Oireachtas Joint and Select Committees
Wednesday, 11 November 2015
Committee on Education and Social Protection: Select Sub-Committee on Social Protection
Social Welfare Bill 2015: Committee Stage
This meeting was convened for the purpose of the consideration by the select sub-committee of the Social Welfare 2015 which was referred to it by orders of the Dáil on 5 and 10 November. The Bill gives effect principally to the social welfare measures announced in the Budget Statement on 13 October which are generally due to take effect in early 2016. They provide for increases in social protection payments, including certain pensions, child benefit, the respite care grant which has been renamed as the carer support grant and family income supplement. The Bill also provides for changes to PRSI contributions and credits. It comprises two Parts, ten sections and two Schedules.
I welcome the Minister of State at the Department of Social Protection, Deputy Kevin Humphreys, and his officials. I ask members and visitors to switch their mobile phones to silent or flight mode to avoid interference with the broadcasting equipment. It is my intention to conclude Committee Stage this afternoon. Is that agreed? Agreed.
I draw members' attention to the grouping of amendments for the purposes of the debate. It is proposed to group amendments Nos. 1, 3, 34 to 38, inclusive and 41 together; amendments Nos. 4, 5, 7, 8 and 14 to 21, inclusive, together; amendments Nos. 31 to 33, inclusive, together and amendments 39 and 40. The amendments which have been ruled out of order are Nos. 6, 9 to 11, inclusive, 13, 24, 25 and 27 to 30, inclusive. All other amendments which have not been grouped will be discussed individually. I will give the explanation the various amendments have been ruled out of order when we reach them.
I move amendment No. 1:
In page 3, line 10, to delete “Social Welfare Act 2015.” and substitute “Social Welfare and Pensions Act 2015.”
These amendments will allow the holder of the office of Financial Services Ombudsman to also hold the office of Pensions Ombudsman. They will also ensure that where the office of Pensions Ombudsman is held by the Financial Services Ombudsman, no salary or remuneration will be received in respect of the office of Pensions Ombudsman. Deputy Willie O'Dea has proposed a similar amendment. The amendments tidy up the Bill and are not controversial.
The proposed subsection (4) in amendment No. 3 states Part 3 will "come into operation on such day or days as the Minister for Social Protection may appoint". Does the Minister of State have any idea as to when that will happen?
The Minister for Finance must bring forward legislation to allow for the merger of the offices of Pensions Ombudsman and Financial Services Ombudsman. Therefore, I do not have a definite date because it is not a matter within the control of the Department of Social Protection. That said, I hope it will happen as soon as possible.
I do not have a major problem with this group of amendments which are technical in nature, but it does seem to be a very clumsy way of putting legislation together. Previously, legislation made reference to the Acts being "read together as one", but this has been changed to "construed together as one Act". In some ways, a full restatement would be better.
On the substantive point about the Pensions Ombudsman, it is a little previous including the measure at this stage, given that the amalgamation of the two offices has not yet happened. It may not happen. I know that the measure is to be brought into operation "on such day or days as the Minister for Social Protection" decides. That could be during the lifetime of this or a future Government. What if it takes a number of years? In the past individuals were allowed to remain in position until an amalgamation happened.I
It will be a separate office until the amalgamation happens because within the legislation there is a prohibition on the Pensions Ombudsman holding another job. When enacted, the Bill will improve services for the customer because there will be a one-stop-shop to deal with related concerns. It is enabling legislation to ensure that when the Department of Finance amalgamates the two offices, we will be able to move speedily. This is the most relevant time to do it.
My own view is that it should be done when the legislation from the Department of Finance is enacted. The logic behind it is there will be the amalgamation of both offices, but that may not happen. That said, I am not opposing the changes. I am just arguing that it seems to be very clumsy and that there must have been a better way to do this. Perhaps it is the opportune time to do so, but I find the construct of the amendments clumsy. Amendment No.1 is simple enough and we have dealt with a number of similar amendments in the past. We dealt with several Social Welfare Bills to which pension provisions were added. I do not have a problem with this because I have been able to use it to my own benefit to table amendments on pension issues. Once a Social Welfare Bill is opened in that way it gives us such an opportunity. I may table amendments at a future date because I have not had adequate time to study the pension related amendments proposed. Given that the Bill has been opened up to cover pension issues, I may submit amendments on the structure of pensions and so forth.
The Government has approved the heads of the Bill. The proposed amendments amount to a bridging measure to allow the holder of the office of Financial Services Ombudsman to hold the office of Pensions Ombudsman pending the passing of the legislation providing for the formal merger of these two offices. I fully accept what Deputy Aengus Ó Snodaigh said about opening up the Bill to deal wit pensions, but it is important that the amendments are agreed to because they will allow the bridging measure to take effect.
I move amendment No. 2:
In page 3, line 11, to delete “read together as one.” and substitute “construed together as one Act.”.
This is a minor technical change to provide for the amendment of the Social Welfare Acts and the amendments contained in Part 2 of the Bill to be construed together as one.
I move amendment No. 3:
In page 3, between lines 11 and 12, to insert the following:“(3) The Pensions Acts 1990 to 2014 and Part 3shall be construed together as one Act and may be cited together as the Pensions Acts 1990 to 2015.
(4) Part 3shall come into operation on such day or days as the Minister for Social Protection may appoint by order or orders either generally or with reference to any particular purpose or provision, and different days may be so appointed for different purposes or different provisions.”.
I move amendment No. 4:
In page 3, to delete line 16 and substitute the following:“ “Act of 2010” means the Social Welfare and Pensions Act 2010;”.
In light of the enactment of the Marriage Act 2015, these amendments provide for various references to the gender-specific terms of "husband" and "wife" contained in the Social Welfare Consolidation Act 2005 to be replaced with reference to the gender-neutral term of "spouse". They also provide for related changes in the Acts. All these changes pertain to the recently enacted Marriage Act 2015 and it is just to tidy up and to make sure the references are correct within the Acts.
I welcome these amendments. I hope all the references contained within the consolidated Act that require change are changed and if not, that any other anomalies will be addressed at the earliest possible stage, given the size of the consolidated Act and other legislation, to give full effect to the Marriage Act as now passed.
I thank the Deputy for his comments. I wish to compliment the staff of the Departments of Social Protection and Justice and Equality on endeavouring to implement the legislative structure arising from the referendum as quickly as they did. While the Government has endeavoured to make all the amendments changing references to "husbands" and "wives" to "spouses", I accept fully a few references may be encountered that may need to be changed at a further time. I acknowledge the Deputy will co-operate in so doing at that stage but I thank him for those comments.
On that point regarding the legislation, are there issues such as, for example, payments that were more specific to one gender or the other? I am thinking of the deserted wives payment and while it may not arise any longer, would amendments be necessary to legislation?
Throughout this process, the Department has endeavoured to change as many as possible. The consolidated Act is under review constantly to ensure the legislative references are correct. Since I came into the House, I and many Deputies have been finding references that were not up to date. However, through a review mechanism, the Government will rectify anything that is discovered. A huge body of work has been undertaken by civil servants in respect of the Marriage Act in an endeavour to rectify everything possible. I certainly am not stating nothing will be found but if it is, it will be rectified as discovered as soon as practicable.
Amendment No. 6 has been ruled out of order as a potential charge on the Exchequer. Basically, this is because the amendment proposes a further increase in the contributory State pension above the increases proposed in the Bill. As this amendment could involve a charge on the Exchequer, it therefore must be ruled out of order in accordance with Standing Order 156(3).
I note my amendment was ruled out of order on the basis it would constitute a charge on the Exchequer. Members are debating the rate of increase for pensioners. Section 3 deals with contributory pensioners and section 4 deals with non-contributory pensioners. The Minister of State will be aware that pensioners have not had an increase since 2010 and the rate of inflation in the interim period has been 4.5% which, apart from anything else, erodes their purchasing power straight away by 4.5%. However, I suggest this probably is exaggerated on the lower side because inflation covers everything from the cost of aeroplanes to the cost of drink, the cost of luxury goods, essential goods, etc. The increase in the prices of essential items, which are more regularly purchased by pensioners, particularly those who are completely reliant on their pension, probably has been approximately 6% or 7% since 2010. In itself, that is bad enough and constitutes a considerable erosion of purchasing power but in the meantime, pensioners in this category have lost the free telephone rental allowance and the household benefits package has been decimated. They have lost and subsequently regained half the fuel allowance but carbon taxes have increased. In addition, tax relief on medical insurance has been severely restricted and this measure particularly affects people in this category. The drugs threshold has been increased and the limits in respect of the over-70s medical card have been reduced, that is, the payments of the amounts under which one will not qualify for a medical card. Moreover, the housing adaptation grants, which again are of particular relevance to this group, have been reduced quite substantially. Mobility grants have been reduced and the bereavement grant has been abolished. On top of all of this, people - not exclusively but including those in this category - must bear the weight of water charges, property tax and increased contributions towards the fair deal scheme. In addition, home help hours have been slashed.
Consequently, these people have suffered quite an imposition apart from the erosion of their incomes through inflation. It is my contention that €3 per week is insufficient compensation for the private nations they have suffered and while I welcome the increase, it is not nearly sufficient to compensate them for what they have lost. Incidentally, I re-read the Tánaiste's Second Stage speech and she mentioned it was a €3 per week "above inflation increase" but this should be corrected. It is not an above inflation increase, which would suggest pensions have been increased to provide for inflation in recent years, an inflation rate of a certain amount now is being projected and the €3 is on top of that. This is not correct.
There are a number of issues and I concur with Deputy O'Dea regarding the litany of cuts to benefits.
These cuts would affect people who are in receipt of the contributory pension and also some of the other pensions, some of which are already listed, and others which would also have an effect. For example, if prescription charges increase it would affect people who benefit from medical cards or the reduction of six weeks in fuel allowance would affect people who benefit from a fuel allowance. Deputy O'Dea referred to the fact that the Minister said that the €3 increase was above inflation and this is what annoyed me most. Even if one was to take the rate of inflation, which in the last four years is over 4.5%, then there should have been a €10 increase and it is nowhere near that. Different inflation figures apply to different people in some ways because if one was dependent upon a service and that service increased in price then the cumulative national inflation figure of 4% or 5% in the last few years does not hold and one might have a higher figure.
