Joan Burton (Dublin West, Labour) | Oireachtas source

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

When I introduced the Social Welfare Bill 2014 in this House last November, I told Deputies that my aim was to begin the process of restoring living standards for families, older people and low and middle-income workers. I was pleased to be able to provide for modest increases in child benefit and the living alone allowance from the beginning of this year. They were the first increases in social welfare payments to be provided for since the beginning of 2009. In this Bill, I am providing further help for welfare-dependent families by introducing a new support to help them to return to work. The new back to work family dividend, which will be payable for two years, will help jobseekers with families and lone parents to return to work or to increase the number of hours worked. I am also enhancing support for lone parents with children between the ages of seven and 15 through an extension of eligibility for the jobseeker's allowance transitional arrangements and changes in eligibility for the one-parent family payment.

All of these improvements are possible as a result of the many sacrifices made by the Irish people and the difficult choices made by this Government to successfully tackle the unprecedented economic and banking crisis. These decisions have delivered an economic recovery that is gaining real momentum, as we saw this afternoon when the Exchequer figures for February were published. We are now seeing the benefits of that recovery. When the quarterly national household survey was published last week, it showed that 3,300 new jobs were created every month in 2014. Unemployment decreased by more than 15% over the course of 2014. The number of people in work has increased by 90,000 since we introduced our strategies to create jobs and reduce unemployment. However, unemployment remains too high and we still have much work to do. The February weekly reductions in the number of unemployed people were extremely positive. I anticipate that when the CSO produces the live register figures tomorrow, the rate of unemployment will be just over 10%.

The household national survey figures that were published last week clearly demonstrate the continuing success of the Government's twin-track approach to creating jobs and helping people to return to work. Pathways to Work is ensuring through the provision of return-to-work supports, training and education that those on the live register are ready to avail of the 3,300 new jobs that are being created every month. The action plan for jobs is helping to accelerate the transition to a sustainable, jobs-rich economy. Under the pathways strategy, this Bill provides for the introduction of a further employment support, namely the back to work family dividend.

One of my main priorities since becoming Minister has been to transform the Department of Social Protection from the passive benefits provider of old to a Department that focuses on assisting jobseekers to return to work. The Department continually reviews its supports for jobseekers to ensure they do not act as a disincentive to work. My Department's work in this area clearly demonstrates that the great majority of social welfare recipients have a strong financial incentive to take up employment. Our experience on the ground is that people are very eager to do so. These findings are supported by the work of the Economic and Social Research Institute, which has confirmed that work pays more than welfare for almost six out of seven unemployed people. These findings hold true even when in-work costs, such as child care and travel to work, are taken into account. This evidence clearly shows that if we can create jobs, people will leave the welfare system to take up work. They want to do so.

It is reasonable that people who have been struggling while out of work for long periods will be concerned about the potential implications of moving from welfare to work, particularly if they have children. This is where the back to work family dividend comes in. This scheme will allow people in a family who are returning to work to retain the child-related element of their welfare payment, known as the qualified child increase, for two years. The dividend will be paid at a standard weekly rate of €29.80 per child, subject to a maximum overall weekly payment of €119.20 per week in the first year. The rate payable in the second year will be half of the rate payable in the first year, subject to a maximum overall weekly payment of €59.60. Over the two-year payment period, the dividend will be worth €2,324 in the case of a one-child family, €4,649 in the case of a two-child family, €6,973 in the case of a three-child family and €9,298 in the case of a family with four or more children. This will mean, for example, that with the support provided through the family income supplement and the back to work family dividend, a person with a partner and four children who gets a job paying the minimum wage will be better off by €304 a week, or €15,790 a year, after moving from jobseeker's allowance into employment. Every Member of the House should welcome this highly progressive policy. The back to work family dividend scheme will operate during the period of economic recovery and will cease to operate with effect from 1 April 2021. The dividend will be tax-free and will be payable in addition to any family income supplement entitlement the person may have.

I would like to inform Deputies that I intend to propose a Committee Stage amendment to extend entitlement to the one-parent family payment to lone parents who are also eligible for the half-rate carer's allowance payment until their youngest child reaches the age of 16.

