Willie Penrose (Westmeath, Labour)

I am glad to contribute to this debate on social welfare on behalf of the Labour Party. I thank the Minister for Social and Family Affairs, Deputy Brennan, for allowing his officials give us some very useful information on the Bill earlier today and I thank those officials for their diligence and courtesy in taking us through the legislation.

I always try to be constructive and when I express a view, it is a fundamentally held belief, rather than something put forward for the purpose of disagreement or antagonism. The Labour Party feels that at times of great economic prosperity wealth should be shared generously with those most in need. I am chairperson of the Joint Committee on Social and Family Affairs and we wrote the report on carers ourselves, without input from consultants, over six or seven months down in the bunker. I wrote the part referring to the need for recognition and acknowledgement. The first thing consultants do is charge a fee for hours worked and a lesson we learned from the report, which I advise the Minister to heed, is to forget about such input and instead put ordinary people, Deputies and Senators in those bunkers to create reports. They meet real people every Friday, Saturday and Sunday in their clinics and know what is going on.

Theory should be done without as it has led the Minister for Health and Children, Deputy Harney, into a notorious mess relating to payment for the provision of nursing home care. I predict that the Minister, Deputy Harney, will sink without trace as a result of the move made yesterday which has taken the gloss off the budget. It may not have a major effect in Dublin, but in rural areas there is a great deal of dissatisfaction relating to the new scheme on payment for nursing home care. I met a man last night aged 76 who was very happy with the budget. However, he said he worked for 46 years to build up his house and would like to leave it to his daughter without a legacy of debt. For this reason, he said he hopes he never has to go into a nursing home. The Minister for Health and Children, Deputy Harney, will force people to make decisions that they should never have to make. I am not here to take the gloss off the budget, but remember the words I have spoken tonight.

I congratulate the Minister for Social and Family Affairs, Deputy Brennan, on this, his third budget, and the significant effort he has made to deal with some of the issues we have brought to his attention over the years. The Minister has gone some way in improving the lot of the poor and disadvantaged, a process that began in the budget of 2004 and continued in 2005. However, I disagree fundamentally with the Minister for Finance's assertion in his Budget Statement that throughout its term in office the Government has assured the less well off have shared in Ireland's growing economic prosperity. That is an effort to rewrite history. If the current Minister for Finance has forgotten the dreadful years of the regressive McCreevy budgets, the savage 16 and other insidious cuts, none of the disadvantaged, nor the groups who support them, have forgotten.

From 1997 to 2004, the gap between rich and poor widened as each of seven successive budgets gave to the rich and took from the poor, making Ireland one of the most unequal countries in Europe. As the Conference of Religious of Ireland, CORI, put it in 2004, the same year they were taken to Inchydoney to manufacture a Pauline conversion, "the rich get richer while those living in poverty still have a long way to go before they ever reach the poverty line of income". That is taken from page 41 of the Priorities for Fairness — Socio-Economic Review 2004 by the CORI Justice Commission in case anyone should accuse me of being political. Two recent budgets giving more to the poor than the rich can only go a small way towards putting right the neglect of the previous seven years and we await the outcome of the most recent budget.

I would also question the real meaning of the boast by the Minister for Finance that in this budget he is providing "the biggest package of support for those on low incomes in the history of the State". There are two very clear reasons for this large package, both arising from this Government's mismanagement of the State's finances. First, as outlined above, the Government increased income inequality and worsened the situation for the poor over the first seven years of its time in office. It will take more than two or three years of higher spending on social welfare to put right the damage done over so many years. Second, a recent economic commentator has put our current inflation rate at 4%. We have not done nearly as well as our EU neighbours in keeping inflation under control although we are facing the same international problems with rising energy prices and the fall in the value of the dollar.

With significant inflation, the Government will obviously spend more in absolute terms just to buy the same amount of goods and services this year as last year. Any Minister for Finance presiding over an economy with significant inflation can always make the very hollow boast that he is spending more than he ever did before, but this is not the same as devoting more resources to the needy. Indeed, the Government, during its entire time in office, has never spent as large a proportion of the country's total income on social welfare as the rainbow coalition did in 1995 and 1996, when social welfare expenditure accounted for 10.4% to 11.1% of the gross national product, GNP. The advent of the current Government led to social welfare expenditure falling as low as 7.5% of GNP and it has remained in single figures throughout its time in power. I have taken these figures from page 85 of the Central Statistics Office Statistical Yearbook of Ireland 2006.