In some ways the Bill shows us, in very stark nature, the different rates for qualified adults. It needs to be tidied up so there is consistency in some way across the board - a later amendment refers to different rates. I will not suggest rates because we are excluded and prevented from suggesting changes which would incur a cost to the Exchequer. I have argued here and in the Dáil that this needs to be addressed in a Constitutional convention. Towards the end of the section relating to when the increases come into operation, and then again in the next section, there are two different dates. The logical thing to do would be to select 1 January 2016 as the date on which the legislation would come into effect. Maybe the date of Thursday 7 January is the first day of payment or the Friday 8 January is for the invalidity pension. Why can one date not be selected and then the next payment can be covered? I cannot understand why there are different start dates. The start date should be 1 January and the next payment would then take effect and a person would get the full benefit, or would lose some, based on the person's start date. When one goes further into the legislation, 1 January seems to be a set date, yet the 7 January and 8 January are selected in this instance. I could not figure out the logic of this other than it might be the date of the first payment. I do not think it would make much of a difference if we removed those dates out and enabled the increases to come into effect on 1 January. When a payment then falls due a person would get the full effect.
I will address Deputy Ó Snodaigh's last query first. This is standard practice for increases and it arises from budgeting for weekly payments. As it ties into weekly payments it is very difficult to administer payment of partial weeks. This is why it is based on the different start dates and has been standard practice in payment of weekly payments since I came into the House and probably since the Deputy came into the House also.
In regard to Deputy O' Dea's comments on inflation, it depends on which group of experts are giving the inflation rates. However, certain items have gone up and others have gone down. In that regard I accept the point which was made by the Deputy. In this context I will now turn to the matter of the €3 pension increase. The Deputy is aware from the Spring Economic Statement of the exact boundaries within which this Government was operating. The Cabinet decided to not only provide for a €3 increase in the pension, but also to provide for a 75% Christmas bonus and an increase in the fuel allowance and the carers' allowance. The Deputy wishes to reference just the €3 figure but that increase is significantly more than was suggested by his own party in its pre-budget submission operating within the same constraints as the Government. We increased the pension by €3 but we also provided for the Christmas bonus, the fuel allowance and the much welcomed change in the carers' allowance. Those are the constraints within which the Government operated and they were acknowledge by Fianna Fáil when it used the same constraints in making its pre-budget submission.
The Government decided to not only increase the pension by €3 per week but to also bring back the Christmas bonus to 75%, increase the fuel allowance by €2.50 per week and to extend the carers' allowance from six to 12 weeks after the death of a carer, who is often a much loved member of the family. The €3 increase is one measure in a package which has been universally accepted. I do not think the Deputy suggested that we should create a €5 increase and not provide all the other increases. I ask that the Deputy looks at the whole package.
I have acknowledged the number of increases that have been made but in many cases they represent a return of what was taken away by the present Government in the first place, but I will leave that to one side. Fianna Fáil's pre-budget submission indicated that it would implement considerably higher expenditure on social welfare and provide for less in terms of tax concessions than ultimately proved to be the case, but that was just our position and how we wanted to balance it. I refer the Minister of State to the statement made in the Dáil by his colleague the Tánaiste and Minister for Social Protection, Deputy Joan Burton, when she said that the €3 pension increase was an above-inflation increase. Would Deputy Humphreys agree that it is not an above-inflation increase and that it is does not take inflation or projected inflation into account?
While we talk of the €3 pension increase can the Minister of State, Deputy Humphreys indicate the overall cost of the increases under this section and what is the overall cost of the package of measures under the Bill itself?
I had the figure on inflation rates and consumer price index buried in my notes here. The consumer price index, while not necessarily the best example, is the one usually used and accepted as a guide. It indicates an aggregate inflation rate of 5.08%. It is not the rate of 1.5% which was quoted by the Tánaiste and Minister for Social Protection, Deputy Burton. She said that the €3 increase was above the rate of inflation. As the inflation rate for the term of office for this Government is over 5% and if the increase was to be above inflation, then nearly €11 would need to go onto the pension each week. Other figures show 4.5% growth in GDP last year. Even if that figure of 4.5% had been used, the increase would be more than €3. None of the figures which has emerged is below the 4.5% and is definitely not as low as 1.50% or less, which is suggested by the €3 increase.
Irrespective of the Minister of State's comments on constraints and although welcome to a small degree, many of the pensioners I have met have said the €3 increase is derisory. It will cover the cost of an extra pan of bread and pint of milk once a week; it will be known, therefore, in the next period as the pan of bread and pint of milk increase. A pan of bread costs approximately €2, depending on where a person shops, and then there is the cost of a pint of milk. This increase will not substantially change people's position. Given the constraints, it would probably have been much better to target the money elsewhere. The duration of the fuel allowance could have been extended, with the payments for the six weeks cut from the period being reinstated. That would have had a much more substantial effect on the lives of old age pensioners and those receiving welfare payments.
I am reluctant to say too much because my blood pressure might go through the roof. I pause, first, to welcome the Minister of State and the Bill.
It is interesting to listen to the comments of those who were formally in government. They say things should have been done differently. If they had been done differently when the previous Government was in office, we would not find ourselves in the mess we are in.
I welcome the increase in the State pension. During the past five years there has been no reduction in the contributory or non-contributory State pension. Holding this together was an important part of what the Government was trying to do. I welcome the €3 increase. We would have liked to have seen it being increased a little more, but we have to start with small steps.
In the previous Government people were leaping ahead of themselves. They were giving €1,000 to everyone with a child under three years of age. That approach did not help and because of it we are where we are today.
It is welcome that the free travel scheme, the free television licence and the living alone allowance are still in place. I also welcome the return of the Christmas bonus, which will see a 75% restoration.
I do not know to whom Deputies have been speaking, but I have been on the doorsteps and the people to whom I have been speaking welcome the fact that the Government has pulled the country back from the brink. This is very obvious from speaking to people on the doorsteps and I speak to people in all areas of my constituency. There are other points I will mention.
I sat and listened to a former Minister speak about water charges. The previous Government proposed a charge of €400. Fresh running water and wastewater services will cost people, in particular old age pensioners, €1.07 per week. We need to deal with reality. If money was abundant, as it was in the past, and it had been used appropriately instead of being squandered, we would not be in the position we are in today.
I welcome the changes proposed and compliment the Minister, Deputy Joan Burton, who has made a huge contribution in the social welfare portfolio. No other Minister made the strides she has made in recent years. I will speak again later, but it is rich for Members to make statements, given that they had the opportunity to lead the country into a better future, but, unfortunately, they wasted it. That is my small contribution for what it is worth.
I will have to keep a careful hold of my blood pressure. Deputy Catherine Byrne refers to leaking by the previous Government. That is hugely ironic in view of the fact that the Government has made leaking an art form. Half of the measures announced in the budget were leaked in advance; it, therefore, ill behoves any member or supporter of the Administration to criticise any previous Administration for leaking.
Deputy Catherine Byrne also referred to the free telephone rental allowance and other household benefits. The free telephone rental allowance is no more and, whatever about the people she represents, this causes a great deal of angst, anxiety and distress among the people I represent. Elderly people are living behind barricades, in particular in rural Ireland, with no access to a telephone because they cannot afford the telephone rental cost. It was the abolition of the free telephone allowance that removed that lifeline from them. I know one or two cases adjacent to my constituency in which people have been subject to very serious crime. They would have been helped had they had a telephone and been able to call An Garda Síochána.
A figure of €400 is being mentioned in respect of water charges. I would never support a Government that would introduce water charges without taking ability to pay into account, regardless of how badly off a person is. There are people in my constituency living on €188 a week who are paying rent to the city council, yet they have to pay water charges. Similarly, people in living Moyross, Southhill and St. Mary's Park are living in conditions of abject poverty. They are dependent on social welfare payments, yet they are paying property tax which is being forcibly deducted from them by Limerick City and County Council. I could go on, but I do not want to delay proceedings unduly.
Deputy Catherine Byrne says she is on the doorsteps and that people are extremely happy and content. Many of the people I represent are in the same category represents. Good luck to her if the people she meets are happy with an increase of €3 a week, but I know that the people I represent certainly are not happy.
Earlier this year the ESRI published a report on inflation. It stated the rate of inflation for low income families was higher than the average inflation rate during the recession and that it was lower for high income families. When we pick a figure, be it the consumer price index or another, a higher figure applies to low income families during the recession. These families are usually dependent on the contributory or, more likely, the non-contributory State pension. If they have another pension, the position might be different. In its paper the ESRI argues that there should be a monitoring of differences in the inflation rate. One rate should not be used as a yardstick.
I share the same constituency as Deputy Catherine Byrne and it is obvious that she is not speaking to the people to whom I speak. Everyone welcomes an increase in his or her social welfare payments, but that is because they have been hammered in the past. That does not mean that the end is near. I will not oppose a Social Welfare Bill when it contains welcome changes. I did not oppose the Bill on Second Stage, despite the Minister's challenge to those in opposition, nor have I opposed previous Social Welfare Bills.
Changes might be welcome, but we must have regard to the context. In this case, the context is that while contributory pension rates were not changed per se, substantial changes were made to social welfare secondary benefits. Changes were also made to qualifying periods for pensions which, in effect, amounted to a cut in income for those in receipt of contributory or invalidity pension. There was also the cut to the respite care grant and death benefit, for instance, on which many of the people concerned would have relied at some stage. We have had a list of cuts and I do not wish to delay proceedings, but their effects should be remembered.
Deputy Catherine Byrne cannot turn around and say the charge for water is €1.07 a week. If true, only €1.93 will be left of the €3 being crowed about to cover the property tax, increased prescription charges and the cost of changes to the drugs repayment scheme. All of these changes will eat into the increase of €3 which will disappear, without taking account of the effect of inflation, which brings us back to where this debate started. The Government is not rowing back on anything which was done previously. In the scheme of things, the €3 increase is minuscule, given what people have gone through in recent times. The constituents I met in recent times welcome the increase, but they will not thank the Government for it.