I have had the privilege of meeting many lone parents since I became Minister for Social Protection, some of whom are also carers. The measure that I am proposing acknowledges the special situation of lone parents who are caring and, in particular, acknowledges the commitment of lone parents who are caring for people other than their own child, such as a parent or sibling who requires full-time care and attention.

The one-parent family payment scheme already provides for lone parents who are caring for children under 16 years of age and who are in receipt of the domiciliary care allowance. The entitlement is not affected by the ongoing changes to the one-parent family payment scheme. The amendment I am now proposing will mean the same level of support will be provided to those caring for someone other than their own child. These measures are expected to positively impact approximately 1,800 people, including the 800 individuals who were due to lose entitlement to one-parent family payment and half-rate carers allowance from 2 July this year. The balance is made up of those who have lost entitlement since July 2013, as well as lone parents who will qualify for one-parent family payment for the first time when their youngest child is seven years of age or older and who are in receipt of carer's allowance.

I want to speak about the one-parent family payment and the changes to the system introduced in the Social Welfare and Pensions Act 2012. Despite significant levels of investment, the one-parent family payment scheme has not been successful in preventing lone parents being significantly more at risk of consistent poverty compared to the population as a whole. In 2004, lone parents were more than four and a half times more at risk of consistent poverty when compared with the population as a whole. That was at a time when the economy was doing well. A significant reason for this was the passive nature of the scheme up to the introduction of these changes. Prior to the reforms, lone parents could have been on the scheme until their youngest child turned 18 years of age, or 22 years if they were in full-time education. Essentially, therefore, society was saying to lone parents that it saw nothing more than welfare for them until the youngest child reaches adulthood. We can do much better than this for the parents and for their children. I have always believed the best protector against poverty is fairly-paid work and that welfare is not a long-term solution for anybody of working age.

Ireland's supports for lone parents have been out of line with what has been happening internationally, where there has been a movement away from long-term and non-conditional support towards a more active engagement approach where education, training and work experience supports are tapered based on the age of the youngest child. In New Zealand, the Netherlands and the UK, including the north of Ireland, the equivalent lone parent supports finish when the youngest child reaches the age of five years. The purpose of the phased one-parent family scheme changes is to reduce long-term social welfare dependency by ending the expectation that lone parents will remain outside of the workforce indefinitely. These reforms aim to provide the necessary supports to lone parents to help them to access the Department's range of education, training, and employment programmes, to develop their skills set and, ultimately, to secure employment and financial independence.

The reforms commenced in July 2013 and since that date in excess of 11,000 lone parents have made the transition from one-parent family payment onto another social welfare payment. Those customers who have moved to a jobseeker's payment are now also being included for activation, giving them access to education, training and employment programmes. I spend a lot of my time visiting community employment schemes and community education and visiting colleges and organisations like An Cosán, which has a huge programme on encouraging lone parents or people who finished education early back into educational opportunities. The demand is there for lone parents to upskill their education and training with the view, ultimately as their children become less dependent, to being able to take part in work on a full-time or part-time basis.

The final phase of the one-parent family payment scheme age change reforms will be taking place on 2 July 2015, when the maximum age limit of the youngest child at which the payment to one-parent family payment recipients will cease will be reduced to seven years for all recipients. It is anticipated that approximately 30,200 recipients will transition out of the one-parent family payment scheme on 2 July 2015. Departmental officials have made extensive contact with families and lone parents who may be affected. I have already mentioned the 800 or so who will see their one-parent family payment eligibility extended if they are also eligible for the half-rate carer's allowance payment. Another 20,000 lone parents will experience no income changes or will gain after the transition, from between €10 to €150. Of the remaining 10,000, who are in employment, the majority will have an immediate incentive to increase the number of hours worked each week to 19. Should they do so, they will be in a position to claim family income supplement and the back to work family dividend. These individuals will then be financially better off than their current position.

