Séamus Brennan (Dublin South, Fianna Fail)

I move: "That the Bill be now read a Second Time."

I am very pleased to introduce the second of two Bills intended to implement the largest social welfare package in the history of the State at €1.41 billion, announced in last December's budget. This substantial investment brings total expenditure on social welfare in this year to €15.3 billion, or almost €1 for every €3 of current Government expenditure. Ireland is now making solid and steady progress in tackling the core issues that can blight people's lives, blunt opportunities and leave some vulnerable and marginalised in society.

As well as income support improvements of over €970 million which took effect from January, another €430 million is being directed to support a range of significant reform measures, representing nearly one third of the total package. These include confronting and tackling remaining child poverty, increasing income supports for all pensioners, recognising and supporting carers and those with disabilities, as well as increasing the status and incomes of women. These are major structural reforms which, when taken with a number of other reforms implemented in areas such as pensions and lone parent allowances, will contribute greatly to the overall policy reform agenda that I have been pursuing for the last two years. These reforms on child poverty, carer's allowance, women's incomes and pensions are about more than just increasing incomes. They are important and necessary structural reforms that create change, open up fresh opportunities and deliver enlightened social policies.

On various occasions I have described child poverty as an unacceptable blight on society. Childhood deprivation can leave lasting marks on children by impeding their development and limiting their life chances. It is not just the child who suffers. Society also loses, as its children are its wealth. Since I began in this portfolio, I have been determined to make a lasting impact on the problem by bringing forward the reforms and targeted measures that reach to the very core of the issue.

In recent years we have lifted more than 250,000 people, including 100,000 children, out of poverty, but we still have a distance to travel. It behoves all of us to redouble our efforts and complete the task. Prior to budget 2007, resources were aimed at alleviating child poverty through substantial increases in the universal child benefit payments, rather than through increases in the qualified child allowances, which are paid to recipients of social welfare payments. In January of this year, I increased the qualified child allowance, which used to be known as the child dependant allowance, for the first time since 1994. The increase in the allowance to a new single high rate of €22 per week has benefited over 340,000 children by targeting those in poorer households.

The shift towards child benefit has been significant in tackling disincentives to employment. In 1994, child benefit represented just 27% of the combined child benefit-qualified child payment for a four-child family. Today, child benefit accounts for over 65% of that combined payment. When a welfare recipient moves into full-time employment, his or her family now loses less than 35% of its child income support through loss of qualified child payments. In this Bill, I am increasing child benefit rates by €10 per month. Over 560,000 families, or approximately 1,134,000 children, will benefit from the increase, which comes into effect in April and will apply to all children. It is expected that expenditure on the child benefit scheme will be €2.15 billion in 2007.

It is well established that child poverty is especially prevalent among the families of those on the one-parent family payment. Last March, I launched a Government discussion paper, Proposals for Supporting Lone Parents, which proposed an expansion of the availability and range of education and training opportunities for lone parents, an extension of the national employment action plan to focus on lone parents and the introduction of a new social assistance payment for low income families with young children. One of the report's proposals was that the upper income limit for the proposed new social assistance payment should be €400 per week. I increased the upper weekly income limits for the one-parent family payment from €293 to €375 in budget 2006. I am delivering on this element of the proposal by increasing the upper income limit to €400 per week in this Bill.

The long-term aim of the proposed new social assistance payment, which is being developed by officials in the Department of Social and Family Affairs, is to help people to achieve financial independence by enabling them to enter the labour force, which offers the best way out of poverty and social exclusion. I fully realise that the proposed new payment cannot be introduced without the development of co-ordinated supports and services by other Departments and agencies. For that reason, the Government has instructed the senior officials group on social inclusion to draw up an implementation plan to progress the non-income recommendations to facilitate the introduction of the new payment scheme.

I have taken the opportunity presented by the budget to address the earnings limits for recipients of deserted wives benefit, which is an issue that has been raised with me by several Members of this House. In response to the Deputies' representations, I have decided to introduce a new single earnings limit of €20,000 gross, even though the scheme has been closed to new applicants since January 1997. In addition, I am providing in the Bill that when claimants' earnings exceed the new limit, they will be entitled to a new half-rate transitional payment for six months to ease the impact of losing their entitlement to the payment. Up to 2,300 recipients of deserted wives benefit may benefit from the revisions to the scheme, which will bring it more into line with other social welfare schemes.