I thank the Minister of State. We all know that this is a start, that there is a long road ahead and that we have come a long way. Certain members said that when the crash occurred, it would cost only €6 billion to recapitalise the banks. Chemical Ali went out onto the plinth and said the troika and the IMF were not in town. Others wanted to run the country on the pension reserve fund. They said it was worth €15 billion when, in reality, there was only €5 billion or €6 billion in it. I have to agree that if we had been left in the hands of the people concerned, we would all be having bread and milk, if we were lucky. I understand people are not dancing in the street, but I have noted when knocking on doors that the people welcome the increases in the pension payment and Christmas bonus and the reinstatement of some of the payments that were cut. It is a start and we have come a long way. I agree that people are not dancing in the street, but they see what the Government has done in managing the economy in the past four years. They will not be fooled when it comes to the general election. We see this in the opinion polls. I talk to people and know what is happening on the ground.
To be fair to the Tánaiste, Deputy Aengus Ó Snodaigh should note that she was not challenging Sinn Féin to vote against the welfare budget. The comment was directed more at his colleagues sitting beside him.
Deputy Brendan Ryan asked me about costs. For pension measures and the qualified adult rate of payment, there is a cost of €93 million to 2016. The overall package is worth approximately €250 million, which is substantial considering where all of the experts said we would be in budgetary matters at this stage. They said we would still be taking money out of the economy and making further corrections. We have certainly come a long way in the past three years. If one considers the budgets announced last year and this year together, one realises we were able to increase the living alone allowance. It is the first time it has been raised since the 1990s. Last year we were able to take the first step towards bringing back the Christmas bonus. It was restored at a rate of 25%. At the time, the Government indicated that it was hoped to restore it at a rate of 50% in the 2016 budget, but we were able to restore it at the rate of 75%.
Deputy Joan Collins referred to the fuel allowance. There is a 12.5% increase on the previous rate. Its purpose is to get people through the worst weather, or bad weather events. In the past when there was exceptionally bad weather, the allowance was extended. I hope we will have no exceptionally bad weather this winter. The 12.5% increase is significant considering that nobody envisaged in any of the budgetary submissions we received that the Government would be able to increase not only the fuel allowance but also carer's allowance and the Christmas bonus.
I accept Deputy Aengus Ó Snodaigh’s figures for inflation, but there is a 1% increase on the 2015 rate. Generally, it is slightly ahead of the projected annual inflation rate of 1% in 2016. I accept that nobody will be dancing at the crossroads over the increases, but people have recognised that since the last budget recovery has started slightly and that we have been able to put something back. It marks the end of the period of cuts which is generally welcomed by the public at large. It is an indication that there is hope and that this and future Governments will be in a position to reinstate some of the payments that were cut. I hope that in future years we will be able to increase the State pension to reflect the economic recovery. My party is committed to increasing it as long as the economy continues to recover in the current manner.
I will get the officials to go through the documentation. As soon as they find the figure, I will give it to the Deputy. I will send it to him after the meeting if it is not found while the meeting is in progress.
The cost of the overall budgetary package is €250 million. The overall increase associated with the increase in the pension of €3 per week is €93 million. There are additional costs associated with the fuel allowance and the Christmas bonus.
As water charges were in place last year, the benefits accruing from the budget are such that people will have greater capacity to meet payments this year. If it were the case that the increases were being introduced this year with water charges, one would accept the argument Deputy Aengus Ó Snodaigh is making, namely, that the increases are being eaten into already. However, the charges were in place last year and will continue. The increases will help people to pay the charges to their households.
Amendment No. 9, in the name of Deputy Willie O’Dea, proposes a further increase in the State non-contributory pension above the increase provided for in the Bill. As it could involve a charge on the Exchequer, it must, therefore, be ruled out of order in accordance with Standing Order 156(3).
Amendment No. 10, also in the name of Deputy Willie O’Dea, seeks to exempt persons reaching 65 years from the requirement to seek employment actively while in receipt of jobseeker’s allowance until they qualify for the State pension. This would have the effect of relaxing the requirements for qualification for jobseeker’s allowance. As it could involve a charge on the Exchequer, it must, therefore, be ruled out of order in accordance with Standing Order 156(3).
The Minister of State has just given us the figures for those in receipt of the State contributory and non-contributory pensions. Some people in receipt of the State contributory pension will have alternative sources of income. Overall, approximately 70% of pensioners rely exclusively on their pensions to survive, but I am open to correction in saying this. The State non-contributory pension is based on a means test, as members will be aware. Recipients of the State non-contributory pension are almost guaranteed to have no other source of income.
What I have said about the rate of increase for contributory pensioners applies with even greater force to non-contributory pensioners because they do not have any alternative source of income.
My amendment was ruled out of order but I want to ask the Minister of State about those who have reached the age of 65. As he will be aware, the target age for old age pension is to rise to 67 years in the next year or two. With the abolition of the retirement pension or as it was subsequently called, "transition" pension, if a person who is compulsorily retired, must retire or is retired aged 65 is now to get jobseeker's allowance, could the Minister of State clarify the requirements he or she must meet? Have they to prove that they are actively seeking and available for work at 65 years? Are they subject to these new regulations about being offered training courses, etc., and if they do not take up the training course, will they be penalised in relation to receipt of their social welfare? What exactly is the position? Is there any difference in substance between a person aged 65 or over applying for jobseeker's allowance and a person under the age of 65 applying for jobseeker's?
The committee discussed this previously with the Minister. My understanding was that the Minister stated that those having to retire who were not of the age of the retirement pension would not have to be available for work but that they could get the jobseeker's allowance. It is the same question. I realise that it is more due to the rules of the House that this amendment was ruled out of order but I understood the position to be as the amendment suggests. The Minister of State might clarify that. Deputy Joan Collins raised it previously.
I seek clarification on that as well. I was quite surprised the reason it has been ruled out of order is that it would be a cost to the Exchequer. How would it be a cost to the Exchequer if we were of the understanding that one does not have to look for work?
When the change to the pension ages came about, a number of anomalies were identified but there were also effects on the recipients. For instance, it is not only that they end up, instead of being on the State transition pension, being on jobseeker's allowance, albeit as far as I know without being forced to look for work. There was a pre-retirement payment in the past which captured that but we do not have it anymore - it is not called that at least.
If one goes for jobseeker's benefit for a number of months if one retires at 65 and the age criteria changes to 67, that involves two years of a gap that one must make up. The jobseeker's benefit runs out. One's partner may still be working. If so, one ends up with nothing whereas in the past one would have been on a contributory pension. There are problems. Some will be caught in a bind because, especially at that age, they will not have the opportunity to plan long enough for that shortfall of one year at present, two years in the future, or three years at some stage, because their contracts were until age 65 and the State transition payment was in recognition that the State pension kicked in at 66 years. There was a recognition previously, but with that gone there is nothing other than jobseeker's benefit, initially, for six or maybe nine months - I cannot remember now. It is when it goes beyond that there is a possibility that one will end up with nothing if one's partner is working because jobseeker's allowance is means tested.
Deputy O'Dea asked when the pension age of 67 years kicks in, and it is in 2021. From age 65 to 66, jobseeker's benefit is paid. Deputy Ó Snodaigh stated he was not too sure whether it was for nine months. Actually, from age 65 to 66, it is paid for 12 months.
The requirements for signing, etc., are all changed and much more relaxed. It is actually relaxed from the age of 62 onwards, not 65. At age 65, on which the questions were asked, the job benefit is paid for the 12 months, from 65 to 66 years, and retirement is at 67 years.
The demographics are changing. Certainly, when my father retired, men's life expectancy was probably five or six years once retired. Life expectancy is changing. There is a whole change in demographics, in relation to the length of time people are living and also the length of time people now want to work and want to seek employment. One of the queries I get on a regular basis in my clinic relates to those who believe they are being forced to retire and who want to continue working for much longer periods and be involved in the workforce.
The pensions area will be a major challenge for all of us in the future because of the change in demographics, such as the change in the number of young people compared to pensioners. We, as a Legislature, have a significant body of work to carry out in future years to deal with the implications of demographic changes to pensions. I believe I have answered the specific questions.
I agree with what the Minister of State says about the demographics, etc. I mentioned somebody retiring compulsorily at 65. I should have said - Deputy Ó Snodaigh reminded me I was incorrect - they apply for jobseeker's benefit, which they can receive, as, I think, the Minister of State indicated, for 12 months. Of course, for somebody of a young age to qualify for jobseeker's benefit in the normal course of events, he or she must prove certain criteria. They must establish that they are available for work, they are actively seeking work, etc. Is the Minister of State saying that does not apply to a person-----
That is what we were told previously. I understood that at the very least there were plans to have a transition a little like what is there for the lone parents. When the Minister of State says there is a relaxing of the rules, how is it relaxed if one still has to be available?
I would appreciate the information as to what exactly the rules are, particularly in relation to activation. What sort of activation measures are they subject to, in terms of being offered courses, etc.?
For the purposes of clarification, amendment No. 10 stated they would "be exempt from the requirement of being available for and genuinely seeking full-time employment". Deputy Humphreys, as a Minister of State, is rejecting it because it could be-----
Everybody was of the understanding that, from age 65 to 66, a person would not be cut-off from jobseeker's benefit or jobseeker's allowance on the basis of not looking for work. We need further clarification on that because it is something we would have to challenge.
I welcome the name change that is being brought about. I also welcome the fact that the Government saw the light and reversed the cut that it imposed.
The name change is an admission of what we knew, that the respite care grant was not used for respite by the vast majority of carers but was used for other supports such as buying equipment, paying for car insurance, fuel and so forth. We have had that debate. This is a welcome change in the budget. The Government has seen the light and has reversed a cut that was not going to bring in the billions that were required but that targeted those in society who in some cases have given up full-time work to care for loved ones and, incidentally, saved the State money. Often they were unappreciated to a degree, so it is a welcome change.
I acknowledge changes that are positive and the carers will welcome this. In particular, the name change is a reflection of what the payment was used for in the first instance. In some cases, it is payment for services that should have been delivered by the State. For example, many people have told me recently that they have used the payment because they have not been able to access the motorised transport grant or the mobility allowance, which is not in this legislation. In that regard, representatives of the Department of Health appeared before the Committee on Public Service Oversight and Petitions and they appeared to suggest that it will be a number of months, if not years, before we see the full outline of a scheme to replace that, which affects many of the people who would be cared for and who would benefit from this.
