Dáil debates

Thursday, 23 February 2006

Social Welfare Law Reform and Pensions Bill 2006: Second Stage (Resumed).

 

Question again proposed: "That the Bill be now read a Second Time."

11:00 am

Joe Callanan (Galway East, Fianna Fail)
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I am sharing time with Deputy Fitzpatrick, if that is agreeable.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Is that agreed? Agreed.

Joe Callanan (Galway East, Fianna Fail)
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I welcome the Bill and congratulate the Minister for Social and Family Affairs, Deputy Brennan, for the great work he is doing for older people and the less well off. Measures will include the introduction of standard and enhanced non-contributory pension schemes that will lift some 34,000 recipients into higher and full pensions, increased support and entitlements for lone parents, carers and widows, changes to scheme names as part of a modernisation programme so that they more accurately reflect modern society and the underlying purpose of the entitlements, increased emphasis on employment activation measures to ensure that no individual's potential is overlooked, establishment of the legal structure for the payment of the early child care supplement — beginning later this year — to some 260,000 families in respect of 350,000 children under the age of six and implementation of a range of budget 2006 increases and improvements.

On pensions, new measures to strengthen protection for members' schemes include: provisions for the Pensions Board to impose a fine as an alternative to the prosecution of an offence; and allowing the Pensions Ombudsman to bypass the internal dispute resolution procedures in cases where there is clearly nothing to be gained from the process.

The improvements, increases and reforms in the Bill represent a further step in a wide-ranging programme of reforms of social policy. Ireland is now making steady progress in tackling the core issues that lead to poverty and leave people vulnerable and marginalised. Investment in welfare supports and entitlements now account for one euro in every three the State will spend this year. Payments alone will not solve our social problems, however. That is why the Minister must go behind the payments and tackle the causes. We must shape reforms that over the coming months and years will introduce further enlightened social policies in a number of key issues. There is no better Minister than Deputy Brennan to do this.

He is ensuring that all older people and in particular the most vulnerable have a decent pension and that this is a priority of Government and future Administrations. It is also important that those reaching pension age who wish to continue working should be encouraged to do so. While pensions to older people have increased by more than 80% in less than a decade, significantly ahead of increases in the consumer price index and gross earnings over the same period, further improvements will now be introduced.

The Bill makes provision for a number of important new measures designed to target resources — in addition to significant weekly increases announced in the budget — at particular groups of older people who are aged 66 or over. These measures include combining all non-contributory payments for people over 66 into one standard and enhanced non-contributory pension scheme with a greatly improved means test that will lift some 34,000 pensioners on to higher or full pensions. The means disregard for this standard pension is being increased from €7.60 to €20 per week. To allow pensioners earn more income without having the value of their pensions eroded, a special earnings disregard of €100 per week will be introduced. The weekly disregard of €20 per week ensures that a single person with no other means will be able to have €35,000 in capital and still qualify for a pension at the maximum rate. This rises to €70,000 in the case of a couple.

The Bill also provides for the extension of the enhanced earnings arrangement in the new non-contributory State pension scheme to particular persons aged under 66 who are in receipt of the widow's or widower's pension, deserted wife's allowance and prisoner's wife's allowance. This will introduce a special earnings disregard of €100 a week. It is estimated that the improvements will benefit more than 3,000 recipients.

The disregard of €100 per week is very welcome, especially for widows and deserted wives. I have always felt that such people who could work part-time perhaps, were unable to do so lest their pensions were reduced. They found themselves in a poverty trap where people on a contributory pension or other allowance could work or earn what they wished. This is a very welcome departure by the Minister and will help many pensions. Also the general disregard of €20 ensures that pensioners without any other incomes can earn up to €35,000 for a single person and €70,000 for a couple. This is also very welcome. It is not long since pensioners found they had to hide a few thousand euro in the mattress, leaving themselves in danger of being attacked or their homes broken into. However, matters have changed for the better over a relatively short period under a good Fianna Fáil-led Government.

I welcome the change of name from "old age" to "State" pensions. This is the right decision as 66 is no longer old due to better life-expectancy into the 80s and over.

The Minister also acknowledged that recognition of and support for carers must be at the core of a caring society. In recognition of the valued and valuable work of carers, the Bill makes provision for increases in the rates of annual respite grant by €200 to €1,200 from June this year. In 2005 more than 36,000 such grants were awarded and it is expected that the number of beneficiaries will further increase in 2006. The duration of the carer's benefit scheme has also been extended from 15 months to two years for each recipient. In addition, regulations will provide for an increase in the number of hours a person can work and still be eligible for carer's allowance, carer's benefit or carer's respite from ten to 15 hours per week. The Bill will also make the necessary amendments to the Carer's Leave Act 2001 to provide for the extension of the duration of carer's leave from 15 months to two years.

I commend the Minister for Social and Family Affairs and previous Fianna Fáil Ministers for their actions on carers. A few years ago if a carer came to me looking for advice on carer's allowance, I had to tell the carer gently that if she or her husband had income of any worth there was no point in applying for the allowance. All that has now changed as the disregard of €580 per couple means that many carers can now qualify. In other words, if a daughter-in-law is minding an elderly relation and her husband's earnings are under €580 per week, she will qualify for the full carer's allowance of €180 per week and still receive additional benefits for her children. I encourage the Minister to go even further in future budgets to recognise the great work carers do.

The Bill also provides the necessary legislative provisions for the payment of early child care supplement, which will be administered by the Department of Social and Family Affairs. It also contains the necessary amendments to the Taxes Consolidation Act 1997 to exempt the payment from assessment as taxable income. Some 260,000 families on child benefit will receive the early child care supplement in respect of approximately 350,000 children under the age of six. This is equal to about 50% of all families on child benefit and some 33% of all children for whom payment of child benefit is made. The rate of payment will be €1,000 per annum, paid over four quarters with three payments being made in 2006. In general, payments will be issued early in the month following the end of each quarter. It is intended that the first payment will be issued in August 2006 for the quarter April to June, with further payments in October for the quarter July to September and in December for the quarter October to December. Payments will issue for full quarters only, which means a full payment will be made in respect of an eligible child born during a quarter or a child reaching six years of age during that quarter. The estimated expenditure on early child care supplement payments in 2006 is €265 million and the estimated full-year expenditure in 2007 is €357 million.

The scheme for childminding relief was announced by the Minister for Finance in budget 2006 and the legislative approach will be underwritten as part of the Finance Bill 2006. The scheme will exempt from taxation the childminding income of an individual who, subject to certain conditions, minds up to three children in his or her home, subject to a maximum income from childminding of €10,000 per annum. The Social Welfare Law Reform and Pensions Bill deals with the social insurance aspects of this measure. To ensure that all those who participate in this scheme are afforded the opportunity to build up a social insurance record that can have important advantages for benefits such as pensions and maternity benefit, the Bill will require that annual PRSI contributions at a rate of €253 are made in respect of such childminding income. This is in keeping with the Government's recognised policies of making every effort to encourage the extension of pension coverage, particularly to women who have emerged as especially vulnerable because of their lack of any, or adequate, pensions.

The Minister has also committed to significant reforms for one-parent families. The Bill will deliver a better standard of living and fresh opportunities for lone parents and their children, with policies directed at breaking down existing obstacles to employment, increasing access to career enhancing education and training opportunities through targeted supports and enlightened social policies. In this regard, recommendations will be published within weeks for general debate before the Government introduces specific proposals. Currently, income support is provided through the one-parent family payment to more than 80,000 lone parents at an estimated cost of €847 million. There has been no change to the income limits applying to the one-parent family payment since it was introduced in 1997. The Bill introduces changes that will give lone parents an opportunity to continue to increase their earnings without raising fears about their entitlement to the payment. A provision in the Bill will substantially increase the upper income limit for the one-parent family payment from €293 to €375 per week. This should allow many more lone parents to qualify.

I commend the Minister for the far-sighted social welfare measures he is introducing, especially those that will allow more people to work and thereby take them out of the poverty trap. I congratulate him and wish him every success for the future.

Dermot Fitzpatrick (Dublin Central, Fianna Fail)
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I welcome the provisions of the Social Welfare Law Reform and Pensions Bill 2006.

I especially welcome the Bill's social welfare measures: the introduction of a standard and enhanced non-contributory pension scheme to lift some 34,000 pensioners on to higher or full pensions, the increased supports and entitlements for lone parents, carers and widows, the increased emphasis on employment activation measures to ensure that no individual's potential is overlooked and to increase people's belief in their own abilities, and the establishment of the legal structure for the payment of the early child care supplement, beginning later this year, to some 260,000 families in respect of 350,000 children under the age of six.

On pensions, I certainly welcome the new measures to strengthen protection for members' pension schemes. Those measures include: provision for the Pensions Board to impose a fine as an alternative to the prosecution of an offence; allowing the Pensions Ombudsman to bypass the internal dispute resolution procedure in cases in which there is clearly nothing to be gained from this process; and powers to make regulations requiring a scheme actuary to have his or her work reviewed to ensure that it complies with the provisions of the Pensions Act 1990.

A big problem facing this country is the need for pensions facilities for the steadily increasing number of people due to come into the pension net. Currently, I am told by the building trades unions that thousands of their members are denied their rights to a pension because of the complete failure of employers to make the required payments to the building trade pension fund. The issue is too important to be allowed to meander through the courts over many years at great expense with possibly no benefits to the aggrieved parties at the end of the day. Even the most carefully regulated building sites are still inherently dangerous and, although health and safety regulations are being improved and tightened up, many workers' entitlement to a pension has been denied.

I am glad that investment in welfare supports and entitlements will now account for €1 in every €3 spent by the Government, but I am also glad the Minister understands that lack of finance is not the only cause of poverty and that further enlightened social policies are needed in several key areas. I welcome the important new measures in the Bill that are designed to target resources at older people aged 66 or over, in addition to the significant weekly increases announced in budget 2006. These measures include combining all non-contributory payments for people over 66 into one standard and enhanced non-contributory pension scheme with a greatly improved means test that will lift some 34,000 pensioners on to higher or full pensions. The means disregard for this standard pension will be increased from €7.60 to €20 per week. A special earnings disregard of €100 will be introduced to allow pensioners to earn more income without eroding the value of their pension.

The weekly disregard of €20 ensures a single person with no other means will be able to have up to €35,000 in capital and still qualify for a pension at the maximum rate. This rises to €70,000 in the case of couples with no other means. The Bill also makes provision for the extension of an enhanced earnings arrangement in the new State non-contributory pension scheme to persons under 66 who receive a widow's or widower's pension, deserted wives' allowance or prisoners wives' allowance. This will introduce a special earnings disregard of €100 per week.