Those struggling on inadequate social welfare incomes are very sensitive to every price increase, whether caused by general price inflation, stealth taxes or Government agreed increases in gas, electricity, transport and health care costs. Real improvements in circumstances are important to the disadvantaged, not comparisons and changes relating only to the previous year's financial circumstances.

The great cheer during the budget speech from Fianna Fáil Party backbenchers at some social welfare payments at last crossing the €200 per week barrier gave a clear indication that it is perceived that helping the poor might improve the party's prospects in the next election and that any social welfare payment of €200 per week solves all the problems of low income groups. Neither of these assumptions is justified.

As far as the election is concerned, let us wait for the results. As far as the increase in social welfare payment is concerned, have any of us in Dáil Éireann tried to live on €200 per week and face the price increases that inevitably come? It is, I think, unlikely. Yet the cheers from Fianna Fáil Party backbenchers at having reached this boundary for some social welfare recipients shows how little those in power know about the realities of life on the bread line.

In fact, the minimum weekly disposable income required to avoid poverty in 2006 is €203 for one adult, €270 for one adult and one child and €337 for two adults. The source for these statistics is again CORI, page 23 of a report entitled, Justice: Developing a Fairer Ireland 2006. Thus, even before the first instalment of these new improved payments has been made, the unemployed, widows and widowers under 65, lone parents, the disabled, carers and many other groups will be below the poverty line.

Before looking at some cases in detail I must say a few words about poverty in general. We are all getting tired of the way in which the Government and the Minister for Social and Family Affairs, Deputy Brennan, refuse to accept the fact that Ireland has poverty levels which are far too high. Instead they criticise and try to rubbish the statistics presented as being out of date, irrelevant to Irish conditions or unfair comparisons. Let me make it clear that all the references to poverty made by me today are taken from the Central Statistics Office's most recent publication on poverty, dated 16 November 2006. The CSO refers to some of the Laeken indicators, agreed by Ireland and all other EU countries in 2001 as the most appropriate methods of measuring social inclusion and of comparing the effectiveness with which different EU countries handle problems of social inclusion and poverty. These statistics show that Ireland has the highest poverty levels of any country in the EU except Portugal and the Slovak Republic.

Ireland is far less effective than other EU countries in reducing poverty levels through social transfers. Our total transfer system only reduces poverty by 18%, compared to the EU average of 25%. The unemployed, one parent families, the ill and disabled and the elderly have very high poverty levels, while a very worrying feature is that in Ireland up to one third of all children live in poverty.

I am tired of the Government closing its eyes to the real and deep seated problems of poverty in Ireland and either criticising the statistics, as if this were just a theoretical game, or trying to pretend that just one year's budget change can put everything right. If the Government refuses to accept the EU's official comparisons outlined above, it must, surely, believe the experience of the Society of St. Vincent de Paul and other charitable organisations. In the last year SVP spent more than €41 million giving direct help to more than 300,000 families that had been let down by the Government's social support system. Some €7.5 million of this figure was emergency support for families who had no money, no food and no resources, €4.6 million was allocated for food and €3.1 million for fuel. It is clear that fuel poverty is a big issue, and spending has been doubled in this regard in recent years, but the level of support should rise to approximately €25 over an extended period because it is a real issue throughout the country. Elderly people tend to be frugal in their budgets and often turn the heat off in their homes to save money. It is sad that people have to scrape together a few bob in this way.

If life is as good as the Government would have us believe, why do members of the Society of St. Vincent de Paul stand outside churches to collect the €41 million the society needs to rescue people? As Professor John Monahan once said, our ultimate aim should be to put the Society of St. Vincent de Paul out of existence. The society spent €1 million on reconnecting families to gas and electricity supplies and, in light of the continuing increases in fuel bills, pleaded with the Government for a weekly fuel allowance of €24 between September and April. However, the budget provides a mere €18 per week. More help is required if ill, disabled and elderly people and families with young children, all of whom remain at risk of poverty, are to keep warm and prepare hot food.

In 2002, there were 154,000 lone-parent families in Ireland, which represented about one sixth of all families, and one in three births took place outside marriage. Approximately 80,000 lone parents, or just over half the total number, received a one-parent family payment, which has been increased in this budget to €207.80. However, the minimum disposable income needed by one adult and one child to avoid poverty is €270, so one-parent families will start the new year below the poverty line.

