Joan Burton (Dublin West, Labour) | Oireachtas source

Members can understand the high priority the Government continues to give to the area of social protection for people relying on a social welfare income in these very difficult times.

The Government's determination to protect the most vulnerable welfare recipients by maintaining the level of core payment rates is strongly informed by the significant contribution of social transfers to poverty reduction in Ireland. As Members may be aware, official data show that in the last year for which figures are available, social transfers reduced income poverty by 60%, from 40% to 16%. If pensions are included, the impact on poverty reduction rises to 68%. As such, our welfare system plays a vital role in minimising poverty, and Ireland's performance on this score is the best in the European Union. This performance is rarely given adequate recognition in public debates about the impact of the economic crisis on the most vulnerable.

In that regard, I wish to acknowledge the support I received from the Opposition last week when I presented a request for a Supplementary Estimate to the Dáil. While we differ on many issues, it is clear that there is support on all sides of the House for the social solidarity that spending on social protection represents.

I am also pleased to have secured €30 million in new spending on employment programmes and child care places. This investment is consistent with the Government's priority of getting people back to work or getting them back to education or training in order that they will improve their chances of getting a job in the future. I hope that if this programme proves successful it will be seen as a small but progressive first step on the road to building a social protection system that will ultimately provide our citizens with better services.

Turning to the specific contents of the Bill, it provides for the following changes arising from budget 2013: changes in certain pay-related social insurance, PRSI, contributions; a reduction in the maximum duration of jobseeker's benefit; changes in the assessment of income from farming and fishing for means-tested social assistance payments; a reduction in the monthly rate of child benefit; a reduction in the respite care grant; abolition of the employer rebate in respect of statutory redundancy lump sum payments paid to employees; and facilitation of the recovery of a greater amount of overpayment through weekly deductions from social welfare payments. The Bill also provides for a number of miscellaneous amendments to the social welfare code, which arise mainly from a budget 2012 measure to provide for a new structure of reduced rates in the case of contributory pension schemes.

I propose to introduce major reforms to pensions policy next year, following publication of the OECD review of the pensions landscape in Ireland, which is due in April. As Members will be aware, I have previously signalled concerns about the current rules for the distribution of assets in the wind-up of defined benefit pension schemes that are underfunded.

Earlier this year I commissioned a technical report to explore the possible options, which I expect to receive presently. This is a complex area and there are no easy options. However, it is clear the current method of distribution of pension funds when a scheme is being wound up is inequitable. I have also been struck by the consensus among certain pension stakeholders on the need for change. As such, once I receive the technical report, I will bring proposals to Cabinet with a view to amending the current order of priority in the social welfare and pensions Bill that I will introduce in the first half of next year.

Cuts have to be made and given the level of expenditure on child benefit, which is over €2 billion or 10% of all expenditure, it has not been possible to avoid some reductions in the benefit in this budget. Despite the budget reductions, our child benefit rates remain high in international comparisons and are still above the rate that prevails in the UK and Northern Ireland. There, the rate for the first child is approximately €110 per month, with a lower rate for second and subsequent children, at approximately €72 per month. Child benefit is a universal payment generally paid to mothers of all income levels. I am determined that any future reform of child benefit will preserve that principle of universality. I have had the opportunity to speak to many women on this issue and I know most favour the retention of a strong universal payment. In particular, it is worth bearing this in mind when one considers that our nearest neighbour, a country that can print its own money and is not in hock to any troika, will remove child benefit in its entirety from families that might be considered middle-income with effect from next year. Is this the system Sinn Féin would like to emulate here?

In line with commitments contained in the programme for Government, I established the advisory group on tax and social welfare last year. The group has presented its report to me and I intend to publish this in the new year. Following publication of the report, I will bring it to the Joint Committee on Jobs, Social Protection and Education so there can a full and informed public debate on the options regarding the future structure of child benefit, specifically with regard to taxing, means-testing or other structural reforms.

The Department will spend €775 million on carers in 2013, €5 million more it is spending on carers this year. There are no changes to the half-rate carer's allowance scheme, which is highly valued by more than 20,000 carers. However, the respite care grant will decrease from €1,700 per annum to €1,375 per annum. This will mean the rate will still be ahead of the €1,200 which applied in 2006 when the Celtic tiger economy was at its peak.

