Róisín Shortall (Dublin North West, Labour)

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Eireann declines to give a second reading to the Social Welfare (Miscellaneous Provisions) Bill 2010 having regard to the failure of the Government to ensure that measures to activate jobseekers and lone parents have been backed up by genuine job opportunities and access to quality training, education and literacy improvement, childcare, and relevant health supports, and further expresses concern that without these measures the cuts in support levels may simply have the effect of further impoverishing people who are already on subsistence levels of income.".

The Labour Party will oppose the Bill and will call a vote at the end of Second Stage. This is not because we are opposed to the principle of activation - we strongly support it - but because we have concerns about the Government's motivation in bringing forward these proposals. It seems the sole motivation is to be seen to be tough with regard to welfare and to be seen to be doing something rather than putting in place a jobs plan and examining and tackling the real reasons people remain on welfare for long periods than being genuinely concerned about ensuring that as many people as possible can move from welfare to work. We must ask why the Government is doing this now and why action was not taken in recent years at times when it would have made sense to do so.

The Labour Party would support a Bill that was genuinely about activation but this Bill is not. I strongly believe in activation. Welfare should be for people who genuinely need it and there should be no place for those who see welfare simply as a way of life. People who abuse the welfare system, who exploit it, defraud it and who take it for granted, are a threat to its very existence. They are the enemy of the poor. The problem is that the Bill is not about activation; it is about cut-backs and the optics of doing something about long-term welfare recipients. How can one call it activation when in the first instance there are so few jobs of any description available? That is the big issue; the jobs are not there. The implication of comments made by the Minister on the Bill is that many people remain on welfare when they have job opportunities. The reality is that the vast majority of people on welfare do not want to be there. They want to be in work but the difficulty is that the jobs are not there. The Government has not produced a serious jobs plan and very little attention has been paid to job creation or protection. That is the key issue the Goverment needs to address but it is not included in the Bill.

There is no provision for extra training or for extra after-school care for the children of lone parents. There is not even a commitment from the Minister on ring-fencing any money that might be saved for helping welfare claimants into work or training. That would be a sensible thing to do; if there are savings to be generated from these proposals they should at least be ring-fenced and ploughed back into providing good quality training opportunities for people who need to get off welfare but cannot do so because of a lack of education or adequate training.

Why is there a need to include a provision to disqualify jobseekers for refusing a job offer when there is already legislation to disqualify them if they are not genuinely seeking or available for work? Why is the Minister repeating this? Again, it seems to be more about the optics. Why is there a need to include a provision to reduce a jobseeker's payment for refusing a training course, when there is already a provision in law to suspend the payment to a person in such circumstances? Is this about the Minister wanting to look tough rather than doing anything meaningful?

If the lone parent reforms are really about activation, why are qualified adults, and those on the non-contributory widow's pension excluded from the proposals in the Bill? Or is it the case that they are next? A range of lone parent reforms was conceived by the late Mr. Seamus Brennan at a time when we had full employment and the economy was booming. That was the time to take action. With the right support services these proposals would have been appropriate then and the Labour Party cautiously welcomed them. However, now is the worst possible time to introduce those changes. We no longer have adequate levels of employment and a lone parent with huge family commitments is competing with 430,000 other unemployed people for work. That does not make any sense.

There is an underlying assumption that lone parents form a type of homogenous group. Nothing could be further from the truth. The majority of lone parents are at work and according to OPEN, of those on welfare 84% are working, looking for work, or undertaking training or an education course. The Minister needs to bear this in mind. There is a great hunger to get back into education or training to avail of any job opportunities and he should not speak in terms of the need to force people to do so.

Equally, there is a very strong case for the Minister ensuring that those people who are currently seeking training or employment are facilitated in doing that. It is his responsibility as part of the Government to ensure that the jobs are there in the first place for these people, something which it had completely failed to do in recent years.

Parents arrive at the status of lone parenthood in very different ways, which is another important point. Some arrive there through unexpected pregnancy, some through a relationship breakdown with a long-standing partner, some through formal separation or divorce, some through the death of a partner and some through abandonment by their partners. No other social group has a higher risk of consistent poverty. Lone parents are four times more likely than others to live in poverty and more than one third of children growing up in poverty in Ireland are growing up in one-parent families. The welfare system has not worked to combat this. Welfare reform is long overdue for this group. About that there is no doubt, but the Minister must go about it in the right way.