What has happened to the proposals on lone parents which the Minister for Social and Family Affairs published earlier this year? Genuine concerns were expressed that elements of the proposals could result in new poverty traps. All proposals must be poverty proofed so as to ensure they do not make people worse off. There was a failure to ensure adequate access to education, which is the best route out of poverty, and appropriate child care. Nevertheless, there was considerable merit in the Minister's proposals, particularly in terms of the abolition of the long outdated prohibition on cohabitation. It is time we got over the idea that being a parent is somehow a problem and addressed the farcical barrier that prevents lone parents from entering long-term relationships for fear of losing their incomes.

One-parent families are now a significant feature of our social system and they deserve better from this year's budget increases than being left on the breadline. The problems they face in terms of caring for their children while trying to find suitable employment are exacerbated by Ireland's high child care costs and the absence of free child care provided by the State. This budget contributed little to child care and the issue remains a stumbling block for many people across the country. The exorbitant cost of child care is preventing many people from reaching their full potential by preventing them from working outside the home. The State must intervene to provide more child care places.

The Minister for Finance spoke eloquently about the national disability strategy and his intention to continue the rate of expenditure provided for in last year's budget. He failed to mention that the State's support for the disabled started from a very low base. A report published in September by the European Foundation for the Improvement of Living and Working Conditions stated that, compared with the European average of 2.2%, at 0.8% Ireland spends the smallest proportion of GDP on disability benefit in Europe. While there are some problems in terms of comparing across countries, a deficit as large as ours will not be overcome by a couple of years of increased expenditure. The report also found that the guidance and counselling services necessary for those claiming sickness and disability benefit to return to work are less accessible in Ireland than elsewhere. The right to work is as fundamental to disabled people as it is to the able bodied. Some 8.3% of the population are disabled but only 14.7% of those who can work are employed.

The Joint Committee on Social and Family Affairs recently received a submission from the Multiple Sclerosis Society of Ireland. Multiple sclerosis, which affects 7,000 people in Ireland, is the most common disabling neurological disorder among young people, although it can occur at any age. Among the issues raised by the society was the necessity for the Government to provide a costed disability benefit. It is widely recognised that the daily cost of living for people with disabilities is higher than for the general public and many disabled people experience a lower standard of living as a result of their disabilities. Among the many areas of increased cost are transport needs, housing adaptations, disability aids and appliances, heating, care assistants and home helps. In 2005, a report from the Department of Social and Family Affairs indicated that 66.5% of people receiving disability payments fell below the 60% level of median income and 22.5% suffered basic deprivation. Current research indicates that people with disabilities are less likely to be in paid employment. A diagnosis of multiple sclerosis, therefore, often means the end of paid employment. A costed disability payment should be carefully considered in the context of introducing equality to the system.

Ireland has approximately 149,000 carers, of whom one third spend more than 43 unpaid hours per week looking after elderly, frail or otherwise disabled relatives and friends. Nearly half of all carers have no paid employment but, whether in work or school, in their middle years or elderly, they sacrifice their time to care for others in their homes. They do not generally choose this role but are forced into it by family circumstances. There is strong evidence that carers suffer from stress and poor health because of the difficult 24-hour nature of their role. The NESF has calculated that all the unpaid care provided by carers in Ireland saves the Exchequer up to €2 billion per year. Unfortunately, the Government is not keen to repay carers for their vital and dedicated work. Less than one fifth of all carers receive any direct financial support from the State. The measures on increased respite care and additional payments are therefore welcome.

I know a woman over the age of 66 who looks after her old-age pensioner husband. She could have received the qualified adult dependant benefit but opted for the carer's allowance because it was financially preferable. Is she now entitled to the qualified adult dependant payment? For reasons of equity, I submit that she is entitled to receive that payment at half rate. I ask the Minister to investigate the matter.

Carer's allowance and other State supports for the disabled and carers rely on a variety of complex means tests administered by different State agencies. Apart from the demeaning nature of such tests, transparency is so lacking that few can make their way through the associated labyrinth of rules and regulations. Despite the Minister's claim that the budget offers great support for the disadvantaged, all carers receive is an increase in the carer's allowance to €200 for those aged under 66 and to €218 for those over 66. This leaves carers under the age of 66 below the poverty line of €203.

The Minister has made only minor improvements to other Government aids for carers. In 2003, the Joint Committee on Social and Family Affairs undertook a detailed study of carers and their problems. It was the committee's unanimous conclusion that all carers needed help and that the carer's allowance should no longer be means tested but should be made available to all carers. More benefits are means tested in Ireland than in any other EU country, yet international evidence shows that means testing leads to high administrative costs and poor social provision. The Labour Party, therefore, continues to support the provision of a universal carer's allowance. In 2003, the estimated cost was €180 million. That was probably an over-estimate, as it did not calculate the reduction in administrative costs which universalism brings.