I am delighted there is a change in terminology in the Bill. The old age pension will now be called the State pension. Today, the vast majority of people who reach the age of 66 do not consider themselves to be old and are, in fact, in the prime of life. I had the honour of attending the launch this week of a survey into the needs of elderly people in Stonybatter in my constituency. While money was one of the complaints mentioned, it did not appear to be a major problem facing the elderly in this area. Many of the problems mentioned related to health, lack of mobility, aids to assist mobility, fears for personal security, social interaction and loneliness. I am sure that if this study was replicated in other constituencies, much the same concerns would arise.

This study was not conducted by social scientists studying for a PhD or a Master's degree but by ten senior citizens who live in the community, spoke its language and, more importantly, were prepared to listen to their neighbours. This is what the Minister meant when he stated we must go behind the payments and tackle the causes of poverty. He might regard this study as a pilot scheme and replicate it in different areas around the country, particularly in areas where need is greatest, using local people to inquire about, empower and motivate their neighbours. I welcome this Bill and wish the Minister success in implementing it.

12:00 pm

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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It may sound strange coming from this side of the House but I also welcome this Bill. All the increases provided for in the Bill are very much appreciated. While money is important, we must remember it is not the only issue connected with poverty. The one measure I would like to see is more communication and interaction between different Departments in this regard. For example, the lack of a medical card for a pensioner with a small amount of additional income can often leave him or her in poverty. If the person's pension and any additional income is assessed, he or she will not receive a medical card and will be forced to pay for his or her medical care, which can have serious implications. This issue must be examined very carefully.

While there have been announcements in respect of medical cards, which are not relevant to the debate on this Bill, the answer to a parliamentary question I tabled last week revealed that of the 200,000 doctor-only medical cards promised, only 5,000 have been issued. Major questions must be answered about how we treat those on low incomes. A total of 100,000 medical cards were taken away, 10,000 of which were in my constituency of Cavan-Monaghan, although it has a much lower income rate per person than Cork, where only 8,000 medical cards were taken back. I appreciate the individual work carried out by the Minister but cross-compliance is clearly needed to ensure we minimise the difficulties experienced by people, particularly elderly people. I am referring specifically to widows, widowers and people between the ages of 66 and 70 since people over 70 automatically receive medical cards. The Minister rightly pointed out in his opening speech that payments alone will not solve our social problems.

He also mentioned lone parents who are caring for 130,000 children and wish to escape welfare traps and start out on a path to training, education and work. A report on literacy published last week reveals that we have a significant problem with young people leaving school with inadequate literacy levels at a time when there is unprecedented finance in the country. These young people are far less likely to secure proper employment and avoid the poverty trap.

I welcome the change relating to people receiving the non-contributory pension, a point I will revisit as it is particularly important. Allowing people to earn €100 per week and still receive the full pension is a very valuable change.

The issue of cross-compliance was starkly highlighted at a meeting I attended last Friday night. A colleague from Cavan County Council raised the case of a pensioner living in a nursing home in County Monaghan who was forced to hire taxis to travel to hospital. She was forced to take two taxis to Dublin, one taxi to Cavan and one taxi to undergo a blood test at Monaghan Hospital, which was only one mile up the road. Her total taxi bill was €552.50, of which €160 was spent on each of the taxi journeys to Dublin. On two separate occasions, she was forced to pay €75 and €60 in waiting penalties. Her journey to Cavan cost her €60, as well as €25 in a waiting penalty. She was forced to borrow the money for these taxi journeys from her local credit union in a town in my area. The taxi driver knew that a person of her age would be honourable and pay but this is how she was forced to raise the money for her journeys. She must now pay back this money out of her weekly pension.

We must examine such cases very carefully and ensure that they do not happen to someone who does not have a family to look after his or her needs. Information must be available to ensure someone like this is dealt with in a caring and realistic way. The local Health Service Executive area maintains that it has no budget for taxi services but in an area like this where there is a lack of hospital services, such an issue must be dealt with very sympathetically. We can give out all the money we like in flat-rate payments but they do not cover this type of expense.

The amount of money a person has in a bank or building society account while still receiving the maximum rate of pension for a single person has increased to €35,000, which is a welcome development. The amount has increased to €70,000 for a couple. This change is possibly related to the SSIA scheme. I remember an occasion when Deputy Jim O'Keeffe and myself spoke in this House to try to bring about some change in this area. The former Minister for Social and Family Affairs, Deputy Dermot Ahern, told us we were only interested in looking after millionaires. We have come a long way, which I appreciate. It is important that people keep this money in a savings account. It gives them a sense of security because they know they will not have to depend on a son, daughter or someone else to help them out if they encounter a problem.

We dealt with another matter at the time which the Bill does not resolve. It relates to pensions for the self-employed and people who had less than ten years contributions in 1988 when the self-employed levies were introduced. Given the age limit, some of these people were not able to pay ten years' contributions. Some of them paid nine years, some paid eight years and some paid five years' contributions. The resolution was that anyone who paid five years' contributions, or more, got a half rate pension but they did not get it pro rata for the remaining years. If someone who paid ten years' contributions was a few days too old, they were barred from getting a full rate pension. Later the half rate pension was included. I ask the Minister to examine this because the numbers of people involved are not great. These people who feel very let down will feel even more let down today when they see people who never paid a penny benefiting from the €100. I ask the Minister to try to rectify the situation. If one has paid six years' contributions, he or she should get six-tenths of the pension and if they have nine or ten years' contributions he or she should get nine-tenths of the pension.

The special earnings disregard of €100 a week will benefit approximately 3,000 recipients. I would like to refer to a specific group of people, namely, small farmers. Like our illustrious Ceann Comhairle, I come from Cavan-Monaghan, a constituency which includes very small farmers, many of whom do not have successors. These people may have a few acres of land on which they want to live for the rest of their lives, which may often be rented or leased. Some are involved in private deals and others are not. If they have a few cattle on the land, they will get the full pension, but if the land is leased or rented, it is considered to be unearned income. Will this money be treated in the same way as the €100 earning?

I want to emphasise why this issue is extremely important. We are in a completely new situation as a result of the nitrates directive to which all farmers must adhere. If a young farmer wants to benefit from his neighbour's land, he must go through the legal process. In other words, if a retired farmer is receiving a pension of, say, €5,000 a year, the money should be regarded as earned income, just as if he was in a job, because it is the same thing. I would like this matter clarified, because in the new nitrates directive era, it is extremely important for a farmer to be able to disclose any legitimate dealings to his neighbour.

On the medical card issue, will the €100 be a disadvantage to those who are 66 years of age or widowers? I welcome the increase in the respite grant from €1,000 to €1,200. Some 30,000 people were granted this money last year. There was a provision in the budget to provide the respite grant to 9,000 people who did not have carers, but who were being looked after. As far as I know, fewer than 7,000 people benefited from that grant, despite the fact that carers' bodies and so on say that some 150,000 people are caring for the elderly. Could this provision be promoted better through the different organisations to ensure that as many people as possible can avail of this respite grant?

I welcome the changes in carer's leave. As a member of the Joint Committee on Social and Family Affairs for a number of years, I am aware that much work has gone into this aspect on a cross-party basis to see how we can best serve the elderly and their carers. The Minister's colleagues will verify that we put enormous work into the whole area of carers. The one area that is still not recognised is the role of widows or widowers. It is good that old age pensioners are able to earn €100, but the situation has still not been rectified. The committee proposed unanimously that at least a 50% carer's allowance should be paid to a widow or widower who is caring for either their own parent or the parent of a deceased spouse. These people are told they cannot receive two pensions. Given that a non-contributory old age pensioner or widow can earn €100 a week, can the same not apply to widows or widowers who are caring for people in care? We have broken the bind whereby people are allowed to earn this money. If a widow or widower works somewhere else they are allowed to receive a non-contributory pension, but they are not allowed to do so if they are caring for someone who is handicapped or aged. It appears a widow or widower can earn €100 caring for a neighbour's parent but they will not be allowed to receive even a half rate carer's allowance if they care for their own parent or their spouse's parent. We talk a lot about the need to deal with the issue of care. We want to make sure people are cared for at home so they do not occupy beds in hospitals and so on. However, if we are to be realistic, we must ensure those who care for these people are paid for doing so.

Regarding the renaming of allowances, the Minister said in his speech that it is important to be revolutionary in this regard. However, we must try to change the attitude of some personnel who work in the social welfare service. While I recognise the majority of personnel are extremely helpful, some individuals who deal with inquiries can be less than helpful. People are scared to approach some individuals. Renaming allowances will not be sufficient to deal with this issue. The title "unemployment benefit" is being changed to "job seeker's benefit", "unemployment assistance" is being changed to "job seeker's allowance" and "unemployability supplement" is being changed to "incapacity supplement". While some people are literally unemployable, they may not be classified as suffering from a disability. I met someone recently who had an alcoholism problem. That person needed some payment from time to time to stay alive, but this was not provided. I sat beside the coffin of this 39 year old man a few weeks later. We must treat issues such as this realistically. During my short period there, his father spoke three times about his son's alcoholism. These issues must be recognised by the social welfare system and the health service, and support must be provided. It is an attitudinal problem in many respects.

The changes the Bill introduces are generally welcome and represent improvements. I am from a farming background and make no apology for raising issues relevant to the self-employed and farmers. It seems many people on low incomes are unaware of their entitlement to the supplementary income payment. I blame employers more than employees for this. Media publicity may not be particularly effective because, for example, many of the people concerned may not read newspapers. Pressure must be put on persons employing ten workers or fewer to ensure they advise those workers of their entitlements or even assist them in completing application forms.

My colleague, Deputy Stanton, yesterday observed that people may not be aware of their eligibility for both supplementary income support and a medical card. Obtaining such entitlements can change a person's life completely. Advertisements in the Irish Independent or The Irish Times will not be effective because the people we wish to target may not read them. The Minister must find some other way of informing them of their entitlements.

Will the Minister look again at the issue of supplementary income support? Older people with small shops and other businesses sometimes find it impossible to make ends meet but receive no income support. They must either give up their jobs or struggle on to the last. Many would like to hold on to their small corner shops or other small businesses. Their accounts are accepted by their banks and they are refused loans. The Revenue Commissioners accept that they are not eligible to pay tax. Why does the Department of Social and Family Affairs not accept their accounts and provide them with a supplementary income which takes them up to a standard at which they can survive? With the increasing number of large stores, many owners of small shops and other businesses find it difficult to survive. I urge the Minister to look again at this area and to allow such people to end their days with respect and dignity.

Photo of Ivor CallelyIvor Callely (Dublin North Central, Fianna Fail)
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I am pleased to support the Bill. I congratulate my friend and colleague, the Minister, Deputy Brennan, for making such significant and innovative changes in social welfare in a short timeframe. I thank him for the package he brought forward in December for budget 2006, involving expenditure of more than €1 billion. This is additional to what is already being spent and brings the total expenditure on social welfare this year to €13.5 billion.

