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

I like to be constructive and I do not invoke any interruptions. I thank the Acting Chairman for the opportunity to contribute and I wish the Minister well.

It is an important fact that almost €4 out of every €10 that is spent in this country is allocated to the social welfare Vote. Indeed, notwithstanding all of the comments here, the former Minister, Deputy Burton, during the period of the worst economic recession across the world, a great depression, managed to maintain funding with minimal impact and cuts. In programme countries all over the world, there have been significant reductions in expenditure on social welfare and benefits. One must face a bit of reality as well from that perspective. Indeed, some have forgotten that, while there was only a €3 per week increase for pensioners, there was also the restoration of the Christmas bonus. For a married couple, that was another €6.50 a week, which brought it up to €9.50 a week. If Deputy Denise Mitchell is going to give the story, she should give the full story and not offer a selective view.

I was one who championed carers at a time when some new Members had not even been elected to the Dáil. After writing a report on this aspect, I helped to ensure carers continued to receive the 50% additional rate in relevant supports. I am unashamedly a strong advocate for carers, yet I do not hear too many mention them. The carers are the ones who put in hundreds of thousands of hours and save us many man-hours across the State, and we must continue to ensure that the caring profession in this country, those who care within their own homes, are helped to maintain and live within their own homes and look after those for whom they are caring. Often the carer is the person who suffers most and that is why we maintained the 50% additional rate. Indeed, the late Seamus Brennan introduced that and I remember him saying here on the floor of the Dáil to me that this could be one that would certainly be significant in the long term. That allowance was maintained through thick and thin, and it is an important allowance. I acknowledge such measures.

I want to be constructive and look at areas that some do not seem to understand. I want to address the important topic of the treatment of the self-employed within the social welfare system, of which I know something. I have often heard Members here speak as if they were late converts to the cause of the self-employed and now portray themselves as almost their saviours or the only advocates left. We all are aware of the importance of having a safety net in place in the social welfare system, as previous Members have spoken about, for when one falls into personal difficulties, such as illness, or where one loses one's job unexpectedly. It is important that those who find themselves in these positions have seamless access to the welfare system and receive due payments in accordance with their contribution rates as laid down by law.

Both myself and the former Deputy, Senator Ray Butler, raised the important issue of the plight of the self-employed in the previous Dáil on a number of occasions. I raised it as far back as the early 2000s. I remember meeting, in 2010, 2011 and 2012, throughout my constituency of Longford-Westmeath, many hundreds of self-employed who had become unemployed unexpectedly. This occurred due to the downturn, due to illness and for other reasons, or due to a closure of business. Such persons are liable for PRSI payment under the class S rate of 4% which entitles them to access long-term benefits, such as the State pension - contributory - or the widow's, widower's or surviving civil partner's pension - contributory. From the foregoing, they do not qualify for jobseeker's benefit, irrespective of how long they have been making contributions, and these people are compelled to seek recourse to the jobseeker's allowance which, as Members will be aware, is means tested. For many formerly self-employed, this turns out to be their first encounter with the social welfare system. It is an emotive, tortuous and complex process in so far as the assessment must reflect the income that the self-employed person might expect to get from his or her business in the previous 12 months. It involves a minute examination of the previous year's activities and income arising is then gone through. Most people do not have €1 left at that stage. It is rather like looking for last year's snow in the middle of summer. It is an exhaustive process that takes a long time and it taxes everyone's patience. Often these people are left in limbo. It must be remembered that there are over 300,000 self-employed. It is a significant cohort. Not too many Members here seem to want to speak up for them, but I will do so unashamedly. At the end, one goes to the community welfare officer and that involves going through a whole process. Those to whom I referred felt bruised, isolated and irritated.

I raised this with the previous Government and I got included in the programme for Government a commitment to examine the feasibility of providing social insurance cover for self-employed persons. The previous Minister established an advisory group on tax and social welfare to progress this issue and to establish whether cover is technically feasible and financially sustainable. I realise the current Minister, Deputy Varadkar, will focus on this, and I laud and compliment him and urge him to do so.

We should not forget that many of these people who are self-employed also provide valuable employment for others. Many were sole traders or partners and found themselves victims as money due from a main contractor or subcontractor, which may have gone out of business, did not materialise, or they were subject to part-payment, ultimately leading to the collapse of that self-employed person's business. These are relevant issues. The previous Government commenced some policy of equalisation with respect to the taxation treatment of the self-employed compared with employed people by increasing the earned income tax credit for self-employed people. That will match the PAYE tax credit by 2018. They are now on a current-year basis in terms of taxation, so this should be done in the sake of fairness. I hope this process will continue. We must confront the issue and address in a positive and constructive way the plight of the self-employed.

From my discussions with self-employed people, I know that, given the opportunity, they would be willing to contribute a special rate of PRSI. I accept this would likely be significant but it would enable them, on cessation of employment because of a downturn or other circumstances, to immediately qualify for benefits and have access to the full range of social welfare insurance benefits arising from making contributions at a given level or class. This may not mean a person would be entitled to the full range of social welfare benefits but it should correspond to the appropriate class. The cost might not be as much as people have indicated, as many self-employed people must register as an employer and self-employed people never received recognition for their role as tax collectors who furnished payments to the Exchequer on a monthly basis. They must employ people to do so. I hope the Minister will apply fairness in trying to achieve a just and equitable resolution for the self-employed in the application of the social welfare system for them, especially in the context of a specific PRSI scheme underpinning the equality objective. It should recognise their special position as employers as well as employees. I understand the Minister wants that.