I also welcome the restoration of the respite care grant. When the cut was introduced we pointed out that it would cause a great deal of hardship. I can testify to the fact that it has done so in the individual cases I have dealt with. Carers contribute an enormous amount to this country. I forget the exact figure but if they were to be paid properly, at the usual rate for the work they do, it would cost the State many billions.
Perhaps the Minister will clarify a matter regarding the old respite care grant. People who did not qualify for the carer's allowance could apply for that grant. The position is that if one receives carer's allowance, one is automatically entitled to the respite care grant. I presume the same applies to this carer's support grant. Will the Minister clarify that there is no change in the regulations and that if a person does not qualify for the carer's allowance they can still apply for, and receive, this grant?
I welcome this change and the restoration of the grant to €1,700 from €1,375. I am well aware of the importance of the respite grant. My mother was ill for a long time and my brothers cared for her at home. The respite grant paid for the items that were extra requirements in addition to minding somebody who was very ill. It could be an item such as a clothes dryer. If somebody is incontinent, having a clothes dryer means one can dry their clothes. It was important to have that grant available so people could use it for other items and functions, particularly for people are very ill.
This refers back to the issue of trying to spread what we have and to give everybody a little. The decision to restore the extra money to the carer's support grant is very important. For many families it is not about the money. It certainly was not about money in our family when it came to minding my mother. It was about the fact that we wanted to keep her at home and to give her as much support as she needed in the final years of her life, and being able to support her and my brothers so she could have the comforts of her own home. It is a hugely important grant. In the past, when the money was not available, it was difficult when some of the benefit was taken away. Now it has been restored and, hopefully, in the future we can give greater acknowledgement to people who provide care and support 24 hours a day, seven days a week for 365 days of the year to family members at home, particularly when they are very ill.
The Minister has restored the money that was withdrawn previously and that is very important.
Amendment No. 11 is out of order as it is a potential charge on the Exchequer. The amendment seeks to amend section 6 with regard to the definition of relevant age of a child in respect of entitlement to the one-parent family payment. The amendment provides for the restoration of the qualifying age for children from seven years of age to 12 years. This amendment could involve a charge on the Exchequer and therefore must be ruled out of order in accordance with Standing Order 1563.
On section 6, the two matters are related. One comes into effect on 1 January and the other commences on 1 June. I understand that 1 June is when the payment is made and 1 May marks the six months requirement prior to it. In some ways it would have made no difference if the Minister had left the date as 1 June for when it comes into effect, because the existing payment is transferring straight in. Again, at some point in the future, we must look at the dates that are set. As with the figures, the more dates that are provided, the more confusing it gets. It is bad enough for us who are dealing with it on a daily basis, but many people might have some idea about the social welfare system but do not fully understand it and get caught out by this and that date.
To qualify for the respite care grant, one must have been caring from 1 January until 1 June. Sometimes people postpone applying. They might be caring for a parent and postpone applying for it, thinking they will wait until after Christmas. It is too late if one leaves it too long into January. One will not get one's full benefits. It is not for the sake of the monetary benefit. As Deputy Catherine Byrne said, it might be for a clothes dryer, heating or something else and they should be entitled to it.
I do not oppose the section but am just pointing to the anomaly with dates.
I realise this matter was dealt with under section 5, but section 6 deals with the restoration of the grant. I welcome the restoration of the respite care grant, now called the carer's support grant. I congratulate the Tánaiste, Deputy Burton, on honouring her commitment to us that she would restore this in full once the resources became available. It is a strong indication of the recovery of the economy that the resources are now available, and I am delighted that it has been restored in full.
It would be easy for potential Governments of any hue to just leave the cuts alone and not reverse them. I am delighted with the restoration of the grant.
I welcome the small increase in child benefit. The briefing provided by the Department in respect of the Bill indicates that Ireland has the fifth highest rate of fifth highest rate of child benefit in Europe. The payment here is €140 per month, whereas the rate paid immediately across the water is €29 per month. That is a huge benefit for people who have children. When I had a young family, people welcomed their child benefit at the end of the month and put it towards the little things they could not otherwise afford or used it to pay a bit extra off the ESB bill or gas bill. It is hugely important for children to get additional benefits from the payment of child benefit. In the long run, it will benefit those who are poorer. I hope whatever Government is in place after the forthcoming election will consider another increase in child benefit because it is most beneficial to families, in particular those with very young children.
I wish to put the Chair on notice that I may be obliged to step out just before 2.40 p.m. to respond to a Topical Issue. I hope it will not happen. My private secretary is endeavouring to get a substitute to respond on my behalf but if efforts in that regard are not successful, I will have to go to the House. I apologise to the committee and I just wish to notify members.
I welcome any change to reverse cuts. Child benefit has now been restored to the average, if one likes, but there were changes to the payment of child benefit for families with more than four children. Is there an indication that the Minister will reconsider that matter in the future? In the past, the Minister said that if money is available some of the cuts would be reversed. That did not happen in other cases but the restoration of child benefit in terms of the average payment was flagged.
Perhaps the committee as a whole could discuss in future the general direction of such payments. Child benefit should be a universal payment but it is important to capture those who are most disadvantaged and who are dependent on social welfare. Rather than have two rates of child benefit, as some suggest, is there an indication that the qualified child allowance would be increased? That would be a way to capture those who are living in poverty and who are most disadvantaged. It would be a more targeted mechanism to ensure the transfers from Government would go to those most at risk of poverty.
Deputy Ryan asked about the respite care grant, which cost €30 million. I very much agree with Deputy Ó Snodaigh on what he said previously about carer's support. The renaming of it is important but what is most important is the principle. He is correct in that regard.
If we are re-elected and I happen to be in the same position, I would be open to looking at everything, However, I am not going to comment on the next budget or the next social welfare Bill at this stage. If I find myself in this position next year, I would be happy to sit down with Deputy Ó Snodaigh and discuss the matter with him.
I move amendment No. 12:
In page 8, line 3, to delete “€1,112” and substitute “€1,212”.
The amendment is required to correct a typographical error in the 2009 legislation, as published. The Minister of the day was Ms Hanafin and the transcript of the Dáil was checked. The amount was €1,202 and there is a typographical error in the Social Welfare and Pension Act (No. 2) 2009, which indicated the figure to be €1,102. I reassure the committee that at all stages the Department operated on the basis of the higher figure of €1,202. The purpose of the amendment is purely to correct that typographical error.
Amendment No. 13 in the name of Deputy Ó Snodaigh has been ruled out of order as a potential charge on the Exchequer. His proposal that the family income supplement should be increased could involve a charge on the Exchequer and, therefore, the amendment must be ruled out of order in accordance with Standing Order 1563.
I move amendment No. 14:
In page 9, after line 22, to insert the following:
“Liability to maintain family
11. The Principal Act is amended—(a) in section 2(7) (amended by section 15 of the Act of 2010)—(i) in clause (I) of paragraph (a)(i), by the substitution of “spouse” for “wife”,(b) in section 344(1) (amended by section 24 of the Act of 2010)—
(ii) in clause (II) of paragraph (a)(i), by the substitution of “former spouse” for “former wife”,
(iii) in paragraph (a)(ii), by the substitution of “other parent of that qualified child” for “mother”,
(iv) in clause (I) of paragraph (b)(i), by the substitution of “spouse” for “husband”,
(v) in clause (II) of paragraph (b)(i), by the substitution of “former spouse” for “former husband”, and
(vi) in paragraph (b)(ii), by the substitution of “other parent of that qualified child” for “father”,(i) by the deletion of the definitions of “husband” and “wife”, and(c) in section 345 (amended by section 24 of the Act of 2010)—
(ii) by the insertion of the following definition:“ ‘spouse’ in relation to a person who has been married more than once, refers only to the last spouse of that person and for this purpose that last spouse shall be read as including the person to whom, but for the fact that the marriage has been dissolved, being a dissolution recognised as valid in the State, that person would be married.”,and(i) in paragraph (a)(i), by the substitution of “spouse” for “wife”, and
(ii) in paragraph (b)(i), by the substitution of “spouse” for “husband”.”.
I move amendment No. 15:
In page 9, after line 22, to insert the following:
“Meaning of spouse and civil partner for certain purposes
12. Section 3 (amended by section 16 of the Act of 2010) of the Principal Act is amended by the substitution of the following subsection for subsection (10):“(10) For the purposes of sections 43, 56, 66, 76, 77A, 102, 112, 117, 122, 134, 141(2)(d), 146, 149(4), 150(3), 158, 161D, 181(4), 210(2), 211(3), 214(2), 216, 219(2), 250(2)(b), 297 and 298, Chapter 9 of Part 3 and Part 7A—(a) ‘spouse’ means each person of a married couple who are living together, and
(b) ‘civil partner’ means each civil partner of a couple who are both parties to a civil partnership who are living together.”.”.
I move amendment No. 16:
In page 9, after line 22, to insert the following:
“Meaning of widow and widower for purposes of widow’s (non-contributory) pension, widower’s (non-contributory) pension, etc.
13. Section 162(2) (amended by section 19 of the Act of 2010) of the Principal Act is amended by the substitution of the following paragraph for paragraph (b):“(b) a widow who has remarried or entered into a civil partnership shall not be regarded as the widow of her former spouse and a widower who has remarried or entered into a civil partnership shall not be regarded as the widower of his former spouse, and”.”.
I move amendment No. 17:
In page 9, after line 22, to insert the following:
“Meaning of widow and widower for purposes of one-parent family payment
14. Section 172(2) (amended by section 20 of the Act of 2010) of the Principal Act is amended by the substitution of the following paragraph for paragraph (b):“(b) a widow who has remarried or entered into a civil partnership shall not be regarded as the widow of her former spouse and a widower who has remarried or entered into a civil partnership shall not be regarded as the widower of his former spouse,”.”.
