is important, and we hope to see it develop in the coming years.
Our key concerns are a living income for those in and out of work and tackling child poverty through income supports and education intervention. We welcome any questions committee members may have.
Mr. Joe O'Connor:
I thank the committee for the invitation to come before it today. USI's pre-budget submission, which is a more concise document than we submitted in previous years, has been circulated. I will focus in particular on one issue which we highlight in the submission.
What the crisis and debacle about the processing last year of grants by Student Universal Support Ireland, SUSI, achieved was to highlight the importance of the maintenance grant to vulnerable students and families throughout the country. In the past four consecutive budgets the student maintenance grant was cut, in either range or threshold, by between 3% and 5%. In recent weeks an Irish League of Credit Union study showed the cost of college has increased to more than €1,000 per month on average for families, and 84% of such families struggle to meet the costs of third level as it currently stands. The gap between the pared-back supports and the cost of college means many families are at breaking point. In our pre-budget submission we include a quote from the Department of Public Expenditure and Reform on the level of student grants in 2011, particularly at the standard rate, as being insufficient to meet the costs of college. Three budgets and three cuts later, this is even more the case. Our message is that any further cutbacks to the student maintenance grant will not only mean that students will struggle but will be very much an anti-family measure.
The maintenance grant at its average rate is €84 per week. This is totally unacceptable if we consider the lowest acceptable rate of jobseeker's allowance for a young person to be €100 per week. Given the saturated market, many students are unable to find part-time employment to support them in college.
Their families have little disposable income to support them, given the wider impacts of the recession. The demand on the student assistance and hardship funds has reached breaking point in many colleges.
I returned from Galway this morning, where I attended a class rep training event in my old college, the Galway-Mayo Institute of Technology, GMIT. I spoke about someone I knew while working there last year and who is no longer in college there. That student went through three years of a level 7 course on the highest rate of the maintenance grant, which I also received while in college in light of my socioeconomic background, and absorbed three consecutive years of cuts to the rate. Before attempting to move on to level 8 this year in the fourth year of his degree, however, he was moved from the highest threshold rate to the second highest as a result of last year's measure. Consequently, he has dropped out and moved to London in search of work that is not in his chosen field.
I have seen the impact of cuts on the ground, not only to students' finances but to their mental health and so on. While being pragmatic enough to understand the state of the country's finances, I call on the committee to make the student maintenance grant a priority in the upcoming budget.
No Union of Students in Ireland, USI, representative would appear before this committee without alluding to student charges and fees. I would be lax not to mention how the increase in the student contribution has had an adverse effect on family budgets. According to the ILCU study to which I referred, 71% of families have seen their budgets severely affected by increases. According to more recent figures, these budgets are already struggling. People are falling behind on bills and other payments. While we accept the multi-annual budgeting nature of the charges, including the increases in the student contribution charge, we call on the Government to consider committing to rowing back on this charge in line with future economic recovery. In the same way that the Haddington Road agreement deals with pay cuts for public servants, struggling and vulnerable students and families should be afforded the same treatment.
I will touch on a last issue before handing over to my colleague, Ms Harmon. We alluded to postgraduate loans in our pre-budget submission. When many students finished college a number of years ago, they had three choices - emigrate, go on the dole or proceed to postgraduate degrees - given the significant jobs crisis facing young people who left college. With the decision to remove almost all fee, maintenance and postgraduate grants, many of these students now face only two choices, emigration or the dole. At 10.8%, the interest rate of the Bank of Ireland postgraduate loan scheme, which was endorsed by the Minister after this decision, is exorbitant. Any student who previously qualified for a maintenance grant at postgraduate level is afforded the opportunity to take on €2,000 in additional debt. The most vulnerable families and students are becoming trapped in a spiral of additional debt. It is accepted across the board - by the Department of Education and Skills, Opposition spokespersons and everyone with whom I have discussed the matter - that this is an unsustainable situation in the long term and creates social inequity and a barrier to accessing postgraduate education for people who could be the highly skilled drivers of our future recovery. Therefore, I call on the Government and this committee to push for this topic to be re-examined with a view to creating a more sustainable and affordable environment for students who wish to progress to postgraduate education.
I will not address the European youth employment guarantee aspect of our pre-budget submission at length, as we will have the opportunity to address it with the committee after the budget. If the proposals required to make the guarantee work are to be rolled out effectively, funding must be made available. In members' representations in advance of the budget, they should call for the provision of adequate funding to resource the youth guarantee and match EU funding.
Ms Harmon will briefly discuss the back-to-education allowance and mature students.
Ms Laura Harmon:
I thank members for giving us the opportunity to address them. It is good to be here. I will discuss another key issue in our pre-budget submission, namely, mature students' access to education. While access rates are at just over 15%, they fall short of the Higher Education Authority's 2013 target of 20%. The back-to-education allowance is an important scheme for students wishing to upskill or reskill. It is also an important scheme in terms of social inclusion for those who are economically disadvantaged.
Many of the changes introduced via budgets in the past number of years have affected mature students, including the reduction of the back-to-education allowance from €500 to €300 in one budget, followed by abolition of that allowance in the last budget; changes in the rates for people under 25 years of age and the equalisation of rates for those over 25 years of age - it is estimated that savings this year in respect of the back-to-education scheme will be in the region of 5.1%; the fact that people in receipt of the back-to-education allowance no longer qualify for the grant; and changes to the distance rates, which means people must now reside 45 kilometres rather than 24 kilometres from their place of study in order to qualify for a grant, which in the main affects mature students, many of whom are commuters.
A national survey undertaken by Mature Students Ireland prior to budget 2012, to which more than 2,000 people responded, found that 43% of mature students were in precarious economic circumstances and 94% were okay or just getting by. This issue is affecting not only individuals but also families. Some 44% of respondents to the survey had at least one dependent child, 25% had two or more dependent children and 46% had at least one dependent adult. There is a need, when considering cuts to schemes such as the back to school clothing and footwear allowance, to look at the broader picture. These are issues that are severely affecting families and students.