Lowering the qualifying age was meant to go hand-in-hand with better child care and training services, the introduction of a parental allowance to replace the one parent family payment and the ending of the ban on cohabitation. Where are these reforms? There is no sign of them in this Bill. These proposals were clearly spelled out in the Government Green Paper, Proposals for Supporting Lone Parents. I wonder if the current Minister has even read it. It would seem that he has chosen to do the dirty work of the former Minister, Deputy Hanafin, for her while tearing up the progressive work engaged in by his earlier predecessor, the late Séamus Brennan. The likelihood is that all that will happen is that an extra 12,000 lone parents will transfer to jobseeker payments over the next six years. This will inflate the live register figures by another 12,000 as people on one parent family payment are not counted at the current time. It is hard to know what the point of all that will be.

The income disregards that claimants previously enjoyed as lone parents when they took up a part-time job will no longer be permitted under jobseeker rules, which will be a huge impediment. It will mean that the single biggest effect of these changes is that they will deprive lone parents of the opportunity for part-time work. I put it to the Minister that he should consider the unintended consequences - I am being charitable to the Minister by calling them unintended - but there may be very serious unintended consequences to what he is now calling reforms which will work against the objective of getting people to move from welfare to work. Not only will lone parents have substantially less income, but they will be even more detached from the workforce. How can this possibly be described as activation?

For those who manage to find work, the main problem will undoubtedly be who will mind their children when they are at work. Most will not be able to afford to pay someone else to do it. What is a lone parent to do during their summer months when his or her child is off school? Teenagers are off school for three months in the summer. Is it now Government policy for 13 year olds to have no parental supervision and to be left to their own devices during the three months of their summer holidays? I would like the Minister to address that point in responding to the debate tomorrow. What arrangements will the Minister make if he will require their lone parents to get involved in training or employment? Just because a child is 13 does not mean he or she can look after himself or herself. Has the Government even considered the social consequences of this? There are huge implications for anti-social behaviour, drug abuse and, ironically, teenage pregnancy. Has the Minister really thought this through? It seems from his comments to date that very little thought has been given to the likely fall-out of his proposed changes.

As the research undertaken by the Vincentian partnership illustrates, it costs substantially more to raise a teenage than it does to raise a younger child. The withdrawal of one parent family payment will in many cases create an additional barrier to school completion and to third level education. If the teenage children of lone parents realise that their parents are in far more strained financial circumstances under the Minister's new arrangements than they currently are, it will inevitably have a knock-on impact in terms of the ability of teenagers in poor lone parent families to remain in school. The pressure will undoubtedly grow on them to leave school early and try to find work. The pressures working against the possibility of them participating in third level education will be even greater.

Will the operational guidelines for the jobseekers allowance be amended to reflect that for some parents the cost of after school care will represent a poverty trap? What will happen in respect of difficult children? There is some provision in the Bill in respect of children who qualify for domiciliary care allowance and for recently bereaved families, which I welcome. However, there is no allowance made for children with, for example, ADHD, challenging behavioural patterns or physical or mental health difficulties. Parents of these children simply cannot be in two places at once. What arrangements will the Government put in place if a parent of a child in those circumstances is required to be at work to ensure adequate care and protection is provided for young people who are at risk?

Allowances are made for lone parents who have suffered a recent bereavement, but why do they stop there? Why are other reasons for lone parenthood, such as abandonment or separation treated any differently? Do people in such circumstances not also need what the Minister describes as time to come to terms with their new status? It seems strange that the Minister is making a distinction between different categories of people who find themselves unexpectedly in a situation where they are lone parents. There would seem to be some element of discrimination and I would like the Minister to address that point. Do people who have been suddenly abandoned not need the same consideration as people who find themselves suddenly widowed? I look forward to the Minister's response.

The Labour Party will seek to amend this legislation by insisting that the welfare of the child should be paramount in deciding on the availability of the lone parent for work. In all aspects of social policy the understanding was that this principle would underpin all social policy relating to children. It seems it does not apply in this case. I will table an amendment to give effect to that principle which should be accepted by all Departments. The welfare of the child should be paramount in deciding on the availability of a parent for work. It is how it works in other countries and how it should work here. It is beyond belief that the Minister has not included such a provision before presenting this Bill. It reveals the crude recklessness and devil-may-care attitude of the Government regarding the poor in our society.

Some of the underlying motivation which concerns me in this Bill is that it would seem that it is not about the welfare or protection of vulnerable people, rather, it is about the welfare and protection of the Government. It is designed to appeal to the prejudices of those sections of the public who believe all lone parents and all jobseekers are sponging off the State. I do not think the Minister should feed that view.

