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

I am glad to have the opportunity to contribute on behalf of the Labour Party to the debate. As Deputy O'Dea said, the Bill gives legislative effect to the various measures announced in the budget on 9 October and deals with increases in weekly rates of pensions, benefits and allowances, including the qualified child increased payment which we especially welcome. I support the extension of the period of payment of DCA for an additional three months when the child being cared for passes away. The increase in the weekly earnings disregard for the one-parent family payment will be of assistance to lone parents and help to make work pay and with incentivisation.

I note the amendment to the Pensions Act which provides for the right of entitlement in certain circumstances to spousal pension benefits for same-sex spouses and civil partners who are members of occupational schemes. I salute that important advancement. The Minister will acknowledge that this issue has been championed by my colleague, Senator Bacik, for a long time. The Labour Party supports this enabling provision in terms of equality of treatment in respect of pension entitlements. It is clearly related to the case of Dr. David Parris which was brought to the ECJ.

Significant parts of the Bill are devoted to contributions and the pensions entitlements arising therefrom. It deals with the significant problem caused by changes in entitlements made in 2012 whereby people who attained pensionable age on or after 1 September 2012, due to the new averaging system that was introduced, lost their entitlement to a full rate of State contributory pension. My Labour Party colleagues and I are pleased that this issue can now be addressed by the Minister and that the additional resources, which will be available as a result of the strong economic growth that was fostered during that time, can be allocated to remedy the situation for once and for all. I am glad this is now right. However, I wish to raise an issue with the Minister. I was contacted by a former Member regarding the pension equality review. It will only benefit people born after 6 September 1946. That date should be 6 April 1946 as the changes were introduced on 6 April 2012. This is a very smart former Deputy. He said that the creation of the inequality happened on 6 April 2012, but the Minister is setting the date at 6 September 2012. He is a retired Deputy but he has given me the case of a woman who was born on 10 April 1946 who was negatively impacted by the 2012 changes. It appears she will not benefit from the current review. I ask the Minister to take that into account and amend the date. It probably affects only a handful. Unfortunately, these old Deputies never retire, and the Leas-Cheann Comhairle is the same. The boots are always on.

It will be no surprise to the House that I have taken a keen interest in pensions, State pensions and the protection of defined benefit schemes, particularly against unscrupulous employers who have left their employees short or deprived of their rights at the stroke of a pen. I spoke about the delay with the 2017 Bill on Question Time yesterday. I have delved into the history of pensions and I have spoken on it previously in the House. When the first old age pension scheme in the world was introduced by Bismarck in 1889 in Germany, the pension was payable at 70 years of age. At that time only 10% of Germans lived for more than five years after receiving their pension. The cost of old age pensions was, therefore, only a small part of government spending.

Today life expectancy in Ireland at 65 years of age is 18 years for men and 21 years for women, and these expectancies are rising rapidly. Until recently Ireland has had a low age dependency ratio because, sadly, many emigrants of the 1950s who should be growing old in Ireland are growing old in the UK, the USA and other countries. At present, the old dependency ratio in Ireland is 21% compared to an average of 29% for the EU. We are fortunate to still have a relatively young population, but the birth rate is declining and this combined with increased longevity will cause a rapid increase in the old dependency ratio over the next 20 years. This increase in the dependency ratio is being referred to as the pensions time bomb. I hate that term. It is as if increasing life expectancy is a bad thing. Increased life expectancy is only a problem if a large proportion of the population is inactive or requires care. A leading English geriatrician recently suggested abandoning the terms associated with ageing and simply classifying people as active or inactive adults.

An ever increasing proportion of the population over 65 years of age is in good health, thankfully, and capable of working, but many are required to retire at 65 regardless of whether they wish it. Those dependent solely on the State old age pension which is payable at age 66, and that age will increase, are often forced into the humiliating position of having to claim unemployment benefit until they reach 66. The legislative intervention in recent weeks dealt with the public sector retirement age and means that public sector employees have the option of working until they are 70 if they wish. However, many private sector workers do not have that option, and there is a strong argument for putting arrangements in place to enable all private sector workers who will be solely dependent on the State old age pension to work until 66 years of age. Again, it would be voluntary, not mandatory. Japan has increased the age at which workers can draw a state pension to 70 and there are proposals to increase the pension age to 75. Some workers who do hard physical work should be allowed to retire at 65 or even 60. It is hard, physical, manual work on building sites for construction workers. However, many workers may well be in better shape and able to work beyond 65 and they should be facilitated to do so.

