Mary Hanafin (Dún Laoghaire, Fianna Fail)

Savings of €2 million are being made through a restructuring of the regional support agencies that work with the family resource centres.

As for the reductions in weekly payments to people with disabilities and carers, I accept these are highly sensitive areas. However, they should be seen in the context of the huge improvements that have been made in recent years. Welfare rates were increased in 2007, 2008 and 2009 by 12.1%, 6.5% and 3.3%, respectively. As a result, even with the reductions provided for in last week's budget, the weekly rate of payment for the disability allowance and carer's allowance still will be almost 20% higher next year than in 2006. Disability allowance will be more than 130% higher than in 1997, while carer's allowance is more than 147% higher than it was in the same period.

These increases have led to real improvements in the day-to-day lives of people affected by illness and disability. Tomorrow evening, my colleague, the Minister of State at the Department of Health and Children, Deputy John Moloney, will outline the improvements made from the perspective of his Department. In addition to improving payment rates, the Government also has enabled more people with disabilities to qualify for the disability allowance by introducing progressive changes to the means test and putting in place generous disregards for people who are able to take up rehabilitative employment. In 2007, the Government increased the capital disregard in the means test for disability allowance from €20,000 to €50,000.

In another important change to the disability allowance and blind person's pension schemes, the Government reformed the assessment of the earnings of spouses or partners in 2007 to ensure that a family will always be better off when a spouse or partner is earning. With effect from September 2007, some €20 per day of earnings, subject to a maximum of three days per week, is now disregarded and the balance assessed at 60%. The arrangements whereby people with disabilities can engage in rehabilitative employment have also been reformed and improved. Prior to June 2006, once earnings exceeded the disregard threshold of €120, any additional income was fully assessed. This was changed in order that any income between €120 and €350 was now subject to a 50% tapered withdrawal rate. The result is that some claimants can earn up to €430 per week before the disability allowance or blind person's pension is withdrawn fully.

Almost one in ten claimants of disability allowance, more than 9,000 people, are engaged in work or are on community employment schemes. Notwithstanding the pressures on services arising from the increases in unemployment, efforts continue to improve the activation of people with disabilities and get them into work, training or education. The disability activation project, which is based in the midlands and supported by the European Social Fund, is testing a multi-agency approach to activation by bringing together agencies such as the HSE, FÁS and the VEC. The work involved can be extremely resource-intensive since in many instances, people will be at the very margins of the labour market and will need much help, including with social skills, before they can take up a job successfully. Between the commencement of the disability activation project and the end of June 2009, some 481 illness payment recipients were invited to attend for interview. Of these, 209 people have met project staff on a one-to-one basis to complete personal progression plans. In addition, training programmes, targeted specifically at people on illness or disability payments in the region, have been held in conjunction with the VEC. As part of this process, key personnel in other agencies were met on an individual basis by the project facilitator to initiate and develop local working relationships and co-operation.

The extent of the Government's commitment to improving the position of people with disabilities in our society can be seen in one simple fact. Taken together, the increase in numbers availing of the disability allowance and sustained increases in the rates of payment, means that even after this budget, expenditure on this scheme will be almost five times greater than it was in 1997. Expenditure on other schemes for people affected by illness and disability, such as illness benefit and invalidity pension, also will have increased by approximately 290% and 170%, respectively, in the same period.

The Government has also dramatically improved the supports provided to carers. It is acutely aware and appreciative of the contribution made by carers to people needing ongoing care and support and is determined to help them as much as possible with this vital role.

The Department of Social and Family Affairs has three payments specifically for carers, that is, the means tested carer's allowance, the social insurance-based carer's benefit and the universal respite care grant. In order to qualify for any of these payments, the applicant must be providing full-time care and attention to a person in need of such care.

A person may engage in employment, self-employment, education or training outside the home for up to 15 hours per week and still be considered to be providing full-time care and attention. The person being cared for must need full-time care and attention and must not normally live in a hospital, convalescent home or other similar institution. Payment rates for carers are 8% more than jobseekers allowance and, in addition, they receive household benefits, free travel, the respite care grant and a more generous means test than for other schemes.

For carers under 66 years of age, the budget in 2007 increased the rate of carer's allowance and benefit by 11.1% to €200 per week. In the budget in 2008, the rate was increased to €214, an increase of 7%. The budget in 2009 increased it to €220.50, an increase of over 3%. In 2010, the rate of carer's allowance for someone aged under 66 is being reduced by 3.85% to €212, which will be just €2 less than it was in 2008. Where people are caring for more than one person, they receive a higher payment which equates to the personal rate for a person with the same means who is caring for one person, plus 50% of the maximum personal rate. Recipients with children also receive a qualified child increase in respect of each child. Therefore, such people have been protected from any cuts in child benefit.

