Joan Burton (Dublin West, Labour) | Oireachtas source

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

This budget and the Social Welfare Bill are designed to build a strong economy and decent society. Budget 2016 is a carefully designed, responsible, interlocking budget where different pieces come together to form an overall picture, a picture of a country moving in the right direction, with living standards being gradually raised in every home.

The social welfare package included in the budget has similarly been carefully designed to ensure a number of core groups will benefit and, as I said, to provide for a decent society and improvements in the social welfare structure. It has been designed to include pensioners, families with children, including lone parents, carers and people with disabilities. It has also been designed to get people back to work because, although we now have a 9.3% unemployment rate and the rate has fallen again this month, there are still more people out of work than we would like. The Labour Party and I, as Tánaiste, want to move to a full employment society, with work for everyone who needs and wants a job.

I know that some of the Deputies on the Opposition benches will, for opposition's sake, vote against the Bill. Let me tell them why, on the basis of the clearest evidence, they should support it instead if they truly want to see the development of a strong economy and a decent society and if they want to assist the most vulnerable in society.

My Department has carried out a social impact assessment of the main tax and social welfare measures in budget 2016. This assessment is based on the tax-welfare micro-simulation model, SWITCH, developed by the ESRI. Social impact assessment is an evidence-based methodology which estimates the likely effects of key policies on household incomes, families, poverty and incentives to take up employment. The assessment has found that average household incomes will increase by 1.6% or €14.30 per week as a result of budget 2016. Importantly, there are higher than average gains for the bottom two quintiles, that is, the lowest income households in society, while the smallest gain is in the top quintile. The biggest beneficiaries are lone parents and dual and non-earning couples with children, with an average gain of 2%. As I said, the budget is focused particularly on families with children, whether parenting with mum and dad or the mother is parenting on her own. Non-earning lone parents and couples with children with a single earner fare above average, gaining around 1.8%.

I should emphasise that child benefit expenditure, although universal, favours lower income households. Therefore, budget 2016 will deliver considerably bigger gains for the poorest households. If any Member of the House votes against the Bill, it will be because he or she is placing politics before poorer households.

Coming to specific measures, throughout the worst of the crisis we protected the State pension. I am particularly pleased to provide for an above inflation increase of €3 a week for pensioners and carers aged 66 years and over. There is also an increase of €2 a week for adult dependants aged under 66 years and an increase of €2.70 for adult dependants aged 66 years or over. These will benefit 583,000 pensioners and over 93,000 qualified adults who live with pensioners. It is the first weekly rate increase for pensioners since 2009. From talking to pensioners I know that there is a very significant welcome for the fact that, for the first time since 2009, we are able to increase rates. While I would love it if I had €5 or €10 a week to distribute to every pensioner, the budget has been crafted in order that, from an economic point of view and in terms of getting people in businesses back to work, we have a balance which will assist the different groups in society, particularly those who are less well off and vulnerable.

I will also be making regulations in the coming weeks for the payment of a 75% Christmas bonus which will benefit older people, carers, people with disabilities, long-term jobseekers and lone parents at what is often a financially stressful time of year. For a single person on disability allowance, this will mean a bonus payment of €141. For a pensioner couple, both of whom are in receipt of the non-contributory State pension, it will mean a bonus payment of €327.50 or over €6 a week to the household. That same household will receive an extra €3 on 1 January for anybody in receipt of a contributory pension or €2.70 for other adults who do not have a pension in their own right. This is a considerable boost to the household income of pensioners.

Some 1.23 million people will receive the Christmas bonus in the first week of December and I make absolutely no apologies for paying it. As Tánaiste and Labour Party leader, my focus is on trying to ensure we can improve things for every person, not just a few. Pensioners asked me on numerous occasions to maintain the core pension rate and we did. They asked us to maintain the free travel scheme and we did. They asked us particularly, as circumstances improved, to restore the Christmas bonus. We have been able to do this, restoring 25% of the payment last year and 75% this year. Pensioners built up the country and supported their children and grandchildren when things were very difficult. The Christmas bonus is also paid to anyone with a disability, on long-term social welfare payments, the long-term unemployed and anybody parenting on his or her own.

When the Government entered office, there were grave fears that the numbers unemployed would exceed 500,000 and the deficit in the Social Insurance Fund was heading towards €2 billion. The rate of unemployment would eventually peak at 15.1%. As of this week, it stands at 9.3% and is continuing to fall rapidly, thanks to the sustained focus of the Government on returning the economy to growth and helping people to get back to work. As a result of returning to work in high volumes and more employers being able to reward employees with pay increases, the Social Insurance Fund has been transformed. The 2016 budget provides for an increase in Social Insurance Fund income to almost €8.9 billion in 2016, with expenditure estimated at €8.67 billion. This means that there will be a projected surplus of €216 million in the fund, the first such surplus since 2007. This means that if we can continue to increase the surplus, those who have contributed to their pensions can be confident that they will receive their pensions and that we will be able to improve them as we go along.

