Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

I welcome the opportunity to contribute to the Social Welfare and Pensions Bill 2014, which will focus on effecting remedies and I hope address the various anomalies which have been identified in a number of areas relating to welfare and pensions. It is important that the social welfare system must provide better services and deal with poverty traps that become apparent. They must be eliminated. Opportunities must be facilitated for jobseekers, which to date have involved structural reforms. That will also be the case in the future. We must also acknowledge that almost nine out of ten households in the country receive some form of social transfers.

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It is important we strive to maintain the strongest form of support for those who lose their job, fall ill or are dependent on a fixed income to get by. It is also the focal point of ensuring there is an effective system of social welfare transfers in place to tackle and eradicate poverty. We should never make an apology for having this as a central objective and thrust of social policy. We should always continue to do so to ensure a level of social support is available to people at times of need.

The best and most effective way to combat and eradicate poverty, of course, is to get people back to work. The Minister has devised several initiatives to help get people back into employment. Some of them have been harshly criticised, however. Last weekend, I spoke to a director of an indigenous meat processing company who availed of some of these initiatives and, as a result, an additional 20 people are employed in the plant. The more we can get off the unemployment register, the more savings can be achieved. Every 20,000 people removed from the register means savings of €95 million on social welfare expenditure. Further savings could be effected throughout the year by creating more job opportunities and combating welfare fraud through effective control measures.

I urge the Government to bring back the Christmas bonus for social welfare recipients. It is probably not possible to re-introduce the full week’s additional payment but at least a decent portion of the bonus should be paid to defined householders and individuals who are often put to the pin of their collar to survive the demanding period during Christmas. It would also be very important in make a positive contribution to the family environment during the Christmas. The bonus was well availed of and used over the years when it was in place. It is often thrown into the mix that this Government did away with the bonus when, in fact, it was the previous Administration. I know from sitting at Cabinet for ten months that this Government faced a financial abyss and straitened economic circumstances. However, restoring the bonus would help.

This Bill aims to improve the administration of the social welfare system and safeguard its sustainability. Several new initiatives focus on debt recovery for people who have been overpaid social welfare benefits. The Department now has extensive powers to recover moneys which have been erroneously paid out or claimed fraudulently. These powers were first introduced in 2012 and permit up to 15% of a person’s social welfare entitlement to be deducted where there is an outstanding overpayment. There are also facilities to put in place detachment from earnings in such cases.

I would sound a word of caution in cases where a person or people in genuine error believed they were entitled to a payment. For example, there could be a case of a widow’s pension which the recipient would have been entitled to, based on the deceased spouse’s contribution. However, she subsequently cohabits but does not realise she is no longer entitled to the payment. These people are now being focused on when it comes to overclaims by the Department with significant amounts demanded from them. I know of cases involving over €100,000. I advocate a reasonable approach to be taken in such cases, notwithstanding there may never be a full recovery of the outstanding amount. A demand should never be greater than 15% of a current social welfare payment. We must not hound these people who genuinely believed in their original entitlement and place stress on those who may be advanced in years, particularly when they may remain dependent on social welfare payments in the future. Where genuine errors are made and where the Department ought to have been aware of the circumstances that prevailed when the person when made their application, then the Department should not pursue or penalise these people now. With cross-referencing between various Departments, it is unlikely this will happen in the future.

I note the extension of the attachment provision in this Bill to payments to be made in the future by public bodies or Departments. This makes sense but, again, a reasonable approach must be adopted in cases where a recipient may have committed irrevocably to another creditor or is ill and requires the moneys for health care payments. Individual circumstances must be taken into account and a reasonable approach adopted. The heavy hand of the law approach cannot be used in this regard.

The Bill allows for the Minister to pay an employee a lump sum payment following redundancy, in circumstances where the payment has not been made by the employer to the employee. Any refund of PRSI contributions due to an employer in such a case will be subject to a deduction in the amount of the redundancy lump sum payment. That is a fair clause.

Up to €70 million was recovered in overpayments which goes close to paying for the free travel scheme, an essential and vital scheme which enables older people, especially in rural areas to travel, playing an important and pivotal role in combating rural isolation and exclusion. Savings and effective recovery mechanisms are important ways of ensuring funding is available to ensure the continuation of so many vital schemes such as free travel.

