Mary Hanafin (Dún Laoghaire, Fianna Fail)

Tá an-áthas orm an Bille seo a chur os comhair an Teach. The legislation will implement the €515 million package of social welfare improvements announced in budget 2009. In very difficult economic circumstances this package will bring total expenditure on social welfare in 2009 to €19.6 billion, which is an increase of €2.6 billion or 15.5% over the Estimates allocation for 2008.

At a time when public expenditure must be tightly controlled, this increased provision for social welfare is a clear signal of the Government's commitment to protect the vulnerable and less well-off in society. The budget provides for increases of between 3% and 3.8% in the basic social welfare payments next year. These increases are above projected inflation for 2009 and so will broadly maintain the real value of these payments. They are also in line with the wage rises agreed by the social partners in the second phase of the national pay agreement. The schemes and other supports which the Department of Social and Family Affairs administers will benefit over 1.7 million people, including 440,000 pensioners, 345,000 ill and disabled people, more than 80,000 carers, 30,000 low income families availing of family income supplement and more than 580,000 families who receive child benefit payments.

The budget includes provision for an average live register figure of 290,000 in 2009. This compares to an average of 216,490 in the ten months to October this year and an expected average of 220,000 for 2008 as a whole. Providing for the expected increase in the live register alone accounts for €1.25 billion of the planned increase in spending for 2009.

In these extraordinary economic times, the Government has had to make some difficult decisions in order to secure our economic future. However, we have still made provision for an increase of €2.6 billion in social welfare expenditure next year and have kept expenditure control measures in this Department to an absolute minimum. I will now outline to the House the improvements in payment rates which will be given legislative effect in the Social Welfare Bill.

As regards older people, we are all aware that the price of fuel is an issue of major concern for many people but particularly for the elderly and the ill. I am pleased that the budget provides for an 11% increase in the value of the fuel allowance, bringing it to €20 a week from next January. The duration of the fuel season is also being extended by another two weeks from April 2009, bringing it to 32 weeks in total. These improvements to the fuel scheme will cost almost €30 million extra in 2009 and will benefit nearly 300,000 households.

The budget also provides for increases of €7 per week in the maximum personal rates of payment for State pension contributory and State pension transition from the start of January 2009. This will bring the new weekly rate to €230.30. The State pension non-contributory is also being increased by €7 per week bringing the new rate to €219 per week from January 2009.

While providing for increases in the State support for today's pensioners, the Government is also conscious of the need to develop a new long-term pensions framework to serve future generations of pensioners. I am pleased to be able to inform Deputies that we are close to the end of a very protracted policy review of issues in this whole area which started with the publication by the Pensions Board of its national pensions review and its report on mandatory pensions, Special Savings for Retirement, just over two years' ago. A Green Paper on pensions was published this time last year allow the debate encompass all aspects of pensions policy in this country. We completed a very successful consultation process at the end of May and to which some Deputies made submissions. We received a wide range of suggestions covering all possible avenues of reform with at one end of the spectrum, an earnings-related pension operated through the social insurance system, and at the other end, a continuation of the existing voluntary arrangements with enhanced tax incentives. While there is a general acceptance that we need to reform our pensions system, no consensus on the way forward has emerged.

The results of the consultation process are probably not that surprising and in the absence of an agreed approach the Government is now proceeding to devise a policy for the future of our pensions system. It bears repeating that there is no such thing as a free lunch when it comes to pensions. If we want a good system we will have to pay for it, whether it is organised through the social insurance system or by way of the private sector. The challenge is to strike the right balance between the responsibilities of all those who can contribute, including the State, employers and employees, and to ensure that whatever system is decided upon, the group who are most in need of pensions coverage, the low to middle-income earners. This is the challenge and the aim is to announce a framework for future policy by the end of the year.

With regard to social welfare payments to people of working age, the budget provides an extra €260 million for such schemes. The maximum personal rate of payment for all working-age schemes is being increased by €6.50 per week with effect from the first week of January 2009, with proportionate increases applying to people on reduced rates. This brings the lowest social welfare weekly payments above €200 for the first time to €204.30. The rates of qualified adult payments are also being increased on all schemes by €4.30 except for the invalidity pension scheme where a €4.60 increase will apply. About 733,000 people will benefit from these increases.