Since I came to office, tackling fraud and improving control have been priorities for me. I am introducing measures to enable the Department to recover overpayments more quickly from those who have incurred them. At present, repayments of overpayments are frequently made at a level of €2 per week. This means in reality that some overpayments take years to repay, if indeed they are ever repaid. As well as providing savings, this measure will send a strong message that there is an obligation to return money owing to the Exchequer. There is an obligation on the citizen, as well as the Department, to ensure only entitlements due are received and what is not due is returned for the benefit of others. The Bill provides that up to 15% of the personal rate can be withheld to repay an overpayment. I am conscious that some overpayments occur because of departmental error. While all overpayments must be repaid, including those that arise because of a departmental error, it is not my intention for people to face hardship as a result of these new arrangements. The particular circumstances of each case will be considered before the repayment amount is determined. However, with regard to those who have been found guilty in court of having deliberately defrauded the taxpayer by abusing the social welfare system, I regard the 15% limit on deduction to be reasonable in those circumstances. This will be deducted from the personal rate, which means it will not affect other payments for dependants, children or child benefit. For example, the personal rate for a jobseeker is €188. If a jobseeker is involved in defrauding the system, up to now we can only recover the amount overpaid at €2 a week, a rate which many regard as a joke. We will now be able to recover a modest amount which will help recover the overpayment and act as a deterrent to fraud.

I will be tabling three amendments to the Bill on Committee Stage: to provide that Sunday be counted as a day of employment for jobseeker's payments, to provide for the postponement of the implementation dates of changes in respect of one-parent family payment, and to provide for changes in the household budgeting scheme for local authority rents. The first change will provide that Sundays will be taken into account for the purposes of determining entitlement to the jobseeker's benefit and jobseeker's allowance schemes. Under the current legislative provisions, a person can, in general, qualify for jobseeker's benefit or jobseeker's allowance where he or she is unemployed for at least three days in any period of six consecutive days. However, Sundays are not counted for this purpose. This means that where a person works on a Sunday, this day is neither treated as a day of employment nor a day of unemployment for qualification purposes. These current legislative provisions are based on the historical notion of a six-day working week in which Sunday is a day of rest. These changes bring the jobseeker's benefit and jobseeker's allowance schemes into greater alignment with the current operation of the labour market by counting Sundays in the determination of entitlement to jobseeker's benefit and jobseeker's allowance. Only people who work on Sundays and claim a jobseeker payment in respect of other days are affected by this measure.

The change in the provisions with regard to the one-parent family payment will defer the dates on which the age reductions from 12 to seven years for entitlement purposes are to apply from the beginning of January in 2013 and 2014 to the beginning of July in each of those years. It will also extend the period over which the transitional arrangements for the continued payment of one-parent family payment are to apply from the end of December 2014 to the beginning of July 2015. This is to provide more time for the creation of additional child care places, as I promised last year when introducing the Social Welfare Bill 2011.

The household budgeting facility, in which a person can opt to have a specified amount of his or her social welfare payment deducted by An Post and paid to certain utilities and to local authorities, will be extended by the introduction of new provisions specific to payment of rents to a housing body. Tenants of local authority accommodation in receipt of a social welfare payment may opt to have a portion of his or her social welfare payment paid to a local authority in respect of rent. Local authorities will require tenants of local authority accommodation in receipt of social welfare payments to sign up to the household budgeting facility before being offered accommodation. Tenants will require the consent of the housing body before being allowed to withdraw from the arrangement and such consent shall not be unreasonably withheld.

Some of the savings achieved by these measures will be redirected to provide additional spending in the key areas of job supports and child care supports. An additional €14 million will be allocated for after-school child care places targeted at primary school children. The places are aimed at low-income families in which the parents are availing of an employment opportunity. This initiative is part of the Government's overall strategy to support parents in low-income families to take up employment and to solve the problem of the extraordinarily high number of jobless households. A child in a jobless household is at major risk at being poor for the rest of his or her life.

An additional €2 million will be allocated to expand the school meals programme, which aims to provide food to children. It is exemplified by the hot breakfast clubs with which many Members are familiar. A total of €2.5 million will be allocated to a new area-based approach to child poverty initiative, which is being worked on by the Minister for Children and Youth Affairs, Deputy Fitzgerald, the Tánaiste and many Deputies to bring joined-up thinking to how a series of agencies interact to provide services to children and families who may be in some difficulty in a given area.