The USI advocates that there should be no more changes to the rate of the back-to-education allowance. However, we do acknowledge that improvements can be made to the scheme. For example, while in 2005, 63% of people in the back-to-education scheme went on to part- or full-time employment and 9% went on to further education, some 60% are now returning to the live register. This is not necessarily indicative of the scheme not working; rather, it is more the economic situation in which we as a country find ourselves.
We believe there is a need for a more consultative approach. Because the back-to-education scheme is a self-selecting scheme, participants could be directed to courses that might be better suited to them. Also, in terms of the requirement for a person to be progressing to a higher level of education, it should be possible for a case manager to waive that requirement if he or she believes the person would benefit from a course which would help return him or her to employment more quickly. We also propose the introduction of a national skills map, which Mr. O'Connor will speak about later.
I understand the Society of St. Vincent de Paul has also prepared a submission on equality budgeting, which is another theme being explored by the committee. Would Ms Deane like to brief us on that issue at this point?
Ms Audry Deane:
We were delighted to see the amicable protest outside and welcome the wide level of support for the equality budgeting campaign with which the Society of St. Vincent de Paul has recently become associated. While we are not experts in this field, from our own intuition and that of our members, of whom there are 10,500, who link the impact of the lack of an equality-budgeting approach to how they experience access to social welfare benefits, we welcome the opportunity to discuss this briefly with the committee.
We understand what is meant by an approach to economic decision-making and planning that puts equality at the heart of decision-making concerning public expenditure and income. We believe that equality audits and impact assessments are the tools for doing so, and we take no issue with that. We support evidenced-based decision making because we believe this must be the way forward if we are to get the best from scarce resources. We understand this to mean evaluating the impact that expenditure and resources have on specific groups and, importantly, finding out who benefits from economic policy measures and who does not.
It improves transparency, which is also very positive.
Through our work and the people sitting in kitchens, we are aware of the unintended outcomes that can occur when policy decision making is done without robust tools. For example, the absence of poverty-proofing has had very negative impacts on households that we have worked with, particularly in the domestic waste area. It was almost ten years ago that it was introduced by the Department and it affected poor households disproportionately, causing a degree of social unrest. It did not do any of us proud and the problem was compounded by very inconsistent approaches by the various service providers and income gatherers.
This issue was raised by our volunteer group, the vast majority of which are engaged in household visitation. We got a critical on-the-ground perspective of how poorly planned policies and cuts to income supports can have a very negative impact. With education, it is of no surprise to members, who will have heard it from a variety of sources, that the cumulative nature of the erosion or explicit rationing of supports to those who have the least ability to buy private commoditised goods - whether it is grinds or educational psychological assessments, as noted by Deputy Ó Ríordáin - is an issue. If people can afford a few hundred euro for them, they will get through the system more quickly and have access to more resources. There is a range of issues predicated on an ability to pay. Uniforms, books, voluntary contributions, trips and equipment are issues for our members, and there is an inability to pay for persistent demands which has eroded the poorest families' ability to achieve a minimum essential standard of living.
We do not have much time but we are aware from a variety of sources that the most recent budgets have had a negative impact on those with the least on which to live. I know there are many statistics in the presentation, and we want to engage with members.
Ms Audry Deane:
There was a drop of 4% in the working aid social welfare payments in each of 2010 and 2011, and after that we have not had any further cuts to core rates. There has been a relatively large and persistent erosion of or change in eligibility entitlements to various social welfare payments. As an example, the Union of Students in Ireland has referenced the change in the jobseeker's benefit and allowance and specifically the number of contributions needed to get access to the various schemes. There has also been a change to the rent supplement scheme. We know the social impact assessment of the main welfare and direct taxation measures in the last budget, and that households with children - particularly with lone parents, to which we will refer - have been worst affected by these measures. Despite the purely economic stance and the idea that the budget has technically not been regressive, we know from various sources that the impact of the ancillary changes to eligibility and entitlement have created significant problems for those dependent on payments.
Lone parents are an important cohort for us, not least because they form the biggest cohort with which we work. Members are aware that this group experiences the most consistent poverty, at 16.4%, and it also experiences relative poverty. Some 56% of the group experience deprivation, which is a shocking statistic for households with children. The explicit changes to eligibility, earnings disregards and, most recently, the jobseeker's transitional payment are having a cumulative and shocking effect on income in these households. We do not have time to go through it, but the recent parliamentary questions have been most helpful in revealing the amounts of money being lost because of earnings disregard changes.
There is no question there. In fact, since budget 2009 the lone-parent household has suffered an income loss of €847.60, and that does not even factor in the child benefit universal payment.
This committee has heard often about what the Vincentian Partnership for Social Justice has offered us. We believe it has a very large role to contribute to the area of and approach to equality budgeting. Its rigorous and robust data, based on a very robust methodology, clearly show that the Irish taxation and social welfare systems do not work coherently to support those on the lowest incomes. Social welfare transfers alone provided an income which allowed for a minimum essential standard of living in only 11 out of the 208 households that it forensically examined. That is a quite shocking statistic. This is obviously due to critical failures at policy level and in integrated policy decision making. It is ripe ground to look at for equality budgeting.
To conclude, equality budgeting can be used to reduce inequalities and improve outcomes for disadvantaged groups and, indeed, help to deal with the gender issue regarding lone parents, which does not have to be spelt out to the audience today. If this is done coherently and with a long-term view, it would be a most useful tool for all of us.
