Joan Burton (Dublin West, Labour) | Oireachtas source

I move: "That the Bill be now read a Second Time."

As Minister for Social Protection in arguably the most challenging economic period this country has ever faced, I have operated on simple and enduring principles, namely, welfare must be there for those who need it and the Government must do everything it can to help people back to work. In short, welfare must be both a safety net and a springboard. To that end, my focus has been on transforming the Department from the passive benefits provider of old to one that actively assists people back to work, training or education. In this legislation, I am continuing these necessary and important structural reforms of the social welfare system. The Department of Social Protection accounts for €4 in every €10 spent each day by the Government. As a result, the Department has been obliged to play its part in the effort to get the deficit under control. However, while making savings in social welfare expenditure has been forced upon us, the reductions have been targeted with the objective of making the system fairer, focused and fit for purpose.

I will start with fairness. Many families in Ireland depend solely on social welfare to provide for all of their needs. This is the reason the Government, in successive budgets, has protected core social welfare payment rates. In a time of unprecedented crisis, it is standing by those who are most vulnerable and international research proves it. Compared with other EU countries, Ireland's system of social transfers is the most effective in reducing poverty. Consequently, protecting core rates makes absolute sense from a social justice perspective. However, it also makes sense economically as at a time when consumer confidence remains depressed and people remain reluctant to spend, the €20.3 billion social welfare budget is a crucial injection of cash into every corner and region of the economy. As I have stated recently in several forums, the European Union must shift its approach from austerity only if the Union is to recover and, thankfully, I believe this message now is beginning to seep through. What does this mean in an Irish context? Given that Ireland is still in a bailout, it has little choice but to observe the conditions of the troika until it again is able to fund itself on the financial markets at reasonable rates. This means further corrections in the forthcoming budget, with the ratio of taxation measures and expenditure savings still to be determined and, again, my Department will be expected to play its part. However, I return to my earlier points about the crucial importance of protecting the most vulnerable and the value of social welfare expenditure as a Keynesian automatic stabiliser. The Government's challenge is to create the room for an economic and social dividend, while respecting the need to meet deficit targets and exit the bailout. The proceeds of the promissory note deal must be put to the most effective use, to invest in jobs and give people hope. The reality is that job creation is the single most effective way of reducing social welfare expenditure.

This year, as part of its Pathways to Work strategy, my Department will spend more than €1 billion on work, training and education places that will benefit approximately 85,000 people. In addition, under the pathways strategy, the Department continues to roll out its Intreo activation service for jobseekers, as well as its new, revamped and reformed social welfare offices. The crucial need for the pathways strategy is highlighted by ESRI research on jobless households. This research showed that during the height of the boom between 2004 and 2007, the share of households defined as jobless shockingly recorded a double-digit increase to 15%. It is hardly believable that this happened at the height of the boom. In stark contrast, the average across the eurozone in 2007 was just below 10%. Even though Ireland was experiencing a boom, its figure increased to 15% and that this was allowed happen during a period of such prosperity is the single most shocking thing about the figures.

The current Government has greater ambition for those citizens who are unfortunate enough to be unemployed. It views each and every individual person on the live register or otherwise distant from the labour market as an untapped resource and a future employee who will participate in the rebuilding of this country. This ambition is the reason the Government is moving from a passive to an active welfare state.

In addition to deep-rooted reforms, I have prioritised efforts to combat social welfare fraud.

Since becoming Minister, I have travelled to numerous local offices throughout the country and spoken to the front-line staff who deal with and support customers on a daily basis. The overwhelming message they have given me is that social welfare fraud is not a victimless crime, and that those who defraud the system do so at the expense of the vast majority of genuine customers who rely on social welfare income supports, and that includes the vast majority of our retirees and pensioners. I want to thank those staff for their honest feedback, their invaluable insights and the work they do on a daily basis.

This Bill will give legislative effect to a number of important amendments to the social welfare code in relation to PRSI, jobseekers' payments, and the prevention of fraud. It will also make amendments to the pensions code in relation to occupational pension provision.

In his Budget Statement last December, the Minister for Finance announced a number of measures to broaden the income base for PRSI in order to ensure the stability of the Social Insurance Fund. This is so that the fund can continue to pay pensions for those who are retired or widowed and for short-term benefits for those who become ill or unemployed.