Deputies will recall that in the Social Welfare Act 2006, I made significant progress towards achieving the Government's commitment to increase the qualified adult allowance for the spouses and partners of contributory pensioners to the level of the State non-contributory pension. Since January, the budget increase of €23.70 per week in the qualified adult payment has benefited approximately 35,000 couples. That increase brings the rate of qualified adult allowance payments for those aged 66 years and over to 86.5% of the target rate referred to in the Government commitment. There is now a €60 million commitment to reach the target rate within the next three years. This Bill includes the provisions necessary to implement in new cases from September, the direct payment of increases for qualified adults to the qualified adult for the duration of the entitlement of the State pensioner. It will remain open to any qualified adult to continue to have his or her portion of the pension paid jointly with the personal portion of the pension, if that is his or her preferred option.

I have said many times that this country's social welfare system should evolve to reflect the social changes of recent years. The system needs to keep pace with changes in working and living conditions, particularly those of women. Accordingly, I propose to reform significantly the way spouses are assessed as qualified adults in a range of social assistance schemes. Women are generally involved in these instances. The assessment procedures for many schemes are predicated on the outmoded notion of a "qualified adult", with the woman in the relationship involved in ongoing part-time and low-paid work. As such assumptions are increasingly outmoded in our modern society, more enlightened social policies are needed.

I propose to remove the differential disregards from employment income which apply to couples on assistance schemes and to assess both members of a couple in a similar manner with common disregards and assessments applying to both. I will remove the poverty traps in the current method of assessment, which arise from the way the current disregard operates. At certain income levels, if a woman increases her income from part-time employment to more than the current disregard of €100 per week, her spouse can lose €1.20 from his jobseeker's allowance for every €1 she earns in excess of €100. Such a situation, which represents a withdrawal rate of 120% in respect of income, has no place in a modern labour market.

Increases in labour market participation will be rewarded under the proposed reform. This will allow women to move beyond the occupational cul-de-sac of long-term part-time employment with earnings below €100 per week. The current position whereby it is more advantageous for the half of a couple who undertakes part-time work to be a qualified adult will be removed. Both partners will be able to claim jobseeker's allowance in their own right, as long as they satisfy the usual conditions. They will receive the same rate of payment as a couple where one is a claimant and the other is a qualified adult. This will facilitate women, in particular, to claim jobseeker's allowance in their own right and access the accompanying range of employment supports and training opportunities. As part of this reform, I will increase the daily disregard of €12.70 from earned income from employment to €20. I will extend the disregard to all customers with such income.

This proposal removes the anomaly whereby parents of qualified children cannot avail of the disregard. It further strengthens the incentive for labour market participation by increasing family income when children are involved. The complexities I have mentioned mean there is potential for some couples to be less well-off under the proposed reform. They will not be less well-off, however, because the Department of Social and Family Affairs will operate a transitional saver system to protect the level of income they have at present from a combination of jobseeker's allowance and employment income. I am confident that the proposals will reduce significantly the complexity in the system and recognise, encourage and reward increased labour market participation.

As carers play a valuable and much appreciated role in our society, it is important that we support and care for them. Since the Government took office in 1997, it has been committed to supporting care in the community to the maximum extent possible. Over that period, weekly payment rates to carers have been greatly increased, qualifying conditions for carer's allowance have been significantly eased, coverage of the scheme has been extended and new schemes such as carer's benefit and the respite care grant have been introduced and extended. As a result of these improvements, almost 28,500 carers now receive either carer's allowance or carer's benefit. Such carers receive a respite care grant, as do approximately 10,000 other carers. Our commitment to carers was further reinforced in the national partnership agreement, Towards 2016, which contains significant commitments in the area of caring. Work is progressing on the development of a national carer's strategy, which will focus on supporting informal and family carers in the community. It is hoped that the strategy will be finalised by the end of the year.

