Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I support an increase in the Christmas bonus, but a huge section of the population is shackled to poverty which is all year round, not just at Christmas.

The Minister devoted a good part of her contribution to the elderly. This is the first pension increase since 2009-10, but the rate of inflation since the last increase has been running at 4.5%. In normal circumstances that would represent an erosion of 4.5% in the purchasing power of what the people concerned are getting, but the position is somewhat worse than this. The inflation basket includes a range of items which the elderly would not purchase and the inflation figure for the primary purchases made by the elderly, of whom 70% rely exclusively on the old age pension, would be closer to 6% or 7%. The pension rate in 2010 would be worth some €10 or €11 less in purchasing power in 2015 and 2016. That would be bad enough in itself, but we must add to it the fact that the telephone rental allowance has been taken from the elderly, the household benefits package which was enjoyed almost exclusively by the elderly has been slashed, the method of calculation for contributory old age pension has been dramatically changed to the detriment of pensioners, there have been cuts to rent supplement and reductions in the higher rates of disability allowance and invalidity pension for the over-65s. There has been a severe restriction of tax relief on medical insurance contributions, which disproportionately affects the elderly, while the threshold for the drugs payment scheme has been increased from €120 to €144 per month or by approximately €5.50 per week, almost double the increase in pensions for the over-65s. Housing adaptation and mobility grant aid for the elderly and the disabled has been reduced quite considerably. There have also been changes in eligibility for medical cards for the over-70s and the loss of the bereavement grant, as well as many more cuts.

On top of all this must be added a raft of new taxes, charges and impositions. For example, the elderly are now subject to water tax, with no account being taken of an inability to pay water charges, and they are also subject to property tax, again with no account being taken of ability to pay. Those who try to provide for themselves are subject to a pension levy which has taken €2.5 billion out of their savings, while hundreds of thousands of home help hours have been slashed. Contributions to the fair deal scheme have been increased by 50%; carbon tax has been increased, while the waiver for refuse collections has been abolished. The VAT rate applicable to most of the elderly and pensioners which was 21% has been increased to 23%. An increase of €3 per week is supposed to compensate the elderly for these three things. The Minister said she had been talking to a number of pensioners who had been showering her with praise for her performance, but I have been talking to a different group who have something very different to say.

I agree with the beginning of a process to bring about tax equalisation between the self-employed and PAYE workers, but I deplore the fact that the Minister has steadfastly refused for the past five years to provide a safety net for those who set up on their own. We are told it is impossible to introduce a system of social insurance under which the self-employed can apply for jobseeker's benefit if they lose their job. We are told it is impossible to provide social insurance if they get sick and lose their livelihood due to illness, despite the fact that we are almost unique in not having such a system. Other countries have such a system, including Germany, Sweden, Austria, France and even smaller ones such as Lithuania and Romania, but we cannot and this is supposed to be a country which encourages entrepreneurship.

I have no problem with the €550 tax credit that is being given to the self-employed. However, is it not somewhat perverse that €550 could be given to be somebody who might be running a very successful business and earning millions in profits and yet we cannot devise a system to allow people, if they wish, to contribute to a social insurance system which gives them a safety net if they lose their business for one reason or another particularly due to illness?

The Social Welfare Bill is significant not for what is in it, but for what is not in it. We calculate that there have been 40 social welfare cuts during the regime of this Government. Two of them have been fully restored and another has been half restored - so two and a half down, 37 and a half to go. For example, there has been no reversal of the cut to the school clothing and footwear allowance, which represents an imposition on the most vulnerable because one almost has to pass a starvation test to qualify for that allowance. It has been slashed to the tune of approximately €40 million and yet there has been no reversal of that.

There has been no reversal of the increase in disallowance of illness benefit from the first three days to the first six days of illness. I have come across many cases where employers do not pay this which effectively means that somebody who cannot work due to illness must now fend for themselves for six days instead of three. There has been no reversal of the cut in invalidity pensions for the over-65s or the cut in disability allowance for the over-65s. There has been no reversal of the cut in maternity benefit, which is costing expectant mothers on average €3,500 a year. There has been no change to the adverse changes in the farm assist scheme. There has been no reversal of the increases in minimum rent contributions for rent allowance purposes. The Tánaiste referred to the discretion that welfare officers have. According to figures recently released to me, there have been in excess of 600 applications for that discretion in Limerick city alone and only two have been successful.