The pensions time bomb lobby argues that providing a State pension will be unaffordable in the future because of the numbers of people who will eligible to receive it. Pension reform is part of the free market economics consensus of organisations such as the OECD and the World Bank. The OECD, in a report on the Irish pension system, ominously states: "Pension reforms are part of many austerity programmes and seen as a key element in reassuring markets that future commitments to pay back explicit and implicit public debt are credible". In these discussions there is no mention of the fact that in Ireland employer PRSI contributions are among the lowest in the developed world. The solution to the crisis is always to make workers pay more and to privatise as much of the pension system as possible. A major so-called reform of Irish pensions was the introduction of personal retirement savings accounts, PRSAs. Although they have been in operation since 2003, only 50% of employers provide access to PRSAs and only 4% of employees and 10% of the self-employed are contributing to them. While an attempt was made to cap the costs of PRSAs, the charges are higher than in the UK, USA and Sweden. The UK has several PRSA-type schemes and none has been successful. The only beneficiaries of the UK schemes have been the insurance companies and their agents who provide them. There have also been mis-selling scandals. Despite these failures, the main proposal for private pensions is a continuation and expansion of these schemes in Ireland. Now we are discussing automatic enrolment so it is an important issue. There are generous tax reliefs for PRSAs but, as with most tax reliefs in Ireland, those on the highest incomes benefit most.

The proposals for existing private pension schemes include measures to improve governance. If this to become a reality, the light-touch regulation operated by the Pensions Board will have to become a great deal tougher. Although Ireland has only 1% of the EU population, our 164,000 occupational pension schemes constitute 50% of such schemes in the EU. There are significant economies of scale in pension schemes and the Pensions Board should consider how these schemes could be consolidated. Despite the plethora of occupational schemes, only 35% of private sector workers have private pension cover even with the generous tax reliefs. That is what the Minister is trying to tackle now.

All the countries that have a higher level of cover have mandatory or quasi-mandatory schemes, but they are mainly large schemes with low management costs and good returns. The main development in private pensions in Ireland in recent years has been the shift from defined benefit to defined contribution schemes. This is why the 2017 legislation is so important. This shifts all the risk to the employee. While some defined benefit schemes may have been over generous, the shift to defined contributions is likely to mean more people partly dependent on the State pension to survive in old age. The Government’s main role in the area of private pensions should be to reduce costs and investment risks. The continuation of tax reliefs should be contingent on providers delivering defined benefit promises and defined contribution providers delivering a guaranteed lump sum on retirement. This lump sum should be the amount generated when contributions and investment returns grow at a nominal rate of 2% per annum. Reducing risks would, in time, also reduce the possibility of the State having to rescue failed private pension schemes as happened with Waterford Crystal and SR Technics. I hope to be making a contribution to what is going to happen in a few years' time when I have left the House.

For the foreseeable future, the State pension will remain the main income source for most pensioners. Currently the old age pension replaces 35% of average earnings. This, with the additional non-cash benefits, is adequate to keep pensioners out of poverty but will only do so in the future if it is maintained at this level in real terms by adjusting it to average earnings. I am concerned that the Government seems eager to push a greater number of people into private pension schemes to reduce public spending on pensions. The policy of increasing coverage of private pensions has failed. It has increased subsidies to higher income earners, substituted individual pensions for occupational pensions and shifted risks from employers to employees. The focus on increasing private pension coverage through an auto-enrolment scheme is the primary objective of national pensions framework. This ignores the failures of the private pension system and ignores the significance of State pension as most important source of income for pensioners. The main policy goal for Ireland's pension system should be to improve the coverage and adequacy of the State pension. The State pension should be a universal scheme and the replacement rate should be increased to 40% of average industrial earnings. Immediately there will be cries that we cannot afford to implement these proposals but a well-researched study by Social Justice Ireland that estimates the costs of a universal pension scheme shows that in the long term paying for a universal scheme would be no more difficult than funding existing arrangements.

I shall now turn to my favourite topic. Perhaps this time next year this could be over for the likes of me, but I will certainly go out on the topic of caring in Ireland today and the plight of carers. Unashamedly, and with great energy during my time in political life, especially in the Dáil, I have been a strong advocate for carers. My aim and objective is to continually improve their lot. They are genuine and wonderful people and they are the unsung heroes. There is a crisis in family carers. That was the message that emerged from the RTÉ "Prime Time" special programme in December 2017. Five family carers bared their souls to the nation in the hope of highlighting their plight and representing thousands of carers across Ireland. Many carers in crisis have told their stories since with little or no response. Sometimes they tell their stories to us in private.

Family carers such as Anne Quinn, who won carer of the year in Westmeath, and many others throughout counties Westmeath, Longford, Meath, Offaly and Laois and so on do not want to be patronised. They do not want our praise or pity nor do they not want to be canonised. They are not saints and they will tell anyone that. They are ordinary people who are struggling to care for their loved ones without the supports they desperately need. They are angry at a system that exploits, and sometimes abuses, their family bonds and that only pays lipservice to the demands of caring safely for their loved ones. They need respite, they need training and some need a downstairs bathroom. Others need home help hours when they need them and not when the system decides they can be give them, if indeed ever. Thousands of family carers are living in crisis and urgently need a break. Their own physical and mental health is suffering, and they cannot secure respite care, even emergency respite, when they can no longer provide care.

In Ireland today, all home care supports are discretionary and, therefore, the service is resource rather than needs-led. This equates to a system which is inequitable, inconsistent and flawed. I understand that a statutory entitlement to home care is coming down the tracks but that is two, three or four years away. Family carers cannot afford to wait that long; they need support now.