This is a huge amount of money and represents a 100% increase in expenditure on welfare supports and entitlements since 2000. This expenditure constitutes a major investment of taxpayers' money. We should be confident that spending on this scale will have a positive impact on the recipients. I welcome the common theme of reform that runs through the Bill. I am aware the Minister is anxious to see the reforms implemented for the greater benefits of those who will receive them.

The Bill includes a full spectrum of measures to address child care costs, including increased child benefit and other measures. This is a major issue that warrants special address. As the parent of three young children, who seem to grow inches taller every time I blink, I appreciate and understand the escalating costs of caring for children. I also welcome the changes in regard to the carer's benefit. In addition, I congratulate the Minister on the new scheme titles, which are most appropriate for our modern society.

I particularly welcome the improvements to the old age contributory pension, retirement pension, invalidity pension and pre-retirement allowance. The new provisions in regard to the State pension, involving the disregard of weekly earnings of €100 in respect of the means test for eligibility, are positive. There are also improvements to the one-parent family payment, early child care supplement, respite care grant, family income supplement, invalidity pension and occupational pensions. The Bill also provides that specific bodies are included as bodies authorised to use PPS numbers as a public service identifier.

The issue that struck me, apart from all the benefits I mentioned, is the concept of reform. I welcome the Minister's indication that these reforms are about liberating, empowering and encouraging people, and striking a balance between rights and responsibilities. As he observed, it is, above all else, about striving to ensure the potential that no individual is overlooked and that nobody's contribution is written off. This legislation is concerned with bringing about the reform that will help us to meet the challenges of modern society.

Of relevance to this debate are the measures announced by the Minister for Finance in the recently published Finance Bill to provide incentives for the transfer of money from SSIA funds into pensions. We all recognise there is a challenge in regard to pensions provision. Nobody wants to see pensioner poverty. We must ensure the foundations are laid so all citizens are secure in the knowledge they will have a decent pension and will be able to live with dignity in later years. This is an area in which I have a particular interest because I served as Minister of State at the Department of Health and Children with responsibility for services for older people. I am aware of the challenge of the amount of work to be done in this area. Equally, we recognise the tremendous amount of good work and input that continues to be made by older people to society, and that should be encouraged.

I congratulate the Government on its decision to pay a bonus of €1 for every €3 transferred directly to a pension account arising from the SSIA benefits. It creates an ideal opportunity for thousands of people to improve their pension positions as it allows for a maximum once off contribution of up to €10,000. I hope the Minister, Deputy Brennan, will undertake a good publicity campaign to promote this scheme. Perhaps the Minister could ensure an appendix to avail of this bonus is attached to the SSIA4 form to draw down the SSIA moneys. Any person who draws down SSIA moneys should be encouraged to see the benefits available arising from this move by the Minister for Finance and the Minister for Social and Family Affairs.

My area of interest is provision for the welfare of older people. The Department of Social and Family Affairs recognises the large number of older people in our community. There is potential to ensure greater participation by older people in our society. I would be happy to discuss privately with the Minister some of the issues I have in mind. I congratulate him on his endeavours to ensure older people, particularly those who are vulnerable, will have decent pensions and security in their latter years. That view is held strongly by the Minister. I congratulate him on his endeavours to secure this arrangement and we all sign up to ensuring such security.

Equally, I congratulate the Minister on the provision of a €100 earnings disregard per week in respect of recipients of pension benefit. Every individual is different and some people look forward to retirement or early retirement. Some people have opted, for one reason or another, to take early retirement but following a number of years with their foot on the back pedal find they would like to return to the workplace but find they are in a catch-22 in that should they do so they would lose certain benefits. This €100 earnings disregard is a great benefit in that it will encourage older people to contribute in some form in the workplace, perhaps simply for the sake of having an occupation. I have met people in my constituency and elsewhere who had a pressurised and demanding job and were happy to back out of it but subsequently find they miss having an occupation and getting up in the morning to face some type of challenge. They would welcome the challenge presented by having an occupation, whether it be doing the books, stacking shelves in their local supermarket or whatever. This provision gives people an opportunity should they so desire to participate in the workplace.

I also welcome the means disregard for the standard pensions which is being increased from €7.60 to €20 per week. In essence, it will mean a person will be able to have means of €35,000 in capital and qualify for a maximum pension, and a married couple will be able to have double that in means. This provision is helpful. There are other ways this benefit will have an impact on people. For example, some people, for a host of personal reasons, may wish to downsize their property, distribute some proceeds of that to their children and retain some of the proceeds, and they will be able to retain such means without it impacting on their qualification for the maximum rate of pension.

Since I was elected to this House and, particularly during my time as Minister of State at the Department of Health and Children, it has been a priority of the Government to recognise the contribution of older people to our economy, society and their communities. One of the substantial means of recognising this contribution is through increases in the pension schemes that are applicable to this group of people. This Bill will introduce further significant reforms in pensions and potentially increase the incomes of thousands of additional pensioners. The Government has ensured the welfare of older people has remained a principal concern. Under this Government, pensions have increased by 80% during the past number of years, well ahead of the consumer price index, a record of which we are rightly proud.

In my constituency of Dublin North-Central there are several active retired individuals and retirement groups. These people are an inspiration as they volunteer, put on shows and exhibitions, engage in fitness activities and events and contribute positively to their community. They are a living example that retirement is not necessarily a time to opt out and sit back. Their energy and enthusiasm is a credit to them. Older people in similar groups elsewhere throughout the country participate in their communities. They know their contribution is vital. The Government, in this Bill, is increasing options and opportunities for older people and allowing them to contribute to the economy without fear of losing their well earned and well deserved non-contributory pension.

I am delighted the Government will allow and encourage those reaching pension age to continue to work should they wish to do so. In the past financial concerns about pensions may have discouraged people from continuing to work or re-entering the workplace. This Bill, by providing a special earnings disregard of €100 per week, will allow people the choice of working and not losing out on their pensions.

Those who cannot continue to work, or wish to use their time in retirement differently, will also benefit under this Bill. A greatly increased means test will ensure that more than 34,000 pensioners will see their incomes raised. Welfare benefits will be combined to make claiming entitlements clearer and more comprehensible.

This Bill will see the establishment of the non-contributory State pension scheme from next September. A standard non-contributory pension scheme based on a means test will be available to all welfare recipients over the age of 66. To ensure additional older people qualify for this new scheme, this Bill will see the means disregard increase from €7.60 to €20. This new scheme, in bringing together all the other support schemes currently in place, will not only increase benefit payments for a significant number of people but will make the entitlement to benefits easier to understand.

I am pleased with the news that pensions will be paid on the date that people turn 65 for the retirement pension and 66 for the old age pension, rather than on the pension pay days. I am sure that those entitled will welcome this extra bonus on their birthday.

The Bill also deals with occupational pensions and rightly addresses concerns workers may have about their pensions. The Government, in recognising those concerns, asked the Pensions Board to undertake a statutory review of those 2 million people in our workforce who are without personal pensions. As the report was published recently, I hope people inside and outside the House will review and debate its findings.

Meanwhile, this Bill introduces several measures to protect those who have paid into pension schemes. The Minister for Finance introduced measures to incentivise the transfer of the SSIA funds into pensions and encourage contributions to occupational pensions. This is another innovation by which the Government will assist occupational pension holders.

The benefits outlined in this Bill are being renamed to better reflect the nature of the benefit in today's society. The old age contributory pension will be the State pension, indicating that the age of 66 is no longer considered old. The Government has no wish to hinder people by suggesting that their age is a barrier to their activities and ambitions. The retirement pension has also been changed to the State pension, indicating that retirement is no barrier to continuing to work.

It is vital that older people who have contributed so much to our economy, society and communities are not hindered by financial worries and complicated means of claiming their benefits. The innovative and far-sighted changes in this Bill will be of great benefit to older people, not only in my constituency of Dublin North-Central but throughout the country. I am happy to support this Bill and commend it to the House.

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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The Minister for Social Welfare has the art of being the first to think of a jazzy headline. While I agree with the name changes for the various pensions in this Bill, the leopard does not change his spots. We must watch to see what these changes mean for the delivery of service.

There are some fine provisions in this Bill so I will not spend all day castigating it. The Minister, however, is in the privileged position of distributing not the Government's money but that of the people who work hard for it. The economy is strong now and the redistribution of wealth is what matters to the elderly, the disabled and so on.

The benchmark of all civilised societies is the manner in which they deal with the elderly and the sick. I will discuss some of the black spots in this Bill and personalise my comments, which is the only way to show how the system has let people down badly. The change in the disregards in this Bill may be a small step but it could have serious consequences. Old age pensioners would hardly need to get up five mornings a week to earn the €100 permitted in the disregard.

Many people will approve of the principle behind these changes. Thankfully today people live longer and are healthier; many 66 year olds whom I know are healthier than were 56 year olds 25 years ago. There is a significant change in overall health and it would be foolish of any Government to consign people aged 65 or 66 years to the scrap heap because these people have a significant contribution to make.

The disregard is small, but I am concerned about how it will be calculated. I assume that employers who take on pensioners must comply with PRSI contributions and so on. Many people will worry about getting back into the system again and what it means for them. In other words, will it be costly for employers to take them on? If the limit is low, at €100, the need to pay PRSI and so on will make a significant difference. No one will want to earn over €100.

Times are changing but in the long time I have been in this House many people have told me they would lose more through earning an outside income while receiving a pension. That concept prevails in rural Ireland. I do not know whether the same is true of Dublin city. I met a man last week who said he would have been better off if he had never seen the pension book because he had to do so much to get it, but he says the book means everything to him. I will be interested to see how the €100 disregard will bed down while that concept persists.

The Minister was rather mean-minded in changing the means disregard from €7.60 to €20. That disregard existed for years. I do not know on what the Minister based the increase, but at €20 it is very small. Pensioners face a wider problem. If I were sitting in the Minister's seat I would be happy with what I was doing because I could argue that pensioners never received a larger pension. The Minister, however, must recall that they have never paid higher prices for ESB, and the ancillary services they receive, their heating fuel, petrol and diesel for their cars. Those items have never been so expensive.

The Government intends that the non-contributory pension, or the State pension as it is now known, will be €200 next year but no one will go mad on that sum. I know people who do not live in high society but would pay €200 to go out for an evening meal. Against that background, we should not lose sight of ourselves in saying how good all this is.

This sum will not be enough for people who may unfortunately have to end their lives in nursing homes, which can cost between €600 and €800 per week. Even with the payment from the Department to top up the pension there will be a significant gap as the years pass. We should not run away with the idea that the increase in the old age pension is a panacea. It must be seen in context.

