Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

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

The purpose of the Bill is to provide the legislative framework for the implementation of the measures announced in budget 2017. It also contains a number of largely technical measures which aim to resolve minor deficiencies identified within the welfare code. Overall, the Bill represents a prudent approach, with modest increases across the board alongside more targeted measures; an inclusive approach, which ensures that the recovery benefits everyone, with no one left behind; a progressive approach to making work pay, through positive reforms to the social insurance system and access to benefits extended to the self-employed; and a targeted approach with measures to assist lone parents, low income farm families and school children.

The Bill provides that the maximum rate of all weekly benefits will increase by €5 so that people of working age, as well as retired people aged 66 or older, will all see an improvement in their weekly income. Increases for recipients aged 66 years and over will come into effect during the week ending 10 March 2017. This includes, for instance, all those in receipt of the contributory State pension and the non-contributory State pension. Pensions next year will be €8 per week higher than in 2009, which means nearly all pensioners are back to where they were in terms of payments from the Department, even if we factor in the abolition of the telephone allowance and reductions in the fuel allowance. I intend to build on this in future budgets by continuing to increase the State pension at a rate greater than the rate of inflation.

The increases for other recipients will come into effect during the week following 10 March, so that all of those who rely on social welfare for their income will have the increased rate paid by St. Patrick's Day. Approximately 840,000 working age people will gain from this increase. It covers people in receipt of 30 different payments, including invalidity pension, disability allowance, blind pension, illness and partial capacity benefit, occupational injury benefit, widow's, widowers and surviving civil partner's pensions, one-parent family payment, back to education allowance, maternity, paternity and adoptive benefit, farm assist, carer's benefit and allowance, pre-retirement allowance, supplementary welfare allowance, back to work enterprise allowance, jobseeker’s benefit, jobseeker's allowance, jobseeker’s transition payment and employment support payments to participants on community employment, Tús, Gateway and the rural social scheme.

It was very important to me and to all of my colleagues in government that nobody was left behind as we sought to extend the benefits of the economic recovery to all sectors of society. Recipients of working age payments, widows, carers, the sick and the disabled have seen no increase in their income since the cuts of 2010 and 2011. Even after the €5 increase they will still be €11.50 per week worse off than 2011 when the Government came into office, so I plan to continue to increase these rates above the rate of inflation in future budgets if resources permit.

Overall, almost 1.5 million people will benefit from these increases and local communities and businesses will also benefit in turn from increased spending. A social impact assessment, using the ESRI SWITCH model on a non-indexed basis, of the social welfare budget package found that people in lowest income quintile, the 20% of people least well off in society, gain the most from budget 2017 measures. The ESRI also recognises explicitly that this was as a result of the inclusion of the weekly rate increase for working age rates of payment.

Alongside the increases in weekly rates, the Bill also provides for very progressive changes affecting the self-employed, a sector which is critical to sustaining the Irish economy. Sections 4 and 9 establish the legislative basis for a new deal for up to 380,000 self-employed people who pay PRSI at the S class. The self-employed sector is hugely diverse and includes people such as farmers, professionals, taxi drivers, small business owners and tradesmen and tradeswomen. Until now, the PRSI contributions they pay have enabled them to qualify for a contributory State pension on reaching pension age. This contributory pension is of course, in itself, a substantial benefit, but I have been concerned for a long time that the social insurance system does not respond adequately to the risks which the self-employed face in the course of their working lives. I am pleased therefore that budget 2017 marks a major step in resolving this deficiency. Section 9 provides that from March 2017, the self-employed will be allowed access the optical, dental and hearing benefits currently available to employees under the treatment benefit scheme. This section also provides that when the range of optical and dental treatments is expanded from October of next year, both employees and the self-employed will benefit equally.

Section 4 provides that the self-employed will be entitled to apply for invalidity pension for the first time with effect from December 2017. This will mean that where a self-employed person is no longer able to continue to work because of long-term ill-health, he or she will have access to the safety net of State income support without a means test. The person's savings, assets or partner's income will not count against him or her. This is all part of the Government's policy of making work pay and encouraging self-employment and entrepreneurship. I intend to extend the benefits available to the self-employed through the social protection system and will look at further options in the coming year.