I thank both organisations for their compelling and succinct presentations. I have a few questions for Mr. McCafferty regarding social welfare. It is chilling to reflect on the fact that the expenditure the Society of St. Vincent de Paul has had to incur to make up for the shortfall in State support increased by over 56% between 2008 and 2011. That is a shocking figure, particularly at a time when the society is finding it more difficult to get donations because of the recession. Mr. McCafferty will be aware that the budget for community welfare payments for once-off items of expenditure for poor families has been slashed. It has been reduced over the past two years by 40% in actual terms, which is worse than real terms. There were reports in the media during the year that community welfare officers who accepted the validity of certain cases raised with them were referring people to the Society of St. Vincent de Paul, among other charitable organisations. Is that true?
Second, with regard to the changes in entitlement to fuel allowance, he will also be aware that there is a specific commitment in the programme for Government to combat fuel poverty. However, what has happened in respect of fuel poverty in the past two years is that there has been a massive increase in energy prices, a carbon tax has been imposed, there has been a reduction in the period for which fuel allowance is paid from 32 weeks to 26 weeks and, in the last budget, the free electricity allowance, which played a big part in combating fuel poverty, has been reduced by over 60% in terms of how much it can benefit a client. Has Mr. McCafferty noticed the impact of this in his dealings with people? Has it generated more demand for the society's support?
I note the comment that there has been an intensification of poverty. The internationally accepted poverty line for a single adult living alone is €204 per week. The rate of jobseeker's allowance is €188 per week, so those recipients are living under the poverty line. They are officially at risk of poverty. They are trying to exist from week to week. The poverty rate for children living in families below the poverty line is one in five.
That is about double the OECD average. The percentage of children living in consistent poverty has increased, dramatically, to 9.5%.
I thank the delegates for exploding the myth that everything will be okay if we do not change core rates. People have been devastated by changes to the eligibility criteria and I know individuals who have been taken out of the social welfare system because of changes to eligibility rates. It is not of much use to them to hear that core rates have not changed because they are no longer eligible for any rate. These points have been gone through in detail. We are told that we should not reduce the core rate of jobseeker's benefit but the period for which it is paid. We are told we should not reduce the core rate of carer's allowance but to reduce the respite care grant. The grant is available to everyone in receipt of carer's allowance and there is effectively a reduction of €7 per week in what a person receives. We are told we are not reducing the core rates, but we have now got rid of the back-to-school clothing and footwear allowance for children up to the age of four years. The rates for other ages have been slashed and eligibility has been tightened.
It is stated on page 4 of the delegates' submission relating to lone parents that "Reductions in the earnings disregard and changes in eligibility for the one parent family payment mean that lone parents in employment [the only way most of them are surviving is through part-time employment] have seen and will continue to see significant falls in their incomes".
I have been trying to make the point to the Minister at Question Time and in various debates that the changes are a disincentive to lone parents to go out to work. This has been confirmed. Do the delegates agree with this point?
I do not understand why, if they can engage in equality proofing in Tanzania and Uganda, we cannot do so here. It goes a long way to explaining why we are looking at these things in isolation and not looking at the cumulative impact for poorer families. It is little wonder that the past three budgets have been regressive. No Minister deliberately sat down and decided to introduce a regressive budget that would hurt the poor more than the rich, but if one decides these things in isolation, without taking account of the cumulative benefit, making cutbacks will necessarily lead to regressive budgets.
Deputy Willie O'Dea covered most of the areas. Can the delegates comment further on the issue of family income supplement? There is a recommendation in respect of it from the advisory group on taxation. It is estimated that 40% of those entitled to the payment take it up. If a decision is made to retain it, how will the take-up rate be improved? Do the delegates have ideas in this regard?
Deputy Willie O'Dea touched on the earnings disregard in respect of one parent families and its devastating effects in terms of eligibility. People are coming into my office and presumably that of Deputy Willie O'Dea having visited the community welfare officer. They tell us that they have been told that they need to go to the Society of St. Vincent de Paul. That is the reality about which I hear in my constituency clinic.
The presentations referred to SUSI. There were major problems last year in its administration. The Society of St. Vincent de Paul in its presentation referred to the number of students and the financial issues facing them. Have they carried over? Do the delegates from the Society of St. Vincent de Paul expect them to carry over? Does the society receive the same number of requests for help from the student population? Will the USI comment on its experience last year compared to this year in how SUSI is working out?
I refer to the USI and the youth guarantee. I know it has done much work with ICTU and has issued a report with some recommendations. Will the USI refer briefly to those recommendations?
Ms Caroline Fahey:
I will start with the issue of community welfare officers referring people to the SVP. Our members work very closely with community welfare officers at a local level because much of the time, they are helping the same people. It is important to acknowledge the pressure on the community welfare service because of the extra demands and so on. Having said that, there seems to be a tightening up of the flexibility community welfare officers used to have where they could look at a person's particular circumstances and help him or her out even though he or she perhaps did not fall into any particular bracket. In some cases, community welfare officers refer people to us and, similarly, we refer people to them. It is not entirely negative because we want to ensure we are helping people to the best extent we can. However, it is important for community welfare officers to be able to be flexible with people and to meet their needs as they present. The SVP should be the absolute last resort after the State has come in and done what it can to help people. We should be there as the last resort rather than the first person to call.
In terms of the changes for one-parent families, when the one-parent family payment was brought in, it had features to encourage and support people in taking up employment - that is, people with caring responsibilities who might not be able to take up a well-paid full-time job but who still wanted to be in the labour force, because the poverty in one-parent families is concentrated among those who are entirely reliant on social welfare. One-parent families which can work are doing somewhat better. However, the changes, particularly to the earnings disregard, mean that people are not able to earn as much as they were and to keep some of their one-parent family payment. The amount of money people will lose as a result of that is colossal, in particular for those who are earning lower amounts of money. If one is earning €200, one loses quite a lot. However, one is still losing perhaps €50 per week even if one is earning €400. When we got those responses to the parliamentary questions, we really felt the features of the one-parent family payment which supported employment were being taken away and, of course, that is a disincentive to employment. It means some people will not be able to keep their jobs. That is the bottom line. With one in five children living in a jobless household, it will contribute more to that problem. We are asking Government to stop taking away the earnings disregard. The plan is to bring it down to €60, which is the same as that which applies to jobseekers, but that does not reflect the fact that people who are parenting alone have a particular set of needs that people who do not have a child relying on them would have.