One of the PRSI base-broadening measures provided for in this Bill extends liability for PRSI contributions in 2013 to certain civil and public sector workers who pay modified rates of PRSI contributions and who also have income from a trade or profession. They will now be liable to a PRSI contribution of 4% on any income arising from a trade or profession.

In recent years, reforms have been made to the one-parent family scheme. The strongest protection against poverty is decent, secure and fairly paid work, and the idea that the welfare system must be a springboard is especially true when it comes to people who are parenting on their own. Although full-time work may not be feasible for parents of very young children, we believe that supporting parents to participate in the labour market once their children have reached an appropriate age will improve their own economic and social circumstances. In the long term, it will be best for them and for their families.

The reforms introduced in budgets 2011, 2012 and 2013 recognise parental choice with regard to the care of young children while at the same time having an expectation that parents will not remain outside the workforce indefinitely. Last year, I said that I would proceed with the measures to reduce the age limit to seven years only if a credible commitment on the delivery of a robust and comprehensive system of child care was forthcoming.

I will be frank. Although I was very pleased to secure an additional €14 million in the budget to fund an extra 6,000 after-school child care places this year, the comprehensive system we need is not yet in place. I am now proposing, therefore, reforms to the jobseeker's allowance scheme to ease the transition of former recipients of one-parent family payment with young children to the scheme.

Jobseeker's transition will be a targeted version of the jobseeker's allowance scheme, which provides means-tested financial assistance and activation supports. Recipients of jobseeker's transition will be required to engage fully with the Department's activation process. Crucially, however, they will be exempted for a transitional period from the full conditionality of the jobseeker's allowance scheme, specifically the criteria that jobseekers must be available for and genuinely seeking full-time work. This will allow the lone parents in question to seek part-time work rather than full-time work if this better suits their family circumstances. They will also be able to access existing child care supports to enable them to engage in education and training programmes. The transitional period will last, provided the individual continues to satisfy entitlement conditions for one-parent family payment, other than the relevant age, until their youngest child reaches 14 years of age.

I wish to speak about family income supplement, FIS. I will be amending the FIS scheme so that former one-parent family payment recipients in receipt of FIS will have it increased in light of the termination of their one-parent family payment due to the age of the youngest child. Once family income supplement is awarded, it is normally paid for a 52-week period, as Deputies are aware, and it is not affected by any changes in circumstances in that period, such as a change in weekly income.

I will be introducing regulations shortly to enable entitlement to FIS to be reassessed during the 52-week period to take account of such a loss of the one-parent family payment. These reforms recognise the difficulty of parenting on one's own and will enable people parenting alone with children of primary school age to qualify for a jobseeker's payment. They represent a compassionate, supportive and effective approach to helping lone parents' transition to work and provide for their families' long-term best interests, particularly their children.

I am introducing changes regarding jobseeker's benefit and jobseeker's allowance to allow for persons working as retained firefighters to be exempted from certain conditions to enable them access these schemes. Since 1972, the social welfare system has essentially subsidised the State's cost of providing a nationwide part-time fire service but no legislative base was ever provided to support this position, which led to uncertainty and difficulty at times for individual firefighters. I am now bringing clarity to this situation in recognition of the social good work of retained firefighters and the invaluable service they provide to communities throughout our country outside the big cities with permanent fire brigades. A retained firefighter who is on call will be deemed to satisfy the availability conditionality. This will mean that retained firefighters will no longer be disallowed on the grounds of availability for the days they are on call. However, they will still have to satisfy the genuinely seeking work and availability conditionality for the days they are not on call. These changes recognise the vital service that these workers provide to local communities. That is an issue that has been raised in the House on and off for the past 40 years. I am delighted to be able to legislate for it and to recognise the invaluable work of retained firefighters.

I mentioned earlier the issue of welfare fraud. My view on this is simple: such fraud undermines confidence in the entire system and is unfair to genuine claimants and the taxpayers who fund the system in the knowledge that it is there for them when they need it.

Welfare fraud is a serious crime and the Department is doing everything it can to crack down on people who abuse the system. We have begun the phased introduction of the public services card with key security features, including a photograph and signature, which will be used to authenticate the identity of individuals, thus helping to reduce fraud and error in the social welfare system. By close of business today, we will have issued over 230,000 public services cards.