I am surprised that when the Minister delved into pensions he did not proceed to ensure that some of the anomalies in the system were corrected. It was not that he was not told about them. While we all hope the Minister will not be on that side of the House for long, he is the most likely Member on the Government side to implement a change. I am not sure of the numbers involved nationally but I know of 15 or 20 pensioners in east Galway so I assume the problem is quite widespread. In 1979 a man in north Galway, since deceased, was employed by the Office of Public Works at Headford. In that year employees were asked by the OPW to sign up to a new pension scheme. He and many others like him did not understand the significance even though they were given information about the scheme. The widows of those who signed up are now in receipt of what is admittedly a very small pension but a pension nevertheless. I ask the Minister to imagine the frustration within the one parish where five or six people are in receipt of those pensions but three or four other widows of OPW workers, who are entitled by right to this payment, but whose husbands did not sign up in 1979, are not. Numerically speaking, there are not many of these cases.

I wrote to the Minister a few months ago on this subject and my letter was passed to the Minister for Finance who is responsible for Civil Service pensions. In the case of the widow for whom I was making a representation, it was decided that unless she could make a very strong case, there was nothing either Minister could do. The Pensions Board or whoever is responsible for these matters should be asked to investigate. It will not make any difference in ten years' time because by the law of averages there will be nobody left to claim it. I ask the Minister to examine this. I will send a copy of my letter to the Minister's office for his consideration.

I cannot understand the reason the Minister did not take action on a matter of great importance. A man from north Galway emigrated to Birmingham many years ago. He worked in this country for five or six years but did not pay contributions because there were none to pay at that time. He spent his working life in England and returned home to his native parish two years ago. He is in receipt of a British contributory pension. He applied for and received the free telephone rental allowance as he is over 66 years of age. However, he did not receive the living alone allowance nor the fuel allowance. It is difficult to understand the reason a returned emigrant could be entitled to the free television licence and the free telephone allowance but for some strange reason the free fuel and the living alone allowance are denied to him. Why is he not entitled to these allowances, given that he sent remittances worth far more than the pension home to his parents and siblings over the years? He returned to Ireland every year for 50 years. It is unfair to an Irish citizen who had no alternative but to emigrate because he had no job in this country, and when he returned home to live, he is regarded as being in a lesser position than his siblings who stayed here. I ask the Minister to consider the effect on Irish emigrants abroad which I assume was never intended. I raised the matter a few times in the past months but it is not provided for in the Bill.

I wish to highlight another problem which I regard as a national issue. An 82-year old man in my constituency had a review of his old age pension which he and his wife have been receiving for 17 years. He emigrated and worked hard with McAlpine's as one of their supervisors in London. He applied for the old age non-contributory pension for himself and his wife when he returned home. He informed the Department of Social and Family Affairs that he was in receipt of a British pension but he did not inform the Department that he was in receipt of a pension from McAlpine's. He should have informed the Department of this fact at the outset.

However, in a recent review of his entitlements he informed the Department of his pension. I compliment the departmental staff for their humane approach. This case was the subject of an appeal before an appeals officer. I accompanied the gentleman to the hearing and he was treated with consideration by the staff. His wife is suffering from Alzheimer's disease and is being cared for in a nursing home in Galway city. It was deemed he had withheld information and arrears had accumulated amounting to €25,000 each for himself and his wife. This man is 82 years and in bad health and his wife is dying. His question at the appeal hearing was whether his house would be taken from him. This man cannot afford to repay any more than €20 a week and €50,000 is due.

I ask the Minister to look at this case as sympathetically as possible. I reiterate that I would never support anyone trying to defraud the system but this is not the case in this instance.

My colleague, Deputy Crawford, referred to pensions for the self-employed and the associated problem. I was in the Dáil when the then Minister, Deputy Woods, introduced the scheme in 1988. It was a good scheme, under which the period set for the self-employed was ten years, provided they were under 56 on that day. A number of beneficial changes have occurred since under different Governments, making entitlement to benefit somewhat easier. However, a small cohort of people remains who have less than the yearly average of five contributions. They are deemed to be going nowhere and their RSI payments were refunded to them. As Deputy Crawford stated, it was considered a good move at the time to give people who had five or more contributions a half pension but they would not be entitled to a pro rata pension. People with nine contributions believed they should get more than half a pension but at the time it was considered that half a loaf was better than no bread. Something should be done for those people who have fewer than five contributions. They would have included themselves in the scheme had they been born in time. The problem lies with their age. No more than with the other categories, time will solve all of this. The case has been made and the Minister knows what I want.

It is usual for farmers to transfer farms to their sons or daughters when they apply for the old age pension. However, a technical matter that affects them is that if they transfer money held in bank accounts it is not seen in the same light as the transfer of farm assets. The transfer of money is considered to be a device to get the pension. I urge the Minister to examine this matter as it has serious connotations.

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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I am almost tempted to take a leaf out of Deputy Connaughton's book and reel off a range of issues that relate to Tallaght. However, I will resist the temptation.

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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Deputy O'Connor will find it hard to resist that temptation.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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Resist everything except temptation.

1:00 pm

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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I will resist it. It gives me an opportunity to compliment not only the Minister but his staff. I am on record as saying the Minister, Deputy Brennan, has revolutionised the Department. The temperate language of the Opposition is a sign that even the Opposition accepts that and he is getting many back-handed compliments.

I attended a chamber of commerce breakfast this morning with Deputy Ardagh and other colleagues. Deputies Connaughton and Stanton may be interested to hear that the former Deputy, Alan Dukes, addressed the group. He reminded us of the time when the Fine Gael Party was brave enough to say the Government was doing a good job when that was the case. There is general acknowledgement that the Minister is doing a superb job. He is taking on issues that have long required to be tackled. He is grasping many nettles that some people believed would not be tackled. He is doing his job in a brave, political way and I strongly support him.

Pensions have been much discussed in the debate on the Bill. There is no question that this area requires to be dealt with and the Minister is leading the way. I take the lead from Deputy Connaughton, but not in a patronising way, as I have always complimented the Department of Social and Family Affairs, in all its guises, for the manner in which it deals with queries. It is important that we look after those who are in need of social welfare. We should not be afraid to look after them, as it is an important job. Throughout my political career I have supported the concept of social inclusion.

I apologise for referring to Deputy Ardagh again but I heard him say last night that we are the envy of the world, that anywhere one goes throughout the world there is a major improvement in the image of Ireland. Any parliamentarian who travels abroad can attest to this. We are now seen as a leading player, which is important. The Taoiseach once said that when all boats are rising it is important that we give additional help to small boats. I expect that this approach drives the Minister in his work in the Department. It is important that we do not lose sight of this notion as there will always be people who are on the margins.

Before I left my office this morning I got two calls in a short time about social welfare issues. When people are under pressure or have difficulty in satisfying the local employment office with regard to the information required for benefits we are sometimes required to intervene and I am happy to do so.

I support the Minister in his proposed renaming of certain social welfare schemes. The old age contributory pension will become the State pension — contributory. The retirement pension will become the State pension — transition. Unemployment benefit will become jobseeker's benefit. Unemployment assistance will become jobseeker's allowance. Unemployability supplement will become the incapacity supplement. Disability benefit will become illness benefit. Orphan's — contributory — allowance will become guardian's payment — contributory. Orphan's — non-contributory — allowance will become the guardian's payment — non-contributory. While it is a challenge, we will all have to get our heads around the new terms.

The Minister must continue to ensure that proper provision is made in the Department and that resources are put to good use in getting across a positive message to the public in so far as these issues are concerned. People need to know about the changes, what their benefits are called and how to access them. Some time ago I attended a function for the opening of a citizen's information centre where the then Taoiseach, Garrett FitzGerald, made the point which is still relevant today, that much of the work that reaches a public representative's desk would not be necessary if the systems were working. I do not wish to be unduly critical of the system but we must remember how important it is to send out a positive message about people's entitlements. Members of all political persuasions get numerous queries from all social classes which show this remains a continuing challenge.

Different aspects of the legislation will attract attention. The extension of pensions investigation powers will no doubt get some headlines, as will the measures affecting jobseekers and pensioners. Those who read the Bill will find other sections that affect them. I compliment the Minister in regard to the jobseeker's allowance. We must ensure that those who qualify will be able to access the services and will not encounter problems. It is important that we help the unemployed to get back into the jobs market.

I heard somebody make the point this morning in regard to the construction industry disputes that it is odd at a time when so many people are coming here to work that Irish people cannot get jobs. I know the Minister is examining this matter which I expect requires special attention. There will always be people who for one reason or another cannot find employment. I attended an important meeting yesterday when a deputation from the Jobstown Action Against Drugs Dependency Group, JADD, met the Minister of State, Deputy Noel Ahern. It made the point that for some people even taking up a community employment scheme is a challenge. We should remember that. I have always taken the view that unemployment should mean job seeking.

I represent an area in Dublin South-West where great progress has been made in terms of employment. I was a founder member of the Get Tallaght Working group 21 years ago at a time when unemployment was a major problem for the area and it was important that jobs would be created. Employment has improved dramatically in the area since then. Tallaght is now leading the way, as it should, being the third largest population centre in the country. That said, people still face challenges and we should not forget about them.

Another highlight of the Minister's legislation is the early child care supplement, about which there has been much discussion recently. It was also highlighted in the Budget Statement by our colleague the Minister for Finance, Deputy Cowen. The Minister for Social and Family Affairs is providing for the payment of the early child care supplement, which I note is being administered by his Department on behalf of the Department of Health and Children. The legislation contains the necessary amendments to the Taxes Consolidation Act in order to exempt that payment from assessment as taxable income.

Some 260,000 families in receipt of child benefit will be paid the early child care supplement for approximately 350,000 children under the age of six. This is equal to about 50% of all families on child benefit and 33% of all children for whom child benefit is paid. The rate of payment at €1,000 per annum over four quarters, with three payments being made in 2006, has been generally welcomed.

I understand that payments will issue early in the month following the end of each quarter. I hope the Department will take the opportunity of publicising this fact and ensuring that people are aware of their entitlements. All public representatives will tell the Minister they are receiving many inquiries about this payment, which is to be warmly welcomed.

I wish to discuss one-parent family payments. I have already brought to the Minister's attention the concern expressed recently about a policy change regarding the length of time recipients have to visit their local post office. I am aware the Minister has reviewed that matter so I hope he will continue to examine that procedure on an ongoing basis.

The Minister stated he is committed to significant reforms to one-parent family payments and the need to deliver a better standard of living and fresh opportunities for lone parents and their children. The Minister has also spoken of the need for policies directed at breaking down existing obstacles to employment, increasing access to career enhancing education and training opportunities through targeted supports and enlightened social policies.