I refer to family income supplement. These things all connect up, so because of the changes to the one-parent family payment, FIS is even more important. In the report of the advisory group on tax and welfare, we were very concerned to see that the proposal was to replace FIS with another payment which would be paid at a lower rate. If people can get family income supplement, it is a huge benefit to them as it provides considerable support. This lower payment would not do the same. FIS is not perfect. Many people who are eligible for it do not seem to be taking it up but we do not feel the solution is to abolish it, especially when we are saying to one-parent families that we will take away their one-parent family payment. Family income supplement can make up for much of that difference, and if it was gone there would be an even worse problem.
There was a massive advertising campaign around the digital switchover. We have huge campaigns around the television licence. Perhaps something could be looked at in regard to the family income supplement. There are other ways in which it could be given to people. We would like to see some proposals on a refundable tax credit to support families in low-paid work. We are not saying FIS is perfect, but do not abolish it until something better is in place to support those families.
With regard to child poverty, child benefit has been reduced considerably in the past number of years.
We know from the advisory group's report that 80% of children are in families that earn less than €80,000. When we talk about child benefit, the focus is always on high income families who get the payment. We need to focus, however, on what the changes are doing to low and middle income families who get the payment, that is, the majority of families. We are advocating for no further cuts to child benefit because it is an anti-poverty measure and the payment has been cut so much already.
Ms Audry Deane:
I will deal very briefly with the SUSI issue as I am sure our colleagues from USI will have more to say on it. It is way too early to know, for the current academic year, how many people will come to us, but every year, particularly in the Dublin region, hundreds of thousands of euro are given out by the Society of St. Vincent de Paul to subsidise a dysfunctional grant provider system. It is very difficult for us, regardless of whether the grant applications are successful, to claw that money back. Everyone here is well aware of how transformative it is, particularly for families whose first child is going on to third level education, in terms of being a route out of poverty.
We cannot understand how SUSI was set up so poorly and the review makes for very sobering reading. I hope SUSI will get the resources it so obviously needs to be able to do its job effectively. Unfortunately, in terms of SUSI's first year of functioning, the hard cases are still coming home to roost. As late as last Friday, I heard from a student who had gone back to Maynooth to do a higher diploma to get a job. There was ping ponging back and forward with SUSI. It had the forms, it lost the forms and so forth. A form was missing and neither side could prove that it had been sent or received. The end result was that she was being billed for €6,500 by Maynooth, correctly from its perspective. She was not able to get SUSI to approve her grant and, as a result, was unable to access her higher diploma. She cannot use the qualification that she had received to gain employment. That is just one example of how difficult it can be for students who end up on the wrong side of SUSI. The human cost is quite sobering.
Ms Audry Deane:
Absolutely, yes. We have a tradition of supporting students throughout the country, but particularly those in rural areas because they have to travel to major conurbations to access third level or further education. It is one of our long-term planks of support. The number of students we support continues to rise, year on year. Students and their families are finding it extremely difficult to make ends meet.
Mr. Joe O'Connor:
I will take the two questions from Deputy O'Brien. On the SUSI question, it is important to note that our experience at this point is that a number of the changes and reforms which USI recommended last year have been implemented and we are reasonably satisfied that the system is quite a bit ahead in terms of numbers of applications that have been processed in comparison with the same time last year. The next couple of months, as we go into payment stage for a lot of students, will be crucial. It is vital that all Deputies continue to monitor the situation to ensure the timelines that have been set out are met and that we can head off any potential crisis. In the second year of operation, things seem to be much improved but the system is still far from perfect, although, as the Deputy said earlier, the previous grant system was also far from perfect.
The point made by the Deputy about students in receipt of grants still accessing the services of the Society of St. Vincent de Paul is most relevant. We cannot allow the fact that students may get their grants in a more timely fashion this year to mask the real issue. That real issue is the fact that in recent years and long before SUSI was set up, there has been an enormous strain on the student assistance fund and on student hardship funds in individual colleges. An extra €3 million was allocated to that fund last year as a direct result of the SUSI debacle. However, that money was absolutely necessary, regardless of any delays, in terms of meeting the shortfall that exists between the cost of college and the student supports available.
For such a small amount of money, this is a direct way to funnel money to the most vulnerable students in the system. Regardless of SUSI, this needs to be prioritised again this year.
I would make one more point on this. Even if the grant is being paid a little bit earlier or on time, the Department of Public Expenditure and Reform, DPER, report from 2011 states that given the relatively low income thresholds at which students may qualify for support - these have been reduced by 3% since the report - any reduction in the rate would impact most severely on students from the least well-off backgrounds and possibly even contribute to an increase in rates of dropout which would negate the overall investment made by the State in such students at third level. From Government officials, that, in itself, highlights the stark importance of protecting the maintenance grant.
On the youth guarantee, the organisations - USI, ICTU and the Irish secondary schools' students' union - have come together as three groups representing over 1 million members looking at what is a huge national crisis in terms of youth unemployment and emigration, and taking a proactive and serious step in our own way to reach out and provide a positive response to this crisis. The first point is that we would like a national coherent joined-up national jobs strategy for young people across the Departments of Jobs, Enterprise and Innovation, Social Protection - which is where the youth guarantee sits - and Education and Skills. It is vitally important that there is a joined-up approach taken to this in all of the measures which fall between three Departments included in our document, which I would be happy to circulate to members of the committee before we present it in the coming months.
