Séamus Brennan (Dublin South, Fianna Fail)

Would the Deputy be then careful about taking universal routes for other benefits as many people may not need benefits? I will continue to examine the affordability and the practicality of means-testing the carer's allowance. However, it is not at the top of my priorities. I prefer instead to increase the thresholds, bring more carers into the system and increase allowances and benefits.

Deputy Boyle asked about abolishing dependence status and individualisation, a direction the Women's Council asked me to take. I am working on this issue. The Deputy asked me about indexing the fuel allowance. The allowance was increased by 55% this year and a €2 million package was introduced for home insulation. The fuel allowance was never meant to be other than a contribution to costs. No one pretends it pays their fuel bills.

Deputy Sargent raised the issue of increasing levels of individual debt and indebtedness in society. The money advice and budgeting service does a superb job in dealing with people on lower incomes with debt problems. I am indebted to it for the work it does.

The Bill increases benefits by 10.5%, four times the expected rate of inflation, and benefits 970,000 people. People on lower rates will receive an extra €17 a week, while a special €16 a week payment goes to people on non-contributory pensions. A sum of €14 a week goes to other pensioners, who are not means-tested. This time, I believe we have got it the right way around. The higher increases have been given to those on lower incomes and vice versa. The child benefit package amounts to over €100 million, which will be paid to 545,000 families, with payments increased to €150 for the first and second child and €185 a week for the third child and subsequent children. The fuel allowance package amounts to €42 million and will begin in January. Up to 274,000 households will receive the fuel allowance.

I am pleased there is a €300 million package for social welfare reforms as opposed to the price of the rates, which amounts to €800 million. I fought hard to ensure that on top of the rates, a special fund was introduced to reform the system. This is to recognise carers, increase the income for vulnerable older people and introduce specific measures to tackle child poverty issues. It will also aim to empower lone parents and introduce measures such as changing the back-to-work regulations so that an individual only has to be unemployed for two years instead of five to claim the allowance.

These measures will promote activation by encouraging people to get back to work, training and education opportunities. All Members have a duty to tackle the social issues behind the payments, not just focus on the payments themselves, valuable as they are. We have to help people move, if it is appropriate, from welfare dependency to financial independence. We must help them make that journey, not just trap them in a welfare dependent position. This philosophy is at the heart of the budget presented in this Social Welfare Bill.

At the cost of €20 million, a new enhanced State non-contributory pension will be introduced which will transfer 35,000 pensioners on partial payments to full entitlement. This has been brought about by increasing the means disregard of €7.60 to €20. On top of this, people on non-contributory pensions will be allowed to earn up to €100 a week before we touch their pensions. The current level is €7.60 assuming they have no other means. This is a signal to people that when they start to get their pensions, they do not have to stop earning funds for fear of their pensions being taken off them. It will allow and encourage older people to take up employment without losing their pension at an early stage.

This is a threshold I would like to see increased on a regular basis. Contributory pensioners are fully entitled to earn what they wish without any interference with their pension. It is important that non-contributory pensioners are allowed to do the same. Up to 100,000 people are locked in the position where if they earned over €7.60, the State took their pension from them, assuming they had no other means.

I am pleased a special effort was made in regard to carers. The allowance was increased by €30 a week, bringing it up to the top rate of €200, an increase of 17% on last year. We often speak of increasing pensions to the €200 a week mark. I am particularly pleased the top rate of carer's allowance is now €200 a week. This makes it the largest single welfare payment in the State, leaving aside the special case for the over-80s. The respite care grant has been increased by 25% to €1,200. This year 33,000 carers availed of this grant.

The child care package is dedicated to measures to alleviate child poverty. The specific measure was to increase the family income supplement by putting in an extra €25 million. We have increased the amounts from €19 to €282 per week. This year it will be targeted at larger families. I will give the House some of the figures intended in this measure on another Stage. When the figures are in the public arena, Members will note the strong effect this change will have on family income support. It will mean larger families, who are most vulnerable to poverty, will gain substantially from the new family income supplement. The measure is a direct assault on child poverty because it will result in people on low incomes receiving top-ups from the State and being allowed to earn more while keeping their benefits. In addition, larger families will receive more than smaller families.

On the issue of child poverty, the back to school clothing and footwear allowance, which benefits 160,000 children, has been increased by 50% or €40 per child, bringing the rate up to €120 for children aged under 11 years and €190 for eligible persons aged up to 22 years. Moreover, funding for the school meals programme has been increased by 25% or €2 million.

I ran through these figures to demonstrate that when one examines the combined effects of the new child care package and increases in child benefit, social welfare rates, the fuel allowance and pensions, one finds that the ESRI's view that the budget is targeted at the lower paid and its benefits reduce as income increases is true. The progressive nature of the budget has been confirmed by the ESRI poverty model which indicates that the bottom fifth in society gained substantially more from the budget measures than the other four fifths of the population.

Deputies mentioned lone parents. I increased the upper earnings limit for lone parents by €82 per week to a new limit of €375. As a result, several thousand people will become eligible for a payment and lone parents currently in work will be in a position to substantially increase their earnings. Allowing people to earn more money before their allowance is touched and removing the allowance at a slower rate to ensure recipients find a solid footing will assist people in avoiding the poverty trap to which Deputy Penrose referred. The jump in the limit by €82 per week or more than €4,000 per annum will be helpful.

Specifically on activation measures, I noted the introduction of a tapered 50% withdrawal rate for disability allowance and the reduction in the qualification period for back to work allowance from five years to two years on the live register. This, too, is part of the philosophy behind what I am attempting to achieve, namely, to recognise carers, support older people, ensure activation is at the heart of the budget and, specifically, target child poverty. In this regard, I was pleased to note from the CSO's EU survey that consistent poverty, to use the words of the CSO, has fallen from 8.8% to 6.8% in one year. While the latter figure is still not acceptable, the budget will reduce it further because we have forcefully targeted poverty.

Many questions were asked about the child care supplement. The supplement will be paid by the Department on behalf of the National Children's Office because the Department has the relevant records and is, therefore, in a much better position to make the payments. The supplement will be paid quarterly in arrears for the second, third and fourth quarters of 2006, with three payments of €250 issuing over the year. The first payment will be made in the summer of 2006 when the necessary processing systems and procedures are in place. Full quarterly payments will be paid in respect of each child who was under six years and had an entitlement to child benefit at any point during the relevant quarter. The date of a child's birthday during the quarter is irrelevant.

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