The habitual residence condition may be reviewed after date of award of a payment to ensure it is being satisfied. I recall when I was spokesperson on social welfare that many Irish clerics, priests, nuns and brothers, who returned from missionary work abroad to retire in Ireland were denied welfare payments because of the habitual residence condition. While it was subsequently modified, that is the type of anomaly and consequence that was not envisaged when the condition was introduced. It is important these conditions are continuously reviewed to ensure no hardship or imposition arises as a result.

The extension of social insurance cover has been achieved in this legislation by transposing the relevant provisions of the directive 2010/41/EU which focused on the equal treatment of men and women engaged in a self-employed capacity. Over the past 50 years, many farmers’ spouses, led by Mrs. Murphy of the Wexford IFA, argued for this provision which will benefit 6,000 of them. Many people will regret this is not retroactive but it is still an improvement. A civil partner participating in his or her partner’s business must earn at least €5,000. Up to now only one of the couple could be insured as a self-employed worker for social insurance benefits. The spouse or civil partner will now be entitled to benefits, subject to the contribution requirements, such as maternity payment of 26 weeks, widow’s pension, civil partner’s contributory pension or the State contributory pension in their own right. The equal treatment directive will make an important contribution in this regard.

I am disappointed with the reaction of some of the self-employed representative bodies to the need to extend social insurance coverage for the self-employed. I have been self-employed for the most part for many years. I know the Minister received a report 12 months ago from the advisory group on tax and social welfare, chaired by Ita Mangan. It recommendations, despite being meritorious, were flatly rejected by spokespersons for various employers organisations. Some of their utterances in this regard are at variance with what I hear from so many self-employed people. In the course of canvassing during the recent local and European elections, a recurring theme was why are the self-employed left out of the social insurance loop. Many self-employed said they were willing to pay extra to ensure they will be covered in the event of another economic crash or, more immediately, if they fall ill and have no means of earning a crust to sustain themselves or their families. They have been treated as non-statistics for the purpose of social welfare claims, falling through the cracks of the system.

We can no longer behave like ostriches. We must grab the bull by the horns. If these organisations persist in their objections, we should introduce a voluntary contribution mechanism for the many thousands who wish to contribute and gain subsequent coverage. Having such peace of mind is very important to the self-employed. I do not like the voluntary nature of such a proposal but, as some say, half a loaf is better than no bread. We should give people the opportunity to participate in such a scheme. If they have a choice there will be no point in crying wolf afterwards. A mandatory scheme is the right and proper way to proceed and I firmly believe this because ultimately they will be the people who will benefit.

Many people suffered during the course of the recent crash. I met many families of people who were self-employed in various areas of trade and they certainly took a hammering. Look at what happened to people in the recession. Many workers, particularly in the construction sector, operated on a self-employed basis, making class S PRSI contributions. These included roofers, joiners, plumbers and electricians. As a result, these workers had no entitlement to insurance-based jobseeker's benefit. Likewise, they still do not have an entitlement to invalidity pension or occupational injury payments which are available to employers contributing to the class A PRSI rate. Many people argue that they are entitled to jobseeker's allowance. This is true, and a significant number have received it, but by hell, were they put through the loops and hoops. The process was very demanding and stringent, and one can understand this. It is all right to base a benefit on past income, but the snow that fell last winter is gone, as is the money they earned. Often, the assessment was based on the previous 12 months, which was ludicrous. Christ almighty, it would drive one to distraction to see such measures. Self-employed people will grab this lifeboat and make contributions.

We are all acutely aware of how self-employed persons have a perception that they cannot access means-tested supports. When they go to apply they are put through the wringer. The Citizens' Information Board and MABS have reported on the difficulties faced by people. I am not making it up. It has been acknowledged in the Dáil, particularly by Deputy Ray Butler, that the Minister has tried to improve access to these payments for the self-employed. This is acknowledged and we accept it, but we must look at where it is.