The other measures we recommend include that the European youth guarantee, which will allow any young person within four months of becoming unemployed a training place, education place or some sort of an apprenticeship, cannot be merely an extension of existing schemes. There needs to be a real and substantive commitment to funding this scheme, and the three partners that have been involved in this process are heavily engaged as key stakeholders in the design, implementation, review and monitoring of the European youth guarantee. Certainly, some of the issues which have arisen out of JobBridge could have been addressed by a closer monitoring of the way the scheme is rolled out because there are some positive elements to that scheme.
We also are recommending a best-practice document which we have for work placements, internships and apprenticeships. Ms Harmon spoke earlier about the back-to-education allowance. We are proposing a national skills map across the country whereby skills gaps and deficits across regions and across sectors where there is need within the labour market would be identified using a national skills map. There is the potential in reforming labour activation schemes, such as the back-to-education allowance, to direct them towards programmes that meet those skills needs. We are not saying that one should not look at the back-to-education allowance scheme to try to improve the scheme; it can be improved. However, the issue is in students, who receive the back-to-education allowance and go to college, proceeding to get employment out of that. The issue is not the rate of the scheme because as a measure of getting the unemployed off the live register and getting them into third level it is very effective. There is a number of other proposals within that.
If I may make one last point before I conclude because I do not think there were any other questions, as the joint committee responsible for education, I want to make a pledge to it as a whole. It is very much our view in USI that education is not public spending but public investment. Too often, we get boxed off into this argument about whether we are better off having overcrowded classrooms at primary level or having young people dropping out of education at third level. It is not an either-or matter. There has been so much talk about the scale of the budgetary adjustment over the past number of weeks and months and I would ask everyone here to put forward the argument that education as a return on investment, both socially and economically, is the direction that this country needs to take, and any decisions that are taken need to stand up to that principle.
I want to contextualise the discussion and will begin where Deputy O'Dea left off. During his contribution, he asked the representatives of the Society of St. Vincent de Paul whether they had noticed a drop-off in their income. Everybody has noticed a drop-off in income because of the mismanagement of our country by Fianna Fáil.
We would not have an education system had Fianna Fáil continued in power. When we inherited this economy, five months worth of money was left in the kitty.
I welcome our guests. Having considered and watched the work of the Society of St. Vincent de Paul for many years, not only at national level because I work with and have assisted it in a humble way at local level, I realise its contribution is absolutely immeasurable. The life impact of poverty on young people is very obvious.
I have given a lot of thought to the budget because we all have a responsibility in the run-up to what are to be difficult times. I have a point that I will make not by way of a question because I am not sure whether the contributors would want to comment on it. I am no longer in favour of universal child benefit. I grew up in what would have been considered to be a working-class area, Ballyfermot, in the 1960s. I am very proud of it. A very small percentage, 3%, of those who finished second level schooling got the opportunity to proceed to further studies or third level. I have no doubt that not only access but also poverty played a major part in that outcome. The latest Growing Up in Ireland study gives us a very clear insight into how poverty affects education. We know that by the age of three, for example, children from more deprived or poorer areas are more likely to display behavioural problems, suffer from obesity or have a poor diet. Even before they start their educational life, they are lagging behind.
Why should Mr. Michael O'Leary or I - if I were a Member with young children - be entitled to the same entitlements as other families? When are we seriously going to make hard decisions about channelling the limited resources available to the Minister to those who have not has opposed to those who have? There are so many impacts on affected young people that must be considered.
Despite the Minister's efforts at social protection, many people and I are aware of the continuing abuse of the child benefit payment. I refer to people coming from outside Ireland – we all know this happens – to claim payment. We hear this from reliable sources. We must ensure that those who are most needy can avail of the limited resources we have available. This is a big challenge for the Minister and I know she is committed to it. The additional money for the Minister for Social Protection to address that is made available through the child benefit system.
I acknowledge the presence of the representatives of the Society of St. Vincent de Paul. The society makes an immeasurable contribution.
For my part, as a Government backbencher, I really appreciate and value the work of the Society of St. Vincent de Paul. I will continue to play my part not only at this committee and at meetings of the parliamentary party behind closed doors, but also in the Dáil to ensure the society's voice is heard, as well as the voices of those represented by the charity - the poorer people in society. In making difficult decisions, we should channel limited resources to those most in need.
I thank the witnesses for their presentations. Yesterday in the Dáil, I referred to the social housing Bill which will be coming before us in this session or early in the next. I see that Ms Deane has put down a supplementary note on the impact of the rent supplement scheme. One of the biggest issues I come across in my constituency office is social housing, and I am sure it is the same for other Deputies as well. At the height of the boom, very little was done about social housing. During 14 years, the previous Government did very little about it. We had the property boom when developers were supposed to build private houses for profit, giving 10% to social housing. However, the Government of the day allowed those developers a get-out clause of which most of them availed, so we ended up with no new social housing.
Rent supplements and social housing are the biggest issues with which community welfare officers have to deal. In my county we have no social housing. We are waiting for some houses to be done up and it is a serious problem. I would like Ms Deane to give some feedback on this issue. We have been told that the only show in town at the moment is the rent allowance, which is putting people on the bottom rung of the social protection ladder under severe pressure. It is difficult even to get a place because in certain cases a lot of landlords might not be registered or do not want rent allowance tenants.
We can see what €30 million has done for the schools budget with extensions being built to replace prefabs. A lot of work has been undertaken for that sum, so we should put a similar plan in place to start building social housing. The lack of such accommodation is a major problem for vulnerable people.
I agree with Ms Fahey that the family income supplement should not be done away with. We need to revamp it in some shape or form. People in the food sector, including restaurants, can find people to work 19 or 20 hours per week, but they cannot get anyone to do a full week's work. We must examine the way the family income supplement is distributed. Rather than being abolished, it should be re-examined and revitalised.