Budget 2017 included a package of measures supporting lone parents, encouraging them into the workplace and into education, and helping to reduce their child care costs. All lone parents on one-parent family payment and jobseeker's transition and jobseeker's allowance will receive the €5 increase in the weekly rates of payment. Those who enter education will receive a €500 annual cost of education allowance, which will be made available to back to education allowance participants with children from the next academic year in September. This will apply to cohabiting and married couples. It will be for anyone in receipt of the back to education allowance who has children. This will help parents, including lone parents, to return to education.

The income disregards for the one-parent family payment and jobseeker's transition payment will rise by €20 from €90 to €110 per week reversing, in part, previous reductions to encourage one-parent families to stay in work, return to work and work more hours. For those earning €110 per week or more, it will increase the combined take-home income by up to €15 per week and my intention is to allow for this from 1 January, subject to the passage of the Bill.

The single affordable child care scheme being provided by the Government will also significantly reduce the cost of child care for lone parents and low-income families. It is a step change in State support for child care in Ireland. I have also provided increased funding for school breakfasts, which will help lone parents and low-income households more generally. Some 63% of one-parent family payment recipients do not receive any income from paid work. The changes in budget 2017 and the Bill will assist lone parents into education and to keep more of what they earn where they are back in employment. They will help them to escape the trap of long-term welfare dependency.

As part of the Government's commitment to rural Ireland, I plan to completely reverse cuts to farm assist, a programme which helps more than 8,000 low-income farm families and fisherfolk. At a time of falling farm incomes, it is essential that we strengthen the safety net for farmers who are on the margins. Even farmers who do not qualify for farm assist should have the reassurance of a strong safety net should they need it. Many farmers who benefit from farm assist live in remote parts of the country with very limited prospects of an off-farm income. Therefore, in recognition of the crucial work undertaken in rural communities under the rural social scheme, an additional 500 places will be made available next year.

Young jobseekers under the age of 26 years generally receive age-related reduced rates of jobseeker's payments of €100 or €144 per week. These will increase proportionally with the general rate increases. However, the focus of the Government is on helping and encouraging young jobseekers into employment and education. We do this by actively engaging with and helping them to receuve additional training and educational qualifications that will assist them to find a job. I strongly believe welfare should be a second chance or a safety net, not a way of life. Therefore, from next September, when a young jobseeker participates in my Department's back to education schemes, he or she will be entitled to receive the full maximum rate of jobseeker's payment which will then be €193 per week, as opposed to the €160 which they currently receive. This 21% increase represents an extra €33 a week and demonstrates the State's support for young jobseekers who seek to enhance their lives. It is the biggest single increase in the social welfare package. Of course, more remains to be done and I am determined that we will help more young people in the most effective way possible by helping them into the workforce or education.

I will now give a brief outline of the various sections of the Bill. Section 1 provides for the definition of certain common terms used in the Bill.

Section 2 provides for one of the technical amendments to the social welfare code which are being carried in the Bill. In this instance, the definition of a qualified adult in the Act is being amended so as to formally provide that a person in respect of whom an increase for a qualified adult is being paid is not disqualified from receipt of a half-rate carer's allowance in his or her own right. To be absolutely clear, the scheme has been operating since its inception in line with the policy intention that a person can qualify for a half-rate carer's allowance in his or her own right when she or he is a qualified adult on another person's claim. No one has lost out in the interim and this amendment merely serves to tidy up the governing legislation in this area, lest there be a challenge.

Sections 3 and 4 provide for the addition of paternity benefit and invalidity pension to the list of schemes for which class S contributions, payable by self-employed persons, are reckonable. Paternity benefit has been open to the self-employed since the scheme was introduced in September, while invalidity pension will be open to the self-employed from December next year.