Another bugbear of mine that is becoming more evident across the country is the low take-up of pension plans. The rate is well below 50% in the private sector. I understand the former Minister, Deputy Joan Burton, put in place a universal retirement savings group to embark on the process of developing a roadmap or timeline for the introduction of a new pension scheme for all workers in Ireland. On completion of its work, the universal retirement savings group will submit its recommendations to the Minister and the Government, leaving a roadmap to plan for increasing pension coverage and a likely timescale.

I recall a survey from the Irish Association of Pension Funds last year indicating that up to 70% of people would support some form of mandatory pension scheme. Has the Minister any idea when the report will be concluded and ready for publication? Does he support the introduction of a mandatory or quasi-mandatory pension scheme? When is it likely that such a scheme might see the light of day? Does he intend making provisions in the Estimates to commence the roll-out of a mandatory pension scheme, as this would obviously necessitate a State contribution, as well as employer and employee contributions?

The Minister is aware that the portion of the population aged 65 or older in Ireland is projected to increase from approximately 12.4% today to 25% by 2050. This demographic change is welcome and represents longer lives for our people, although it brings significant challenges. For example, currently there are 5.3 people of working age for every such person, but this ratio is expected to decrease to 2.1 people by 2050. The State pension will remain the bedrock of the Irish pension system. However, while the State pension is expected to provide a basic retirement income for workers, many people retiring may experience significant drop in income if they do not have adequate supplementary private pension provision. That relates to a key recommendation of the OECD review of the Irish pension system, which is to improve the adequacy of pensions by increasing coverage in the funded part of the pension scheme through a universal mandatory or quasi-mandatory employment-based pension scheme. Ireland is one of only two member countries of the OECD that does not have a mandatory or quasi-mandatory earnings-related supplementary pension for workers. It is out of this that the universal retirement savings group emerged and it has entered a consultation process. I know the Small Firms Association is opposed to the idea of a mandatory pension scheme for Irish workers, probably because of its cost to business, the State and employees. It would rather pursue a voluntary approach to pension provision, but how successful that would be is open to question. I suppose one must see how far it could go.

We welcome the introduction of the paternity leave scheme, with legislation being initiated before the weekend. Our own Minister and then party leader introduced the idea of two weeks of paid paternity leave in recognition that fathers should have the opportunity to bond with newborn children. It is a step forward but we are still a long way from becoming one of the more father-friendly countries in the European Union. Is this the first step of a scheme of expanded paternity leave, and if so, what is the timetable for expansion? Is there any consideration of shared parental leave, which has been successful in Norway and Sweden?

The Christmas bonus was abolished in 2009 and 2010, with a 25% and 75% bonus reintroduced in recent years. There were 1.2 million people benefitting from this bonus last Christmas, and it is a very welcome assistance to people at a demanding time of the year. We are all aware that people who receive a Christmas bonus are not hoarders and they spend money within the local economy and businesses; it can be a major boost in that way. The bonus has always come from current departmental expenditure and that will be the case this year. Will the new fiscal rules demanding that any Supplementary Estimates be funded through expenditure savings in other Departments or through discretionary measures have any impact on the Minister's ability to ensure the Christmas bonus can be provided in December? As the economic recovery will continue, I hope, will the Minister give consideration to a full restoration of the bonus?

I notice in the programme for Government that there is mention of a new working family payment targeted at low-income families. Anything that improves the lot of low-income families, especially those who are working for low incomes, is welcome. Every parent working at least 15 hours per week will be guaranteed that every extra hour he or she works will result in more take-home pay, which is laudable. How much has been allocated for the new payment and when will it be introduced? How many people will benefit from the payment and by how much will they benefit? How will the payment work alongside the existing family income supplement and the back-to-work family dividend? Those are important issues.

The universality of child benefit is important and it goes to mothers in 95% of cases. It is important that this will continue, with no proposals for changing the way child benefit is paid. That must be clarified. Last year our parliamentary meetings raised the idea of increasing the funding available for school meals by €3 million. There are over 1,430 schools and community groups providing meals in schools, preschools and community groups. If we returned to government, we had hoped to increase the funding available by €5 million each year, expanding the school meals programme to at least one third of all schools and preschool settings, with particular focus on promoting breakfast clubs. That is an important way of tackling child poverty so does the Minister know how much might be provided for such programmes to tackle child poverty, such as the important school meals programme? Is there funding for minor capital works required in some schools? These are important issues.

I am particularly concerned about carers so I will finish on that point, which I referred to when I started. Much tremendous work is done by carers who are unpaid. If one works it out, such carers might get one third of the minimum wage per hour that they devote to their work. The work put in could be valued close to €4 billion, even if the work was valued at the minimum wage, which is a large amount. Money is still tight and there are many demands. There were adjustments in many areas in the past number of years and the Minister will have to address them. I know he has priorities of his own. I urge the Minister to do whatever can be done to improve the plight of carers, who are the unsung heroes of Irish society. These people fought a battle and achieved the restoration of the respite care grant, which was welcome after a very difficult time. Anything that can be done to ameliorate their position, such as providing additional financial resources, should be done. I include in this even small elements, such as allowances for phones. This area should see the first allocations as these people have done a tremendous service. One wonders how our hospital system would cope if they did not do their work, and the cost-benefit analysis of every €1 spent on carers is phenomenally positive. They should get whatever funding can be raised.

They are deeply appreciative people. They have the Carers Alliance and what used to be the Carers Association. Recognition was the first step.

I am very glad that back in the early 2000s I, as Chairman of the Joint Committee on Social and Family Affairs, brought forward a report with my colleagues. We did not engage any consultants or anything else. We wrote 15 recommendations and seven of them were implemented. That is the one thing I think is important. The moral of the story is that one does not need consultants to achieve progress.

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