I move amendment No. 18:
In page 9, after line 22, to insert the following:
“Calculation of supplementary welfare allowance
15. Section 196(2) (amended by section 19 of the Act of 2010) of the Principal Act is amended, in paragraph (a), by the substitution of the following subparagraph for subparagraph (i):“(i) both spouses of a married couple,”.”.
I move amendment No. 19:
In page 9, after line 22, to insert the following:
“Absence from State or imprisonment
16. Section 249 of the Principal Act is amended by the substitution of the following subsection for subsection (2) (amended by section 26 of the Act of 2010):“(2) Except where regulations otherwise provide, where any benefit under Part 2 to which a person is entitled includes an increase in respect of a qualified adult, that increase shall not be payable for any period during which the qualified adult—(a) is absent from the State, or
(b) is undergoing imprisonment or detention in legal custody.”.”.
I move amendment No. 20:
In page 9, after line 22, to insert the following:
“Excepted employments and excepted self-employed contributors
17. Schedule 1 to the Principal Act is amended—(a) in Part 2, by the substitution, in paragraph 1 (amended by section 26 of the Act of 2010), of “spouse” for “husband, wife”, and
(b) in Part 3, by the substitution, in paragraph 1(ii) (amended by section 19 of the Social Welfare and Pensions Act 2014), of “spouse” for “husband, wife”.”.
I move amendment No. 21:
In page 9, after line 22, to insert the following:
“Elections under Taxes Consolidation Act 1997 relating to charging, collection and recovery of certain contributions
18. (1) Section 23 of the Principal Act is amended—(a) in subsection (5) (amended by section 5 of the Act of 2013)—(2) Section 30G (inserted by section 6 of the Act of 2013) is amended—(i) in paragraph (a), by the substitution of “by the spouse in respect of whom the election is made” for “by a wife”,(b) by the insertion of the following subsection after subsection (6):
(ii) in paragraph (a), by the substitution of “the other spouse” for “her husband”, and
(iii) in paragraph (b), by the substitution of “each spouse” for “the husband or the wife”,
“(7) In subsection (5), ‘spouse’ means each person of a married couple who are living together.”.(a) in subsection (5)—(b) by the insertion of the following subsection after subsection (7):(i) in paragraph (a), by the substitution of “by the spouse in respect of whom the election is made” for “by a wife”,
(ii) in paragraph (a), by the substitution of “the other spouse” for “her husband”, and
(iii) in paragraph (b), by the substitution of “each spouse” for “the husband or wife”,
and“(8) In subsection (5), ‘spouse’ means each person of a married couple who are living together.”.”.
I move amendment No. 22:
In page 9, after line 22, to insert the following:
“Medical assessor – registered nurse
19. Section 2 of the Principal Act is amended in subsection (1)—(a) in the definition of “medical assessor” (inserted by section 3 of the Social Welfare (Miscellaneous Provisions) Act 2015)—(i) in paragraph (a), by the deletion of “or”, and(b) by the insertion of the following definition:
(ii) by the insertion of the following paragraph after paragraph (a):“(aa) an officer of the Minister who is a registered nurse, or”,and
“ ‘registered nurse’ has the same meaning as it has in the Nurses and Midwives Act 2011;”.”.
The intention behind this amendment is to add to the departmental adviser's capacity by means of the employment of suitably qualified nurses and to amend the definition of "medical assessor" in the Social Welfare Consolidation Act 2005 to provide for that change.
I am not sure whether I am opposing or agreeing with this. I find it odd. We had a discussion here about trying to get doctors as medical assessors and there was no comment last year about having nurses. The vast majority of nurses I know do not have the diagnostic capability and the groups representing GPs or consultants have been very reluctant to allow nurses the extra power to go beyond certain tasks, even though they are well capable of doing it. I am just concerned that we will end up creating a row between the two professional bodies. It is not very clear what exactly the role of the nurse will be. Most of the medical assessors are assessing documentation that is sent in to say whether a person qualifies or does not qualify for payments. I presume that is what it is if they are assessing for the Departments. That suggests they have diagnostic skill. If not, if it is just that a nurse will go through the documentation or be present when a person who is making a medical application presents to make sure they do not take ill, that is acceptable. Could the Minister of State elaborate on how he sees this working?
We had a very long debate last year on this. We have gone to the market and are constantly trying to recruit. The Department is determined and committed to keeping the number of medical assessors at 25, but we are finding it increasingly difficult to fill those positions. When there is a panel and we go to the panel to offer the position, it is not taken up. There is a problem. From last year we went out seeking agencies and we have not yet been able to fill the number of medical assessor posts we would like to have. It is envisaged as a desk-bound assessment, so the assessor would not have clients coming in and would not be doing medical assessments on them. That would still be the responsibility of a doctor. I am sure the Deputy remembers, from last year, that the Department's deciding officer is the person who makes the determination on that. It is envisaged that these would be occupational nurses, who would be suitably qualified and would act as a triage, similar to what happens in our emergency departments. I hope that reassures the Deputy. It is an effort to give a better and a quicker service to our clients, who are applying for their various entitlements. It is an effort to improve the scheme and to allow flexibility within the Department by using suitably qualified people to give their opinion to the deciding officer.
I thank the Minister of State for his explanation of the need. Is he confident that nurses would have the competence to fulfil this role? Within the medical assessor structure is there a senior medical assessor and would there be some level of supervision over this?
In all cases, full training is given. It is not about that. It is an effort to give a better service. While we have successfully reduced the time from application to payment, and the Department and officials must be thanked for this, this is necessary to ensure that backlog never occurs again when there are particular times of pressure. The nurses would be used in the Department in an evidence-based medical protocol under the direct supervision of the chief medical officer and the deputy chief medical officer. This is a real effort by the Department to respond to demands, because there is an increasing number of claims coming in. We want to make sure they are dealt with in a speedy and efficient manner and to ensure that the time between a person applying and the person getting the benefit is kept to a minimum.
The intention is that it is dealt with in an efficient manner, but I reassure Deputy Ryan that in the first instance proper training will always be given and there will be proper supervision. In all cases in this Department, there is a constant review of how things operate. This will be a benefit. The focus is on directly recruiting nurses with experience in the field of occupational health, or who are in possession of an occupational health qualification. Many of the referrals are in that area. No disrespect to doctors on that, but in some cases nurses working in that sector would be far more experienced than a GP in a particular service. They will be recruited directly to the Department. We are not operating through agencies, so they will be employees of the Department of Social Protection, with the proper supervision, training and supports required and with the ongoing review of case files, where there is a continuity of decisions. In all cases, it is not the occupational nurse who will make the decision, it is the deciding officer, taking it from the opinion of the assessor, whether they are a medical doctor or an occupational nurse.
The nurse would not reject it. The deciding officer makes the decision where the occupational nurse or medical assessor, as it is at the moment, gives an opinion to the deciding officer. Not on all occasions-----
-----is the medical assessor's opinion accepted. In some cases, it is overruled by the officer in the customer's benefit. In all cases the medical assessor's recommendation to pay is accepted, but where there is a refusal to recommend it, the deciding officer is overruled.
There is quite a lot in this. It was sprung on us. I have not had a chance to talk to the representatives of the nursing organisation. It is a step up. Most occupational nurses are well capable. It is the same argument in terms of midwives in hospital - they are not given the responsibility they deserve. The Minister of State is right; most occupational nurses would be well capable of making decisions based on the documentation in front of them. The problem is that I cannot see doctors being too happy about this. They have been very protective about their role in the past, although not necessarily on this issue. This might break it and it might be welcome in that way, but they have been very protective of their space, and the fact they are the ones making diagnoses.
The Minister of State is saying the deciding officer makes a judgment based on a medical diagnosis, which comes before a moral opinion, whereas nurses usually do not present medical opinions but rather they present it to a doctor who then makes the decision. Often nurses spot things much more quickly than the doctor and, in that respect, this might work better. The problem up to now is that the medical assessors seem to have been the people making the bad decisions. If one notes the level of appeals overturned, many are in the medical area. We must make sure that whatever new system comes in, we do not end up with more appeals that could be made on grounds such as only a nurse looked at an applicant's file and that the applicant wants a doctor look at it. I am not saying that would be the case but some people will try to find a reason for the appeal to stand up. I would not stand over that but that is the level at which we are.
In the past, I have encouraged people with whom I have dealt to get a consultant's letter because the consultant knows better than the GP. The occupational nurse would probably know better than the GP but that is not to say the person involved would not kick up. Has what is being proposed been broached with the Minister for Health? Is the Department of Health happy with what is being proposed because it has implications in terms of what it has been trying to encourage, namely, to allow nurses to take on a greater role and to encourage doctors to allow pharmacies to take on a greater role? That change has been very slow but this change is a major jump.
If appointed, a nurse will be taking on the role of a medical assessor. Will nurses be paid the same amount as that set aside in the past for a medical assessor in the Department, if they are doing the same work or have to write up the same type of documentation as medical assessors, or will they be taken on at the rate of pay for an occupational nurse in the health service? If it is at the higher rate, it would be welcomed by nurses and a flood of applications would be received but if is it at the lower rate, we might end up in the same position. Having regard to the level of work and the level of stress medical assessors seems to be under, we might end up in a year's time with none applying.
I appreciate what the Minister of State said about trying to recruit extra people to relieve the backlog and make the system more efficient but this is a fairly radical step. I share some of the sentiments expressed by Deputies Ryan, Ó Snodaigh and others. The Minister of State said the deciding officer makes the ultimate decision but in the real world, the deciding officer almost invariably goes on the opinion of the medical assessor. I have dealt with a number of cases where people who were obviously medically quite unfit and in very bad shape were turned down for invalidity pension, disability allowance or some other benefit based on the medical assessment. I could not understand the decision or what the medical assessor was thinking. One of the questions I have been regularly asked over the years is whether the people who make the decision are medically qualified. I have said they are medically qualified, are employees of the Department of Social Protection and are doctors. Now I will have to explain that the person who turned them down could have been a nurse.