Social housing is like a can that has been kicked down the road for years, while nothing has been done about it. It is now time to start taking action.
I want to thank the representatives of the Society of St. Vincent de Paul and the Union of Students in Ireland for coming to this meeting. It is an opportune time because the budget will take place in a few weeks' time. I thank the witnesses for giving us their views on what needs to be done to assist the sectors of society they serve so well and for which they are so important. As they have said, there needs to be a focus on ensuring that the quality of life of students and the poorest people in our society is protected, maintained and improved as much as possible. I would like both organisations to develop a couple of points that were made. One of the representatives of the Society of St. Vincent de Paul said there should be a particular focus on preschool education. I appreciate that the preschool sector has developed significantly over the last five or six years. This new initiative has greatly enhanced the educational prospects of young people and has helped to address child poverty. I would like the witnesses from the Society of St. Vincent de Paul to expand on what it hopes might be achieved in the forthcoming budget. Reference has been made to school meals in this context. After-school care needs to be developed much further as the services that are available in this area are very limited in many areas.
Mr. O'Connor from the Union of Students in Ireland highlighted the important role played by the student assistance fund last year, particularly for the many students who were severely affected by the incompetence associated with the initial establishment of SUSI, which seems to be operating much more effectively this year. Responsibility for administering the student assistance fund, which plays a massive role, is devolved to individual institutions, which are able to use their common sense and judgment to disburse funds to those students who need it most. Mr. O'Connor mentioned that an additional allocation was made last year. On the basis of its engagement with various colleges, and in light of the pressure that came on the fund last year, what level of funding does the USI consider necessary to meet the likely demand for the fund this year?
What is the current position with regard to students who are awaiting responses from SUSI and other bodies about their grants? Has the USI encountered any problems this year in respect of the payment of registration fees? Are demands being placed on students to pay registration fees before it has been confirmed whether they qualify for a grant? It was important that a degree of leeway was afforded last year. I have a sense that there may be problems in a couple of instances this year. I wonder if that is something the USI has encountered. If so, it should be addressed. No student who is awaiting a decision on the award of a grant should be asked to pay the registration fee up-front. If the fee is out of that student's range, his or her continuation in college will be placed at risk.
There has been massive regression in the area of postgraduate study in the last couple of years.
As the Union of Students in Ireland has pointed out, the maintenance grant and the fees for students undertaking postgraduate studies have been done away with in recent budgets. They have been replaced with a €2,000 fee award for students under a certain family income threshold. What has the USI experience been in respect of the take-up of postgraduate studies? What has been the experience of students unions throughout the country? I believe there is a real situation at the moment because postgraduate studies are quickly becoming the preserve of those who can afford to go to college and who have their own means. They are not easily accessible at the moment. What are the thoughts of the USI on the developing situation at postgraduate level?
We are here ahead of the budget which is due in three weeks time. Whatever comes to pass, whether it is a softer budget of €2.5 billion in cuts, a hard budget of €3.1 billion in cuts or somewhere in between, the reality is that there will be adjustments, in particular in the two areas we are discussing today. Certainly, there will be adjustments in social protection. At the moment there is talk about the Minister, Deputy Burton, having to adjust by €440 million. Whether that ends up being the case or whether it is somewhat lower I am unsure, but if it is lower, there will be hardship and adjustments.
I thank both groups for their presentations, which are important contributions to the debate about the budget. I hope that whatever the Minister, Deputy Burton, has to do, she will not hit the priority areas identified by the Society of St. Vincent de Paul, namely, child benefit and family income supplement. In speaking to our Ministers ahead of the budget, Labour Party members will be strongly arguing the case the society is making and we have been doing so for the past two or three budgets. Regardless of whether people in the room like it, the heavy work done in terms of adjustments that we inherited has had to be done and this budget was going to be a tough one irrespective. Whether it is €3.1 billion or €2.5 billion in cuts, it will be tough for many people. We will be fighting hard to ensure the priorities of the Society of St. Vincent de Paul are maintained because they are our priorities as well and we share them.
There is talk of the Minister, Deputy Quinn, having to reduce his budget by €100 million on the education side. The reality is that education, social protection and health are the big spending Departments and to achieve the €3.1 billion or €2.5 billion or whatever in cuts, it cannot be done without adjustments in these areas. We must be honest with people that this work has to be done. We wish it did not have to be done but the reality is there will be a good deal of pain for many people. However, I hope that following this budget, things will get a little easier. I thank the witnesses for their contributions. They can rest assured that people in the Labour Party Parliamentary Party will be fighting hard to make it as easy as possible and, one hopes, to protect the priorities of the witnesses as well.
Mr. Joe O'Connor:
The figures for the overall budgetary adjustment started out at approximately €44 million but shot upwards from several different elements. One of these relates to redress payments for the victims of clerical abuse. While this issue must be addressed, we are concerned that the children of the future will be made to pay for the sins of the past if some of these cuts come about as a result of that saving. Although obviously there will be pain in this budget, the difference between €2.5 billion and €3.1 billion is significant in the context of a maximum of €100 million savings in education. This is why I am advocating that education is an investment to the State that must be prioritised in this budget.
I have no wish to get into the political argument around this but the reality is that people in the USI this year are not concerned with what has happened in previous years or budgets. There is no doubt that under the last couple of Governments, measures have been carried out which have greatly affected our members. Although longer-term debates on third level funding and so on must be worked through, we are convinced that protecting the maintenance grant is the only way to protect the most vulnerable people we represent and that is why we are keen to get that message across strongly.
In reply to Deputy Charlie McConalogue's questions about the student assistance fund, I have been involved in the GMIT students' union for the past three years, a college in which more than half of the students are on maintenance grants and from lower socio-economic backgrounds. The demand in both colleges in Galway - NUIG and GMIT - has more than doubled in the past two years. The average payment to a recipient of that fund has decreased quite significantly. In order to address the demand which, without doubt, will be there this year and given the increasing strain on families and the lower level of student supports, the €3 million which was set aside last year to make up a total allocation of €11 million for the payment, while it will still lead to a very difficult situation for colleges, is the absolute minimum that must be provided to ensure the fund can continue to operate in the way it has, by protecting people from falling off the bottom who are only just about able to remain in college.
