Dáil debates

Friday, 3 December 2021

Social Welfare Bill 2021: Second Stage

 

8:25 pm

Photo of Marc Ó CathasaighMarc Ó Cathasaigh (Waterford, Green Party) | Oireachtas source

At the outset I welcome the Minister's announcement on the PUP. It is a measure of how quickly this Covid-19 position changes that we have had the Revised Estimates before the committee this week but the situation has already changed. I echo Deputy Duncan Smith's comments about the arts industry in particular and I have already been contacted by people from theatres and concert organisers who sold tickets but are now looking at 50% capacity. They will need our support.

Deputy Ó Murchú spoke about the carbon tax and he is always a very informed and balanced contributor. It is worth noting that many of the specific measures contained in this Social Welfare Bill are funded through the carbon tax and the hypothecation of the increases in the carbon tax for precisely that reason. It is something that very often gets lost in the debate.

The chief executive officer of Barnardos said that multiple measures set out in this budget provide much-needed help for vulnerable families and children. She welcomed the commitments to increase social welfare payments and the equalising of back-to-school allowances for single- and two-parent families, as well as expansion of the hot school meals programme that the Minister referenced and the widening of childcare supports to more families living in disadvantaged circumstances. She also acknowledged that while positive measures are being introduced, significant challenges and difficulties remain for disadvantaged families. That is very true.

The first of the sustainable development goals is to end poverty in all its forms everywhere. Globally, one in every five children lives in extreme poverty and, closer to home, Ireland has higher rates of child poverty than the EU average. In June this year the EU adopted the child guarantee, stating every child in Europe should have access to free healthcare and childcare, decent housing and adequate nutrition, with a primary focus on disadvantage, including those experiencing poverty. Here in Ireland we still have a way to go to live up to that guarantee. We must take a long-term view and ensure there are multi-annual investment programmes targeted to those who need it most. This monetary investment must be supported by strong policies, good governance and quality assurance. The Minister for Children, Equality, Disability, Integration and Youth, Deputy O'Gorman, this morning reiterated his commitment to working towards eradicating child poverty.

This week the OECD published its country policy review on early childhood education and care in Ireland, acknowledging the strong policy agenda for early learning and care in Ireland and noting that the OECD recommendations align closely with budget 2022 announcements, particularly the new core funding stream of €207 million. Ensuring social protection for all children is critical to reducing poverty and investment in childcare, according to Social Justice Ireland, is a key lever in reducing child poverty.

The second budget of this Government is progressive. It acknowledges the need to look after the people who need it most in our society, including the young and old. The distributional analysis of budget 2022 indicates that income gains from welfare packages are highest for people of retirement age and lone parents. Through all life stages we must focus our help on those who need it most. In order to build a fairer society and one that is more cohesive and resilient, we must ensure the State supports and promotes intergenerational solidarity. We are all conscious of the ageing population in Ireland and the need to care for people in older age and to ensure they are able to live healthy and independent lives while continuing to contribute to our society.

The committee dealing with social protection is currently hearing from stakeholders and experts on the report from the Commission on Pensions set up under the programme for Government. That report outlines quite starkly the challenges of our changing demographics and how the ratio of working age population to older population is changing. The commission recognises the cost of the contributory State pension will increase very significantly, of the order of 65%, by 2030, and it suggests that expenditure on State pensions could consume the entire Social Insurance Fund if we operate under a business-as-usual scenario. People of working age cannot plan their personal pension arrangements in confidence without knowing the future value of State pensions and neither can current recipients of the State pension. They cannot plan or budget with confidence over the medium to long term. People receiving the State pension - we all agree such people should have comfort and peace of mind as they age - can feel vulnerable to rate cuts depending on the Government of the day.

Most countries have a formal process of benchmarking as a means of ensuring the value of welfare payments. Ireland is one of just two OECD countries that does not use a formal system of benchmarking. There are nonetheless a number of challenges for benchmarking, as a link to something like pricing could result in a widening gap between people receiving the State pension and other members of society. If linked to multiple benchmarks, the pension could outstrip both prices and wages, eventually potentially overtaking wage levels.

This Bill is to give effect to the social welfare provisions of budget 2022, including increases in weekly welfare rates of pensions, benefits and allowances, as well as proportionate increases for qualified adult dependants. We can see the potential for social welfare rates as part of an annual budgetary process having a positive impact on poverty levels but there is no explicit linkage between welfare rates and earnings; nor is there is any explicit link between welfare rates and prices, so the value of welfare rates can deviate from year to year, impacting poverty alleviation. We have seen that in the inflation rates, largely owing to energy prices. The Roadmap for Social Inclusion 2020-2025 outlines a potential alternative approach - the smoothed earning system, which could be applied to our social protection measures here. Such a system would ensure that over the long term, the relative value of welfare payments compared with market earnings would be maintained, and over any short-term period the real value or purchasing power of these payments would be protected.

It is important the changes we make in the near future are prudent, fair, caring and take the long-term view. We must lift children and families out of poverty and prevent others from falling into it. I agree with Deputy Kerrane that we should set as a target the MESL, a standard below which nobody should be expected to live. This standard of living means an individual's or household's physical, psychological and social needs are met. Our social protection system is there to give that basic underpinning and set out the essential standard of human dignity we should promote and protect within our society. We must provide that security as well as peace of mind. This Bill takes important steps in that direction and both the budgets passed by this Government, when considered together, move in that direction. I very much welcome the Bill in that regard.

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