There is no reform of the real reasons some people spend so long on welfare, namely, the number of poverty traps in the welfare system. There is no improvement in the criteria for family income supplement, for example. One still cannot qualify for it if one is self-employed. The minimum hours rule is a huge impediment to qualification. This should be the Minister's priority because it potentially offers a silver bullet for tackling the reasons people find it so difficult to move from welfare to work. He needs to investigate the problem, of which family income supplement is a significant element. Reform of this area could make all the difference to people taking up employment but, again, little or no consideration is being given to it.

There is no relaxation of the income disregards when taking up temporary work. The withdrawal rates for some people taking up temporary employment or short-term work projects are very high and can be in excess of the marginal rate of tax. The welfare system needs to be overhauled to build in flexibility. The Minister is nodding but he is not acting. The Bill does not provide the improvements that would allow people to re-enter on their old rates if they take up temporary employment.

Disgracefully, there is still no improvement to the qualifying criteria for mortgage interest supplement and rent supplement. How long do we have to wait for these? I despair at the many cases of people who do not qualify for mortgage interest supplement because the rules have not been updated since the mid-1990s. Reform of this supplement was promised by Easter 2009 and, subsequently, Easter 2010. This unforgivable delay is testimony to a Government that has put the interests of the banks ahead of ordinary people who are struggling.

What is the problem with changing rent supplement so that the qualifying criteria mirror the differential rent criteria of the relevant local authority? This improvement could be made overnight and it would make a huge difference to people on rent supplement by eliminating a long-standing poverty trap that causes welfare dependency. The Minister and everybody in this House are aware of the poverty trap whereby it is not worthwhile for people on rent supplement to go to work. There are straightforward ways of eliminating this trap and if the Minister is serious about helping people to get off welfare, why is he not proposing them?

The previous Minister, Deputy Hanafin, promised changes to the back to education allowance so that more people could qualify but no such improvements have been mentioned by the present Minister.

The lack of reform in these areas is the real reason for welfare dependency and tackling these issues would take far more people off the dole than any of the reforms outlined in the Bill. A national training, education or work guarantee should be offered to every unemployed person under the age of 25. Does the Minister realise there are 74,000 such people? Why is he not taking specific action to address the problems they face?

There are several ways in which revenue could be raised without hurting the poor. On Committee Stage of the Bill I will be proposing a range of reforms which would accrue savings in the policy areas for which the Minister has responsibility. Almost one dozen changes could be made to raise revenue and eliminate the need to hit people at the lowest levels of income. I sincerely ask the Minister to consider some of these changes.

He could, for example, reduce the maximum tax-free pension pots allowable. He undertook to investigate this issue but the Bill does nothing about it. At present, rich people can have pension pots of almost €5.5 million. This is a ridiculous amount for which there is no justification. Why not reduce the limit to €2.5 million, which would still be higher than the maximum pension pot allowable in the UK? What about allowing the first €50,000 in employer contributions to a pension to be tax free and taxing the remainder as benefit in kind? At present, there is no limit to the tax-free contributions an employer can make. The Minister has spoken about limiting the maximum possible tax-free lump sums taken on retirement to €200,000 but there has been no action on it. He is responsible for pension policy and savings can be made in this area. There is no justification for allowing rich people to earn huge amounts in tax free payments from their pension contributions or pension lump sums. Why is the Minister not addressing this issue instead of hitting the very poorest?

Why not make insurance companies compensate the Department for illness or disability payments where they have admitted liability and where the value of social welfare entitlements is deducted from the gross claim settlement? Why are insurance companies being let off the hook? This is a way of saving money which would not hurt people.

Why is PRSI not charged on rental income, capital gains or share based remuneration and share options? Why not withhold payment of mortgage interest supplement until proof is provided that a bank has played its part in assisting somebody by giving a break on mortgage repayments or extending the term. Why does the Minister not insist that the banks help out rather than have the State step in and let them off the hook?

Why not increase penalties for social welfare fraud by both employers and welfare recipients or give greater scope to the Department to recover outstanding amounts? Data matching between the Courts Service and the Department could be improved.

Why are landlords who charge illegal supplements by forcing tenants to pay top up rents not blacklisted? Why are the landlords who refuse to pay tax on their rental income not being named?

The Minister is nodding along to my suggestions but there is no action.

See this speech in context