Under the existing legislative provisions, there is a mandatory requirement for new applicants to allow for his or her photograph and signature to be captured and reproduced in electronic format for purposes of a PPSN allocation, public services card and claims for social welfare benefits. I will be proposing a change to provide for the introduction of a condition for existingrecipients of social welfare payment that the person must satisfy the Department as to his or her identity, including allowing for electronic capture of photograph and signature.

I am introducing a number of changes to occupational pension provision in this Bill. These changes give effect to the recommendations of the critical review undertaken on the Pensions Board and the Pensions Ombudsman as part of the Public Service Reform Plan.

I am also introducing a number of other amendments to the Pensions Act to give powers to the Pensions Board to wind up a pension scheme in certain circumstances, provide for the disclosure of information on a proposal by the Pensions Board to restructure scheme benefits and to provide for an appeal to the High Court on a point of law against a direction by the Pensions Board to restructure a defined benefit pension scheme, provide the Pensions Board with a right of appeal to the High Court to seek compliance with a directive to either restructure scheme benefits or a direction to wind-up a scheme, change the fines regime that applies to personal retirement savings accounts and amend the terms of office of the Pensions Ombudsman.

The changes I am bringing forward today will strengthen governance and regulation of occupational pensions and give consumers greater input into pensions policy. They will reform the governance structure of the Pensions Board by distinguishing between the operational oversight and the policy advisory functions. The Pensions Board will be renamed the Pensions Authority to ensure public awareness and clarity of its role and functions and distinguish it from the policy advisory activities. The chief executive of the authority will be known as the pensions regulator.

I am introducing changes to the Pensions Act to give the Pensions Board power to wind-up a scheme in certain circumstances. I am very aware of the serious funding challenge facing pension schemes. It is expected that most defined benefit schemes will be in a position to meet the funding requirement by the end of 2023. However, the trustees and-or employer of some schemes may decide not to adopt or not to comply with the requirement of the funding standard, and in such cases the board may have to direct the trustees either to restructure scheme benefits or wind-up the scheme. The power to wind-up is considered a measure of last resort.

There was an expectation that I would be bringing forward in this Bill changes to the manner in which assets are distributed on the wind-up of a pension scheme. This is a very complex and sensitive issue and one which requires careful consideration before any change is made to the current provision. My officials have engaged with representatives of stakeholders and have also engaged external consultants to advise on the matter. In light of the recent decision by the European Court of Justice in the Waterford Crystal case, the Government recognises the need for a comprehensive policy and legislative response that addresses the range of issues involved. We have been in intensive discussions with the Attorney General and her staff. In addition, it is considered necessary to await the submissions of funding proposals from pension scheme trustees as these will give a more comprehensive and in-depth picture of the funding position of defined benefit pension schemes.

I will be tabling two amendments to the Bill on Committee Stage to allow for the expansion of the penalty rates regime for jobseeker's allowance, jobseeker's benefit and supplementary welfare allowance and a measure to enhance powers in the area of overpayments recovery.

I will now outline the main provisions of the Bill. Section 1 provides for the Short Title, collective citations, construction and any necessary commencements. Section 2 defines a number of common terms used in this part of the Bill. Section 3 replaces references to training which is provided or approved by FÁS that are contained in the Social Welfare Consolidation Act in light of the new structural arrangements for the provision of State training. Section 4 amends the definition of a "special contributor" which is used for the purposes of the special collection system operated by the Department of Social Protection for the collection of certain PRSI contributions. Section 5 is a technical amendment.

Section 6 extends liability for PRSI contributions to modified rate PRSI contributors, that is, PRSI Class B, C and D contributors, who also have income from a trade or profession. This PRSI contribution will be at the rate of 4% of relevant emoluments and income, but will not count towards determining entitlement to social insurance benefits. Section 7 provides for a number of amendments to the Social Welfare Consolidation Act 2005 to take account of the provisions of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010. Section 8 amends the conditions of entitlement applying to the partial capacity benefit scheme to enable decisions relating to whether or not a claimant has a restriction on his or her capacity for work and the level of that restriction to be appealed to the social welfare appeals office.