Budget 2009 also provides increases for families with children who are in receipt of social welfare payments. Social welfare-dependent parents currently receive an extra €24 a week for each child on top of their basic social welfare payments, through what is termed the qualified child increase. This is being increased by €2 to €26 per child, with effect from January 2009.

Improvements are also being made to the family income supplement which is paid to low-income working families. The income limits for the FIS are being increased by €10 a week in respect of each child, giving an average extra payment of €6 per child a week. It is estimated that a total of 29,000 families will benefit from FIS in 2009 and that approximately 2,000 additional families will become eligible for a FIS payment.

The income thresholds for entitlement to back to school clothing and footwear allowance are also being increased to enable 18,000 more families to benefit from the scheme. The Government decided in budget 2009 that with effect from January 2010, child benefit will no longer be paid in respect of children who are 18 years of age. This change is being phased in gradually and the Bill provides that a half-rate payment of the appropriate rate of child benefit will be made in respect of existing and future qualifying 18 year olds from 1 January 2009 to 31 December 2009.

Special alleviating measures are being introduced in respect of children aged 18 years who are in social welfare-dependent families or low-income families. A compensatory payment of €15 per week will be paid to families in receipt of social welfare payments which include a payment for a qualified child in this age group and to low-income families in receipt of family income supplement which include qualified children in this age group. This additional payment will also be applicable where an 18 year old is in receipt of disability allowance in his or her own right. Compensatory payments will be paid to the person who was receiving the child benefit for the 18 year old in question. In addition, the back to school clothing and footwear allowance will be increased by €215 to €520 per annum for eligible 18 year olds. These compensatory payments will cease on 31 December 2010.

While policy in relation to the early child care supplement is the responsibility of the Minister of State with responsibility for children, the Social Welfare Bill will provide the legislative basis for the change to the scheme as announced in the budget. The cost of the early child care supplement in 2009 is expected to be €397 million. The primary aim of the scheme was to help parents with the cost of preschool child care. The payment was introduced for children to the age of six, even though most children start school well in advance of their sixth birthday and the burden of having to pay for full-time child care ceases at that point.

The approach taken in 2005 was the most generous possible, to ensure that no child would lose the payment before starting school; however it is now considered that a more targeted approach is consistent with the current economic context. With effect from January 2009, the eligibility period for children qualifying for the early child care supplement will be reduced from six years to five years and six months. The supplement will also be paid on a monthly rather than a quarterly basis as at present. The combined effect of these measures is expected to result in savings in the Department of Health and Children Vote of some €93 million in 2009.

I will outline the changes being made to certain social insurance schemes. Deputies will be aware that Ireland's social welfare system is based on two different types of entitlement: a social insurance system for people who have paid sufficient PRSI contributions and a social assistance system for people without adequate contributions who have little or no household means of their own. Social insurance is intended both to enable people to insure themselves against adverse life events such as unemployment or illness and to provide for their State pensions and other benefits, through contributions to the national social insurance fund. Social insurance benefits are not means-tested; entitlement depends on having paid the required number of PRSI contributions relevant to the particular benefit being claimed. For the past 11 years the social insurance fund has been in surplus, with more than sufficient income to the fund to cover the payments being made from it each year, without the State having to provide a contribution. However, this is changing. As a result of further increases in the live register, expenditure is expected to exceed income to the fund by over €200 million this year and approximately €900 million next year. Although these current deficits can be met from the accumulated surplus, it seems likely that annual Exchequer subvention to the social insurance fund will be required again within a few years.

In this context it is appropriate to look at some of the instances where people with a very limited or distant contribution record have been able to qualify for very significant benefits, regardless of their household income. Currently, people who have paid just 52 weekly contributions in total can qualify for jobseeker's benefit, illness benefit and health and safety benefit. This means, for example, that recent migrants or young workers who have only worked here for a total of one year are entitled to claim jobseeker's payments for 12 months. This will change from next January, when the number of required paid contributions will be doubled to 104 for new claimants.

A further anomaly that exists at present is that some people who were previously working part-time can receive a higher rate of payment from these schemes than what they were actually earning while at work. Again, this is considered to be inappropriate and a disincentive to employment. From next January, therefore, this situation will be addressed by increasing the earnings thresholds which currently apply to the reduced or graduated rates of payment from €150 to €300 per week.