I would like to make one further point about this issue. Child care is an issue for lone parents and I recognise that. It is why we specifically introduced the jobseeker's allowance transition scheme from June 2013 to support lone parents with young children affected by the reforms. Parents who have a youngest child aged under 14 years, and who continue to parent alone, are entitled to the jobseeker's allowance transition payment. These customers are exempt from the jobseeker's allowance conditions that require them to be available for, and genuinely seeking, full-time employment. They can instead work part-time without restrictions and still receive the jobseeker's allowance transitional payment, subject to a means test. They also have access to the Department's Intreo services and to related supports to enable them to become job-ready and to find employment.

We have the experience in the Department of dealing with the 11,000 people who, over the past three years, have made the transition. We can say that there is a huge desire among lone parents who are given information about what is available and given one-to-one interviews with one of our officials to make an ambitious plan, working with the staff in the Department, about what they want to do, their goals, the kind of employment they would like and how they will go about acquiring that employment on a full-time or part-time basis.

I am in the happy position of having been able to meet lone parents who took the opportunity to return to education, to go to college to pursue FETAC-certified courses, and who, as a consequence, are now in a position to obtain jobs which are better paid than those which they would have obtained if they did not possess any qualification.

The revised structure is infinitely better than the passive scheme we had in place before. It will help lone parents to return to work and build a better financial future for themselves and their families over time. Those to whom I refer will be assisted by my Department throughout the process. Again, this is something every Deputy should support. There are those who argue lone parents should be left on lone parent allowance for up to 18 years or even longer. We are referring to people who are in the prime of their lives. In that context, there are interventions which take place when their children are seven years old and in first class in primary school and again when they reach 14 years of age and more than likely be in secondary school. Said interventions include a range of options relating to education, training and work experience. We want to help those to whom I refer to avail of these options and put themselves in a position to obtain well paid employment. That is the objective.

What I have outlined offers a very important avenue of opportunity for lone parents. It runs contrary to saying to them that if they have babies when they are 22 or 25 years old and they are parenting on their own, our vision for them is that they will remain in receipt of social welfare payments and become dependent on them until their children reach adulthood. As a woman, I simply do not understand why that would be a more attractive option than becoming involved in education or training. It must be remembered that approximately half of the 30,000 people in the country who are parenting on their own are full-time homemakers. There will be absolutely no changes whatsoever to their payments. All that is being offered is an opportunity to take part, if they so desire and as their children grow older, in education or training. They can do this when their children are established in primary school and again when they go to secondary school.

In addition to the changes to entitlement to the one-parent family payment in the case of lone parents who are also eligible for the half-rate carer's allowance payment, I will also be proposing a further Committee Stage amendment to clarify the role of my Department's medical assessors in the social welfare decision-making process. It will also enable external medical practitioners to be authorised to provide medical opinions for social welfare decision-making purposes.

I will now outline the various provisions contained in the Bill. Section 1 provides for the Short Title and its construction and collective citation with the Social Welfare Acts.

Section 2 provides for the definition of the term "Principal Act" for the purposes of Part 2 of the Bill as meaning the Social Welfare Consolidation Act 2005.

Section 3 clarifies certain legislative provisions applying to the carer's benefit, carer's allowance and respite care grant schemes to bring them into line with the operation of these schemes. It also clarifies that eligibility for these schemes is determined by a deciding officer on the basis of all of the information provided to support the applicant's claim.

Section 4 provides for an extension of the jobseeker's allowance transitional arrangements which were introduced in July 2013.

Sections 5, 6,11 and 13 and the Schedule to the Bill deal with the introduction of the new back to work family dividend and consequential matters.

Section 5 provides for the discontinuance of the existing scheme of continued payments for qualified children. The scheme provides that the increases in jobseeker's benefit and jobseeker's allowance payable in respect of qualified children can continue for up to 13 weeks after the person takes up full-time employment which is expected to last for at least four weeks. The scheme will be discontinued on the introduction of the back to work family dividend. As stated, the latter will be 100% of the qualified child increase for the first year and 50% for the second.

Section 6 provides the legislative basis for the back to work family dividend by inserting a new Part 7A into the Social Welfare Consolidation Act 2005.