I am using €11 million of the savings from the jobseekers' measure to make a major expansion to our employment and internship programmes. An additional 2,500 places for JobBridge internships will be provided in 2013, an additional 2,500 places are being made available for the Tús scheme in 2013, the community employment scheme is to benefit from an additional 2,000 places in 2013 and a new local authority social employment scheme offering an initial 3,000 places will be introduced in 2013. These additional places on employment and internship schemes complement the child care measures to which I referred earlier.

Overall, expenditure on working age employment supports has been increased by €95 million to €1.05 billion in 2013. The Department is becoming active in helping people to get back to work and consequently it is important that we have places to offer to people who, for the most part, are desperately anxious to get back into work, especially those who have been out of the workforce for a long time. Many of these places can be used in conjunction with the very good initiatives developed by my colleagues, the Minister for Education and Skills, Deputy Quinn, in particular Springboard and the back to education initiative.

I will now outline the main provisions of the Bill, which is in three parts and 14 sections. Part 1 contains preliminary and general provisions. Part 2 contains amendments to the Social Welfare Acts, including several amendments to the contributory pension schemes arising from the budget 2012 decision to provide for a new structure of the reduced rates of state pension (contributory) and state pension (transition).

Section 5 reduces the amount of the annual respite care grant by €325 from €1,700 to €1,375. The new rate will apply to all claimants who qualify for the annual respite care grant, which is paid as a cash sum, in June 2013 and in each subsequent year. Section 6 provides for the abolition of the weekly PRSI-free allowance of €127 with effect from 1 January 2013. Section 7 increases the rate of assessment of self-employment income from farming and fishing from 85% to 100% in the case of the farm assist, jobseeker's allowance, pre-retirement allowance and disability allowance schemes. In addition, it provides for the abolition of the annual child-related income disregards. These changes will take effect from April 2013.

Section 8 reduces the monthly rate of child benefit by €10 per child in respect of the first, second and third child. From January 2013, the monthly rate for each of the first three children will be €130 per month. Section 8 also provides for a reduction in the monthly rate of child benefit by €10 per child, to €130, in respect of the fourth and each subsequent child from January 2014. Section 10 provides for an increase in the minimum rates of the pay-related social insurance contribution paid by self-employed contributors with effect from 1 January 2013. It will go up from €253 to €500. The position is similar in respect of voluntary contributions as set out in section 11. Section 12 reduces the duration of jobseeker's benefit from 12 months to nine months in the case of people who have paid at least 260 PRSI contributions and from nine months to six months in the case of people who have paid less than 260 contributions. These changes will take effect from April 2013 and will apply to new claimants.

Section 13 sets out the recovery of over-payments. It provides for a deduction of up to 15% of a liable person's relevant personal weekly rate of social welfare payment. A person will not be entitled to compensate for any over-payment deduction from her primary social welfare payment by seeking an additional payment of supplementary welfare allowance. Increases payable in respect of a dependent adult or child or those relating to child benefit are not affected. Section 14 amends the Redundancy Payments Act 1967 by abolishing the rebate paid to employers in respect of statutory redundancy lump-sums paid to their employees. Rebates will continue to be available to employers on or after 1 January 2013 on statutory lump-sum payments made to employees who have been made redundant before 1 January 2012 at a rate of 60%, and on or after 1 January 2012 but before 1 January 2013 at a rate of 15%.

These are the main provisions. Since I became the Minister for Social Protection I have been mindful of how crucial our social welfare expenditure has been in protecting the most vulnerable and in minimising poverty during the economic crisis. The remarkable poverty reduction impact of welfare in Ireland has greatly underpinned social cohesion in contrast to other countries affected by the economic crisis in which we have seen a good deal of violence on the streets.

I am mindful of the impact on family living standards from high unemployment, falling incomes and over-indebtedness. I am focusing on people returning to work by providing an extra 10,00 child care places. Fortunately this November, 11,000 more people went back to work than in November 2011 and 7,000 more than in November 2010. Each time someone goes back to work the Exchequer gains by up to €20,000. This, along with securing the Social Insurance Fund cap, is how we protect the social welfare structure in place in Ireland while making it responsive to help people get back into a job or, to use President Obama's phrase, to become job ready. This is the purpose of the Social Welfare Bill and all the reforms we have undertaken since we came into Government.

See this speech in context