Recipients of carer's allowance are also eligible for household benefits and free travel, which are unaffected by the budget for 2010. This is worth the equivalent of €40.70 per month for electricity or gas, which is €43.60 with the rural standing charge, €26 per month for telephone and €160 per year for a television licence. All carers providing full-time care and attention to a person in need of such care, regardless of their means or social insurance contributions, will continue to receive the annual respite care grant of €1,700 for each care recipient. It is worth remembering that ten years ago the respite care grant was €254 and was only available for recipients of carer's allowance.

Over the years the means test for carer's allowance has been significantly eased and is now one of the most generous means tests in the social welfare system, most notably with regard to a spouse's earnings. Since April 2008, the income disregard has been €332.50 per week for a single person and €665 per week for a couple. This means that a couple with two children can earn in the region of €37,200 and qualify for the maximum rate of carer's allowance, as well as the associated free travel and household benefits package. A couple with an income in the region of €60,400 can still qualify for a minimum payment, as well as free travel and household benefits. These levels surpass the Towards 2016 commitment to ensure that those on average industrial earnings continue to qualify for a full carer's allowance.

Other improvements made for carers in recent years include the extension of the duration of carer's benefit and carer's leave from 15 to 24 months and the approval of almost €1.5 million in funding for training for carers to help reduce the risk of injury to the carer and help them cope with the emotional and psychological aspects of their role. Twelve groups were approved for funding under this measure including the Carers Association, which will provide locally-based training programmes for about 10,000 family carers, which will start in January 2010 and run until mid-2011. Caring for Carers Ireland has 95 courses for 1,000 carers. Crosscare provides targeted training in Dublin and the Alzheimer Society of Ireland runs 28 courses for 800 carers.

The budget in 2007 provided for new arrangements whereby people in receipt of a social welfare payment, other than carer's allowance or benefit, who are also providing someone with full-time care and attention can retain their main welfare payment and receive a half-rate carer's allowance. Recipients of half-rate carer's allowance are also eligible for the household benefits package, free travel and the annual respite care grant. This provision has been retained in the budget for 2010 and will continue to be paid next year.

The cost of the half-rate carer's allowance is estimated at €90 million in a full year. At the end of October last, 18,903 carers were benefiting from this measure. This represents about 40% of those in receipt of carer's allowance. Of the almost 19,000 persons in receipt of the half-rate carer's allowance, more than 7,500 are in receipt of a State pension, which was not affected by the budget, or invalidity pension. Some 2,000 people are in receipt of a disability payment and 3,500 are in receipt of the one parent family payment. The carer's allowance rates for carers over 66 years of age have not been changed and remain at €239.

It is estimated that the combined expenditure on carer's allowance, carer's benefit, the respite care grant and half-rate carer's allowance will be €650 million in 2009, compared to the €50 million spent on carers by the Department of Social and Family Affairs in 1997. The supports provided for carers in Ireland are among the most generous in the world because we value the work they do. The payment rate for carer's allowance in Ireland for those under 66 will be €212 next year, which is almost four times that which is available in the UK.

Carers in the UK do not receive the household benefits packages, including free television licences, electricity and telephones. They do not receive free travel or a respite care grant of €1,700 per year to be used at the discretion of the carer. We also have greater flexibility in the qualifying criteria for carer's allowance. This Government is committed to supporting care in the community to the maximum extent possible. The proof of this lies in the supports we have introduced and developed over the years. It is a record of which the Government and the whole country can be proud.

In evaluating the actual impact the reductions in the weekly rates of payment to people with disabilities and carers in the budget are likely to have on the people concerned, it is important to consider the overall position with regard to falling prices. Prices have dropped considerably this year. By November 2009 prices, as measured by the consumer price index, had fallen by approximately 5.5%. I appreciate that people with disabilities may face extra costs and many of them would not have benefited from the decrease in the cost of mortgages, but they would also benefit from the drop in the price of basic items. On a year-on-year basis, food is down 6%, energy by 11 % and clothing and footwear by 13%.

People have expressed concern about the carbon tax. Alleviating measure will be introduced to ensure that people do not suffer from fuel poverty as a result of the tax. Its impact will come into effect in September next year, which gives us ample time to introduce measures to help those who will be affected. The consumer price index is expected to fall by another 0.8% in 2010.