There has been no reversal of the increase in the threshold for the drugs payment scheme. There has been no reversal of the restrictions in eligibility for the State pension scheme. Jobseeker's benefit for part-time workers was changed to the disadvantage of those workers and there has been no reversal of that. There has been no reversal of the reduction in the employer redundancy rebate. There has been no reversal of the household benefits package changes. There has been no reversal of the changes from nine months to six months for jobseeker's benefit. There has been no change in the reduction of the provision for exceptional needs payments. There has been no change in the abolition of the €300 cost of education allowance. There have been 40 cuts and two and a half reversals.

The net result of these five regressive budgets is something very interesting to behold. According to the Department of Finance, we are likely to enjoy growth of approximately 4.5% to 5% this year with a projected growth next year of 5% - although Professor Honohan might disagree. Nevertheless and despite the burgeoning corporation tax receipts we heard about only today, over 390,000 people are living in consistent poverty, which is double the 2008 figure.

Some 1.4 million, or nearly one in three of the population, are experiencing some form of deprivation. Some 700,000 people are at risk of poverty, of whom 211,000 are children. More than one in every six children and one in every ten people over the age of 65 are at risk of poverty. We still have social welfare rates that are about €20 per week below the poverty line. Food poverty is rampant and the Government has totally reneged on its solemn commitment deliberately given to measure the impact of each budget in advance to ensure it is poverty proofed - and no wonder.

Not today but on other occasions, the Tánaiste has often adverted to the importance of social transfers in combatting poverty and taking people out of poverty. The Government has taken in excess of €1.8 billion out of the social welfare budget and given back about €500 million. That is a net reduction of about €1.4 billion. If she says that social transfers help to combat poverty, is the corollary not true that a reduction in social transfers tends to increase poverty?

On several occasions the Tánaiste has claimed to have made a difference in moving the entire social welfare system from what she likes to call a passive system to an active system. I wonder. Society is changing. We all agree that people's skills can become obsolete and they need to be retrained for new opportunities that present themselves. There was an activation scheme that predated the Tánaiste's arrival at the Department of Social Protection. I am not saying it was perfect; in fact, it was imperfect in many ways. However, the main focus should have been on improving that activation system. The money the Government is now spending on so-called activation would be better spent on improving and making that scheme more appropriate.

As I understand it, the Tánaiste has moved the system from one of activation to one of compulsion such that if somebody is offered a training or education course, regardless of how inappropriate to their circumstances or how useless it might prove to them in the future, they have to take it or suffer the consequences in terms of loss of social protection. The same applies if somebody is offered a job, regardless of how insecure or how low-paying and regardless of the conditions. I have come across people who were on social welfare and were offered jobs 50 km or 60 km away from their homes. Taking into account the expense of travelling to and from work, they would finish up worse off. Nevertheless they are compelled to take it up. That is the system now.

Of course, it is all based on a false assumption that the unemployed are lazy idle scroungers who must be forced to take up work. Of course, for the Irish people nothing could be further from the truth. All the evidence has shown that the overwhelming majority of Irish people would prefer a job to being unemployed. The net result of the changes introduced by the Government has been to develop a harsh, unsympathetic and authoritarian social welfare system that forces people to take training courses or accept work on lower wages or with worse conditions. The only people benefiting from that are employers.

Now an array of supervision, assessment and intervention faces anyone who is unfortunate enough to become unemployed. Only 100 people faced sanctions in 2011, rising to 5,300 in 2014 and the upward trend continues even though the numbers of unemployed are falling. This is only a small percentage of claimants and yet the threat is continually experienced by thousands of individuals with a gradual heightening intensity.

Beyond those directly affected by the sanctions, everybody is subject to a social welfare system that is now infinitely more precarious. The safety net we can expect if we lose our jobs has been transformed for the worse. The tragic irony is that there is no evidence that those types of sanctions, including cutting welfare as a means to change behaviour, actually work and numerous studies dispel the notion. A harsh social welfare system does not create jobs apart from those of the officers employed to investigate people. The vast amount of money spent on this would be better spent on matching people to suitable vacancies or suitable training.

The current system is almost a throwback to the English Poor Law Amendment Act 1834, which required people to take whatever was offered, regardless of how low-paying, demeaning or degrading, or else face the indignity of the workhouse.

That system was based on the contemporary economic theory that there is no such thing as unemployment and that if one leaves people with no alternative they will take any job regardless of how insecure, lowly paid or how much it disadvantages them even monetarily. That system is well known to us, thanks to Charles Dickens.

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