As I have said on many occasions, the primary objective of the social welfare system is to provide income support. As a general rule, just one weekly social welfare payment is payable to an individual. In practice, people who qualify for two social welfare payments always receive the higher payment to which they are entitled. I am aware that this causes particular concern for people in receipt of one social welfare payment when they become carers.

The Joint Committee on Social and Family Affairs has made some specific and sensible recommendations in this regard. I have responded by introducing in this Bill a fundamental reform in relation to payments to carers. From September, people in receipt of certain other social welfare payments, who also provide full-time care and attention to a person, will be able to retain their main welfare payment and receive another payment, subject to their means, up to half the rate of carer's allowance. Abolishing the old rule that a person cannot receive two welfare payments means that, for the first time, people who are caring will have some real recognition of their caring duties.

I am also including in the Bill provision for an increase of €300 in the rate of the respite care grant to €1,500 from June 2007. This will allow up to 40,000 carers to have a well-deserved break from their caring duties. The full package of measures for carers which I included in budget 2007 will cost in excess of €107 million in a full year. We have travelled some distance in recognising and acknowledging the significant contribution carers make in looking after people in their own homes and communities. Our next step forward will be to achieve our vision of a co-ordinated, comprehensive, accessible and sustainable system of delivering services and supports in the community to people who need care. At the same time we will continue to support and reward carers and ensure that we care for the carers.

The Bill gives effect to a number of improvements to the supplementary welfare allowance rent supplement scheme as part of the overall supplement package announced in budget 2007. These include an extension of the qualifying conditions and an easing of the rent supplement means test. The key objectives of the changes are to simplify the means test, so that a rent supplement recipient can judge the impact of an offer of work, and address disincentives and eliminate poverty traps faced by rent supplement recipients seeking to increase their hours of work or wishing to take up full-time employment. I am also making provision whereby rent supplement may be withheld in respect of accommodation which fails to meet local authority housing standards and to allow rent supplement to be refused in respect of private rental accommodation located in specified areas of regeneration identified by the Minister for the Environment, Heritage and Local Government.

This latter measure supports the State's significant investment on regeneration in areas such as Ballymun. The objective is to achieve a better balance between owner-occupied and rented accommodation in these particular localities. In taking this approach, provision is made to protect existing tenants.

I am also taking the opportunity in the Bill to bring forward enabling legislation which will help to give effect to the Government decision to transfer certain income support and maintenance scheme functions from the Health Service Executive to my Department. At present, the SWA scheme is delivered by some 700 community welfare officers, CWOs, 59 superintendent community welfare officers and supporting clerical staff in the community welfare service of the HSE. The Social Welfare Consolidation Act 2005 currently stipulates that HSE staff determine entitlement to social welfare allowance.

The legislation I am now bringing forward is a technical change which is necessary to ensure that CWOs may continue to administer the scheme when they transfer out of the HSE to my Department and will come into operation by means of a commencement order. The legislation required for the transfer of functions will be prepared later this year following full consultation with staff and other stakeholders. The HSE's community welfare service is responsive and flexible in meeting needs and I will be ensuring that these attributes are preserved and built upon as part of the transfer process.

The transfer of functions presents fundamental reform and developmental opportunities for a fully integrated and enhanced income support system, including the restructuring and integration of income support services within one entity. This presents both a challenge and an opportunity for those within the CWS and my own Department in supporting those most disadvantaged in society. I regard the transfer of functions as a positive way forward and I am confident that it will be embraced by all as the transfer programme progresses in the coming months.

The Government is concerned about retirement income in general, now and in the future. I do not need to remind the House of the demographic pressures our pensions system will face in the future. Thankfully, unlike other countries, our position will remain favourable for a number of years yet. It is important that we use the time we have available to act now to find the solutions for tomorrow. Everyone is entitled to adequate income, dignity and security in their older years. I am determined that we work towards delivering adequate retirement income to all our citizens which is financially, economically and socially sustainable.

I was very pleased at the prominence afforded to pensions in the social partnership negotiations for Towards 2016 and the final agreement features a number of commitments in this area. As part of the agreement, the Government is committed to publishing a Green Paper on pensions outlining the major policy choices, the challenges in this area and the views of the social partners. Following a consultation process, the Government will respond to the consultations by developing a framework for comprehensively addressing the pensions agenda over the long term. I am confident that the forthcoming Green Paper will offer options for reform — for both State and supplementary pensions — that are sensible and realistic.