I have supported the Minister's plans both in this House and at the Fianna Fáil social and family affairs policy group of which I am the secretary. I have brought a number of issues to his attention which fall within his Department's remit. I am glad the Minister has informed us that reports and recommendations will be published within weeks for a more general debate before specific proposals are brought to Government.

Income support is provided through the one-parent family payment to over 80,000 lone parents at an estimated cost of €847 million this year. There has been no change to the income limits applying to the payment since it was first introduced in 1997. The Bill includes changes that will give lone parents an opportunity to increase their earnings without raising fears about loss of entitlement to the payment.

We should be careful to help people who otherwise might be caught in a poverty trap. Lone parents are among the many people who attend my eight clinics throughout Dublin South-West each week. They have told me of the challenges they face in trying to take up employment. The current buoyant economic period is welcome as people are finding employment. People who have been unemployed for a while may face a challenge in resuming work but lone parents face additional challenges, including child care and rental costs.

Members of the House have often spoken about the manner in which some of these issues are handled, so I am glad the Minister has indicated an enlightened approach to them. I hope the days are over when local authority inspectors hid in bushes to see if people had visitors for whatever reason. Such matters must be dealt in an enlightened way. Bearing in mind our commitment to social inclusion, we must ensure that lone parents are given an opportunity to be part of the rising tide that lifts all boats. They must not be caught in a poverty trap because of old fashioned ideas of what they should or should not be doing. In his reply, the Minister might indicate how he intends to deal with that. In his initial statement he said he will bring forward proposals in this regard and will open the debate so I will be interested to see his ideas being fleshed out in order to make progress.

Every day we get some sort of reminder that a general election is close. However, I calculate that there are over 450 days to the next election so it is important for Ministers to remain at the helm to continue the jobs they are doing. The Minister, Deputy Brennan, is certainly doing that. I expect that in the next year he will bring forward a number of exciting legislative provisions which will prove that this is a good, caring Government at work.

I support colleagues who made a case for the continued recognition of carers. I am a member of the Joint Committee on Social and Family Affairs, which is ably chaired by my colleague, Deputy Penrose. The record of that committee shows it has created many all-party initiatives which recognise the work of carers. In fairness to him, the Minister understands their importance. We must continue to support carers because there will never be enough of them.

The Carer's Association is located close to my constituency in Clondalkin. Every time a deputation from the association appears before our committee and other fora, its members clearly indicate the particular challenges they face. I often bring my life experiences to politics and in this respect I have had many dealings with this issue through family connections. My late father, who died ten years ago, was looked after for a while by my sister so I saw at first hand the challenges that such matters entail. I have heard colleagues talk about carers being under strain and facing such pressures for a long time. As public representatives, we all come across many people who are dealing with such challenging situations. Therefore, I hope the Minister will continue to understand our strong support for carers. I was glad to note that he made that particular point in his earlier contribution. He is on record as having said that carers are at the core of a welfare society, which is as it should be.

The Bill provides for increasing the rate of the annual respite care grant by €200 to €1,200 from June. In 2005, more than 36,000 grants were awarded. It is expected that the number of beneficiaries this year will increase further, which is welcome.

The duration of the carer's benefit scheme has been extended from 15 months to two years for each care recipient. In addition, regulations will provide for increasing from ten to 15 hours per week the time a person can work while still receiving a carer's allowance, carer's benefit or respite care grant. The Bill contains the necessary amendments to the Carer's Leave Act 2001 to provide for the extension of the duration of carer's leave from 15 months to two years.

I welcome the Minister's initiative on child benefit. He made the point that ending the unacceptable level of child poverty in an Ireland of considerable affluence in the 21st century was a target that must be achieved by the Government and society. In addition to substantially increasing the lower social welfare weekly rates by €17 per week in the budget for 2006, a number of measures have been taken to confront child poverty. The investment of more than €100 million in additional increases in child benefit will lift payment rates to €150 for the first two children and €185 for the third and each subsequent child.

To be briefly parochial, local colleagues and I have strongly supported the childhood development initiative based in Jobstown in Tallaght. The Minister is aware of the great work done in that regard. The Taoiseach visited Tallaght in the summer to launch the initiative report. When we talk of child poverty and the need to deal with the challenges and difficulties, I certainly support that initiative. It falls within the remit of various Departments, including Education and Science and Health and Children, but I know the Minister for Social and Family Affairs also takes an interest. He shares a constituency boundary with me and takes an interest in my constituency. No doubt he will continue to do so and I am always happy to have his help. I look forward to supporting the Bill and warmly congratulate the Minister.

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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I thank the Minister for attending. He has been here for a considerable time and he is to be commended on that for it is often the case that Ministers of State attend for Ministers.

I will take up where the previous speaker left off on innovation and imaginative structures to be put in place to deal with a world which has changed dramatically since the introduction of the social welfare code in this country in 1953. Needs have changed unrecognisably. When one considers what was required of the State when social welfare was first realised, one realises what a mammoth task it has become and how great are the needs of people. Our recognition of those needs is not just commendable but also demands we do something to address them.

The Minister's colleague in his neighbouring constituency, Deputy O'Connor, has heaped praise on the Minister for increasing the period for which carer's benefit is granted from 15 months to two years. Giving someone carer's benefit for just two years is a terrible injustice. Since these people are on benefit, one knows they gave up jobs to look after others in need of 24-hour care. The notion that they would fall out of benefit because they made that sacrifice is unjustifiable, whether it is for 15 months, the 390-day norm in the social welfare benefits system, or two years. It is indefensible that someone should fall out of benefit because of having done a selfless thing.

Such a person has made a huge sacrifice by giving up a job to do something which perhaps the person being cared for wanted that person to do. It may be that the carer was the only person allowed by the carer to do the job. That is often the case. It could also be that the carer thought the care provided by the State was not sufficient, recognised that the person needed 24-hour care, and therefore gave up his or her job to provide the care. Such carers have straight away reduced their income dramatically. They have virtually given up their social life and are on call on a 24-hour basis.

I know that after a period a carer can accept up to ten hours' work on a social basis and so on. Nevertheless, the sacrifice is clearly recognisable and is a selfless act. After two years, however, the person falls out of benefit and no longer qualifies. If that person were no longer needed as a carer, he or she would have to begin a contribution record again. That needs to be examined, if only on the basis of such carers returning to work and perhaps being reinstated to the point they had reached when they gave up jobs to become carers. One should not necessarily continue getting the benefit while out of work, but one should get it on return to work or when a person comes to qualify for what will now be called the State pension, it would automatically be considered on a contributory pension basis no matter what lapse occurs.

The sacrifice and selfless act must be recognised, as well as the fact that the State would probably not have provided the level of care involved. That recognition would be revolutionary, and since Deputy O'Connor recognises the Minister as a well known revolutionary, it would be no great feat for him to undertake. I wonder if there is any room for socialists in the world because Fianna Fáil appears to have them all if one were to take the word of its backbenchers.

I want to talk about the means test for the carer's allowance. It always astonishes me that so few people claim or draw carer's allowance. It is not of the magnitude we expect when we look at the figures and is quite a small number. Now that we all recognise the crisis in the care of the elderly, we must take a serious look at abolishing the means test for carer's allowance.

When the rainbow coalition was in Government, it began by doubling child benefit as a recognition of and a first step in eliminating child poverty, although we are not quite there yet. Nevertheless, an indication or first step from the Minister on the carer's allowance would be very important. A crisis is looming and it will not be a surprise because we knew the demographics ten years ago. They have changed slightly because of the economic success of the country and because of immigration but the demographics exist and we all know we face a crisis in care of the elderly. We must make it easier for families to care for people at home.

I looked yesterday at a report published by the independent living advisory group, which reports to the Government. All of its findings show that people with disabilities want to live independently. From looking at reports on the elderly going back ten or 20 years, it is clear they want to live in their homes and communities. That is the best possible outcome and we need to facilitate it. The Department of Health and Children has a different job but the job of the Department of Social and Family Affairs is to facilitate people who live on support payments from the State. We need to think hard about that.

I hope the Minister will correct me but a particular item is not in this Bill. I may have missed it.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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Deputy Lynch does not miss much.

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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I take that as a huge compliment from Deputy Ardagh.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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Absolutely.

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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Although I do not pretend there are no widows over 65 or 66, we nonetheless have a group of young widows and widowers. This category of people do not do very well under the State. There has been an historic and deliberate attempt by all Governments to ignore this group as its circumstances will not always exist. The people involved, the Government and everyone else know that the group is in a transient period. That a mother or father of young children can find himself or herself in unplanned for circumstances is unfair, especially given that his or her lifestyle is based on two incomes. Their situations arise from tragic circumstances and are not a case of a marriage breaking up or one spouse deciding to leave the family home. However, they receive no secondary benefits.

In this day and age, most of us would accept few houses do not have televisions. I do not want to generalise because, if I do, I will get a telephone call from the person who does not fit the norm to tell me I am wrong. Recent reports inform us that virtually every bedroom has a television set. However, young widowed mothers do not get free television licences. Licences are not inexpensive items and widows must find the money for them every year. In most cases, television is their only entertainment. They do not have free electricity or fuel. No one should be expected to live without the benefits of energy in his or her house. However, widows are expected to provide out of miserly pensions the comforts they have come to expect for their children.

That they are young widows means a pension deriving from employment or a private pension is not available. They find themselves in circumstances near to but not in the welfare allowances net but have lifestyle expectations gained when they were married and their partners worked as well. We must examine this issue concerning this group of people. The social welfare code and needs of people have changed.

I spoke to the Minister about lone parents previously but in a different context. We are now speaking on this Bill in which the only significant measure I see is the disregard of earnings in respect of the one parent family allowance. Before entering the transitional payment stage, one will be able to earn €375 per week, which will be increased from €293 per week. I welcome this measure. People will appreciate it as the money involved is serious to a significant extent.

I was approached last Friday by a young woman who received a letter from the Department of Social and Family Affairs. I am not unique and am sure the Minister, Deputy Ardagh and others have also been approached by such people. I am one of those who believes the Department has changed radically over the past 15 years as to be unrecognisable. Its staff is courteous, available, anxious to help and, if one is mistaken in looking for one payment, they will direct one appropriately. This is important as the people being dealt with are vulnerable.

I spoke to the Minister previously about the young woman in question. As in other cases with which I have dealt, the letter she received told her she owed more than €12,000 but, because she was unknowingly entitled to family income supplement since the date from which she owed money, the bill dropped to €6,500. One might as well have told her she owed the State €5 million and to repay it at €5 per week. She could not get this money together and has entered the appeals process. The Minister and I know that, if this young woman had stayed at home rather than worked, she would not have been billed. She does not receive a rent allowance, only a transitional half rate payment because she went out to work, and was honest, compliant and up front in giving the Department the information it requested. Approximately 4,000 people are in this position or so I am told. Fortunately, the cases I have appealed were successful.

