John Perry (Sligo-North Leitrim, Fine Gael)

I thank Deputy Mitchell for sharing time. When contributing to the Second Stage debate on new legislation, it is the normal expectation Deputies would speak to the detail of the Bill. However, in the case of this legislation from the Minister, Deputy Harney, I call on the Government to withdraw the Bill and start again. To paraphrase the old adage, given where the Government wants to get to, this is the wrong place to start. Even at this late stage it is not too late to correct this mistake.

The introduction of a universal automatic entitlement to a medical card for the over 70s was announced with great fanfare by the previous Fianna Fáil Taoiseach. Perhaps he wanted to cement one good deed into history with a grand gesture to rival the introduction of free travel for pensioners by a previous Fianna Fáil leader, the late Mr. Charles Haughey. In the Bill before the House the principle of a universal automatic entitlement to a medical card for the over 70s is being deconstructed by the Taoiseach and the Minister. Even worse, it is being deconstructed in a way that is vague and sees the reintroduction of means testing. Worst of all, the number of pensioners to lose their medical card will be relatively small. With all the resources at the Minister's disposal, is this Bill the best option she can choose to achieve some minimal short-term cash savings which are decreasing by the week? Did she not consider any other options?

When the Minister started this review, she could have examined the demographics and other statistics to find an age somewhere between 70 and 105 years, for example, whereby she could still preserve the principle of a universal automatic entitlement to a medical card. The Fianna Fáil Government should have been able to find an age bracket that would ensure the entitlement was preserved for some age band of pensioners. The fact that the Minister did not do this suggests the Bill is the precedent that removes the automatic entitlement for a starter group of pensioners and that the age selected and the flexibility in the means test protocol will be used to gradually expand the band of pensioners to be excluded from entitlement in future years. Cutting off entitlement to the medical card for a small number of older people now, approximately 20,000 according to the Minister's estimate, does not make any sense, unless the real agenda is to gradually exclude more in the future.

Having abolished the universal automatic entitlement to a medical card for the over 70s, the Minister seems to have had second thoughts and has now introduced a new three tier system of entitlement for the over 70s. One category is those who can receive a medical card based on an assessment of their financial circumstances. A second category is those people over 70 years whose income is above the specified income limits but who can apply to the HSE for a discretionary medical card on the basis that their health circumstances cause undue financial hardship. The third category of people over 70 years will be denied a medical card under the terms of the Bill.

Current medical card holders over the age of 70 years will have to make a voluntary declaration to the HSE by 2 March next year if their income is above the thresholds. People who turn 70 years after next January and who do not have a medical card will have to undergo what the Department of Health and Children describes as a simplified means test to establish that their income does not exceed the threshold. Perhaps the Minister would explain what is meant by "simplified", because it is far from simple when the application is being processed. The Bill provides for a complex bureaucratic calculation protocol covering gross income, including income received through pensions, interest on investments or savings, rents from property and income from part-time employment. All of this is to be done on the basis of a voluntary declaration by the pensioner.

The signals from the Bill are that people who worked hard all their lives, made a success of their career, achieved a good standard of income and managed to save a good lump sum for use in their declining years are now to be penalised by the State. In their years as pensioners they are to lose out in comparison with others. This is not fair. Effectively, the Bill provides for an honour system of voluntary declaration on the means test protocol. I will agree with the Minister on one point, that, by and large, those who are likely to lose their entitlement to a medical card are people of personal honour. All their lives they were model citizens, independent and responsible, earning their living, paying their taxes and saving for the future. Furthermore, we must not forget that even as pensioners they are still paying taxes. These people are more deserving of a universal automatic entitlement to a medical card than many others. If the country cannot afford the automatic entitlement in these more difficult economic times, I propose that the Minister consider the concept of retaining the universal automatic entitlement to a medical card and asking these citizens to make a moderate annual co-payment as an alternative way to cover the budgetary gap.

I believe in the principle of universal entitlement to a medical card. I was Chairman of the Committee of Public Accounts when this proposal was introduced in 2002. The advice was given to the Minister at the time but the calculations by the Department were totally inaccurate. The universal entitlement to a medical card was introduced in an attempt to win the 2002 general election.

People are taxed throughout their working lives and through the probate system. Many have made a considerable contribution, have half pensions and are still paying income tax. In many cases, the only benefit they receive is the reassurance provided by a medical card.

Many people have lost substantial savings. In recent weeks, I heard of a case of a senior citizen with a large shareholding in the Bank of Ireland whose savings declined in value from hundreds of thousands of euro to less than €100,000. This person is so concerned and experiencing such stress that their life expectancy is likely to have been shortened considerably.

A large number of independent elderly people who are not supported by sons or daughters live in private nursing homes at their own expense. The value of shareholdings and investments has declined as a result of the current financial debacle, while State investment in pensions is declining daily. Many people invested privately in blue chip companies having been given the impression by the Government that these companies and the banks were the best places to invest. Their investments are now worth very little. In the past year, for example, the value of Bank of Ireland shares has declined from €18 euro per share to slightly more than €1. I appeal to the Minister to reintroduce an automatic entitlement to a medical card for those aged 70 years and over. This is the least those in their senior years should expect.

See this speech in context