Section 9 provides for changes to the jobseeker's benefit and jobseeker's allowance schemes to exempt persons who are working as retained firefighters from certain conditionality due to the nature of that employment. Section 10 provides for amendments to the jobseeker's allowance scheme to cater for the transition of persons to that scheme who no longer qualify for one-parent family payment due to their youngest child reaching specified age thresholds. Section 11 extends the identity authentication requirements that currently apply to new applicants for a social welfare payment, a personal public service number or a public services card to existing recipients of social welfare payments. Under these requirements a person will be disqualified from continuing to receive a social welfare payment where he or she fails to satisfy the Minister as to his or her identity.

Section 12 provides that a working director with a shareholding of 50% or more in a company will not be regarded as being insurable as an employed contributor in that company. Section 13 clarifies the operation of the income disregard which is used for the purposes of the rent and mortgage interest supplement scheme. Section 14 extends the list of bodies that are authorised to use the personal public service number for the purposes of carrying out transactions with members of the public and for sharing personal information and exchanging relevant data for the purposes of carrying out those transactions. The new bodies being included are the Insolvency Service of Ireland, Quality and Qualifications Ireland and payment service providers who have been authorised by the Revenue Commissioners to collect the local property tax. Section 15, together with the Schedule to the Bill, is a technical amendment dealing with obsolete references and typographical errors.

Section 16 provides for amendments to the Civil Registration Act 2004 to allow for the provision of index information from the registers of births, deaths, marriages and civil partnerships to the Department of Arts, Heritage and the Gaeltacht to facilitate access to this index information. Index information in relation to adoptions and stillbirths is excluded.

Section 17 defines the term "Principal Act". Section 18 inserts a definition of the pensions council which is being provided for in the new section 26B of the Pensions Act 1990. The Pensions Act was amended in 2009 to allow for payroll evidence to be admissible to prove an offence and to increase the term of imprisonment for conviction on indictment for an offence of failure to remit pension contributions to an occupational pension scheme to deal with a very largescale problem in the construction sector at that time. Sections 19 to 21 apply this offences regime to personal retirement savings accounts.

Sections 22 to 25, inclusive, and section 30 provide for structural changes to the Pensions Board by giving effect to the recommendations of the critical review undertaken on the Pensions Board. This critical review was undertaken as part of the public service reform plan. These sections and the details contained on the following pages will come into effect later this year when they are the subject of a commencement order.

Section 26 amends section 50 of the Pensions Act 1990 to provide for the disclosure of information where the board proposes to issue a direction to restructure scheme benefits and for an appeal to the High Court by such persons as may be prescribed on a point of law on a direction from the Pensions Board to restructure a pension scheme.

Section 27 inserts a new section 50B in the Pensions Act 1990 to provide the Pensions Board with the power to wind-up a pension scheme in circumstances where a scheme is underfunded and the trustees and employer are not in a position to adopt a funding proposal, or where the trustee of a scheme fails to comply with a section 50 direction to restructure scheme benefits. Section 28 inserts a new section 50C in the Pensions Act 1990 to provide the Pensions Board with the power to apply to the High Court to seek an order requiring a person to comply with a direction to wind up a pension scheme or to restructure scheme benefits.

A critical review of the Office of the Pensions Ombudsman was also carried out as part of the work of the steering group chaired by Mr. Richard Hinz of the World Bank. It is expected that the recommendation of this review of the Office of the Pensions Ombudsman will be included in a future Bill. In the meantime, and in order to facilitate any future proposal to merge the Office of the Pensions Ombudsman with the Office of the Financial Services Ombudsman, section 29 extends the age on which the Pensions Ombudsman must vacate that office from 67 to 70 years and allows for the appointment of the Pensions Ombudsman for a period of up to six years, rather than a set term of six years.

The Government continues to invest heavily in social protection for citizens in spite of the economic circumstances in which we find ourselves. That is only right and just. However, I am also ensuring that the money we spend on social protection, which is contributed by those at work in taxes and PRSI, is spent on those in genuine need, and in a positive way that encourages and helps them to return to work. This is not a one-way street. The obligations of the State must also be balanced by the responsibilities of citizens. Seeing those who are capable of working languish on welfare is not something we should ever support. Seeing young people, with all their creativity, talent and energy, languishing on social welfare is not part of my vision for Irish society. Hence, my strong political bias towards work and the policies to promote it, such as a commitment to full employment, activation, investment and skills training, not only for Ireland but for the European Union. This Bill is another positive step on the road towards an active, supportive and engaged social protection system. I commend the Bill to the House and I look forward to an informed debate and to hearing the views of Members on the measures contained in it.

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