In this context a special unit has been established in the Department to examine payments made to workers. It is not this young woman's fault she went over the limit for the transitional payment. When she was asked to return her books, as it were, to reduce the payments by half, she did so. When she was asked to send in her P60, she did so. She did everything the Department requested of her. It has discovered it overpaid her by a certain amount and she is now in a state of panic.

While a number of cases may have been dealt with because the process has continued for two years, approximately 4,000 other people are in the same position. If people owe the State money, they owe the State money. If this young woman had stayed at home, she would not owe the State anything and would still get a rent allowance and the other benefits to which she, as the mother of a young child, is entitled. However, she did not stay at home. She went out to work. Her income is paltry which is why she receives family income supplement.

While I do not know how, something must be done in respect of that cohort of people. Many amnesties have been introduced by the Dáil for people who owed more than €6,500 and could afford to repay many times the amounts this young woman owes. I appeal to the Minister to introduce an amnesty for the group in question. That we would decide to crucify and cause such angst among all young women who choose to work, better themselves and inform the Department without underhanded dealings is astonishing. That 3,700 women have already paid is terrifying and I wonder how they managed to make the repayments.

People with disabilities is my favourite subject. I read a report yesterday on people with disabilities who want to live independently. We automatically assume people with disabilities are young men and women in wheelchairs, but this is not the case as there are all types of disabilities. For example, the elderly can have disabilities. Reasons for disabilities include strokes, severe heart attacks, accidents, births, diseases, etc. We must not force people with disabilities to return to sheltered workshops or to sit in the corner of their homes.

We have grown accustomed to seeing people with disabilities who we did not believe would venture out into the big bad world at every street corner. I welcome this as it creates diversity and gives us a different view of the world. It ensures we listen to the point of view of people who see the world in a very different way. I will not refer to access because it is so poor in this country that it terrifies me. The private sector will not deal with this until 2015.

Why is there no indication that the Minister accepts it costs more to live for people with disabilities? Most people can get from A to B under their own steam but many people with disabilities cannot. They must rely on taxis, public transports or lifts from others. We must examine the idea of a cost of disability allowance. Perhaps this could be done as a first step, with the intention of implementing the full allowance sought in the equal citizens document. We must begin to examine this measure and it will eventually happen. The Minister's colleague on the backbenches, from a neighbouring constituency, Deputy O'Connor, sees him as the Che Guevara of the Government, and if the Minister wishes to make a mark he should introduce the measures I have suggested. If the Minister amended his budget to introduce a starter payment for disability allowance it would be deeply appreciated and he would forever be remembered for it.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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I represent Dublin South-Central, a constituency in the south-west inner city that is the most socially and economically disadvantaged in the country. If one overlays a socio-economic map on a geographic map of Ireland, the constituency of Dublin South-Central is the darkest area on the map. When I began my Dáil career in 1997 it was black, now it is purple and I hope it will change to a bright sunshine yellow, with all disadvantage eliminated. I am hoping for a utopian society and all Members of this House and the Government strive towards this end. Deputy Lynch stated that people have major needs but I believe they also have great expectations. Members of the Oireachtas, including the Minister for Social and Family Affairs, Deputy Brennan, face a major challenge and over the past ten years the Government has been meeting this challenge.

During the drugs scourge in Dublin South-Central, heroin was rampant and everyone feared travelling across Dolphin's Barn bridge. Certain chemists and doctors were a magnet for those who sought a supply of drugs. Over the past ten years, through local drugs task forces, the Government has achieved a considerable amount. Today the drugs problem has diminished dramatically in comparison with ten years ago. The people responsible for this include Mr. Chris Flood and Deputies Eoin Ryan and Rabbitte.

Fatima Mansions and Marrowbone Lane are being regenerated, while St. Michael's Estate in Inchicore is being demolished and replaced. Teresa's Gardens and Dolphin House have the opportunity for regeneration and Dublin City Council is anxious to make progress on the regeneration that the tenants of the complexes wish. The Government has the money to undertake a high class, high quality regeneration of those areas and I look forward to the residents agreeing to this.

Community enterprise schemes, such as the job initiative and the social economy, have improved the lot of many people, particularly lone parents. The social capital of the country, particularly my constituency, has improved dramatically. Ten years ago, elderly women with long coats and scarves walked along the roads depressedly. Now the same cohort of women is dressed to the nines, with hair done, getting on the bus to Westport, Rosslare or some area in Cork, with volunteers such as former Garda Sergeant John O'Sullivan. Volunteers and participants in social community enterprise schemes work with the community to ensure the improvement in living standards of the elderly. Through participation, lone parents are also improving their quality of life and the social capital.

The dramatic improvements in social welfare to which I refer are of great importance. In 1996, before this Government came into office, child benefit for the first and second child was €35 per month. In June 1997 it increased when the Fianna Fáil-Progressive Democrats Government came into power and it now stands at €150 per month. My calculator does not have enough zeros to calculate the significant percentage increase.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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What a great Minister.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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In 1996, the payment for a third child and subsequent children was approximately €41 and it now stands at €185 per month. The increase over ten years is in excess of 400%.

In 1996, the old age contributory pension was less than €93 per week. Today the amount is €193.30 per week. In 1996 the figure for the old age non-contributory pension was less than €80 per week and it now stands at €182 per week. This is an increase of more than 100%, and these substantial increases are still not enough. I am sure we will see further increases. Whatever was stated in the media when he was appointed to the position, the Minister for Social and Family Affairs, Deputy Brennan, has shown during the period he has been in the position that he is innovative and cares about equality and justice. He cares about his clients and customers. I do not know how many millions of customers there are. I am sure the Minister will tell us. He has shown he cares through the work he has done and effort he has made, and through the budgetary improvements that have come about. As Deputy Lynch stated, the Department is now courteous, available and anxious to help. All of the new systems are being introduced with style and management competence and ability second to none. I congratulate the Minister and ask him to keep up the good work.

Regarding matters in the Bill, as I stated, child benefit has improved greatly. Do people realise that 540,000 families receive child benefit? It benefits in excess of 1 million children. These figures are huge. They are nothing like the figures we would have dreamt of ten years ago. The early child care supplement for children under six years is received by 250,000 families and 350,000 children. Each of those will get €1,000 a year towards child care costs. That is a significant figure. There is no meanness involved. If a child is born within a quarter, the parents will receive €250. If a child reaches his or her sixth birthday within that quarter, no matter at what stage of the quarter it happens the parents will receive the full €250 for that quarter. This generous spirit was not seen before in the former Department of Social Welfare. Previously the amount was worked out to the exact fraction. The Minister's hand is obvious in this type of measure and he is to be congratulated on that.

The family income supplement is definitely the most important supplement available to families. It is not fully utilised. Deputy Lynch spoke about a particular lone parent who went out to work, and who was entitled to the family income supplement but did not avail of it. I can understand that. People on lower incomes spend so much time trying to live from hand to mouth that they cannot get into the schemes that are available. We all send out leaflets because full colour printing is now provided by the taxpayer free of charge. We as Deputies have a duty to inform all the people about the family income supplement.

I did not realise until I went through the Bill that contributions to the personal retirement savings account, PRSA, will now be disregarded as far as the threshold amount is concerned. People aged up to 30 years can put up to 15% of their income into such an account. Will the Minister consider putting in place a scheme regarding the personal retirement savings account to give a tax equivalence to people entitled to the family income supplement? The State should increase by one third the amount of money put into a PRSA by anybody entitled to the family income supplement. For every €3 a person receiving the family income supplement puts into a PRSA, the State should put in €1. It is unlikely that people receiving family income supplement pay tax in the first place. There must be an incentive for it. If that is put together with everything else, it would inform people more of their entitlements and would allow more people to claim family income supplement.

Regarding the one-parent family payment, I am delighted that, as Deputy Lynch stated, the amount of the disregard has increased by €82 to €375 per week. This gives an impetus, a reason and encouragement to lone parents to take a job. It would help them through the great expenses they have in bringing up young children.

I would like the Minister to also consider the problems that widows, deserted wives and prisoners' wives have. People who may not have children, and who have been separated through no fault of their own, may find themselves in a position they never imagined. A one-parent family can earn up to €375 per week. If possible, will the Minister consider changing the anomalous situation within the system to allow a widow, deserted wife or prisoner's wife in a peculiarly nasty situation avail of this slightly better facility to earn money and get more involved in society?

I am particularly delighted about the changes in maternity leave. I know it is not strictly a social welfare issue. However, the four extra weeks paid maternity leave effective from 1 March are extremely welcome. The four extra weeks unpaid leave, also effective from 1 March, are also welcome. A provision for a further four extra weeks to both paid and unpaid leave comes into effect in March 2007, when a total of 56 weeks paid and unpaid leave will be available to parents. Paid maternity leave will be 26 weeks, unpaid maternity leave will be 16 weeks and 14 weeks unpaid parental leave will also be available.

I expect fathers will take this parental leave and take some of their family responsibility as is allowed under these Acts. It is a challenge to all new fathers. Many fathers today are older than in the past. In our day, men were fathers in their 20s. Now, a man is lucky if he is a father in this 30s. They should get in there and get to know their children early and avail of the parental leave.

A person in receipt of the old age non-contributory pension can now earn up to €100 per week in a part-time nixer job. This allows those who want to remain active to do so. They can work a few hours a day to help out in the local community or take up a job and it will not affect their non-contributory pension. That is a great development and will give great encouragement to elderly people.

I should be rapped on the knuckles for using the term "elderly". According to the Minister one is not elderly at 65 years of age.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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The Minister is dead right.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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The Minister is changing the name from "old-age pension" to "State pension" and rightly so. Most of the people we know who are aged 65 and 66 are well-capable of going out and working. They would enjoy work and want to work, but are constrained because if they do so it will affect their non-contributory pension. The change is good. The Minister says it will affect 34,000 people. I expect it will affect many more in the future.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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The Deputy will be Taoiseach yet.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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The people entitled to respite care grant are carers who fall within the rules irrespective of means. They must care for a particular person who needs care on a full-time basis apart from a certain number of hours that they are entitled to work. Last year more then 36,000 people took up the respite care grant. I would like the Deputies to trumpet the availability of this grant because many carers do not realise they are entitled to it. We should tell them about it. I hope that this year the number will increase substantially. Deputy Lynch suggested that we abolish the means test for the carer's allowance. While we would all love to do so, there is not an unending pot of gold. There must be priorities. The income for carers has been increased substantially to €580 for a couple and that is welcome.