Given that the self-employed are subject to insecurity of income, there is no valid reason they should not benefit from and contribute to the system on the same basis as others. Approximately 280,000 or 290,000 people are self-employed, which is approximately 15% of the overall employment figures. It is time we addressed this issue once and for all. At present, self-employed persons are liable for PRSI at the class S rate, which entitles them to access long-term benefits such as the contributory State pension and widow's, widower's and surviving civil partner's contributory pension. It also provides cover for maternity and adoptive benefits. The rate is 4% of all income and the minimum contribution is €500. It was €286 for donkey's years. Self-employed people are eligible for means-tested payments, but the assessment of income is convoluted and it is difficult for people to qualify. I stand over this statement.

Extending social insurance coverage to the self-employed, as pointed out in the expert group's report, would bring the Irish social security system closer to the levels in other countries. In many EU member states coverage is more comprehensive, particularly with regard to work-acquired injuries. Eligibility, qualifying criteria and payment conditions vary from country to country, as do contribution rates. A total of 25 member states provide cover for illness or invalidity, 18 member states provide cover in some way for occupational injury or disease, and 12 member states offer cover in the case of unemployment. Only Ireland and the Netherlands do not have any cover of this nature. Belgium has a separate social insurance scheme for self-employed workers. In the majority of EU member states social protection for the self-employed is provided through general social security arrangements. It is clear that the extension of social insurance coverage to the self-employed would bring the Irish social security system closer to that which prevails in other EU member states.

It is fair to say that ordinary self-employed people do not need actuarial assessments to realise that in order to be eligible for illness, incapacity or jobseeker's benefit they would have to contribute substantially more than 4% of their income. From my experience and discussions with them, they are prepared to make a contribution because ultimately it would be a self-serving and worthwhile exercise to do so. The expert group did not recommend extension of the PRSI system to provide jobseeker's benefit to the self-employed, but it had no qualms in recommending that social insurance for the self-employed should be extended to provide cover for contingencies for long-term sickness or illness. This should be provided irrespective of whether the sickness or illness was acquired through work. It should be limited to longer-term illness and disability support such as invalidity pension and partial capacity benefit.

We have a template from the report issued in May 2013. Like many reports, it has been allowed to gather dust. I appeal to IBEC, ISME and other such groups to discuss this. Everybody here was on the hustings in recent weeks. I was amazed at the number of people who raised this issue with me. I raised it as a Topical Issue several years ago, so it is not an issue to which I have come recently. I believe in it strongly. It is apposite to note that the group recommended extending social insurance to the self-employed to provide cover for long-term ill-health or incapacity on a compulsory basis, as application on a voluntary basis through opt-in or opt-out could lead to selection of bad risk and would undermine the social solidarity and contributory principles which underpin the social insurance system. The group was strongly in the mandatory camp rather than supporting an opt-in or opt-out system.

To get it up and running, it is important to examine opt-in and opt-out and conduct a trial for 12 for 24 months to see how it would work. Perhaps a trial would have to be for a longer time, such as five years, because one must contribute for a minimum time to obtain benefits. I hope there will not be any need for it, but it is a fallback position and a safety net. Every self-employed person knows it will cost more; they all live in the real world.

There will be more automation because of the prevalence of electronic funds transfers and efforts to combat fraud, but we should hasten slowly. The sustainability of post offices is important. When people go into post offices they have personal contact. They are identified and are known well by the postmaster or postmistress, and this is a strong secure element. There is also the transactional value it brings to post offices. We should slow down the rush towards electronic funds transfers, because many people do not want them. I deal with many elderly people who are happier with a face-to-face transaction and with the money being handed out. They may buy other things in the post office which will contribute to its long-term sustainability and viability. The post office serves as a very important bulwark in rural and urban Ireland and it is recognised as such.

Some people just raise their head for an electoral opportunity because they think there is something in it, but for the past 25 years I have been a strong advocate of the importance of rural sustainability. Everybody is rushing to the cheap shops and the big out-of-town stores. Soon there will not be one shop in a village in my area which now has four shops. It will happen with post offices and corner stores. Efficiency, effectiveness, computerisation and technology are all right, but Padraic Neary from Tubbercurry, whose letters to the editor I always read, states that we should slow down and think because, while technology is great, it will mean fewer people involved, which in turn will mean shops will disappear. Is this the society we want? It is not one to which I subscribe or one that I want. People should take note of this, be cognisant of the situation and slow down before we wipe out shops in rural areas and rural infrastructure altogether.

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