Section 5 provides for a technical amendment to the legislation governing entitlement to illness benefit which secures the existing practice and policy intention whereby the rate of payment to a claimant is held constant for a period of 312 benefit days or one year. In practical terms, this ensures a claimant is not negatively affected where his or her claim for illness benefit straddles two years and the governing contribution year changes as a result. This section also confirms the existing practice whereby a claimant on a reduced rate illness benefit payment can gain as a result of a change in the governing contribution year when my Department will ensure the higher rate is paid.

Sections 6 to 8, inclusive, provide for the increase of €5 in the weekly rates of maternity benefit, adoptive benefit and paternity benefit which will come into effect in March 2017. The main changes in the rates are dealt with in sections 18 and 22 to which I will come shortly.

Section 9(a) is similar to sections 3 and 4 and provides for the extension of treatment benefit to the self-employed. This section will come into effect in March 2017. The purpose of section 9(b) is to widen the application of the treatment benefit scheme beyond what is currently provided for, which is limited to dental and optical examinations. Once the necessary discussions with the bodies representing dentists and opticians are finalised, I will introduce regulations to make an expanded treatment benefit scheme available to both the employed and self-employed with effect from October 2017. I am a strong supporter of the contributory principle, the idea that people who pay into the system should benefit from it. We should not divide society into one group that pays for everything but receives little in return and another that contributes very little but believes itself to be entitled to everything for free. Social insurance is the contributory principle at its best and I envisage more benefits being linked with it in the future.

Section 10 is another provision which brings policy and practice into line with the legislation. Put simply, it allows lone parents in receipt of both the one-parent family payment and blind pension to retain both until their youngest child turns 16 years. This has been done on an administrative basis to date, pending the tidying up of this aspect of the social welfare legislation.

Section 11 provides for an amendment to the definition of qualified child for the purposes of the supplementary welfare allowance scheme to provide that the qualified child must be ordinarily resident in the State. This will formally bring the definition of a qualified child for the purposes of the scheme into line with that used in the wide range of other schemes operated by the Department.

Section 12 is an amendment to require employers, where they are requested to do so, to provide information for the Department on child benefit claims. This mirrors the existing requirements in a number of other schemes operated by the Department such as family income supplement and the back to work family dividend. These powers are particularly relevant in the case of child benefit payments made on the basis of employment in the State under EU regulations. In order to determine entitlement at the initial claim stage and ensure the right to ongoing entitlement can be validated, the Department must be able to secure confirmation of details from employers.

Section 13 deals with situations where a person has an entitlement to maternity, paternity, health and safety or adoptive benefit, as well as the back to work family dividend. Since January 2015, the back to work family dividend offers financial support to families moving from social welfare into employment where the claimant, having taken up employment or self-employment, stops claiming a jobseeker's payment or a one-parent family payment. It has been brought to our attention that, under the legislation, someone in receipt of the family dividend cannot concurrently receive payment for maternity, paternity, health and safety or adoptive benefit. Where that happens, payment of the family dividend is suspended until entitlement to, for example, maternity benefit is exhausted, at which point payment of the family dividend is resumed. This practice is disruptive for affected individuals, as well as being very cumbersome from an administrative perspective. Section 13 provides that maternity, paternity, health and safety or adoptive benefit may be paid concurrently with the back to work family dividend.

Section 14 provides powers to allow regulations to be introduced to prescribe a specified time for making a paternity benefit claim. Again, this measure is a standard provision which applies to the full range of welfare schemes.

The purpose of section 15 is to ensure there are adequate legislative powers to enable the Minister for Social Protection to set out in regulations the conditions which apply where a person nominates another to act as his or her temporary agent to receive or collect a social welfare payment on his or her behalf.

Section 16 is another technical amendment. It simply provides that the current references in the social welfare consolidation Act to members of An Garda Síochána being seconded to the Department by the Minister to exercise the powers and duties of a social welfare inspector will now, more accurately, provide that the gardaí in question are seconded to the Minister.