Section 7 strengthens the legislative provisions relating to the authentication of the identity of a person presenting at a post office for a social welfare payment on his or her own behalf or, where a person has been appointed to act as an agent on behalf of a social welfare beneficiary, the authentication of the identity of that agent. In addition, the section allows the Minister for Social Protection to make special arrangements for specific categories of persons for the furnishing of identifying information directly to the post office where the payment is to be made. These arrangements will be put in place for members of certain vulnerable groups such as homeless persons who may have difficulty in retaining identity documentation.

Section 8 clarifies the application of certain provisions relating to the recovery of social welfare payments that have been obtained fraudulently.

Section 9 provides for a number of amendments to the operation of the provisions relating to the recovery of the value of certain illness-related social welfare payments from compensation awards which were provided for in the Social Welfare and Pensions Act 2013 and which came into operation in August 2014.

Section 10 provides for the inclusion of the Pyrite Resolution Board in the list of bodies specified in Schedule 5 to the Social Welfare Consolidation Act 2005. Bodies specified for the purposes of Schedule 5 are authorised to use personal public service, PPS, numbers and the public services card for the purposes of carrying out transactions with members of the public, sharing personal data and information for the purposes of carrying out relevant transactions and exchanging data for the purposes of controlling social welfare schemes and other schemes and services administered by specified bodies. The Pyrite Resolution Board is responsible for the implementation of the pyrite remediation scheme.

Section 11 and the Schedule provide for a range of consequential amendments to the Social Welfare Consolidation Act 2005 arising from the introduction of the back to work family dividend scheme.

Section 12 provides for a number of amendments to the Social Welfare Consolidation Act 2005 to delete or update obsolete references to a number of schemes contained in the Act and to correct a minor typographical error.

Section 13 amends the Taxes Consolidation Act 1997 to provide for the exemption of income received under the back to work family dividend scheme for the purposes of liability for income tax.

Section 14 amends section 38 of the Personal Injuries Assessment Board Act 2003 which relates to the enforceability of assessments made in accordance with the Act and provides that an order to pay issued by the Personal Injuries Assessment Board shall state the respondent to whom it is issued is liable to pay the Minister for Social Protection the amount of recoverable benefits specified in a statement of recoverable benefits, if any.

The main purpose of the Bill is to provide for the introduction of the back to work family dividend to help jobseekers with families and lone parents to return to work or to increase the number of hours worked. Taken together with all of the other employment support and activation measures introduced in recent years, this will ensure people who have been on the live register for prolonged periods will be in a much better position to benefit from the recovery in the labour market. As stated, the fall in the numbers on the live register for February appears extremely positive and I anticipate that the figure will stand at just above 10%. As Deputies are aware, the fall in unemployment means that employers are hiring. In addition, lots of people are becoming self-employed and either contracting or subcontracting. I take the opportunity to point out that an individual going to work in a self-employed capacity in the construction industry will qualify for the back to work family dividend.

I am conscious that a huge number of men lost their jobs when construction died from the beginning of 2008 onwards. The back-to-work family dividend will be worth just under €90 per week to a man with three children who goes back into construction either as a traditional employee or a self-employed person. It is meant to tide the individual over when he or she returns to work either as an employee or on a self-employed basis. People can be very nervous about what is going to happen to their takings or income flows. This will cushion people during their first two years of returning to employment.

In terms of the live register, I am conscious that much remains to be done even as we fall below the European average. The live register indicates that long-term unemployment is falling and, happily, the level of youth unemployment is also falling. I am determined to ensure our activation policies make a real difference to the many people who are still unemployed notwithstanding their best efforts to secure a job. One consequence of the recession is that such people have been frustrated by the lack of opportunities to match their ambitions with their talents. The people who are currently out of work in Ireland constitute a potentially powerful and fantastic pool of talent. It is our job as legislators to help them along the road back from unemployment. They became unemployed often through no fault of their own. Their employment may have collapsed or their firm closed down. Particularly in respect of those parenting on their own, we need to offer them opportunities to gain valuable training, education, qualifications and skills which will allow them to earn a decent income that will help to improve living conditions for themselves and their families. Regardless of how generous any welfare system may be, at the end of the day it cannot compare to the improvement in individuals' incomes once they return to work. That is the way to improve people's lives.

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