I view this Green Paper as the beginning of the end of a process of examination, consideration and national debate. While we face a difficult challenge in securing agreement on a way forward, I am confident that the process will deliver a system that will command broad acceptance and provide the way for people to accumulate adequate resources for their retirement. Work on drafting the Green Paper is progressing well and I am confident it will be completed on schedule by the end of March.

I will now outline to the House the main provisions of the Bill which includes new measures and amends the Social Welfare Consolidation Act 2005, the Pensions Act 1990 and a small number of other Acts.

Sections 1 and 2 contain the usual provisions for the Short Title, citation and commencement of the Bill, and the definition of certain terms used throughout the Bill. Section 3 contains a technical amendment to clarify the definition of a volunteer development worker for the purposes of the social welfare code. Section 4 provides for an increase of €10 in the monthly rate of child benefit, bringing the lower and higher rates, respectively, to €160 and €195 per month. Families who receive the monthly payment via their bank accounts will receive the budget increase from April 2007, while those who receive payment via personalised payable order books encashable at post offices will be paid in the first week in May 2007, back dated to April 2007. In addition, section 26 provides for a measure of flexibility in the payment arrangements for child benefit by removing the presumption that a child resides with only one person.

Section 5 provides, in addition to a technical amendment, that where a person who was in receipt of illness benefit for at least two years has engaged in employment for less than 26 weeks and subsequently re-applies for that benefit, payment will not be made at a lower rate than that which he or she previously received. This section and section 8 provide that former recipients of carer's benefit or carer's allowance who transfer to illness benefit or jobseeker's benefit may revert to a rate not lower than that previously in payment. Section 5 also removes an obsolete reference to "rules of behaviour".

Section 6 contains a number of measures to enhance the maternity benefit scheme. These include provision for the payment of maternity benefit to the father of a newborn child on the death of the child's mother without having to satisfy the contribution conditions of the scheme in his own right. This section also provides for the payment of not less than six weeks maternity benefit on the death of the mother, bringing this scheme in line with the after-death payment arrangements of other social welfare schemes. In addition, the section clarifies the position in respect of disqualification for receipt of maternity benefit by providing that benefit will not be payable where a woman engages in any form of insurable employment or self-employment, or fails, without good cause, to attend for medical examination.

As the provisions governing adoptive benefit mirror those applicable to maternity benefit, section 7 extends the section 6 enhancements to adoptive benefit. It also clarifies that a person will be disqualified from receiving adoptive benefit if he or she engages in any form of employment or self-employment. As outlined, section 9 contains amendments to the provisions governing the means test and the assessment of spouses' earnings for the purposes of jobseeker's allowance, pre-retirement allowance, farm assist and disability allowance.

Sections 10, 11, 16 and 25 provide for technical amendments to the occupational injuries schemes including the deletion of an obsolete provision regarding the prescribed time for claiming the cost of medical care. They also provide for the deletion of obsolete references in the Social Welfare Consolidation Act 2005 to "rules of behaviour".

Section 12 provides for the inclusion of education and training, subject to prescribed conditions, in the activities in which a recipient of carer's benefit may engage and still satisfy the conditions for receipt of that benefit. Section 13 provides for a technical amendment to clarify date of entry into social insurance for the purposes of a State pension, contributory.

Section 14 provides for the direct payment of increases for qualified adults payable with the State pensions directly to the qualified adult, for the duration of the period of entitlement of the State pensioner. This provision is applicable to the State pension, contributory, State pension, transition, and the State pension, non-contributory, and will come into effect for new claims made from 24 September 2007.

Section 15 provides that where a recipient of invalidity pension subsequently qualifies for State pension, contributory, or a pension payable under reciprocal arrangements by another state, he or she shall be entitled to receive whichever payment is the most beneficial. Section 17 provides that guardian's payment, contributory, and guardian's payment, non-contributory, shall not be payable simultaneously with a payment under Part VI of the Child Care Act 1991.

