Willie Penrose (Westmeath, Labour)

I move amendment No. 1:

In page 5, between lines 14 and 15, to insert the following:

"1.—The Minister shall within 6 months from after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the earnings disregards applicable to schemes operated under the Social Welfare Acts and the impact of transition to work on the recipients of secondary benefits attaching to such schemes.".

We had a comprehensive debate about this on Committee Stage. The Minister probably knows my views as they have been often articulated. I hate to harangue him continually with these views. There is an idea that getting people into work is the best way out of poverty. However, it is not good enough to point to relatively low unemployment figures and assume that someone who has a job will have no further problems. The Minister will surely agree that is far from the truth. Not everyone has a job that will leave them comfortable. Many of those who have jobs are not taken out of poverty. There is a plethora of policies by which the Government intends to encourage work and social inclusion. Many of these have become ineffective through not operating earnings disregards and liable inflation, tightening the regulations unduly for entering schemes and making it harder to retain secondary benefits. It is that situation at which the thrust of this amendment which was eloquently moved by my colleague, Deputy Seán Ryan, on Committee Stage, is aimed. Many vulnerable people who may have been unemployed for some time or have low levels of educational attainment are in low-paid, insecure, part-time temporary work. The same is true of many groups whose members suffer social exclusion. The Labour Party believes that everything possible must be done to assist them to move into the workplace by ensuring the work they obtain is decent. Income policy should focus on a combination of minimum-wage and tax policy to ensure work is adequate to remove people from poverty.

The survey on rent supplement undertaken for the social partners found that 54,000 children lived in houses in which rent supplement was paid. These households are the poorest of all as even increases in social welfare payments are clawed back in most cases to below the basic supplementary welfare rate. As proposed changes to the rental system will take years to implement, special interim measures are required to alleviate the impact of the claw-back on families in poverty. If the income threshold of €317.43, which has been in effect since 1996, had been index linked, it would stand at approximately €400. It has been in place for over eight years. Earning disregards which apply to long-term payments such as the one-parent family payment should be carried over to supplementary welfare to ensure that earnings up to a certain amount are completely disregarded while half of the remainder is assessable as means. The qualification for greater attention by access to back-to-work schemes should be eased. While a number of the savage 16 cuts have been tinkered with, they have yet to be reversed.

The policy of the Department of Social and Family Affairs to claw-back from the wills of old-age contributory pensioners whose assets exceed the means threshold due to the saving of pension payments was discussed ad nauseam on Committee Stage. The committee discussed the impact of the policy on health board residents who receive a refund of withheld pensions. Members of the committee wished to ensure that elderly residents of welfare homes in receipt of non-contributory pensions will not be penalised. The refunds made to them in consequence of the Supreme Court decision will be assessed as means. While I acknowledge that the Minister, Deputy Brennan, has increased the capital disregard threshold to over €20,000, the weekly pensions of the people in question may be reduced. This retrograde step would create tremendous difficulties and form the focus of everyone with an interest in fairness in the system. The matter is one the Minister should observe closely.

An alternative possibility could involve the Department clawing back in due course the sums it considers to be overpayments. The Minister has consistently made a fair point which used to fall on deaf ears when we made it to his predecessor. The barren ground has gone and we may have a little fertile soil whereby the Minister may allow an acorn to become an oak. If not we will harass him politically. Joined-up Government policy in the treatment of pensioners is a figment of the imagination. There is a plethora of step-in and step-out schemes, disregards and top-ups, but no comprehensive policy. The Minister must focus on pensioners. I accept there might be some validity in the Minister's contention that the claw-back must apply to all income as it will not be possible to trace sources. Assets accruing from pensions already paid by the Department, however, are readily identifiable as such.

There are still some people in rural areas, if not many, who live frugally and are self-sufficient in the supply of potatoes, onions and other vegetables. We should encourage more people to live like that. Such people may have saved over their lives sums of €30,000 and the executors of their wills have a fiduciary duty, rightly, to comply with tax law. The minute they do, however, the Minister's vigilant inspectors will identify circumstances in which a claw-back may be appropriate. A claw-back is fine if someone has sold land or is earning an undisclosed income from land. As the Minister pointed out correctly, the idea of social welfare is to distribute to those in need. It is right to raise barriers to people who are well off who attempt to obtain something from the system to which they are not entitled. The equitable principle of tracing was established in a 19th century case which I cannot exactly remember as I am no longer a student. It relates to banks and the intermingling of one's money with someone else's. It is not beyond the realms of the Department's ingenuity to identify as arising from a genuine source refunds of moneys originally paid out as pensions. While the people in question were already means tested to obtain their pensions, their heirs will have their inheritances assessed as capital.

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