Arthur Morgan (Louth, Sinn Fein)

Sinn Féin made several proposals in its pre-budget 2008 submission on social welfare, very few of which were taken on board. The amendments would have gone some way towards bringing about a more efficient and better social welfare system.

We support the Bill on the basis that any increases in areas such as child benefit and the one-parent family payment are sorely needed. We will not act as an impediment to their introduction. Only last week we saw publication of a report from the Vincentian Partnership for Social Justice which revealed how low-income families are struggling to make ends meet. These families could not manage in 2007 despite far higher increases in the budget for that year, so they do not have a hope this year. Budget 2008 gave the Government the opportunity to take a decisive step towards meeting the national target of reducing consistent poverty to between 2% and 4% by 2012 and eliminating it completely by 2016. The Tánaiste and Minister for Finance, Deputy Cowen, may have described it as a responsible budget but it was not a sensible one.

Last year Sinn Féin called for the whole social welfare system to be overhauled. We called for the Minister to iron out the many anomalies that cause difficulties by preventing people from returning from welfare to work and even from applying for welfare. We argued for the abolition of the qualified adult payment, a payment which is both too low and discriminatory. We argued against situations such as the one that pertains currently in which the equal opportunities child care scheme is being replaced with a scheme which will deprive low-income families of a child care place. This flies in the face of the Minister's proposed reforms of the lone parent allowance, under which parents will be obliged to return to work when their children reach the age of eight regardless of whether the State has enough child care places to accommodate their children. We called for simplification of the social welfare system by doing away with 12-page application forms such as that for the one-parent family payment. We wanted flagging systems put in place, perhaps through the taxation system, to advise people automatically of their welfare rights. We wanted steps to ensure a smooth transition from welfare to work by, for example, not raising the income thresholds for rent supplement, which allows individuals to earn very little before losing their allowance and potentially their homes.

We saw a number of small increases in this year's budget, some of which are being implemented in the Bill. We welcome these, no matter how small, but as I have outlined, they do not go far enough. Last December in this Chamber I got into an argument with the Minister, Deputy Cullen, about the nature of these increases. I said that I accepted not everything could be delivered in view of the economic slowdown, and the Minister took umbrage. Despite all the evidence to the contrary, he retorted that the economy was not slowing down and had a go at me about how successful the economy actually was. If the economy is that successful, can he explain why this Bill only provides for €6 extra in child benefit? Why are we not increasing fuel allowance or introducing paid paternity leave this year?

I recognise that there are some improvements in the Bill — for example, in the area of payment methods. The transfer of the domiciliary care allowance from the Department of Health and Children to the Department of Social and Family Affairs, as other speakers have pointed out, may streamline and improve the system. I welcome the Government's commitment to the national carers strategy. Along with every other public representative, I have met many carers, and the work they do is essential to the running of our society, although it has been hugely undervalued and underpaid to date.

There are other omissions in the Bill. For example, what is the Minister doing to address the plight of elderly returned emigrants who are experiencing difficulties in accessing pension and other welfare payments due to the habitual residence requirement? The difficulties caused by the application of this requirement have been highlighted by the Crosscare Migrant Project, which has stated that the restrictions are often applied inconsistently and are a deterrent for Irish emigrants who are thinking of returning home. This issue was raised again just this afternoon during Priority Questions. Unfortunately, this Bill as it now stands will not ease the burden of the poor in society. It makes a number of changes to methods of payment but it does not go far enough in making the whole payment system more efficient. I call on the Minister to use this year to review a number of payments and the methods by which they are paid.

The present policy on pensions is neither equitable nor progressive. It is failing low-paid workers and women. Little attention is paid to the escalating costs of inequitable tax reliefs which are not succeeding in extending pension coverage among the lower paid. A wealthy minority has been able to take advantage of excessively generous tax incentives paid for by all workers, including low-paid workers, through the general taxation system. My party believes that the provision of a basic non-means-tested universal pension for all people of retirement age, funded from the general taxation system, is the only option in which the objective is to ensure independent pensions for all men and women. This would also be the most progressive and redistributive option. The amount of the pension would be based on what is necessary for a pensioner to achieve a certain, specified, decent standard of living. A second-tier pension related to social insurance contributions, under which homemaker disregards would be replaced with gender-neutral carer's credits for years spent on caring duties, should augment this basic pension. In conjunction with this, a significant and immediate curtailment of tax incentives for occupational pensions, PRSAs and approved retirement funds is required. The objective should be the elimination of these incentives and a redirection of this funding into basic non-means-tested pensions.

The state of the social insurance fund has not received sufficient attention. The main conclusion of the actuarial review of the social insurance fund, which was published last autumn but was available to the Government prior to that, was that while total income to the fund is projected to equal or exceed benefit outgoings up to 2010, the net cashflow position is projected to decline rapidly thereafter. On the basis of the central economic assumptions and benefits indexed in line with earnings, the surplus will be exhausted by 2016.

In advance of the election, Fianna Fáil put forward proposals to cut employee PRSI from 4% to 2% and to cut PRSI for the self-employed from 3% to 2%. Sinn Féin attempted to highlight the devastating impact the implementation of such proposals would have on the delivery of social protections. We highlighted the fact that there were already serious concerns about the adequacy of the social insurance fund based on the findings of the first actuarial review. The latest review has reinforced these concerns and found that, in fact, contribution rates will need to increase substantially if the fund's income is to be adequate to support the benefits being paid from the fund in the future. How much worse would this scenario be if the Fianna Fáil proposals to cut PRSI contributions were implemented?

My party believes there must be a focus on maintaining an adequate social insurance fund so that the State is in a position to improve social protections, raise social welfare rates, improve maternity benefit including length of leave, introduce payments in respect of parental leave, increase redundancy entitlements and introduce a reformed State pension. The sooner that happens, the better for all.

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