Joe McHugh (Donegal, Fine Gael) | Oireachtas source

Gabhaim mo bhuíochas le hachan Theachta fá choinne na moltaí sa díopóireacht anseo inniu. In opening the debate on the Bill on Tuesday the Minister for Social Protection, Deputy Leo Varadkar, characterised the thinking and policies underlying the Bill and budget 2017 as prudent, with modest increases for all those who looked to the social welfare system for income support; inclusive, with no one being left behind and a clear commitment to ensuring everyone shared in the positive effects of economic recovery; progressive, with particular attention being given to a critically important sector of the economy - the self-employed; and targeted, with key measures aimed at lone parents, farmers and schoolchildren.

In listening to the debate one thing that was striking was the positive response to the extension of benefits to the self-employed. There is a deal of work to be done to ensure the systems in place in the Department will be in a position to deal with the applications for treatment benefit from March and for invalidity pension from December next year. That is the reason for the deferred implementation dates, rather than being a cost saving measure in this case. As the Minister said previously, he plans to continue with the reforms in this area and work towards the extension of other benefits to the self-employed. Deputy Willie O’Dea asked about the full year cost associated with the extension of invalidity pension to the self-employed. It is estimated that the cost in 2018 will be in the order of €23 million, but as the scheme matures over a number of years, the full year cost of the measure could be in excess of €80 million.

Many of those contributing to the debate queried the reason there were no increases in budget 2017 in payments such as the back to school clothing and footwear allowance, family income supplement, the free fuel allowance and qualified child payments. Deputies know that there was a limited amount available to the Government to enhance the social protection system. When it comes to children, we decided to focus on improving funding for services such as child care, school breakfasts and meals, SNAs and medical cards for children with disabilities.

The reduced rate of jobseeker’s allowance paid to young people was referred to by a number of contributors. This approach seeks to discourage young people from entering long-term welfare dependency by incentivising them to avail of education and training opportunities. Long-term welfare dependency carries severe consequences for those affected, their families and communities and the economy as a whole. Budget 2017 further enhances this incentive by providing that where a young jobseeker returns to education or training, his or her allowance will be increased to match the maximum rate of jobseeker's allowance of €193 per week from next September, an increase of €33 per week. This is the largest single weekly increase provided for in the social welfare package. Young carers, young people with disabilities, lone parents and young people participating in community employment, Tús and other schemes will receive the full €5 increase. We want to encourage, support and reward young people who seek to enhance their skills. It is important to also note that the levels of youth unemployment have been falling, from 20.9% in October 2015 to 15.1% in October 2016.

Some Deputies raised concerns about JobPath, a new approach to resourcing the delivery of employment services to those who are long-term unemployed. Two service providers, Turas Nua and Seetec, are contracted to work with persons who are long-term unemployed. These contractors supplement the work of the Department's case officers and local employment services. JobPath provides additional capacity for the Department in order that it can extend the case management approach in delivering employment services to those who are long-term unemployed.

Participants on JobPath are provided with a range of training and development supports which can include career advice, CV preparation interview skills, specific skills training and funding for items such as tools and work clothing where appropriate. These supports are designed to help the jobseeker compete for and secure appropriate employment. Some 54,000 people have started on JobPath to date and very few complaints about the service have been recorded by the Department. There has now been a sustained reduction in the numbers signing on the live register. In October 2016, the live register stood at just over 277,000, a reduction of more than 43,500 on the October 2015 figure.

Deputy O'Dea raised some issues in regard to pensions. Other than some technical changes to the welfare code, this Bill is now designed solely to give effect to the measures announced in budget 2017 and, beyond the increases in the rates of pensions payments, no other legislative change involving pensions is addressed in the Bill. The pensions area, however, is hugely important and challenging. Expenditure on pensions, at approximately €7 billion, is the largest block of expenditure by the Department of Social Protection, representing some 35% of its expenditure. Demographic change alone increases this by €200 million each year. Maintaining the value of the State pension is critical to protecting older people from poverty. Other pension-related issues were raised and the Minister and his officials will no doubt be looking at them. The issues associated with pension entitlement are constantly being reviewed. Entitlement levels are currently calculated by means of a yearly average calculation, where the total contributions paid or credited are divided by the number of years of the person's working life. As the Deputy said, this can give rise to situations which are anomalous. Work is under way to replace the yearly average system with a new system termed the "total contributions approach". Under this approach, the number of contributions recorded over a working life will be more closely reflected in the rate of pension payment received. The position of women and men who were home-makers will be considered in developing these proposals.

It is expected that the total contributions approach to pension qualification will replace the current average contributions test for State pension contributory for new pensioners from around 2020. This is a very significant reform with considerable legal, administrative, and technical components to be put in place prior to its implementation and it is an area to which the Minister, Deputy Varadkar, will be paying close attention over the coming months. Deputies also raised concerns about the position of those who retire from the workforce before the age of 66, when they would become entitled to claim the State pension contributory. The background to this issue is that the Social Welfare and Pensions Act 2011 provided that the State pension age will be increased gradually to 68 years. This is being done to make the pension system sustainable in the context of increasing life expectancy. Each year more people are living to pension age and living longer in retirement. As a result of this demographic change, the number receiving the State pension is increasing by approximately 17,000 annually. This has obvious implications for the future costs of State pension provision which are currently increasing by close to €1 billion every five years.