At present, it is necessary to have made 13 paid contributions in the relevant tax year in order to qualify for illness benefit. However, this condition does not exist for jobseeker's benefit, with the result that people who may not have paid PRSI contributions in the past number of years can qualify. Again, it is considered that this position does not adequately reflect the contribution-based rationale for social insurance and so, from next January, the Bill provides that new claimants for jobseeker's benefit will be required to satisfy the same conditions as those on illness benefit and must have paid 13 contributions in the relevant tax year to qualify for benefit.

The other two changes being made to jobseeker's benefit relate to the duration of the payment. At present, people who have 260 or more paid social insurance contributions can receive jobseeker's benefit for up to 15 months. The Bill provides that, with effect from 15 October 2008, this is being limited to 12 months for current claimants with less than six months duration on the scheme, as well as all new claimants. Where the claimant has less than 260 paid contributions, the maximum duration of jobseeker's benefit will be nine months instead of 12 if the claimant currently has been in receipt of benefit for less than three months and in respect of all new claimants.

In summary, the Bill provides that new claimants for jobseeker's benefit will in future have to have paid a total of at least 104 contributions to the Social Insurance Fund, with at least 13 of these paid in the relevant tax year, and the duration of the payment will be either 12 or nine months depending on the number of social insurance contributions they have made in the past. I stress that the people with limited means who will be affected by these restrictions in entitlement to social insurance benefits will be able to claim jobseeker's allowance or another social assistance payment, such as the supplementary welfare allowance. The maximum rate of jobseeker's allowance is paid at the same rate as jobseeker's benefit.

Deputies will be aware that changes to the Money Advice and Budgeting Service and the Combat Poverty Agency were also announced on budget day. The Bill is amending the Citizens Information Acts 2000 to 2007 to enhance the functions of the Citizens Information Board through the assignment to it of responsibility for the provision of the Money Advice and Budgeting Service. MABS staff provide a highly valued service to people who are over-indebted and need help and advice in coping with debt problems. However, it has been recognised for some time that the service needs a proper legislative basis and structure. After detailed consideration, the Government decided that assignment of the responsibilities to the Citizens Information Board would best achieve that outcome. The MABS and citizens information centres complement each other as both are involved in providing information, advice and advocacy services to the public. In addition, the Citizens Information Board has a long association with the MABS at both national and local level and was involved in establishing some of the original MABS pilot projects.

The proposals envisage that the MABS will be a separate and distinct service within the Citizens Information Board. There will be no change in the status of the 53 independent MABS companies with voluntary boards of management, nor in the employment status of their 240 employees who provide the local services. The Bill as published does not contain legislative provisions to give effect to the decision to integrate the Combat Poverty Agency with the office for social inclusion. As I will detail in a few minutes, it is intended to introduce such provisions on Committee Stage.

I will now outline the main provisions of the Bill. Sections 3 and 4, together with Schedules 1 and 2 to the Bill, provide for increases in the rates of social welfare payments. These include an increase of €7 per week for recipients of pensions and carer payments who are aged 66 years and over. The Bill also provides for an increase of €6.50 on all working age payments, including jobseeker's benefit, disability allowance, one-parent family payment and carers benefit and allowance payable to carers aged under 66 years. It further provides for increases in the allowances payable in respect of qualified adults and qualified children. These increases come into effect in January 2009.

Section 5 provides for increases in the weekly income limits used to determine entitlement to family income supplement. The new thresholds range from €500 in the case of a family with one child to €1,250 in the case of a family with eight or more children. These increases will take effect from January 2009.

Sections 6 and 7 provide for an increase from €50,700 to €52,000 in the annual PRSI earnings ceiling applicable to employees and optional contributors. This amendment comes into effect from 1 January 2009.

Section 8 provides that income from dividends arising from stallion fees, stud greyhound fees and profits from the occupation of certain woodlands will be taken into account in estimating reckonable income for PRSI purposes. This amendment is necessary to disregard the provisions of section 140 of the Taxes Consolidation Act 1997 when estimating reckonable income for PRSI purposes.