The issue of fraud was raised during the debate. I want to take the opportunity to highlight again the measures we are taking to tackle welfare fraud. Welfare fraud is theft. It is a serious crime and the Department of Social and Family Affairs is doing everything it can to crack down on people who abuse the system. It is an issue we have taken very seriously. There are more than 600 staff working in areas related to the control of fraud and abuse of the welfare system. In recent months, more than 350 staff, many of whom worked in the Department of Agriculture, Fisheries and Food, have come into the Department of Social and Family Affairs from other Departments.

In this year alone, 600,000 individual claims were reviewed. In April, we added additional targets which we hoped to reach in our efforts at fraud control. The original target was €500 million, which was increased. It is better to increase the targets than cut social welfare payments which was, in effect, the option. We have increased and exceeded the number of claims we have reviewed, something which we did not anticipate. The amount of money we have saved has not been as high as we hoped, given the number of reviews we conducted. We reviewed all the different schemes in place.

The reality is there is no basis to substantiate the figure of 10% fraud, as alleged in a recent television programme. The Comptroller and Auditor General and the joint committee accepted that. The level of fraud on most schemes is very low. If Deputies say there is 10% fraud across all scheme, they are saying 10% of pensioners, people on disability or carers are defrauding the system. They are not and the levels of fraud in such schemes is very low. The percentage fraud identified in the fraud and error surveys was 0% for pensioners, 0.1% for illness benefit, 0.8% for family income supplement, 1.8% for child benefit and 2.3% for the disability allowance.

However, there are some groups within some schemes and there are some groups of claimants who present a much higher risk than others and that is why we have made changes in that regard, including requiring people to collect their money in person when they sign on to ensure that they have not left the State, for example. There is increased use of the requirement for photographic proof of identity - next year we will roll out the PPS card, which will contain the photograph and the signature. That will be an important part in combating fraud.

A number of people are now complaining to us about the number of times we are writing to them to certify that their child is here in the country and attending school. We have made substantial savings in the child benefit budget by finding people who were no longer in the country and were not entitled to claim it. Across all different sectors, various targeted control measures are working. We will improve that next year. We shall exceed the target this year and we exceeded it last year. We have sent cases to the Chief State Solicitor. It is interesting that in the nine cases the Deputy mentioned that featured in the television programme, every one of the individuals had been caught. They were all people who had been prosecuted or had been found. That proves the system works. The public have been very helpful to us - we have received 1,000 reports from members of the public, all of which are followed up.

Our cross-Border operations have meant that the number of people signing on in offices in the Border region has decreased substantially. Our fraud detection system, working across the other Departments, is much more successful than it was in the past. The new measures we introduced in the Bill will help us in this regard also. It is a matter we take really seriously. We are very tough on fraud and are clamping down on it. Unfortunately, that in itself was not enough to avoid us having to make cuts in the budget. Next year, we envisage spending €676 million more on social welfare than we did this year. It will be an increase of 3.3% despite the fact that we have had to introduce these cuts. Some €21.1 billion will be spent next year.

I know it is a difficult and sensitive area, but I also know we need to get the economy back on track. We need to ensure that we make the decisions that will save money. I did not want a situation where we had to cut social welfare. I equally did not want a situation where if we left untouched any one of the three sectors - public sector pay, social welfare or services - that the other two would need to bear the burden. We did it in as balanced and fair a way as we could by protecting pensioners and children in vulnerable situations, and by trying to minimise the cuts. Had we take the option Fine Gael is suggesting of excluding particular groups, it would have placed an even greater burden on others of the same age. Those were some of the difficult decisions.

I believe we have shown our commitment in recent years with the large increases in rates and the extensive supports we have given to people with a disability and carers. It is a difficult budget and we have tried to minimise the impact. When I met the groups - I do not accept that we ignored them - the carers made it quite clear that their priority was to hold on the half-rate carer's payment and to hold on to the respite care grant. It might have been easier not to cut the rate, but to halve the respite care grant, as the McCarthy report suggested. Had we done that, it would have taken considerably more money from the pockets of many more people, including those who provide care on a full-time basis but do not get a carer's allowance. It was a very careful balancing act, bearing in mind particularly what is happening in health with more money going into home care packages. Those have been difficult decisions, but when considered in the overall context in doing what is in the best interests of the country, hopefully we will never again find ourselves in this situation. That is why, unfortunately, we had to make these decisions.

See this speech in context