Section 17 deals with the position of Romanian and Bulgarian nationals and their families who were working in Ireland during the transitional period from 2007 to 2011. The section provides that contracts of service in the State in which they engaged during that transitional period fall within the categories of employment where a person is regarded as an employed contributor. As a result, PRSI contributions paid by Romanian or Bulgarian employed contributors during the transitional period will be recognised as valid.

Section 18, along with Schedule 1, provides for new rates for social insurance benefits. The increase of €5 in the maximum weekly rate of the State pension, contributory, will be paid from 10 March next year, as will the increase in the widow’s, widower’s and surviving civil partner’s contributory pension where the claimant is aged 66 or over. The increases in all the other insurance-based payments will come into effect in the week ending 17 March in line with the payments calendar. Proportionate increases for those in receipt of reduced rate payments and for qualified adult dependants are also provided.

Section 19 provides for the inclusion of a reference to the green low-carbon agri-environmental scheme, GLAS, operated by the Department of Agriculture, Food and the Marine in the relevant Schedule to the Act in order to formally provide that income from this scheme should be partially disregarded in assessing means for social assistance payments. Section 20 provides for the reintroduction of the income disregards and tapering arrangements which applied to the farm assist scheme prior to budget 2012.

Section 21 provides for an increase in the earnings disregard for the one-parent family payment, from €90 to €110 per week, reversing previous reductions and offering a greater encouragement to one-parent families to stay in work, return to work or work longer hours. As I mentioned earlier, taken together with the increase in the weekly rate of one-parent family payment this will, in many cases, increase take-home pay by €15 per week. Subject to the passage of this Bill by this House and the Seanad prior to the Christmas recess, this measure will come into effect from 5 January 2017.

Section 22, along with Schedule 2, provides for new rates of social assistance payments. All maximum weekly allowances are being increased by €5, with proportionate increases for those in receipt of reduced rate payments. Proportionate increases for qualified adult dependants are also provided. As with the insurance-based schemes covered by section 18, the increases for those aged 66 and over will be paid in the week ending 10 March 2017, with all other increases coming into effect over the course of the following week. Section 23 sets out the standard provisions in relation to the Short Title, construction and commencement of the Bill, once enacted.

The measures contained in this Bill will be supplemented by other budget measures which do not require amendments to the primary legislation. For example, the payment of the Christmas bonus early next month, which will benefit more than 1.2 million people at a cost of some €221 million, is one such measure. The Bill reflects the prudent approach of the Government to ensuring that the economic recovery, which is under way and which is reflected in increasing numbers of people securing employment, is not put at risk. There are meaningful, if modest, increases in social welfare payments which will benefit individuals, families and their communities. There are also specific targeted measures which will provide additional supports to vulnerable sectors of our society, including one-parent families and low-income farm families and fishermen.

The Bill is also reforming in recognising the unique contribution which the self- employed make to our economy and society. It strengthens the connection between PRSI contributions and benefits through, for example, the enhanced treatment benefits in respect of dental, optical and hearing care for the employed and self-employed and access to invalidity pension for the self-employed. I should mention at this point that I intend to bring forward a Committee Stage amendment which will change the social insurance status of city and county councillors as public officeholders so that, in general, their income as councillors will in future be liable for class S PRSI. In return for their PRSI contribution of 4% they will be able to access the same benefits as a self-employed person paying the same amount. This will end the injustice of councillors paying PRSI but receiving nothing in return for these contributions, unlike the employed and self-employed, who pay the same percentage.

I also wish to advise the House that I will bringing forward another amendment on Committee Stage to update the provisions in the Social Welfare (Consolidation) Act which relate to habitual residence. My colleague, the Tánaiste and Minister for Justice and Equality expects to be in a position to formally commence certain provisions of the International Protection Act 2015 before the end of this year. The Act deals with the entry into and presence in the State of people in need of international protection and as a consequence the relevant sections of the Social Welfare Act will need to be updated and aligned with this legislation.

This is the first Social Welfare Bill to be introduced under this Government. I hope it is one of many that will improve living standards, assist people to move from welfare into work, support self-employment, promote self-reliance and develop a strong social insurance system based on the contributory principle.

I commend the Bill to the House.

See this speech in context