Section 18 provides that, for the purposes of the bereavement grant, "qualified child" shall include a person aged between 16 and 22 who is in receipt of disability allowance. Section 19 contains a technical amendment to clarify that the widowed parent grant is applicable to recipients of widow's and widower's contributory pensions which are payable under the Social Welfare Consolidation Act 2005.

Section 20 provides that where a person who was in receipt of a widow's or widower's payment ceases to be a widow or widower and subsequently applies for jobseeker's allowance, payment of the allowance will commence without the application of the "waiting days" condition normally applicable for that allowance.

Section 21 provides for an increase in the upper earnings limit for customers in receipt of the one-parent family payment from €375 to €400 per week. This provision is effective from May 2007. Section 22 confers power to make regulations to provide for a transitional payment where a deserted wives benefit beneficiary's entitlement ceases because her earnings have exceeded the prescribed upper limit of €20,000. Section 23 provides for a means-tested payment equivalent to up to half the carer's allowance rate to certain persons who may also be in receipt of another social welfare payment.

Section 24 provides that where a person is unemployed for 12 months and in receipt of rent supplement, he or she may engage in full-time employment, or where a person participates in a community employment or back to work scheme, he or she will continue to receive rent supplement if he or she has been accepted as being in need of accommodation under the rental accommodation scheme. This section also provides at Schedule 1 for the transfer of certain functions from the Health Service Executive to the Department of Social and Family Affairs, as recommended by the Core Functions of the Health Service Report and as agreed by Government. In effect, the section removes the HSE from the administration of the supplementary welfare allowance scheme.

Section 24 also provides for a number of consequential amendments to existing provisions in the area of appeals, overpayments and recovery of overpayments arising from this. This is a technical change, necessitated by the fact that, following the transfer, the staff concerned will no longer be employees of the HSE. The section also provides for measures to preclude the payment of rent supplement where accommodation standards, as defined by the Department of the Environment, Heritage and Local Government, are not met. In addition, the section contains the legislative provisions to preclude the payment of rent supplement in areas of regeneration, as identified by the same Department.

Section 27 provides for an increase in the amount of the annual respite care grant from €1,200 to €1,500 from June 2007. The section also provides for an enhancement of the scheme by providing that, subject to the conditions that may be prescribed, a person may engage in education and training and still qualify for the grant.

Section 28 clarifies the obligation of a claimant to provide the information and evidence required in support of a social welfare claim, and to inform the Department of any relevant change of circumstances in the course of payment. Section 29 outlines in legislation the five factors, based on European Court of Justice case law, that are taken into account when determining whether a claimant for certain social welfare schemes satisfies the habitual residence condition.

Section 30 provides for the exchange of relevant employment data between my Department, the Revenue Commissioners and the Minister for Enterprise, Trade and Employment to facilitate the operation of the agency established under Towards 2016 with responsibility for ensuring employment rights compliance. Section 31 contains measures to further strengthen control in issuing personal public service numbers. They include increased penalties, enhanced identity measures and provisions to combat the use of fraudulent documentation.

Section 32 provides for the household budgeting scheme to encompass any telecommunications service provider which is registered with the Commission for Communications Regulation. Section 33 contains provisions for the inclusion of the managers and staff of social welfare branch offices in the categories of persons designated to decide claims for certain social welfare payments under the social welfare code. This measure is intended to facilitate improvement in claim processing times in branch offices by removing the current requirement to forward certain claims to social welfare local offices for decision.

Section 34 provides for an improvement in the means test applicable to disability allowance by increasing by €30,000, from €20,000 to €50,000, the amount of capital which is disregarded for the purposes of the means test. It also provides for some technical amendments to Schedule 3 of the Social Welfare Consolidation Act 2005.

Section 35 provides a number of enhancements to the means test for entitlement to supplementary welfare allowance, including the exclusion from means assessment of any moneys received by way of guardian's payments and respite care grant. This section also provides for the disregard, for rent supplement purposes, of 50% of additional income, including earnings from employment to a maximum of €200 per week and subject to a minimum disregard of €75 per week. This, together with the improvement in section 24, whereby a rent supplement recipient accepted for the residential scheme may engage in full-time employment, is aimed at supporting people returning to work and to assist tenants in achieving long-term housing solutions for their needs.