The Government pandered to the Progressive Democrats' right-wing ideology in the recent budget by unnecessarily giving away €186 million in reducing the top rate of income tax from 42% to 41%. I will benefit from the reduction, but why should I? It would be much fairer and more socially just for Fianna Fáil, which occasionally claims to be socialist, to use this money to universalise the carer's allowance. In that way, the money would end up in the hands of those who really need it. Such people clearly deserve recognition and support for looking after people and saving the Government up to €2 billion. That is where the money should be spent. The €150 million could be used to eliminate the need for the degrading means test.

The Minister might ask me whether, as a member of the Labour Party, I have gone mad. I have not gone a bit mad. One's child is entitled to free primary school education in this country even if one is earning €1 million a week. The children of the very rich have such entitlements. A person over the age of 70 who gets a pension of €10,000 every week is entitled to a free medical card. Why should people who provide essential services be penalised for exceeding the means test limit by just €2, €3 or €10? The proposals regarding nursing home care which have been made by the Minister, Deputy Harney, are the worst I have seen for a long time. People will eventually be forced to sell their homes, through no fault of their own, even after they have left this life. It is an attack on the elderly.

If the Government were to abolish the means test, it would deal with this issue immediately. Many people would become even more encouraged to look after elderly people. As Deputy Stanton said, it has been proven in every country in the world that people are far happier in their home environment. He mentioned the wrap-around care system in Denmark, under which psychological services and care packages are provided. In Denmark, all kinds of services, such as rehabilitation services, are made available to the elderly as soon as anything happens. This proposal will put the heart crossways in older citizens who are feeling unwell. We should remember that we all will reach that stage at some time.

I reject any proposal to include the family home in any means test. The family home is not used to calculate means for any other services, such as medical cards, pensions and third level grants. Why should an exception be made in the case of elderly people who are too sick to stay at home? Old people are being singled out. It seems that their homes will eventually be sold to pay for their nursing home bills. If the Labour Party gets into government, it will set about overturning this measure. The Minister for Social and Family Affairs can beat us to it by abolishing the means test. Such a move would send an important signal. It could be an important step for the Government.

I acknowledge what the Minister is doing in section 12. I applaud him for this very good initiative. He might not think it is important. Section 12 provides that certain self-employed people in receipt of social welfare payments who are not entitled to credited contributions, such as farm assist and jobseeker's allowance, can pay PRSI contributions. It is an extremely important measure, even if he does not think it is.

We will have to do something about the averaging system. We start off on the day the ball is thrown in, there is a big gap in the middle and then comes the tail. It is a disaster. It is time to change the law to allow the spouses of farmers and other self-employed persons to make voluntary PRSI contributions so they can qualify for pensions in their own right. The Minister has admitted to me that the spouses of employed or self-employed contributors are specifically excepted from social insurance contributions in respect of their working activity with their spouses. Such spouses are effectively forgotten. They are invisible in the social welfare code. They spend many hours at the shoulders of their spouses trying to retain and build up businesses. They work extremely hard from morning to night.

Many of the people to whom I refer are shopkeepers in rural areas — I am sure it is the same in Dublin — who get up at 7 a.m. and work until 9 p.m. to provide a service that many of the whizz-kid supermarkets do not provide. Such people, who comprise an important part of Irish society, are being let go. Many of them will end up poverty-stricken. They might have an old building, but that is all they will have at the end of their time. The same can be said about farmers. This anomaly in the social welfare code relates to the spouses of farmers and shop owners, as well as people in other self-employed categories. Women who are classified as "relative assistant" and are prevented from paying PRSI cannot qualify for contributory pensions in their own right. If they work a certain number of hours in the shop or on the farm, they should be allowed to pay a PRSI contribution on a voluntary basis, as is the case with carers. It is time for this matter to be reviewed. A submission should be made and examined in this context.

I now turn to an issue of real concern to me and my Labour Party colleagues. It has been partially addressed by the Minister. Having raised the matter in this House, I have to take some credit for driving it this far. While the Minister does not tend to show much of a reaction, he is keen to listen to us. He gets somebody to examine the matters we raise, which shows he is fairly shrewd. I suppose accountants tend to have more guile than more robust people like us who are from rural areas. I am speaking about the modernisation of the social welfare system, which is full of outdated and outmoded concepts. When I spoke previously about this matter in the Dáil, I received e-mails from men saying I must be the most anti-man person who ever went into this House. While I am not anti-man, I hate inequity and inequality. I love to see it rooted out, wherever it is.