One of the main planks of this budget is to encourage people to return to work. That encouragement exists through many of the items I mentioned. It is backed up by the availability of child care places. Over several years more than 40,000 child care places were made available through the Department of Justice, Equality and Law Reform. Funding is available for a further 50,000 places bringing the total to 91,000 places by 2010. It is important that funding be put in place not only to increase places but for resources, buildings and improvements and, more importantly, for the training of child care workers to bring the standard up to a significant level. Childminders' income up to €10,000 is disregarded for income tax purposes but not for PRSI purposes. This ensures that people, mainly women, who mind children can have all the social security benefits enjoyed by other workers, such as pension and health benefits. I commend the Minister for Social and Family Affairs on putting that in place. I am delighted to speak on a Bill that is positive and that has so much in it for the people. Everyone must agree that we should fully support it.

2:00 pm

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Tá athas orm deis a fháil labhairt ar an mBille seo. Is Bille é a bhfuil teideal fada air na laethanta seo, an Bille um Athchóiriú an Dlí Leas Shóisialaigh agus um Pinsin 2006.

It seems that the wordsmiths in the Department are having a field day. I see they have already reformed the terminology for a number of the payments and entitlements. While that at least indicates that thinking is going on, closer reading of the Bill indicates that there is a need to measure whether the fine words meet expectations and whether we can benchmark ourselves against other countries in any fair or reasonable way.

The Minister said that above all else we are about striving to ensure that the potential of no single individual is overlooked and that nobody's contribution is written off. Those are fine words and I also seek that objective but at my clinics I regularly meet people who are falling between stools. They may have been working, had an accident and find that because they have a house they fall between the stools in terms of means testing. They cannot get work because they have had an accident and they do not get a payment. The poverty trap is alive and well for some people notwithstanding the entitlements and the Minister's words.

From the Green Party's point of view social welfare should be designed to maximise participation in the workforce. Social welfare for the disabled, elderly and other groups should not preclude involvement in the labour force. Many groups are forced into the poverty trap by compulsory retirement on reaching pensionable age, loss of social welfare on returning to the workforce or by having to choose between caring for elderly parents and full-time or part-time work. I do not envy the Minister the complexity of his remit.

I pay tribute to the citizens' information centres throughout the country and particularly in my constituency, Dublin North, where much valuable advice and sensitive attention is given to the many people who avail of the services. I urge anybody who is not familiar with the citizens' information centres to keep them in mind. They constitute an important facility run by Comhairle and I hope the Comhairle Bill will be before us soon so that we can debate the reforms and updating of information technology needed to help impart the information.

I read the Minister's speech with interest. As the Minister was speaking about his Department one would expect it to be positive. It is important to be sober when we compare ourselves with other countries. Ireland spends 16.1% of GDP on social protection. In other countries that are highly competitive from a business point of view, such as Finland, 27.2% is spent on social protection. Fine words will not make up for that clear difference between Ireland and other countries. I am proud that Finland is not only competitive and has good social protection but has had the Green Party centrally involved in Government and re-elected to Government. It would still be in Government except that the Finnish Government decided to build a nuclear power plant. It is important that we examine how other countries manage.

A recent "Prime Time" programme illustrated the point when it quoted the EU average for the proportion of elderly people living below the poverty as 14.6%. Although that figure is unacceptable, it is much lower than the figure for Ireland, which Professor John Monaghan of the Society of St. Vincent de Paul suggested in the interview was 27.1%. Notwithstanding the improvements that have been made, we are starting from a relatively low base by comparison with the rest of the European Union. The Government needs to be reminded of that, lest it becomes complacent and believes that because it has done better than previous Governments all is now rosy. In comparison with other countries, we certainly have much work to do.

I appreciate the solutions to many problems involve not just the Minister for Social and Family Affairs but collective responsibility whereby other Departments pull their weight in tackling social inequity and in looking out for the most vulnerable in society. As Paul Murray of Age Action has highlighted — Deputy Lynch mentioned this as well — elderly people often face a much higher cost of living than those who can avail themselves of a car for travelling to out of town shopping centres where they can do all their shopping in one trip and benefit from economies of scale. Elderly people often need to rely on corner shops and convenience stores, which have higher prices. Given that those higher costs of living perpetuate the income differences that have been mentioned, we need to ensure planning and social infrastructure take account of the most vulnerable in society rather than play to the loudest audience, which comprises those who can manage and who do not necessarily think about the day when they will be elderly.

A similar issue arises in respect of education. The Bill makes extensive provision for child care, but I know many people in Dublin North find that child minding and child care facilities are becoming much more difficult to access because we have such a fast-growing population. Schools are becoming so packed that the enrolment age is being pushed higher, with children no longer being able to enroll at the age of four but having to wait until they are five or even six. As a result those children are left by their parents in whatever playschool or crèche facility is available and younger children do not get places at the age expected. That puts parents in the difficult position of trying to find money to pay for child care. The Department of Social and Family Affairs needs to lead the charge on that type of joined-up thinking, because the Department is affected by other factors coming into play that are in the control of other Departments.

Looking to further debate on pension reform, the Green Party welcomes the fact the Government has kick-started these discussions. I acknowledge that the State pension has improved as Deputy Ardagh said but, given the increases in the cost of living, we should not lose the run of ourselves. In comparison with equivalent schemes in other EU states, the Irish State pension remains very low at 30% of the average wage or approximately €10,000 maximum.

As Deputies we should also take account of the fact that, whereas we demand lots of bureaucracy and paperwork for the means testing, cross-referencing and checking of welfare claims to ensure people do not receive money under false pretences, we in the Dáil can claim expenses without the need for any receipts to vouch for them. We need to apply the same rules to ourselves as we apply to other people for social welfare. All our expenses should be vouched for by receipts so things are clear and transparent. Cynicism in the public mind is not helped when such facts come to light time and again when we debate social welfare. I will leave the matter at that because I want today's debate to proceed on the issue of pensions, but I will be interested in participating in that debate again.

Finally, on the issue of nursing homes, I was astonished to read in the Minister's speech, in which he paid a well deserved tribute to carers, that although only 5% of the elderly live in nursing homes, 50% of funding for the elderly is spent on institutional care. Carers get a rough deal from this Government and from society in general. We need to reform not just pensions but other matters so the elderly and those who care for them are given not just a verbal tribute but a fair monetary tribute as well.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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I am grateful for the opportunity to speak on the Social Welfare Law Reform and Pensions Bill 2006. This important debate not only allows us to put down markers on the direction in which our society is going but to challenge and question the Government and to put forward sensible ideas on social welfare, child care, the elderly, carers and the disabled. I welcome the constructive proposals in the Bill, in particular the extra financial assistance it will give to our citizens. However, there is no need for Deputies on the Government side to lose the run of themselves or to clap themselves on the back for the way in which we treat the weakest sections of society.

Before I go into the details of the Bill, it is appropriate that I mention the 25th anniversary of the Stardust fire tragedy in Artane in which 48 people died and more than 240 were injured. The pub has recently reopened on the 25th anniversary of the tragedy. I condemn that complete lack of sensitivity and I strongly support the families. In this debate on the welfare of our citizens, I urge the Cabinet to support the families in their hour of need. I also use this opportunity to thank and commend the people from the northside who have pushed the issue for many years, including Neil Fetherstonhaugh and Tony McCullagh who have written an excellent book on the matter. We need to support the families by providing a proper investigation and inquiry. In raising the issue again, I urge the Minister to bring it to the Cabinet table.

On the broader welfare and disability issues, I strongly support the idea that resources should be targeted at the most needy. Despite the wealth in our society, we currently have approximately 3,000 people with intellectual disabilities on waiting lists. That is not a huge figure so we should consider how we can target such people on waiting lists for residential, respite and day care. The problem could be tackled fundamentally. I accept an attempt was made in last year's budget to make a large dent in the figure, but we need to target specifically the most needy. People with intellectual disabilities must be top of that list.

We have heard from many good news merchants about how the Bill deals with the Ireland of today, but I remind such people that there is another Ireland out there. Some sections of our population are living in extreme situations with major problems in their lives. Some 19.4% of the population, 780,000 people, experience relative income poverty. The position of older people has deteriorated significantly in recent years and their poverty rate has increased by twice the average figure. The rate of in-work poverty has doubled and stands at 9%, with 157,000 people affected. The in-work poor are the second largest labour market category, after those with home duties, and account for more people than those in poverty who are unemployed or ill. Furthermore, 6.8% of the population, 270,000 people, live in consistent poverty. Groups at risk include children and adults in lone-parent households. We must also address the fact that cash transfers in this country reduce income poverty only by 40%, which is two thirds of the mean poverty reduction effect achieved through social transfers in the EU as a whole.

The poorest fifth of the population received less than a quarter of income of the richest 20%, with cash transfers representing more than 80% of gross household income for this group. I raise these issues because there are people living in cities throughout Ireland in such poor situations. They turn up only now and again on our television screens on programmes such as "Prime Time", as regards crime. There are a great many poor people who need help and they are not all involved in crime. I should like the middle-classes to wake up to the fact that 90% of those who live in poverty do not get involved in crime. Those that do, very often come from a dysfunctional family, or have an alcohol-related or abuse-related problem. I commend those people and stress that as legislators we have a duty to support them and act as a resource for them.

One can see clearly from the broader debate that not all of Irish society has gained equally from continued economic buoyancy. This is mostly due to structural inequalities which act as a barrier to sharing the benefits of a booming economy. Low educational attainment and outdated skills act as key barriers to employment, which is the major route out of poverty. I tell people who talk about poverty that the answer is education and more education. If children can be brought into the net before they even enter primary schools, they have an advantage. Already at four years of age when they enter the primary schools they are three or four years behind in literacy levels. Most schools in disadvantaged areas will spend the next eight or nine years trying to get children to catch up with average standards in middle-class areas. This is something that must be dealt with directly, head-on. I know that the Department of Education and Science currently has a number of projects under way to assist and support these children and to target the resources, and most Members of the House would agree with this. I urge the Minister for Education and the Science and the Cabinet to promote such projects as regards spending more money on the education of the disadvantaged.

In the wider debate on taxation, Ireland has become a so-called low tax economy in the sense that direct taxation levels are now historically low. However, indirect taxation accounts for about 50% of all Exchequer revenue and is now a more dominant form of taxation. As indirect taxes are generally regressive, these hit the poor the hardest. Tax expenditures and reliefs for higher earners act as a drain, with the revenue foregone accounting for approximately one fifth of aggregate Exchequer returns. Efforts to broaden the tax base need to be pursued so that the tax system is seen to be fair. That is something that we must have the courage and the bottle to deal with.

As regards social expenditure, relative to its EU counterparts, Ireland has one of the lowest levels as a proportion of national income. Listening to the debate earlier today one would think we were up in the premier division. Recent research by Combat Poverty Ireland identified public services as the key area that requires increased spending along with mechanisms for linking benefits to incomes from paid employment — and increasing the earnings of low-income working families. The independent group of Deputies in the House will always stand for low-income working families as a major priority in its broader political vision and agenda.