Sections 9 to 11 provide for amendments to various definitions. Sections 9 and 10 provide for the amendment of the references to a reformatory or industrial school and medical practitioner which are contained in the Social Welfare Consolidation Act 2005 by replacing those terms with the definitions "children detention school" and "registered medical practitioner", as provided for in the Children Act 2001 and the Medical Practitioners Act 2007 respectively. Section 11 amends the definition of "widowed parent" in order to provide that the grant will be payable to a widow whose child is born within ten months of the date of death of the deceased spouse.

Section 12 provides for the deletion of a provision which applied to persons who were in receipt of pre-retirement allowance prior to April 1993. This provision is obsolete as all recipients of pre-retirement allowance would have transferred to State pension payments before or during 2004.

Section 13 clarifies that, for the purposes of the one-parent family payment scheme, a "qualified parent" must be the parent, step-parent, adoptive parent or legal guardian of the qualified child. It also provides for continued payment to existing recipients who established entitlement under the current definition of "qualified parent".

Section 14 provides for amendments to the provisions governing payment of rent and mortgage interest supplement under the supplementary welfare allowance scheme. It provides that the maximum amount of rent supplement will be specified in regulations. It also provides that the amount and duration of mortgage interest supplement will be determined by the Health Service Executive having regard to the circumstances of the person concerned and subject to any conditions and so forth that may be prescribed.

Section 15 provides for a number of amendments to the provisions governing the illness benefit scheme, with effect from 5 January 2009, as follows: the minimum number of qualifying contributions required will be increased from 52 to 104; illness benefit will be payable for 624 days — two years — in the case of a person who has more than 260 paid PRSI contributions; payment will continue where a person has been in receipt of illness benefit on a long-term basis, provided that the claim is not broken for a period exceeding three days; and existing special provision for claimants who participate in reactivation programmes will be maintained.

Section 16 provides for amendment to the provisions governing the health and safety benefit scheme by increasing, from 52 to 104, the minimum number of PRSI contributions required in order to qualify for benefit, and providing that the claimant must have at least 13 paid PRSI contributions in the relevant tax year.

Sections 17 and 18 provide for amendments to jobseeker's benefit. At present, the social welfare legislation provides for the disregard of certain periods where a jobseeker's benefit claimant participates in specified training and employment schemes. Section 17 provides for the extension of the linking period in respect of jobseeker's benefit to two years and six months in the case of a person who is participating in certain vocational training opportunities schemes.

Section 18 provides for a number of amendments to the jobseeker's benefit scheme as follows: an increase, from 52 to 104, in the number of PRSI contributions required in order to qualify for benefit; a requirement that the claimant must have 13 qualifying contributions in the relevant tax year; amendments to the duration of benefit, namely, 12 months in the case of a person who has paid at least 260 PRSI contributions and nine months in the case of a person who has paid less than 260 PRSI contributions; and special provision for claimants who were in receipt of jobseeker's benefit on budget day, 14 October 2008.

Provision was made in the Social Welfare and Pensions Act 2008 for the transfer of the administrative responsibility for domiciliary care allowance from the Department of Health and Children to the Department of Social and Family Affairs in 2009. While those provisions have not yet been given effect, section 19 of the Bill provides for amendments to the domiciliary care allowance scheme. These include reflecting the amendment to the definition of children detention school, as provided for in section 9 of this Bill; and providing an increase from €299.60 to €309.50 in the monthly rate of the allowance.

Section 20 contains amendments to entitlement to child benefit by providing that the benefit will be payable in respect of a child up to his or her 18th birthday. It also provides that a special payment of half the standard child benefit payment rate will be payable in 2009 only in respect of qualified children who are currently aged 18 years. Special provision is made to provide for a compensatory payment of €15 per week to families in receipt of social welfare payments, which includes a payment for qualified children in this age group, and low-income families in receipt of family income supplement, which includes qualified children in this age group. This additional payment will also be applicable to persons within this age group who are in receipt of disability allowance in their own right. This compensatory payment measure will cease to have effect on 31 December 2010.

Section 21 provides for a small increase in the rate of early child care supplement to €92 per month to facilitate transition from quarterly to monthly payments. It also provides that payment will be made monthly in arrears rather than on a quarterly basis, and that the supplement will be payable in respect of a child up to the age of five years and six months. These amendments will take effect from 1 January 2009. Section 22 provides for the deduction of any contributions payable under the income levy in calculating weekly family income for the purposes of family income supplement.