The Department recently met with the social partners to discuss the proposed measures and will hold further consultations with the social partners shortly. Arising from these discussions, some further adjustment to the measures may perhaps be suggested. In that event, I may bring forward proposals to Government for the inclusion of any necessary amendment to the Bill on Committee Stage.

The main measures I am introducing in this Bill with regard to the Pensions Act will further enhance the regulatory regime governing supplementary pensions. Section 36 and Part 1 of Schedule 2 make provision for the inclusion of trust retirement annuity contracts — trust RACs — within the remit of the Pensions Act 1990. This is a requirement under Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision — the IORPs directive. This amendment to the Pensions Act only applies to trust RACs which currently have approximately 10,000 members. These are arrangements for groups of individuals established under trust, for example, the Law Society of Ireland or the Institute of Chartered Accountants of Ireland. This amending provision treats trust RACs in a similar manner to that already provided for in the Pensions Act 1990 in respect of defined contribution occupational pension schemes.

Part 2 of Schedule 2 contains amendments to the Pensions Act to enhance the Pension Board's powers in the area of prosecution. Section 3A of the Pensions Act was inserted by section 39 of the Social Welfare Law Reform and Pensions Act 2006 to provide an alternative to the prosecution of an offence by the Pensions Board. It allows the board introduce an on-the-spot fine regime as an alternative to taking a prosecution. Section 3A is now amended to specify the sections of the Act, a contravention of which will warrant the application of an on-the-spot fine. Contraventions of the Act which are not specified under section 3A because they do not, in the board's view, meet the criteria for an on-the-spot fine will be considered for prosecution by the board.

The Pensions Act is also amended to increase the level of fines for both summary and indictable offences under the Act from €1904.61 to €5,000 for a summary offence and from €12,697.38 to €25,000 for an indictable offence. It provides that fines imposed under the Act shall not be paid out of the resources of the scheme or trust RAC, or out of the assets of any PRSA, as the case may be.

Part 3 of Schedule 2 to the Bill provides for a number of miscellaneous amendments which are mainly technical in nature, namely, the insertion of two new sections into the Pensions Act in regard to the accountability of the chief executive of the Pensions Board and the Pensions Ombudsman before the Committee of Public Accounts. This amendment is in compliance with the requirements of the Report of the Working Group on the Accountability of Secretaries General and Accounting Officers — the Mullarkey report. I thank the Pension Board for its help in drafting these amendments to the Pensions Act.

Section 37 amends the Taxes Consolidation Act 1997 to underpin the proposals in Towards 2016 for the Revenue Commissioners to transfer to the Minister for Enterprise, Trade and Employment, and the new office dedicated to employment rights compliance, information similar to that which the Revenue Commissioners will be empowered to transfer to my Department. Section 38 and Schedule 3 of the Bill amend the Combat Poverty Agency Act 1986 and the Family Support Agency Act 2001 to provide that the director and chief executive officer, respectively, of these agencies, which are under my remit, are accountable to the Committee of Public Accounts on the same basis as are the Accounting Officers of Departments.

This Bill builds further on the development of social inclusion measures adopted by this Government over recent years. It safeguards the living standards of those who rely on social welfare income and other supports and prioritises the allocation of resources in favour of those most in need. Resources will continue to be targeted at helping those most in need in order not alone to raise their standard of living but to ensure that everyone is a valued citizen who can make his or her own individual contribution to society regardless of his or her particular personal circumstances. However, while the significant social issues we face can be eased, they cannot be solved by welfare and support payments alone. It is vitally important that we do not view welfare solely as a panacea. That is why a "one size fits all" welfare system does not provide the answers. Welfare support systems must be tailored to the specific needs of individuals and should be seen as stepping stones to achieving a better quality of life.

The Bill is also about solid and fundamental structural reforms of welfare policies. It is about reforms that will modernise, make the welfare system fairer and deliver more enlightened social policy, which the country deserves. For these reasons, I commend the Bill to the House and look forward to a constructive debate.

See this speech in context