As Deputy Ó Snodaigh said, there are definite problems here, judging by the number of successful appeals, where the initial medical assessment goes against the applicant and it is overturned on appeal. The number is pretty scary. The percentage of successful appeals in regard to medically based entitlements where the initial refusal was because the medical assessment was not sufficient is quite scary. There should not be that many successful appeals in a properly functioning system. Therefore, what is being proposed is quite a radical step. I would be interested to know what consultations have taken place. Deputy Ó Snodaigh raises a very interesting question about the rate of payment, which I think will have a huge impact in how the system will operate.
There is another eight minutes before the next Topical Issue is taken. The debate was late starting, so Deputy Catherine Byrne can speak. We could dispose of this amendment before the Minister of State leaves.
I have only one question on this amendment and I have listened to Deputies Ó Snodaigh, O'Dea and others. Who will make the final decision in a case? The Minister of State said that this will speed up the process. I agree with that because people have been left waiting too long. In the past, we said that nurses did not get the recognition they deserved when dealing with the people who were making decisions, whether in an accident and emergency department or even in a surgery. Thank God, that is changing. The fear people would have is that a nurse, who has been brought up to speed and has read the file, would make a recommendation to the appeals officer, or the deciding officer, who then makes the decision.
The Department of Public Expenditure and Reform will set the rate in regard to the salaries. On the issue of appeals, I have discussed this matter with Deputy O'Dea on numerous occasions. One of the reasons for the level of success in regard to appeals is that we allow additional information at every step of the way. In other jurisdictions, that is not allowed; they only allow an appeal to be based on the information that was provided in the first instance. If the Deputy wants us to go down that route, and I would fight him tooth and nail.
It would be totally wrong and that would be a great way to massage the numbers. However, I am not into doing that.
Deputy Ó Snodaigh raised a legitimate point, which was not a reflection on nurses. Nurses are more than capable of doing this. They operate in every area. There have been preliminary discussions and during the suspension, I might be able to check this with the HSE but I am quite confident that the occupational nurses in that area are more than capable. The deciding officer makes the final decision.
No, other than the fact that it is anticipated there will be a core team of between five and ten nurses who will be employed by the Department to conduct triage and desk assessments and provide opinions for guidance to the Department's deciding officer to help determine entitlements in respect of various high-volume schemes. There is not a backlog within the Department but we always have to plan and be prepared.
Deputy Ó Snodaigh asked about nurses and consultation. The Department's chief medical officer met with the Office of the Chief Nursing Officer in the Department of Health. There has been some discussion on this issue.
It may be my age group in many ways but the nurse looks at the nursing profession in a different manner. The profession has changed so radically over the past decades in terms of training and experience. It is a very high standard profession with a lot of hands-on experience. I am not degrading general practitioners, but in many cases they would not have that. I think nurses will be a real addition to the Department and will make it much more effective. I welcome Deputy Ó Snodaigh's comments on this. It is actually quite a progressive move.
I was not trying to say it was not progressive. I thank the Minister of State. He is quite right that nurses' roles have changed although their everyday work may not have changed enough. I was trying to make sure that if we go down this road, there will not be a hiccup. There would be nothing worse than having a number of nurses lined up in a month or two to take up the position - for which I think they are eminently qualified as they have the hands-on experience - and then having a hiccup. I want to ensure the nurses will play their full role.
I asked about remuneration because the text states "medical assessor". I presume that role has been benchmarked at some stage. If not, will a different layer be created on the basis that the nurses might not be seen as full medical assessors, keeping them on a lower rate? Hopefully that can be clarified quite quickly as they should be on the full rate if they are doing the full job. I hope they will be able to do that.
I remember for the domiciliary care allowance that there was a set of ailments that qualified and another set that required greater investigation within the Department. There were two lists. Thankfully, that is gone. It was not always a medical assessor who made those judgments. That is an easy enough role, but the role the nurses would have would be more intensive. They would have a greater understanding of some of the ailments that come up and some of the restrictions, particularly if they are occupational therapists. Some of the medical assessors in the past did not seem to get to grips with all of those issues. I have seen people refused disability allowance when one look at them or at the original documentation would suggest they should have received it immediately. At least some of the nurses will have some practice.
Is there a minimum level of practice or do they just have to be qualified? Even with doctors, qualification is often not enough. Maybe we should look at that in the future and require them to have some work experience before becoming medical assessors. It is such an important role. In past years it has caused quite a headache. The assessments are made and sent on to the deciding officers, who invariably take what the medical assessor sends them because they are not qualified to make any judgment on it. Then that decision is overturned.
Sometimes people do not have all the documentation supplied. In the event that it is clear the documentation is not complete, a phone call to request this or that letter before making the final decision would save the Department a lot more money than some of the other schemes. People can address that, which is what the review was to do. Maybe the nurses with their hands-on experience would be able to have that approach as well. If it is clear to them there is a problem, rather than making a decision they might encourage the Department to seek other documentation to back up what seems like an incomplete file.
I am not opposed to the section. I am raising concerns that it was sprung on us and was not fully thought out. If it is as I said, it might work and might help address the problem we have.
Is it the case that the Department is considering nurses having a rule in adjudicating on some of the illnesses or medical issues that somebody might have? Is that what we are discussing? I imagine the Department gave a lot of thought to an initiative like that. We could easily do nurses a disservice by assuming they might not be up to whatever task the Department envisages for them. I am not quite sure I am happy with Deputy Ó Snodaigh's line of argument.
I have said all along that I think they are well capable of doing the work. They have not been allowed do it because of demarcation within the medical professions. It is the same with pharmacists. This might be one of the steps forward. I was just making sure that we do not have a clash in the future between the IMO and the Department. If the IMO is happy with it, then work away.
I can imagine the Department has looked into all the possibilities, difficulties and conflicts that might or might not arise and that it will avoid the situation Deputy Ó Snodaigh has described.
As I have just said, the chief medical officer has met with the Office of the Chief Nursing Officer in the Department of Health. I thank Deputy Ó Snodaigh for the constructive manner in which he has given his opinions on this issue. This is a movement towards a more holistic assessment of people, which is very important. It is about putting a good, efficient service in place for our clients. Suitable, qualified nurses certainly have a key role in this.
It must be made very clear that the medical assessor or qualified nurse in this role does not diagnose. He or she does an assessment and gives an opinion but is not involved in the diagnostic element of it. What comes to the assessors is the documentation, whether it is from a general practitioner, consultant, other medical practitioner or a counsellor. It is an assessment on which they give an opinion. The deciding officer makes the determination. That has not changed.
Relevant experience, and I often think of occupational nurses, is what they will bring to the Department along with the life experience they have. They will bring a whole new dimension to dealing with these cases. It will be very much a holistic approach. It is a progressive way. I also take Deputy Ó Snodaigh's point that when we bring in something new we have to make sure we put the supports, structures and mechanisms in place to make sure it will work as envisioned. That is something the Department of Social Protection is very good at; it constantly reviews, checks and looks to make sure the job is being done exactly as it says on the tin. I commend the Department in that regard. When we came into office there was a backlog and an application was taking up to 26 weeks.
The times relating to those decisions are now down to 11 and 14 weeks. I take Deputy Ryan's point that we must ensure that the determinations being made are correct. We must ensure that we do not just speed up the process for the sake of doing so and see to it that good decisions are made within what I would regard as a realistic timeframe. We have got there very quickly and we must ensure that this momentum is maintained. Last year we had a long discussion on the use of agencies. When we went to the market seeking qualified doctors, we found that there was a shortage. In such circumstances, flexibility is required. In fairness to everybody here, the debate has been very constructive.
I move amendment No. 23:
In page 9, after line 22, to insert the following:“Budgeting in relation to social welfare payments – amendment
20. Section 290 of the Principal Act is amended—(a) in subsection (1), by the insertion of “, subject to subsection (3A),” after “paid”,
(b) in subsection (3), by the insertion of the following paragraph after paragraph (bc) (inserted by section 19 of the Social Welfare and Pensions Act 2012):
“(bd) a credit union within the meaning of the Credit Union Act 1997,”,and(c) by the insertion of the following subsections after subsection (3):“(3A) For the purposes of subsection (1), a payment to a credit union referred to in subsection (3)(bd) may be made—(a) in respect of a scheme that—(3B) Without prejudice to subsections (1) or (2), for the purposes of subsection (3A), the Minister may, in regulations made under this section, prescribe—(i) is approved by the Minister, and(b) where the beneficiary concerned is a member of the credit union to which the payment is made under this section.
(ii) relates to a class or classes of borrowings from a credit union as may be prescribed,
and(a) a class or classes of borrowings by a beneficiary from a credit union in respect of which payments under this section are to be made,
(b) the maximum amount of such borrowings which shall not exceed €2,000,
(c) the interest rate charged in respect of such borrowings, the maximum amount of which shall not exceed 1 per cent for each month, and
(d) the duration of the period for repayment, by the beneficiary concerned, of the borrowings.”.”.
This amendment refers to micro credit, the availability of which has been welcomed in the House. I am interested in hearing any contributions that Deputies wish to make on the subject.
A change was made to what became the Social Welfare Act 2012 which excluded credit unions from the household budgeting package. I shall outline its effect on Travellers, in particular, who availed of the facility to pay for mobile homes through An Post using the Lough payment scheme, which relates to the Lough Credit Union. I have argued with a number of Ministers about this matter and plus MABS and others have argued for the scheme's retention. The anomaly was an inadvertent exclusion but once it was excluded, we had to ensure that it worked. The Tánaiste and Minister for Social Protection introduced a pilot scheme last year, through the credit unions and MABS, to ensure the scheme worked. I have been informed that the pilot scheme which dealt with micro budgeting and small loans worked quite well. I hope such a scheme will continue into the future. My amendment refers to the credit union. I hope my proposal will benefit people who avail of the credit union movement, in particular those who have no other source of funding for major outlays such as upgrading a mobile home or making home improvements. I want to ensure that people can have moneys for such outlays taken out of their payments with the agreement of the recipient and the credit union. The credit union movement does not allow people to overextend their finances. My amendment seeks to help people manage their payments. MABS was set up to help people manage what little money that they have and ensure they pay their ESB bills, etc., which is why the household budgetary services was created. Unfortunately, the 2012 Act excluded the credit union movement.