The increase in the national minimum wage to €9.15 an hour from 1 January is hugely important for low-paid workers. I pledged earlier this year that if we increased the minimum wage, we would address any PRSI step effect arising from such an increase. We are doing so in this Bill. Put simply, the measures will reduce the weekly PRSI bill for over 88,000 employees and ensure the benefits of an increase in the minimum wage will be felt by all those in receipt of it.

This is, of course, in addition to the gains from the USC changes announced on budget day.

This Bill provides for a €5 increase in the rate of child benefit - the second budget in a row in which child benefit has been increased. This will bring the monthly rate of child benefit from €135 to €140 per child with effect from 1 January 2016. Child benefit is a crucial support to families through difficult times, in particular to low and middle-income families. The increase will benefit 623,000 families and almost 1.2 million children. The introduction of a paternity benefit scheme will take effect next September, as was announced in the budget. The family income supplement income threshold is also being increased by €5 for each of the first two children per week from next January. This will mean an additional €3 or €6 per week for over 59,000 low-income working families - benefiting over 131,000 children. I will shortly make regulations to provide for an increase in the earnings disregard for the jobseeker's transition payment from €60 to €90 per week. This improved disregard will apply to existing and new recipients from next January. All earnings above €90 will be assessed at 50% from January. They are currently assessed at 60%. Funding for the school meals programme will increase by €3 million next year to €42 million. The school meals programme currently benefits 217,000 children in over 1,700 schools and other organisations. The allocation of an additional €3 million in 2016 will provide for breakfasts for an additional 27,800 pupils or a lunch or light meal for almost 12,000 additional pupils.

The strong economic recovery that we can see around us is, above all, a jobs-led recovery and this is crucial because secure and fairly paid work remains the best protection against poverty. The budget is, therefore, a pro-work budget. The budget announced increases of €2.50 per week in the top-up payments for jobseekers availing of community employment, the rural social scheme, Gateway, Job Initiative and other such schemes. Earlier this year, I introduced a new incentive called the back to work family dividend which helps jobseekers with families to return to work. This dividend provides an incentive of €1,550 per child in the first year of employment or self-employment and half that amount in the second year. Over 9,500 families and 15,000 children benefit from the dividend. These are families with children going back to work. This measure, when taken together with the employer incentives such as JobsPlus, will ensure that long-term jobseekers also benefit from the strong recovery in the labour market.

Apart from the rate increases I have already mentioned, the fuel allowance is being increased by €2.50 per week to €22.50 for the duration of the fuel season. This is another targeted measure and will benefit almost 381,000 households. The name of the respite care grant scheme is being changed to the carer's support grant. In light of the hugely important role carers play in our society, I am particularly pleased to announce that the rate of the grant is to be increased by €325 to €1,700 from 1 June 2016. It will be payable to around 86,000 carers next year. In another improvement, carer's allowance will now be paid for 12 weeks after the death of the person being cared for instead of the current duration of six weeks. I thank the carers' organisations which made that proposal to me in the course of our pre-budget discussions.

I want to use this opportunity to refer to the rent supplement scheme. My Department is currently providing support to approximately 63,800 people living in private rented accommodation. The cost of the scheme in 2015 will be over €298 million. Between rent supplement, the housing assistance payment and the rental accommodation scheme, the State is currently accommodating almost 100,000 households via the private rented market. Given the size of the State's involvement in the private rented sector, any general increase to rent supplement would serve only to increase rents overall. That would particularly affect low-income households which are renting, including students and low-paid workers. Instead, my Department is operating a framework which ensures that families or individuals at risk of losing their rented accommodation can get urgent assistance from the community welfare service. Department officials will on a case-by-case basis increase the rent supplement limits to ensure people stay in their homes. To date, more than 4,400 households have had their rent supplement increased. The Minister for the Environment, Community and Local Government and the Minister for Finance will in the coming days finalise a housing package which will address both the crucial issues of supply and providing greater certainty for tenants.

I am very concerned about reports in recent days of mistreatment of workers on some, and hopefully few, Irish fishing trawlers. Following a decision at Cabinet yesterday, the Government is immediately setting up an inter-departmental task force to examine the complex issues arising. The aim is to formulate a co-ordinated and effective cross-Government approach. My Department's special investigation unit, which in particular tackles fraud, will actively participate and assist in any multi-agency approach that emerges or is required in the context of Government-interdepartmental decisions or proposed joint initiatives in this sector. We do not want to see any workers taken from tens of thousands of miles away, put on board small fishing vessels and, if one is to judge by the story, having their passports taken and their ability to go on land restricted in some cases. This is an absolute disgrace in light of the traditions and history of this country. The Government and I are determined to see an end to this.

