Róisín Shortall (Dublin North West, Labour)

The Social Welfare Bill 2009 is about social welfare in name only. It is unashamedly about extra taxes and reduced benefits with hardly any measures that will actually improve our social security system, help the poor or those struggling in the recession. For the most part, it is a finance Bill in disguise. What concerns me most is how families will be able to afford many of its measures, particularly families with very young children. With the introduction of the health levies under section 12 and the abolition of the early child care supplement under section 8, a single-income family with two children under five years on €40,000 a year will lose €230 per month from their net monthly income. Add the income levy, the abolition of mortgage interest relief, additional excise on diesel and such a family will incur extra costs amounting to more than €3,000 a year. Many families will pay more.

The Labour Party is opposed to the Bill for what it does to family budgets, how it threatens jobs and how it hits easy targets instead of raising revenue in other areas. It contains several of the largest cuts announced in the supplementary budget. It proposes halving and the eventual abolition of the early child care supplement. The supplement may have been introduced by Fianna Fáil to bribe the electorate, but it has since become an essential part of family budgets. As such, its abolition will have a serious impact on the ability of some families to make ends meet. A family with two children under five years will lose €83 a month from 1 May. The same family will lose a staggering €166 a month from 1 January next. That has the same effect as halving child benefit for the same family. It was interesting that when child benefit for 18 year olds was abolished last year in the Social Welfare (Miscellaneous Provisions) Act 2008, a tapering arrangement was provided for welfare recipients with children to allow them to adjust to the sudden drop in income. No such provision is contained in this Bill. Many parents who have lost their jobs will now have to put up with a massive reduction in the amount of support they receive for their children.

Contrary to the impression created by some media commentators, the introduction of a subsidy towards preschool costs only fractionally offsets the substantial loss of income for the young families affected. Instead of a payment of about €5,000 for the first five years of their child's life, parents will now receive a payment for one year in preschool. The abolition of the early child care supplement comes at a time when the cost of child care for families continues to rise - up 5.8% in the past year, yet the budget contained no measures to tackle prices in this sector or to address excessive rent and insurance costs for providers. For many young families, child care costs are often higher than mortgage costs and always higher than the cost of groceries.

One Dublin family with two children under two years this week gave me detailed accounts of their monthly outgoings. One parent works full-time and the other part-time. It costs the family €5,000 on average each month to run the household. They have a modest lifestyle - they have one car, one annual holiday, a two-bedroom ex-council house, are non-smokers and have a mortgage of only €60,000. Even sending the children to a child care facility only three days a week, their child care bill comes to €1,500 a month, 30% of all outgoings. This is the real cost of having young children in 2009. It is the reality that no one in government and few in the media seem to appreciate. Rising child care costs mean that while some families may be benefiting from deflation, the cost of living is actually rising for parents who use child care facilities - the very people hit by this cutback.

The focus of the public has been, by and large, on the extra income levies. However, many do not realise that the doubling of health levy rates represents the single largest tax increase for most workers in the supplementary budget. Section 12 proposes new rates of 4% and 5%, with the 4% rate starting at €26,000 and the 5% rate at €75,036. For that same family on €40,000 to whom I referred, the reduction in take-home pay from the health levy alone will be €66.67 per month, double the income levy bill. The income and health levies combined will take €100 a month from such a family. How on earth is taxing people on modest incomes by taking €100 from their monthly income going to restore consumer confidence or protect jobs? It is a recipe for disaster with people cutting back more and taking more trips to the North. Surely there was scope to introduce a tapering arrangement. Under the proposed arrangement, the effect of the levy is such that a person on €26,500 will have a lower net income than a person on €25,500. Yet again, we have another proposal from the Government that it has failed to work out properly before it presented it. I urge the Minister to adjust it on Committee Stage.

Sections 5 and 6 propose to introduce new rules for job seekers. What precisely has the Minister in mind? The phrasing appears to suggest a job seeker's payment could be refused if a person were not to agree to take a training or development course when requested to do so by a departmental official. All the announcements around the budget suggested such a move was for young people leaving school with no mention of it being extended to everyone, yet that appears to be the intention as the Bill is drafted. No indication is given as to what constitutes a reasonable offer. For instance, one could not offer an unemployed IT specialist a computer course or someone in Drogheda a place on a course in Wexford. Who would pick up the cost of attendance or what would happen if there were transport, family or health issues? Where are the course places? Who will provide them and who will pay? Is there a way of appealing a decision? Will a claimant still be counted on the live register?

As regards the under 20s, the Labour Party believes the worst outcome for a young person is that he or she goes straight from school onto the dole. I have no problem with the general scenario of making welfare payments contingent on attendance at an education, training or development course. However, there are several categories of teenagers that simply will not fit into this scenario. I am concerned about the Bill's proposals in this regard and that the details have not been properly considered by the Minister. I am concerned that it is included among a package of measures designed to save money. It should be introduced only on a revenue neutral basis, with the savings in welfare reinvested in training and development courses. The State will still profit in the long run by preventing long-term dependency on welfare.

There are already several caps in place on PLC and VEC courses, with demand far exceeding supply. There are no guarantees in the Bill that a suitable course will be available to each claimant or on the quality of those courses. Can I take it from the way section 6 is framed that the claimant will not be denied his or her full entitlement to social welfare unless an officer requests him or her to take up a course, and that there will be no automatic disbarring from the current payment? The Minister might let us know how these provisions will work if no course is available because, clearly, there is a lack of sufficient quality training places at present.

What guidelines will the Minister put in place for this scheme? As Deputies, we all get very mixed opinions from the public about individual job liaison personnel. Some claimants get the feeling they are simply being processed, especially when staff are dealing with people in such large numbers, as at present. This reform will be a disaster if that attitude remains. Guidelines in this area will have to be very clear and where disagreement arises between front-line staff and the claimant, there should be a right of appeal. The Minister might consider examining this for Committee Stage.

The Minister needs to clarify what will happen if there is a genuine difficulty in completing or attending a course for any number of reasons, such as family, transport, health issues or the cost involved. For instance, what happens in the case of a young drug user who may get a place on a drug treatment course and must attend daily for methadone? What rules will apply in those circumstances?

There will be some categories of young people for whom the new arrangements will simply not fit. Young people who leave State care may simply not be in a position to take up a training place. If, for example, a young person has left State care, cannot return to the family home and has to rent, he or she will be left with a net weekly income of just €76 per week because of the combined effect of changes in this Bill and changes to rent supplement.

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