We have received representations from the credit union movement specifically proposing such a change. Naturally, I welcome the amendment. We made approaches to the Minister about the matter and welcome this change. Regulations are needed in order to bring the provision into effect. When does the Minister of State envisage the regulations will be introduced? Incidentally, section 290 of the principal Act also envisaged the making of regulations. When were the regulations referred to in that section in place?
First, I shall reply to Deputy Ó Snodaigh. To be truthful and honest, when the Deputy raised this matter on Second Stage, I was unaware of the Lough payment scheme and misunderstood him. While the personal microfinance scheme may offer an alternative to those who remain in the Lough payment scheme, where their local credit unions are participating in the pilot, it may not provide a solution to all loans operated under that scheme. The Department is prepared to allow the Lough payment scheme arrangements to continue on an administration basis until the remaining clients, who have transitioned to alternative methods, have discharged their current liabilities. While the micro scheme may offer an alternative to that, its not particularly designed for the Lough payment scheme.
We hope to introduce regulations in respect of this matter as soon as possible. I intend to have the pilot scheme operational by the end of this month in time for Christmas. I thank the Citizens Information Board, the Money Advice and Budgeting Service, the Social Finance Foundation and the Society of St. Vincent de Paul for their assistance in designing the scheme. I hope to roll out the pilot scheme by the end of the month to 30 credit unions in the first instance. It will make an enormous difference to people who are paying up to 200% in interest. The pilot scheme will operate well, especially as it works with the credit union movement. I have met representatives of the credit union movement on numerous occasions and they are anxious to get the pilot scheme up and running. Lessons will be learned from the pilot relating to the household budgeting scheme.
Regulations have been made in respect of the household budgeting scheme and are live at present but we need new regulations for microfinance. I hope that the many people who avail of the services of the Money Advice and Budgeting Service will avail of the pilot scheme. It is a game-changer and I hope it will allow people to move away, in the long-term, from paying extortionate interest rates and being enticed by individuals who knock on their doors offering roll-over loans, etc. The initiative has received a good response. It has been spearheaded by the Citizens Information Board, which has provided assistance and back-up. The initiative has been universally welcomed. As we said when we discussed nurses, the proof will be in the detail and that is why I am anxious that the pilot scheme be rolled out. Let us learn any lessons from the pilot scheme and provide a proper microfinance system to people who have no access to borrowing.
Yes, once the relevant regulations are in place. That is the target date. We need this amendment in order to use the household budgeting scheme and then introduce a regulation. Our target is to keep pressing forward with the initiative, which has many moving parts. Originally, I thought the initiative would be far simpler but, unfortunately, this is what happens in many situations.
I had hoped the scheme would cover the Lough scheme payments but it seems more limited. Therefore, I again appeal to the Minister of State to include such payments because they are in the same vein. I welcome the initiative but it is not as extensive as I had hoped. The Lough payment scheme came about following agreement among a number of credit unions and it seemed to work well. I met a number of Travellers who have benefited from the scheme. They told me they never had a problem making repayments because they were facilitated in this regard by something similar to a direct debit. As a result, their repayments were guaranteed. Most of them previously had difficulties accessing funds other than by means of taking them from their savings.
They were unable to save sufficient money to buy a new mobile home or otherwise. It was usually for a mobile home that they needed a loan. They did not have a proper credit rating. In some cases, they were transient because they were living in a mobile home, which meant the financial institutions would not accept their addresses even though the Department accepted them as they were in receipt of social welfare payments. MABS and the credit unions worked with them. As far as I know, in all the time it was operating - I think it was up to ten years, and unofficially in some cases - all of the debts were cleared. They did not have to rely on the fact that the credit unions in these instances were the guarantors of the loan.
The Department will be in existence long after us. Will it examine the documentation produced at the time by the Northside Family Resource Centre and the National Traveller MABS group, which outlined the case? It would be useful not only for Travellers in that more and more families are ending up homeless and without an address and they will face similar problems in the future as they do not have a permanent address. Without a permanent address, they will find it difficult to access funding, whether for a car, a mobile home or something like that. At least in this way, they would have some control because the money comes out of their payment and there is already a rule that money cannot be taken out which would leave people in absolute poverty. The Department can also control that so people do not sign up to something they cannot afford. Given the housing crisis, we should look at this as an urgent proposal.
I thank Deputy Ó Snodaigh, who is quite correct in many ways. Approximately 370 clients have transferred to alternative payment schemes. Approximately 130 clients are still availing of the Lough scheme, as an administrated scheme. The Deputy made some very good points in regard to the Traveller community and I would be happy to look at this again at some stage.
Amendment No. 24, in the name of Deputy Ó Snodaigh, has been ruled out of order as it involves a charge on the Exchequer. The amendment seeks to provide that in recovering overpayments, the Department of Social Protection would ensure that a claimant's income would not fall below the relevant supplementary welfare allowance rate for the claimant or his or her family. The amendment could have the effect of reducing the amount of money the Department could recover and thereby be a charge on the Exchequer. It has been ruled out of order in accordance with Standing Order 156(3).
Amendment No. 25, in the name of Deputy Ó Snodaigh, has been ruled of out order in accordance with Standing Order 156(3). It seeks to require the Minister to introduce statute of limitations to govern the recovery of historical repayments. Overpayment amounts are recouped to the Social Insurance Fund. If they were not recouped, this would be a charge on the Exchequer.
I move amendment No. 26:
26. In page 9, after line 22, to insert the following:“Recouping Social Welfare payments from employer in wrongful dismissal cases
11. Any employer who has had a finding made against them of unfair dismissal under the Unfair Dismissals Acts 1977 to 2007, shall reimburse the State the cost of the unfairly dismissed former employee’s social welfare payments for the period of time between the date of the former employee’s dismissal and the date on which the finding is made
against the employer under the aforementioned Acts.”.
This is something I put forward previously, although I do not know if the Minister of State has heard the argument for it. This would be to the benefit of the State. People who take cases to the Employment Appeals Tribunal must wait quite a long time before they are heard. In the intervening period, some end up in receipt of a social welfare payment. This amendment provides a mechanism to allow the Employment Appeals Tribunal to recoup the cost to the State of the social welfare payments from the employer in the event of the former employee winning a case. Should an employer be found to have dismissed an employee unfairly, why should the State foot the Bill? I cannot give the figures on the number of cases or the amount involved but in recent times, people were laid off without the rules of due process being complied with. In some respects, this is a money making scheme for the Department because it would enable the Department to recoup what it has been forced to spend, whether on supplementary allowances or otherwise. In the past, Ministers have said they will consider this proposal and that is the reason I keep tabling this amendment but they have never come back with a proposal.
I support the amendment, which is a very sensible. As we are talking about money making schemes for the Department, will the Minister of State clarify a further point? If a person on social welfare is claiming for an adult dependant and that dependent receives a prison sentence, what is the position of the person claiming the payment? Does the adult dependant payment cease for the period of imprisonment of the dependent adult?
I am sorry that nobody has come back to Deputy Ó Snodaigh on his proposal because we discussed it when we were looking at the amendments this morning. In the first instance, this relates to legislation which should be dealt with by the Minister for Jobs, Enterprise and Innovation. However, there is merit in this amendment because the Department has done something similar in respect of accidents. I do not propose to accept the Deputy's amendment but I will ask my officials to write to the Minister for Jobs, Enterprise and Innovation asking him to consider it and for his views on the proposal.
Amendment No. 27, in the name of Deputy Ó Snodaigh, has been ruled out of order because it imposes a potential charge on the Exchequer as it proposes to increase payments. Amendment No. 28, in the name of Deputy O'Dea, has been ruled of out order. It proposes to delete section 4 of the Social Welfare and Pensions Act 2012 which provides for the application of the one-parent family payment for children depending on their age and the deletion of this section would have effect of restoring the one-parent family payment to its previous level, so it would be a charge on the Exchequer. Amendment No. 29, in the name of Deputy O'Dea, proposes that the fuel allowance would be available for 32 weeks of the year, which would be an additional cost to the Exchequer and, therefore, has been ruled of order. Amendment No. 30, in the name of Deputy O'Dea, proposes to increase the amount of profit per day which can be earned without having the day discounted as a day of employment and, therefore, not allowing the assistance to be claimed. This would increase the number of days on which people can access particular benefits or assistance and it would be a charge on the Exchequer and, therefore, has been ruled out of order.
I move amendment No. 31:
In page 9, after line 22, to insert the following:“11. The Minister shall, within 4 weeks of the passing of this Act, prepare and lay a report before the Houses of the Oireachtas, reviewing all expenditure reductions or the ceasing of payments in relation to the household benefits package, including the gas allowance, electricity allowance, telephone allowance since 2011, and setting out the options for restoring those payments to their previous levels.”.
I wish to withdraw amendment No. 31 and do not propose to move amendments Nos. 32 and 33, inclusive, as I wish to reconsider them. I will resubmit them for Report Stage.
May I make a point on amendment No. 30?
I realise I am not entitled to discuss it because it represents a charge on the Exchequer. However, it has been strongly represented to me that the regulation in this case is somewhat outdated. Perhaps the Minister of State would review that. We can discuss it privately sometime.
I move amendment No. 35:
In page 9, after line 22, to insert the following:
“Amendment of section 126 of Principal Act
22. Section 126 of the Principal Act is amended, in subsection (1), by the insertion of the following definitions:“ ‘Act of 1942’ means the Central Bank Act 1942;
‘Act of 2004’ means the Central Bank and Financial Services Authority of Ireland Act 2004;
‘Financial Services Ombudsman’ means the Financial Services Ombudsman referred to in section 57BJ of the Act of 1942 (inserted by section 16 of the Act of 2004);”.”.
I move amendment No. 36:
In page 9, after line 22, to insert the following:
“Amendment of section 128 of Principal Act
23. Section 128 of the Principal Act is amended—(a) by the insertion of the following subsections after subsection (1):“(1A) Without prejudice to subsection (1), the Minister may, subject to the consent of the Minister for Finance, appoint a person who also holds the office of Financial Services Ombudsman to hold the office of the Pensions Ombudsman.and
(1B) An appointment referred to in subsection (1A) shall be made for a period that does not exceed the remaining period of appointment of the person concerned as Financial Services Ombudsman.”,
(b) by the insertion of the following subsection after subsection (2):“(3) In subsection (1B), ‘remaining period’ means, in relation to an appointment of a person, the period commencing on the appointment of the person under this section and ending on the expiry of the period of the appointment of that person as Financial Services Ombudsman under section 57BJ of the Act of 1942.”.”.