I will now turn to the specific measures in the Bill. Section 1 provides for the Short Title of the Bill, its construction and collective citation with the Social Welfare Acts. Section 2 provides for the definition of certain common terms used in Part 2. Section 3 provides for an increase in the rate of contributory State pension. It also provides in respect of persons who are 66 years or older for increases in the rates of the following schemes: widow's, widower's and surviving civil partner's contributory pension; death benefit; and disablement pension. It also provides for increases in rates for qualified adults. Section 4 and Schedule 1 provide for an increase in the personal and qualified adult rates of the non-contributory State pension. It also provides for an increase in the rate of carer's allowance for recipients who are 66 years or older. This will be particularly important for people on a half-rate carer's allowance who are looking after their spouse or partner in addition to whatever State pensions they may be entitled to. Section 5 and Schedule 2 provide for the renaming of the respite care grant, which will now be the carer's support grant. Section 6 provides for an increase of €325 to the carer's support grant from €1,375 to €1,700. Section 7 provides for an increase in the monthly rate of child benefit from €135 to €140.

Section 8 provides for an increase of €5 per week in the family income supplement, FIS, earnings threshold for families with one child and €10 per week in the thresholds for families with two or more children. This measure comes into operation on 7 January 2016. Section 9 provides for the period in which carer's allowance is payable following the death of the person being cared for, to be extended to a period of 12 weeks.

Section 10 provides for two changes in pay-related social insurance, PRSI: a new tapered PRSI credit is being introduced for employees insured at class A whose earnings are between €352.01 and €424 per week. The upper threshold at which the lower 7.8% class A rate of employer PRSI applies is being increased from €356 to €376 per week. These measures take effect from 1 January 2016.

I wish to advise the House that I also intend to introduce amendments on Committee Stage on a number of matters. Earlier this year we saw the historic result of the marriage equality referendum. The subsequent legislation, the Marriage Act 2015, was enacted on 29 October. On Committee Stage I will be bringing forward amendments to the Social Welfare Consolidation Act 2005 in light of the enactment of that Act.

I will also be bringing forward amendments to provide for the inclusion of registered nurses within the definition of medical assessor in the Social Welfare Consolidation Act 2005. These nurses will be employees of the Department. Other amendments will cover the inclusion of credit unions providing personal micro-credit loans among the specified bodies for the purposes of the household budgeting scheme, and the correction in the Bill, as published, of the figure for the FIS earnings threshold for a family of seven children. I also intend to bring forward an amendment of the Pensions Act 1990 to enable the Financial Services Ombudsman to carry out the role, duties and functions of the Pensions Ombudsman in light of the intended merging of those two offices.

Over the recent very difficult and challenging years, our social welfare system has continued to play an essential role safeguarding the most vulnerable people in our society. Having protected that very strong system through the worst of times, we are now strengthening it further in better times. The social protection measures contained in this Bill and in budget 2016 are built on the foundations of the recovery. The clear objectives of these measures are to secure improvements in living standards and to create greater opportunities for every person, every family and every community.

We have a significant social welfare package this year, including the measure concerning the Christmas bonus, improvements in a range of payments, benefitting in particular pensioners and retired people, people on disability allowance, carers, families with children and families at work, who have children and are on low incomes. That is made possible by all the taxpayers, workers and employers in the country who pay PRSI. The fact that so many more businesses and individual workers are getting back to work has been the mechanism that has enabled us to provide for the improvements and changes we have made in the Bill. I have a duty to those people to ensure that every cent of their PRSI contributions is used to improve the status of the Social Insurance Fund, which was almost wrecked when I came into office and heading for a deficit of €2 billion. This will for the first time be back in surplus next year so that pensioners and contributors can have confidence in the availability of the retirement pension in this country. I must also make sure that all social protection and welfare money goes to those for whom it is intended, that they get the payments they are entitled to and that the special investigations unit, inspectors and departmental staff will do their best to ensure that nobody can defraud the social welfare system or take money that rightly should go to people such as pensioners.

I thank all the staff in the Department who faced very difficult times during the crisis but have transformed the Department from the payments Department of old to one that provides a good quality public employment service, working with employers to get people back to work. It is important people recognise that the public servants in this country, working in the Department of Social Protection have made a very special contribution to individual lives and to the recovery of the country in general.

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