Deputy O'Dea made a good reference to the postcode lottery for carer supports and services. Where a person lived often determines what supports he or she will get and this has to change. If I am out in the sticks in a simple village such as Ballinacarrigy, I should be able to get the same service as in a large town like Mullingar or Athlone. People who live in Emper, Ballinacarrigy, Sonna, Rathowen, Castletown, Moyvore or Ballymore or wherever should get the same service that is available in the larger towns. Carers must have access to key supports in their community throughout their caring roles such as timely information, in-home and residential respite care, peer support groups and ongoing training in line with the demands of their caring roles. Family Carers Ireland presented the Government with a solution to eliminate the postcode lottery. For an additional € 3.5 million per annum, the organisation can provide access to core supports for carers in their community, including emergency respite care, essential training and peer support. This proposal, however, appears to have fallen between the cracks and disappeared.

One in twenty of Ireland’s population is a family carer. I obtained some figures from Family Carers Ireland prior to coming to the House, and as Deputy O'Dea said, by 2030, demographic patterns predict that this ratio will have fallen to one in five people. International evidence is clear that the burden of care increases with time and without appropriate support, carers slide from capability to coping to crisis. After almost ten years of cuts to services - some public and overt and others covert and hidden - too many individual carers in Ireland have moved from coping to crisis. To avoid crisis, family carers must be supported throughout their caring journey and in accordance with their individual needs. These needs will be minor for some. They need a few more hours of home support, but others require more extensive support as their role intensifies.

I recall the Government’s response to RTÉ "Prime Time - Carers in Crisis" programme. It was swift but it was probably not adequate. There was an announcement on 15 December of additional funding to improve respite care services and to ensure that all carers could access GP services without charge. We must welcome any measure that is brought forward. We cannot be churlish and we have to be constructive and they were certainly steps in the right direction but they go nowhere because of the depth and the scale of the crisis. Despite this announcement, the figures for respite service provision in the first quarter of 2018 were down on figures for the same period in 2017.

Pension entitlements is another area of concern for family carers. There remains in Ireland today a small number of long-term carers who have cared for in excess of 20 years who do not qualify for a State pension, contributory or non-contributory, due to their caring responsibilities and the assets of their partner, and, therefore, receive no acknowledgment from the State of their years of care and the enormous contribution they have made to our society. I understand that the Minister is trying to tackle this with her recent announcement that she is moving to address this inequitable situation. I look forward to her reply and confirmation that carers will be duly acknowledged in the total contributions system that is being prepared. Carers have saved the State tens of billions of euro. The entire system would have collapsed, including the hospital system, the accident and emergency system, all the home care packages and everything else.

Thousands of family carers remain in crisis and they are battling all the time against a system that requires carers' allowance recipients to provide full-time care, which Deputy O'Dea referred to as a minimum of 35 hours a week. They receive just €16 more than recipients of the jobseeker's allowance for doing a minimum of 35 hours per week. They are being paid buttons. Recipients of carer's allowance, carers benefit or the carer support grant are prevented from working or studying more than 15 hours per week. Admittedly the carer has to be in the home, but they are there. They are there right throughout the night, with the alarm switched on. An in-law of mine sleeps with the alarm in the ear. It denies carers the right to a break.

It consistently reduces the number of home support hours available for an older person or someone with a disability in circumstances where there is a family member in receipt of carer's allowance. It very often expects a carer to carry out essential tasks single-handed where health and safety regulations prevent paid care workers from undertaking such tasks due to risk of injury.

Deputy O'Dea referred to the failure to replace the mobility allowance and the motorised transport grant, which were withdrawn. The system means tests carers' access to the GP visit card - they feel very hurt by this - by offering it only to those in receipt of carer's allowance, while providing universal, non-means tested access to people aged over 70 and children under six. We should do the same for the carers. As for the rigorous system of means testing, I think the time has come to abolish the means test for carer's allowance altogether. I have held that view and never changed it. This was one of the recommendations I, as Chair of the then Joint Committee on Social Protection, brought forward in 2003. It was the only one of the major recommendations we made that did not get through. More time is spent on administration of the carer's allowance. If the person being cared for is deemed medically to require care, that should be enough. People who are very rich are able to buy in care in any event. It is a universality issue.

I am asking the Government to invest in home care now. For too long, home care has been underfunded, inconsistent and inequitable, leaving families with little choice but to choose care homes over home care. In its pre-budget submission, Family Carers Ireland called for an investment of €102 million in order to increase the number of home support hours by 25%, from 17.09 million to 21.4 million. Ireland’s first national carers’ strategy was published in 2012, signalling the Government’s commitment to respecting carers as key partners and supporting and empowering them in their caring roles. The strategy has now come to the end of its timeline and I am calling for ring-fenced funding to be provided for phase 2 of the national carers' strategy for the period 2019 to 2022.

Family carers are propping up our struggling health service. They save our State €10 billion each year. The question should not be whether we can afford to support them but whether we can afford not to.

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