I move amendment No. 37:
In page 9, after line 22, to insert the following:
“Amendment of section 129 of Principal Act
24. Section 129 of the Principal Act is amended by the insertion of the following subsection after subsection (6):“(7) Subsection (6) shall not apply to a person who holds the office of Financial Services Ombudsman, where that person is also appointed to be the Pensions Ombudsman pursuant to section 128(1A).”.”.
I move amendment No. 38:
In page 9, after line 22, to insert the following:
“Amendment of section 130 of Principal Act
25. Section 130 of the Principal Act is amended by the insertion of the following subsection after subsection (2):“(2A) Notwithstanding subsections (1) and (2), in a case where the person who holds the office of Financial Services Ombudsman is also appointed, pursuant to section 128(1A), to hold the office of Pensions Ombudsman—(a) subsection (1) shall not have effect in relation to remuneration, and
(b) subsection (2) shall not have effect in relation to superannuation benefits.”.”.
I move amendment No. 39:
In page 9, after line 22, to insert the following:
“11. The Pensions Act 1990 is amended by inserting a new section 48A as follows:“48A. A solvent firm shall not be allowed to close a defined benefit pension scheme except where the scheme has reached a minimum 90 per cent funding standard.”.”.
We have had previous discussions about this topic, or at least we have had them with the senior Minister. At the moment, in the case of a defined benefit pension scheme in operation in this country, the position is that the employer, regardless of how solvent, well-off or wealthy it is, can close down the scheme. The employer is entitled, without any restriction whatsoever, to close it down to the detriment of the people who have been paying into it genuinely, sometimes for many years, with a legitimate expectation of a certain level of pension entitlement.
As I understand it, the position in the nearest jurisdiction, the United Kingdom, is that an employer is not legally entitled to close down such a scheme unless it brings it up to a 90% funding level. The employer cannot close it down unless it is 90% funded so long as the employer is solvent.
Amendment No. 40 relates to the scenario whereby, because a scheme is in difficulty, the trustees make a decision to restrict entitlement under the scheme. Again, it has been strongly represented to me that in many cases there are one or two categories of people who are sometimes unhappy with the decision taken by the trustees and they have no input. In particular, I have deferred pensioners in mind. They seem to have no input. They have to take what they get.
I am suggesting there should be an independent appeal mechanism to which any group of pensioners adversely affected by the decision of the trustees could seek redress. Everyone could have confidence in and appeal to such a mechanism on the basis that their rights are being severely restricted. If an appeal system was in place, it might well lead to a rejigging of what has been done by the trustees. I can think of cases where such changes would be applied.
I support the amendments. The 90% figure has been suggested by the OECD in cases where there are healthy employers or those with positive net revenue. This is to ensure employers are not chancing their arms, as they have done in the past, to avoid future liability or what they perceive as future liability. The view of many employers is that a defined benefit scheme is more onerous than a defined contribution scheme.
We made the argument three years ago or more in respect of some of the major schemes under threat. Legislation was produced which had a different scheme depending on who the beneficiaries were and whether a scheme was under threat or being wound down. At the time there were more than 200 defined benefit schemes. I understand there has been a substantial reduction in the number since then. We are trying to ensure in the remaining cases that at the least the right decision is being made. The idea is that a profitable company, whether it is profitable here or abroad or part of a group of companies, makes a suitable contribution and that the workers, pensioners and deferred pensioners are protected and can access what they have paid into the schemes.
The proposals in these two amendments are reasonable. We have made the arguments before. At the time, they were not accepted. However, I hope things have settled down to the point where they would be accepted as reasonable and within the spirit of what our pension system should be doing to protect those who have, in many cases, paid into a scheme. This would ensure those people would not be as much of a burden on the State pension regime. In some cases the schemes are the only source of pension for these people, but if they do not get their full entitlement, they will become a burden on the State. In some ways, this is a protection for ourselves.
As Deputy O'Dea has said, these arguments have been thrashed out with the Tánaiste on many occasions by himself and Deputy Ó Snodaigh. In many ways, I am giving information that the Tánaiste has conveyed to them on several occasions.
Defined benefit schemes in Ireland are set up and maintained by employers on a voluntary basis. There has never been a statutory obligation on employers under Irish law to contribute to pension schemes.
The Deputies referred to the wind-up of schemes. The decision to wind up a defined benefit pension scheme does not rest with the sponsoring employer. It is a matter for the trustees of the pension scheme. The Deputies referred to that in their contributions.
I will go through the positives and negatives again if Deputies so wish. However, I am not prepared to accept the amendments at this stage. Although we are experiencing an improvement in our economic performance, the imposition of a significant additional cost on employers at this point may have a counter-productive impact with regard to the feasibility of the businesses and the jobs of those employed, given that many employers would lack the capacity to absorb the extra costs and the proposed changes could trigger the closure of schemes.
Given the uncertainty in respect of the overall impact and the potential for unintended consequences, legislative or otherwise, in applying debt on employers it is not proposed to make changes of this nature. The regime is considered as a package of measures that the Minister for Social Protection has introduced in recent years. The idea is to take an approach that can nurse and support schemes to move gradually to a more sustainable funding position. The Pensions Authority is working with and supporting schemes to achieve a more sustainable funding position.
The funding standard is the key instrument in monitoring the health of a pension scheme. The authority is paying particular attention to those schemes with weak funding positions. The standard was in abeyance from the end of 2008 until it was restored in June 2012. The reintroduction of the funding standard was to provide a clear view of the funding position of schemes. It will facilitate the restoration of scheme funding levels. In advance of the reintroduction of the funding standards the Minister introduced legislation to require pension schemes to obtain additional funding in the form of risk reserve to protect scheme members against further volatility in the financial market.
The objective in the short term is to support weaker schemes and enable them to get to a more sustainable funding position. In the medium term, the objective is to support all schemes to meet the requirements of the funding standard.
If arguments and disagreements cannot be resolved regarding the trustees or some other matter, they can resort to the courts. There are court proceedings over some schemes. I was in a defined benefit pension scheme because, unusually in this House, I have worked most of my life in the private sector. For private sector employees, it is always a concern. There would be unintentional consequences, however, if we accepted these proposals. They would have to be carefully studied before we go down that road. It is not my intention to accept these amendments.
The Minister referred to unintended consequences. The only intended consequence of my amendments is to protect employees, who like the Minister himself, have been making bona fide payments into a pension scheme with a legitimate expectation that they will get a certain amount out after the sacrifices they have made over the years to pay in. The moneys could have been used for other purposes, obviously.
I understand that. Again, the Department has made the point that it is the trustees who decide on closing down a defined benefit scheme, not the sponsor. In the real world, however, they do so at the behest of the employer or the company.
I am not suggesting we should have a rule whereby the employer has to come up to 90% of funding if that is going to cause job losses, force the company to close down or restrict its activities. There is no statutory obligation on employers to provide defined benefit pension schemes. Nevertheless, when they do set them up, certain consequences follow. Some years ago in the UK, a rule was introduced that a solvent employer, one who could well afford it, had to come up with 90% of the pension fund before they could close it down. That was eventually accepted in the UK. It has not caused, to my knowledge, any major industrial outfall, job losses or collapses because it is confined to those who can well afford to have the schemes at 90% paid up if they want to close them down.
I will not press the amendments but I am putting the Minister of State on notice that I will resubmit them for Report Stage.
I accept the Deputy’s good intentions and that he is not trying to undermine the viability of businesses. However, while there has been an improvement in the economy, we have to be careful that there are not unintentional consequences by accepting proposals such as this. That is why I would be cautious on this matter. The last thing we want to do is put companies in a more difficult position by increasing their liability for pension schemes which, in turn, could result in job losses.
The pensions area is the next big challenge for the State. We need to move slowly on it to ensure we get it correct because it will have an impact on the economy for many decades.
A category of pensioners, such as deferred pensioners, could be adversely affected by a decision of the trustees to change the terms of a scheme. However, they have no input into that decision which seems grossly unfair. The Minister of State said that if they are unhappy, they can take a case to the courts. There is an old saying, "The courts are open to everybody and so is the Ritz Hotel". Going to court in this country - I could go on about the legal profession of which I am a member - is ruinously expensive.
My proposal is an independent appeals mechanism which will not cost an arm or a leg or substantially further deplete a fund. Will the Minister confirm if people have a right in a situation like this to appeal to the Pensions Authority?
On the question of the trustees and deferred pensioners, earlier this year the Tánaiste and Minister for Social Protection approved measures to facilitate engagement between the trustees of pensions schemes and groups representing the interests of pensioners and deferred scheme members by signing the Occupational Pension Schemes (Sections 50 and 50B) (Amendment) Regulations 2015 and the approved Pensions Authority guidelines to facilitate this change. I hope this might be helpful to the Deputy for Report Stage.
I accept that and thank the Minister of State.
Again, on the appeals system, if somebody is dissatisfied, even after engagement with the trustees, do they have to go to court? Is there a facility to allow an appeal to the Pensions Authority?
I move amendment No. 40:
In page 9, after line 22, to insert the following:“11. The Pensions Act 1990 is amended by inserting a new section 48A as follows:“48A. An appeals mechanism for pension scheme members shall be put in place where trustees have decided upon reduced benefits for members, and such appeals mechanism shall ensure that any category of such pension scheme members have not been unfairly treated in any restructuring arrangement.”.”.
I move amendment No. 41:
In page 3, line 5, after “Acts;” to insert the following:“to amend and extend the Pensions Act 1990 to provide for the appointment, as Pensions Ombudsman, of the person who also holds the Office of Financial Services Ombudsman;”.
I thank the Chairman for facilitating the interruption earlier to allow me take a Topical Issue matter in the Dáil. I also thank the staff from the Department of Social Protection and the committee staff who have helped with the smooth running of today’s meeting. Above all, I thank the members who have helped and engaged in a constructive manner.