As someone who is proud to represent the Labour Party in this House, I want the 1920s and 1930s social welfare model to be overturned and reformed because it contains outdated and outmoded concepts. In so far as the model relates to eligibility and assessment, it tends to relegate women to roles within the system which are subservient to the roles of men. I highlighted an example of that when I spoke about the spouses of farmers and shopkeepers. Those who are set apart in the social welfare code are virtually not recognised. We have to bring an end to such concepts, in the interests of equality, equity and fair play.

Members should not doubt that the Labour Party wholeheartedly promotes and supports economic independence for women. If we are to achieve this worthwhile and noble objective, we must agree unequivocally to abolish the limitation rule for all payments. We should not fiddle around with it — we should abolish it. The Progressive Democrats are looking to waste money by giving people like me an additional €20 per week, but they should keep that money and use it to bring equity to the system. They might not be interested in that, however. I almost forgot that the Tánaiste and Minister for Justice, Equality and Law Reform is a promoter of inequality, so what am I talking about? I was a bit of a clown to mention it.

I would like the Minister to increase the rate of all qualified adult payments to 100% of the rate of the personal payments and to make them directly payable. While he is starting to do that, he is not doing them all together. He is going a bit of the way. I suppose he has been in politics long enough to understand that the foot in the door is a good start. I acknowledge that. Women are the qualified adults in many households. It is sometimes the case that there is no economic benefit to the household if both adults receive an individual payment. In the cases of the majority of qualified adults, their payments go directly to their husbands, which is wrong. They should get payments in their own right. If a woman's payment is given directly to her husband, it takes away from her economic independence and excludes her from receiving any payments in her own right.

As the Minister has said previously, the only way for him to address this situation is to ensure that qualified adult payments are paid directly to the qualified adults. I welcome the Minister's move in the direction of abolishing the limitation rule. We must bear in mind that 95% of qualified adults are women, many of whom are excluded from the labour market because of their caring and parental roles, to which Deputy Stanton referred. The Government gave a commitment in Sustaining Progress to increase the qualified adult payment to 100% of the full person's payment by 2007. That commitment will not be honoured, however. The timescale for the achievement of this worthy and important objective has been long-fingered.

The Labour Party is alarmed at the Government's proposal to subsume the community welfare service into the Department of Social and Family Affairs. The service, which caters for the most vulnerable people in our society and operates at the cutting edge of the link between health and poverty, should be left where it is, within the health service. If it is not broken, why should it be fixed? This is little more than a craftily disguised cutback and an attack on vulnerable people in the community. This plan, which is being pushed by one or two people — I know who they are — is provided for in the Bill. The Minister should take advice from a fool by throwing this aspect of the Bill into the bin.

If the plan proceeds, community welfare officers will ultimately be reined in and prevented from providing information, advice and advocacy to vulnerable people in our communities. It would mean in effect that the most effective link that such people have to statutory health and personal social services would be severed. This is because the people whom community welfare officers serve, including those with addictions, those with mental health problems, abuse victims and people with chronic social, behavioural and psychological issues, are far more likely to access health and personal social services through the community welfare system than through formal channels because the possibility of discretionary community welfare payments provides an incentive, allows CWOs to make needs assessments and puts them in touch with appropriate health services. If the Minister allows this to go ahead, he will run an unacceptably high risk of breaking the link between payments and access to health services which will be severed over time, if not very quickly. That is because the Department of Social and Family Affairs will be reluctant to fund functions for which it has no statutory responsibility. That is the point.

The Government's policy is based on the report of the interdepartmental review group on the core functions of the health service report, which recommended the transfer. There is no difficulty with the objective of focusing the Health Service Executive's resources and activities on core health functions but the community welfare service performs a core function.

Our former leader, the late Frank Cluskey, on introducing the scheme stated it was more than a mere cash response. The service was deliberately placed within the community care structure and under the auspices of the Department of Health with the intention of delivering a local response to individual need and, crucially, providing its clients with access to a range of health and personal social services. The importance of the relationship between income maintenance and effective personal and health services, as well as a safety net separate from other social welfare payments, was clearly and specifically identified in the Dáil debates as what led to the establishment of the services.

I ask the Minister not to do this. With the exception of that, he has done a reasonably good job and I hope he takes note of the various points and suggestions I made which will get us further down the road to ensuring poverty will be a bygone in time to come.

See this speech in context