On the point about SUSI, it is our experience that the vast majority of colleges operate with a deadline of 31 October for payment of the student contribution charge. The level of efficiency in processing applications by SUSI during the next month will have an impact. Many students will not have received their grants before the deadline date. I will ask the HEA to ensure flexibility in order that these students can avail of services in their colleges. Last year saw a significant issue arising with regard to students who were not fully registered and not considered qualified to apply for the student assistance fund. Students who were temporarily registered under the SUSI system while awaiting their grant were initially not considered qualified to apply for the student assistance fund, even though they badly needed assistance, until a further directive was sent from the HEA. The same arrangement will need to be put in place this year.
Ms Laura Harmon:
I refer to a point made by Deputy Derek Keating on the Growing Up in Ireland study and the correlation between findings of the early childhood development survey and the issue of behavioural problems. If a child is not given a chance in the early years, this will have a direct impact on his or her educational attainment in later life. In 2010, 19.5% of children and one in ten people in Ireland were at risk of food poverty. As mentioned, 16.4% of lone parents are also at risk of poverty. In 2010 the gap between the highest and the lowest earners increased by 25%. These are very stark statistics.
On a point of clarification, I think the CSO subsequently corrected the figures. It was found that the gap in incomes did not widen according to the SILC measurement. It was necessary to readjust the 2010 figures because there had been a mistake. It was found that the level of inequality had increased marginally between 2010 and 2011 when the figures were readjusted.
Mr. John Mark McCafferty:
Deputy Willie O'Dea spoke about energy which is a key issue for the society and dealt with by a number of Oireachtas committees. The issue of prices is very topical. I refer to the debate at the Labour Party conference across the water about prices and regulation. I wish to underline the fact that two years ago in late November 2011 the Minister, Deputy Pat Rabbitte, launched the energy affordability strategy, the Government's strategy for tackling fuel poverty.
It does not have a high profile, but it does exist. The objective of the initiative was to bring together the various strands of policy with a view to tackling fuel poverty. One of the issues in this regard is pricing, about which we are very concerned. Decisions in this area are now out of the Minister's hands and subject to regulation. As perhaps the largest price taker in Europe, Ireland is very exposed to high and rising energy costs. That is why the amount of money and time we have had to devote to the energy issue has mushroomed, a situation which is unsustainable for the organisation.
Budgeting issues are also key. We have been at pains to encourage people to use prepayment or pay-as-you-go meters. This is very relevant from both a social protection and an income point of view. The use of prepayment meters through the three established utility companies is one of the key ways in which people can make their energy bills a little more affordable and assume greater control of their budgeting. We receive very positive feedback from the people we are assisting who avail of these facilities. The meters are provided free of charge for clients in arrears by either ESB Customer Supply or Bord Gáis Customer Supply, depending on whether the customer uses gas or electricity. However, the vast majority in difficulty are on repayment or instalment plans and a prepayment meter, therefore, will only get them so far. Many of our customers have defaulted on a repayment or instalment plan and there is a subsequent renegotiation or rescheduling of it. The monitoring of these arrangements is very important in making energy bill repayments more manageable for people.
We asked for the carbon tax to be hypothecated and ring-fenced, but this was not done. Instead, the moneys went into the common pot. The effectiveness of the strategy is compromised as a result because the resources are not there to ensure retrofitting takes place as quickly as we would like. A key issue which is tied to the social housing output issue is that, historically, housing standards have been extremely poor in this country compared with those in other northern European countries. This has a bearing in terms of building energy ratings, with many people effectively paying to heat the sky. A huge portion of the social protection budget is expended on fuel allowance and the various free schemes. While we are anxious that they be protected, we realise there is something very wrong in that level of expenditure merely serving to compensate for very poor energy efficiency levels.
There was an indication this morning that an acceleration of the retrofitting scheme might be included as part of a possible stimulus package, if there was some wriggle room in the NewERA moneys. That would be a win-win outcome, being pro-job creation, pro-health, pro-environment and, in the longer term, offering a better balance between income supports and retrofitting targets. The winter fuel allowance and the free schemes or payments in lieu of energy units must be protected. In the longer term, however, we need to see some relationship between what we are paying in income supports and the energy efficiency of housing. These issues must somehow be coupled. The Department of Communications, Energy and Natural Resources, the Department of Social Protection and the Department of the Environment, Heritage and Local Government must talk to one another if there is to be more effective co-ordination on the issue. In short, the energy issue is absolutely key for us and an important income support consideration.
The issues of retrofitting, building quality and so on are also relevant when it comes to a discussion on social housing. My colleague, Ms Deane, will deal specifically with the social welfare allowance end of it, but I will make some general points.
The Society of St. Vincent de Paul is itself a social housing provider, with some 1,000 units at our disposal. The main difficulty in this area is the failure by Governments over many years to establish a robust housing policy underpinned by a robust commitment to social housing, whether through local authorities or the voluntary and co-operative movement. There are many lessons to be learned from the Dutch and other northern European neighbours in avoiding an approach which residualises housing, assigning it as simply a private matter for landlords, a sector at which money may sometimes be thrown, not one in which the State would have oversight or give direction.
Successive Governments have relinquished their responsibility in respect of the creation of quality, affordable and sustainable communities through housing provision.
The final point I will make is that there remains an oversupply of housing and vacant units. However, these are not all located in the places where people either currently are or where they should be. Our colleagues in Threshold have already stated there will be a great deal of demand in respect of the stimulus package. Output of social housing must be increased. It is not sufficient to state we have units available and that we can fill them with people in Longford or Carrick-on-Shannon when the demand is actually in urban areas.