The change to pension age began in January 2014 with the abolition of the State Pension transition which was available from age 65 for those who satisfied the qualifying conditions. This had the effect of standardising State pension age for all at 66 years. This will increase to 67 in 2021 and 68 in 2028. There is no general statutory or compulsory retirement age in the State. The age at which employees must leave their particular job is a matter for the contract of employment between them and their employers and there have always been people who have retired before State pension age. This does not prevent them from taking up a new job. In terms of financial supports, social welfare benefits will continue to be available to the age of 66 for those who are required to leave employment. Jobseekers whose benefit expires in their 65th year will continue to be paid benefit up until the age of 66. Where a jobseeker's benefit claim spans two benefit years, a new governing contribution year requirement is not applied to the second benefit year of a claimant aged 65. Effectively, this means that they may receive payment in both years based upon eligibility in the first year.

Deputy Broughan asked about the current standing of the social insurance fund. The Revised Estimates for 2016 provided for a surplus of €217 million. It is envisaged that the surplus at the end of the year will be in the order of €300 million after the payment of the Christmas bonus.

There were a number of contributions concerning the impact of reforms to the one-parent family payment in recent years, issues that were raised also at the most recent session of the Joint Oireachtas Committee on Social Protection, when the findings of a recent report by Dr. Michelle Millar from NUIG, commissioned by the Irish Research Council, were considered. The rationale for reducing the age thresholds of the one-parent family payment is sound. Again, it is designed to discourage long-term welfare dependency by enabling the Department to engage with lone parents in order that they have enhanced access to the wide range of education, training and employment supports that are available. The increase in the earnings disregard for one-parent family payment from €90 to €110 per week, which is provided for in this Bill, is evidence of the commitment of the Government to offer greater encouragement to lone parents to avail of employment opportunities and to increase their income from employment. This is the right direction to take and future reforms affecting lone parents will continue to concentrate on making child care more affordable and work more attractive, as well as reducing barriers to education.

Issues relating to liable relative and maintenance provisions as they affect lone parents, and in particular those lone parents who moved from one-parent family payment to the jobseeker's transition payment, were also raised by Deputy O'Dea. The most recent data indicate that some 40% of one-parent family payment recipients and 36% of JST recipients are in receipt of maintenance. There is no evidence that the difference between these numbers, of just 4%, is a result of the recent reforms. However, the Department is now reviewing the legislation governing liable relatives and maintenance.

Deputy Penrose inquired about what will be done with the increased funding being made available for the school meals programme. The €5.7 million of additional funding, which will bring the total allocation in 2017 to €47.7 million, will be directed to increasing funding for existing DEIS schools, both those which are already in the scheme and those which are not yet participating. It will provide funding for newly designated DEIS schools following a review of DEIS by the Department of Education and Skills and will increase funding for breakfast clubs in non-DEIS schools, feeding 35,000 more children. Most disadvantaged children are not in DEIS schools. It is the Minister's vision to extend school breakfasts to all primary schools over the next five to ten years.

A number of Deputies raised concerns about the time it takes for the Department to process applications for the carer's allowance. Deputy Barry suggested that the average processing time for carer's allowance was 40 weeks but the most recent data indicate that the average processing time is now 14 weeks. Another Deputy raised the time it was taking to deal with appeals and I appreciate that this is still a long time but efforts are continuing to reduce it further against a background of an increased number of applications. Additional resources have been and will be applied to improve the average processing time. As with a number of other schemes operated by the Department, and particularly those where a medical assessment is involved, processing times generally will be reduced if applicants provide full and complete information and evidence when the initial application is being made and attach all of the required supporting documentation.

I appreciate that Deputies raised a range of other issues during the course of the Second Stage debate. I and the Minister welcome the generally positive response to the Bill from the House and the acknowledgement that everything we would like to do cannot be done in one budget. Deputy Brendan Smith acknowledged the work on farm assist, an issue which was also raised by Deputy Calleary. It is important that the collective work of this House continues to ensure that what was a very difficult situation for a number of farmers was addressed in this year's budget.

My two county colleagues raised the issue of seasonal employment and I will continue my conversation with the Minister on that issue. It is particularly acute in respect of the Killybegs area and for part-time fishermen in the processing sector. It also affects farmers.

I congratulate Deputy Moynihan for introducing a new history curriculum to the House whereby the history of the State just goes back to 2011, the State was formed in 2011 and nothing happened before then.

I also congratulate Sinn Féin, in particular Deputy Aengus Ó Snodaigh, for setting an extended continuum prior to 2011 by going back a few years.

In a financial context, just under €30 billion has been taken out of the economy since 2008. We now have an additional €1.3 billion with which to play in the total budget for next year. That puts in context how far we have come and where we need to go. As our resources are finite, it is important that we continue to work together to ensure we will make life easier for the many people who are still struggling.

I acknowledge Deputy Dara Calleary's comment that he is already working hard on the next budget, which is a good sign for the future. Perhaps he might spare a thought for the budget for the year after that also.

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