Part 3 provides for miscellaneous amendments to other Acts. Amendments to the pension Acts are covered in section 23. It clarifies requirements for the submission of an actuarial funding certificate for new schemes commencing on, or after the date, of transposition of EU Directive 2003 741/EC of 23 September 2005. The amendments also confirm that eight named schemes shall have an effective date for the submission of an actuarial funding certificate of 1 January 2009.

Regarding the Civil Registration Act 2004, section 24 removes the requirement for an tArd-Chláraitheoir to consult with the Minister for Health and Children when giving information to certain specified others. This change is necessitated in the context of the transfer of functions regarding the General Register Office from the Minister for Health and Children to the Minister for Social and Family Affairs.

Part 4, covering sections 25 to 28, inclusive, provides for the proposed transfer of the functions of the Money Advice and Budgeting Service to the Citizens Information Board. The purpose of the measure is to provide that the board will support the provision of the Money Advice and Budgeting Service. It will promote, develop and disseminate information and education about debt, money management and related matters. It will compile and publish data, undertake research and provide the Minister with information and advice on matters related to its functions.

I will be bringing in several amendments to the Bill on Committee Stage. These will include a saver provision, to preserve the duration of entitlement to jobseeker's benefit for a claimant who transfers temporarily to carer's benefit or carer's allowance. There will be a redrafted provision for the revised arrangements applicable to child benefit to more clearly set down the arrangements for the compensatory payment of €15. In anticipation of the transfer of administrative responsibility for blind welfare allowance from the Department of Health and Children to the Department of Social and Family Affairs, an amendment will be introduced to provide for an increase in the rate of the allowance.

An amendment will also be introduced to give effect to the Government's decision, announced in the budget, to provide for the integration of the Combat Poverty Agency and the Office for Social Inclusion within the Department. It is not my intention that the Combat Poverty Agency will simply be absorbed into the Office for Social Inclusion in its existing form. Rather a new strengthened division will be created which will make the best use of the considerable experience and expertise of the staff of both existing bodies. It will seek to address the weaknesses identified by the recent review of the agency to both. This new division will provide a stronger voice for those affected by poverty and social inclusion issues.

As the Combat Poverty Agency is established under statute, legislative changes are required to alter its status. The proposed legislative provisions will entail the dissolution of the agency and the transfer of the permanent staff, property and assets, any pending legal proceedings and any other liabilities of the agency to the Minister, as well as for final accounts of the agency to be drawn up and for related matters. Arrangements regarding the position of the agency staff will be finalised following discussions with the Department of Finance, the staff and their union representatives. It is proposed legislative provisions will be brought into effect by way of a commencement order to enable the smooth transition for the Combat Poverty Agency and the office for social inclusion to the new arrangement.

Pensioners who are paid by electronic methods will receive their increase in full from January 2009. Increases for recipients of jobseeker's benefit and allowance, illness and maternity benefit, one-parent family payment, family income supplement, farm assist and supplementary welfare allowance will be paid in full from January 2009. As has been the case previously, because of the lead-in time involved in the production of personal payable orders, recipients of certain long-term payments such as widows and widowers, carers allowance and invalidity pension will receive their increase in mid-February backdated to January along with their new payable order books. Increases for certain other long-term payments such as State pensions and disability allowance will be paid by a special once-off payment in mid-February to cover 12 weeks' payment to the end of March when new payable order books will be issued.

The Bill will provide the legislative basis for a range of improvements next year. These include €7 extra per week for State pensioners; €6.50 extra per week for welfare recipients of working age, such as jobseekers and those on illness benefit; an extra €2 per week on the fuel allowance, with payment also being made for an additional two weeks; increases in child-related payments to those dependent on social welfare and improvements in the family income supplement for low-income working families; and 18,000 more families becoming eligible for the back to school clothing and footwear allowance.

To fund these improvements, along with making payments to increasing numbers of people on the live register, it has been necessary to make savings in some areas. However, we have kept these expenditure control measures to a minimum. At a time when public expenditure must be tightly controlled the extra €2.6 billion being provided for social welfare in 2009 is a clear signal of the Government's commitment to protect the vulnerable and less well-off in society.

I commend the Bill to the House and look forward to a constructive debate.

See this speech in context