Ms Audry Deane:
I will quickly mention housing and rent supplement. We could use up all of our time before this committee decrying the €500 million spent on rent supplement, but there would not be any point in doing so. To give Deputy Willie O'Dea some insights, the families and households with which the Society of St. Vincent de Paul work and which, unfortunately, are at the wrong of the food chain with regard to private rented sector accommodation are the most vulnerable. The interaction between social welfare payments and taxation makes it difficult for people with families to genuinely consider taking up employment. This is almost an unemployment trap and is a huge challenge for Ireland. Deputy Willie O'Dea also referred to single males and stated that while the poverty line for such individuals was €204, their incomes from social welfare payment was €188. The latter amount is €186 if the person concerned is on supplementary welfare assistance, of which €32 goes towards rent. The sums just do not add up in this regard. We are aware of top-ups and double-tenancy agreements. We have contributed our insights on these matters and are aware that the housing assistance payment and the RAS will - technicalities dealt with aside - assist us in getting to a better place in the coming years. We simply cannot continue to spend €500 million on rent supplement and that is not the solution.
On preschool services, the early child care supplement introduced by the previous Government which cost €486 million per year was not a particularly good use of taxation because it left no legacy of improved quality. It was simply a direct cash payment to parents and did nothing to improve the infrastructure, quality or standards in the sector. These are all in sore need of reinforcement. We spend 0.1% on the early years sector. For the information of Deputy McConalogue, we set out a range of the resources needed to develop the sector further. There should not be any move to row back on what is already in place, namely, the free preschool year for four year olds. In times of recession and retrenchment other countries have managed to ring-fence funding for this most precious cohort. We all know the statistics and economic arguments involved in respect of the return on investment, etc. However, I will not bore members by discussing them now. What I will say is this is a critical sector and quite an amount of development is required in it.
There is no after-school care infrastructure in place. In that context, we are deeply concerned about the activation of the lone-parent cohort. We are so concerned about the people concerned that we are carrying out research on how they are going to cope with the lack of resources when they are activated in the workforce. This matter does not just relate to lone parents. Any working parent is concerned about the huge cost implications of after-school care. We hope we can contribute to developing the architecture for the relevant strategy under the Minister for Children and Youth Affairs, Deputy Frances Fitzgerald. We have great hopes for it.
To end on a positive note, we have a very innovative initiative in respect of school means which, in our view, does not cost a great deal but which has great potential in reinforcing and leveraging the capacity in the school meals sector. Schools are a fabulous setting in which to encourage the provision of healthy and nutritional food for disadvantaged children, in particular. We are aware of the statistics in this regard. One in five children goes to bed or school hungry because there is not enough food in his or her home.
We also know that one in six children do not have breakfast during the week. There are many statistics on this area and I am not going to shower them on the members at this late stage in the afternoon as they have a good deal to get through. The Minister, Deputy Burton, has so far successfully protected the school meals scheme which costs €37 million. It has amazing potential to be leveraged. The Departments of Education and Skills, Social Protection, Health, and Children and Youth Affairs should co-operate to contribute towards providing a budget that would be ring-fenced to improve potential outcomes. We know that the Health and Food for All organisation, which has huge competences and experience in this area, is engaging directly with the Department of Social Protection. We very much hope that the members will support the fact that the continuation of the school meals project is a no-brainer, and there are great solutions here that are ready to be applied.
Ms Caroline Fahey:
Our position in the Society of St. Vincent de Paul is that we are supportive of a payment to all families with children supplemented with extra targeted payments for those on the lowest incomes. Ms Audry Deane spoke briefly about the poverty trap associated with rent supplement. Deputy Butler raised the issue of people working 19 or 20 hours but not wanting to work beyond that number of hours because they would start to lose benefits. We do not defend the payment of child benefit to the wealthy who do not need it. We defend the payment of it to those in low or middle income jobs who are concerned that they would lose the benefit if they earned a little bit extra. A great aspect of child benefit payment is that it supports people regardless of their employment status. We do not want to build another poverty or unemployment trap into the system.
Ms Caroline Fahey:
We are saying that it should be a universal payment. The provision of services is another important area which I will not go into now, but it and the provision of supplementary payments are very important for those on the lowest incomes. An issue that is regularly raised with us is the loss of child benefit in respect of a young person in second level education who turns 18 years of age before sitting their leaving certificate. Those young people are left in limbo in that they have not moved on to third level and cannot qualify for a grant, awarded late, or otherwise. They are still in secondary school and their parents are trying to meet the costs of their education at an expensive time when they are buying examination papers, books and incurring other expenses. We are seeking for the lowest income families who are struggling with that cut to be compensated.
I endorse what Ms Fahey and Ms Deane said about people being afraid to work a few extra hours because of the fear of losing supplements. I welcome that the Minister is examining the position of people who have been short-term or long-term recipients of social welfare to provide that if they get a job, their full entitlements to rent supplement and other benefits will not be removed from them and that they will be given a package to assist them to return to work. When we are out meeting people, we hear on the doorsteps that a husband or a wife might have been offered a job but by taking it up they could stand to lose €40 or €50 when they subtract all the allowances they would lose and factor in the cost of petrol money and travel expenses. I welcome that the Minister is examining this issue. Everything in terms of benefits should not be taken from these people. They should assisted in the same way as recipients of the back to work scheme whereby they would be given an amount in year one, another amount in year two and a further amount in year three until they are up and running and into the system. I would welcome the establishment of that type of system, as I am sure would the Society of St. Vincent de Paul.
All the members would second that sentiment. As a committee we have been examining budgetary matters and each of us will bring what we have learned from this meeting to our own parties when we have parliamentary party discussions in the lead-up to the budget. I thank the delegates again.