Greater efforts are required to integrate groups excluded from the labour force. Generous investment in both incomes and services for children, such as education and health, are the keys to meeting the target as set down in the national anti-poverty strategy, Eliminating Child Poverty. Then we can have the debate about sustainable economic growth.

Sustainable economic growth is crucial to our capacity to tackle poverty. It provides jobs and resources which are crucial if poverty is to be tackled in the years ahead. To maintain economic and employment growth, the Government needs to ensure Ireland's competitiveness in a global economy and to continue public and private investment in infrastructure and productive activity. The national action plan can contribute to this objective by targeting investment in human capital and local development which can deliver economic outcomes in the longer term. It is no longer a question of creating the wealth. We have that. The debate now is about how to distribute the wealth and resources.

At present there is a centre-right view of the economy in operation which is damaging to the State and the poorer sections of society including people in need. I urge the Government to redistribute resources and opportunities in a fair and equitable manner. Despite economic growth not all social groups or areas of the country have gained equally. I urge a greater redistribution of resources and opportunities towards low-income groups. Greater effort is needed to integrate groups excluded from the labour force. Measures which target groups and areas excluded from economic growth are also important. Such measures will yield returns for the economy in terms of fostering economic growth among the less buoyant sectors. We have seen examples of good practice, I accept. Dublin City Council has come up with excellent projects which included investment in houses and community centres in disadvantaged areas, and this should be developed.

I welcome the opportunity to debate this legislation. However, the debate is no longer about wealth, but rather about how it is distributed to the most needy.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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I wish to share time with Deputy Curran.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Is that agreed? Agreed.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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Deputy Finian McGrath, in a flight of fancy at times, with occasional lucid intervals, described Ireland in fairly typical gloomy terms.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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That is the reality.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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He hit the nail on the head once or twice. Then he retraced his steps to search for facts to support a previously conceived conclusion, namely, to try to undermine the Government. It is an old tactic, something of a "Cassandra" that is invoked from time to time, but it does not stick to the facts. There have been historical increases in all social welfare payments year after year. It must be frustrating for Members of the Opposition, who would very happily stand over such increases. They stood over minuscule increases when they were in power.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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The Deputy should not include me in that.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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Admittedly, there is greater wealth to hand, thanks to the activity of this Government, so the gloomy outlook is ungenerous and inappropriate.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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There is another world out there.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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In an honest interval Deputy Finian McGrath might even concede that. However, on this occasion we are talking about the important area of social welfare reform and pensions. I take the opportunity to discuss pensions again. The problems with the pensions sector are obvious. The Central Statistics Office figures earlier this month reflected the fact that coverage has decreased in 2004-05, particularly among men, and especially in the west of Ireland. That pattern is unfortunate. We have two Deputies from the west here and they may know more about why that pattern appears to be more pronounced in that part of the country. It is a problem we will have to face in 20 years' time.

The problem will be exacerbated by the vast increases in public service pensions. It is estimated that they will quadruple from the payments that were made around 1989 compared to what will have to be made in 2030, a bill in region of €3 billion which will have to be paid by all taxpayers, public and private workers. That is a problem we will have to face. Naturally, the Government has taken major steps towards addressing it, but much more has to be done. I just want to reflect on those CSO figures, however. The numbers have gone down and that does not seem to make sense because, clearly, Irish people are prepared and willing to save. They are willing to put money aside. What is not included in the figures compiled by the National Pensions Board is the fact that so many have second homes and rental properties which are actually their pensions. Until we accept this and try to factor it into assessment of needs in 20 years time, we cannot grasp the figures as they apply.

An article by Mr. David McWilliams in yesterday's Irish Independent described this fault line between those who had bought houses in the 1980s and before and those who had purchased them from the mid-1990s onwards. Those on the good side of that fault line, the older people of Ireland, have major equity which they have been able to transform into second homes and rental properties. Ultimately, these assets will represent their pensions as lump sum payments when they cease to work, whenever that may be.

Mr. McWilliams described how a house bought for between £20,000 and £30,000 in 1982 or 1983 would now be worth more than €1.5 million. This increase in personal wealth cannot be measured against any increase in effort, risk or any other factor. It is simply an accident of time and circumstances which occurred without the owner's intervention.

Those of us on the other side of this fault line who have come into the housing market late, too late in some circumstances, have either negative equity or nothing as lucrative as the older people of Ireland have managed to gain. This state of affairs must be taken into account when one is assessing pension coverage.

Younger people are also being forced into defined contribution pension schemes which are far less lucrative than public sector pension schemes and older defined benefit schemes. People in the latter schemes have many more advantages than younger people in defined contribution schemes. Mr. McWilliams's article was very interesting and well researched. I hope the change in figures will be acknowledged by the Pensions Board.

One of the issues referred to in the board's report, which was published in January 2006, was the question of mandatory pensions. The Minister said he will be forced to consider whether mandatory pensions can and should be introduced in Ireland. At the moment, employers and employees face compulsory social insurance contributions, but mandatory pensions would be another tier on top of this. However, introducing mandatory pensions is a soft and easy option to take when certain other options should be considered and pursued.

Introducing mandatory pensions would be particularly damaging to small and medium enterprises. Larger businesses have the time, expertise and resources to set up the superannuation schemes required under a mandatory system but smaller businesses would be damaged by it. They already operate in a high-cost, competitive environment where rates, insurance, energy costs and wages are increasing. Adding this further layer of bureaucracy, together with all the administrative costs associated with it, would be particularly damaging for small and medium-sized enterprises.

We should examine other options for addressing the pensions issue. One of these is a public information campaign. Deputies may have seen a very well resourced public awareness campaign on television in respect of recycling. It featured the well known celebrity gardener, Diarmuid Gavin, and an older woman who was showing inappropriate affection for him. The campaign exhorted the public to reduce, re-use and recycle. Everybody understands the message of this light-hearted campaign, which has been broadcast for a number of months.

A similar campaign that would focus on the pensions sector is needed. In doing so, the Government would be pushing an open door as people in Ireland have a propensity to save. The success of the simple, understandable and transparent SSIA scheme, which was taken up by 1 million people, is proof of this. The scheme was, admittedly, a no-brainer, so to speak, and a short-term scheme. However, there is an untapped market as Irish people have a propensity to save. Personal retirement savings accounts have clearly not been as successful as they could have been, in spite of changes included in this Bill. We need a nationwide public awareness campaign which would explain to people that if they do not take out a pension and face old age with just the State pension, they will be forced to live on an income of just €9,000 per annum. While there have been considerable increases in pension coverage over recent years, these stark figures may cause a few people to wake up.

We must address the question of how to persuade people of my generation and those who are younger to take out pensions. I have reached the age where I am beginning to acknowledge my mortality. I acknowledge that I may not be here forever and I can envisage old age, especially on Saturday mornings. People of my age and younger need to be made aware of the necessity of pension coverage because of the changes that have taken place. A proper public awareness programme would accomplish this aim. It is not appropriate to consider a mandatory pension scheme at the moment because it is a soft option.

Only 24,000 carers out of the approximately 150,000 carers in the State receive either carer's benefit or carer's allowance. There has been considerable progress in improving the lot of carers, particularly in the last budget and social welfare legislation, but we have a long way to go. I read a rather cynical article recently which argued that a minority can always determine Government policy if it is well organised. Examples of such minorities would include taxi drivers, heavy goods vehicle drivers, farmers in general and poultry farmers. Such minorities can have a disproportionate influence on Government policy merely because they are well organised.

On the other hand, by virtue of the 24-hour, seven day a week work they do in caring for individuals, carers are not as capable of organising themselves, yet the budget contained a 20% increase in the carer's allowance, which was the highest single increase in any payment under the social welfare scheme, which is a credit to the Government. It shows that the Government is not necessarily influenced by the loudest voices but is influenced by a genuine and sincere issue, as was the case with carers. It proves that one does not need to block traffic or drive sheep into Department foyers to influence Government policy. One can do so by the very logic of one's argument. I am very pleased to see that this has happened in respect of carers.

The Carers Association raised the issue of insurance contributions in respect of people receiving carer's benefit. The issue has become even more significant because the duration of carer's benefit has been increased to two years. It is important that insurance contributions be allowed to continue, as is the case in respect of the changes made to the child care income disregard of €10,000. This issue should be addressed if the Government has not already done so. I commend the Bill to the House.

Photo of   John Curran John Curran (Dublin Mid West, Fianna Fail)
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I welcome the opportunity to speak on the Social Welfare Law Reform and Pensions Bill 2006. It is quite unusual for me to acknowledge that I agree with a comment made by Deputy Finian McGrath about social disadvantage. I agree with his argument that the way to deal with social disadvantage is through education. While I listened to him speak about social welfare in general, I realised that the traditional argument that increases in various benefits are insufficient is no longer relevant to a discussion on social welfare. In saying this, I do not mean to upset my colleagues on the opposite side of the House. In debating social welfare issues, we now look at fundamental changes, which is a reflection of the previous budget which introduced a range of real and significant increases in social welfare payments.

Deputy Sargent acknowledged that the increases were significant but argued that we should not forget rising costs. We do not forget that costs are increasing but in real terms, the increases outlined in the budget and carried through in this Bill are multiples of the cost of living index. As a result, they are very real increases.

I will now examine the impact of the Bill. It proposes to change the name of the non-contributory old age pension to the State pension, which is a much more appropriate name. The Bill changes specific aspects of the non-contributory old age pension. The new weekly disregard of €20 ensures that a single person with no other income can have capital of €35,000 while a married couple can have capital of €70,000. This change is of considerable comfort to people who have invested in SSIAs and similar products and recognises where we are.

A special earnings disregard of €100 per week will be introduced to allow pensioners to earn more income without eroding the value of their pensions, which is appropriate not just from the perspective of pensioners but because there is a demand for people with experience who might not want to work full-time or retire permanently. There is an opportunity for these people to engage in limited work. I ask the Minister to pay attention to this aspect because there is a demand for workers. A significant number of people in their 60s can contribute and would like to work on a part-time basis. Let us see what the take-up is on the €100 earnings disregard, which is innovative. The market requires this innovative initiative, as do individuals. An analysis should be carried out each year to find out how many people are taking up this option. I would like to see the disregard extended so that people could work two or three days a week without it having a significant negative impact on their pension.

I would like to refer to the early childhood supplement, which followed a long and difficult debate on how to tackle child care and so on. The budget announcement is being given legislative effect in the Bill. The constituents to whom I spoke gave a warm reception to the proposal. This move reflects a targeting of resources at an age group that might not normally be in school and for whom additional costs could be involved. The Minister was correct to go this route.

I draw the Minister's attention to an issue which is not referred to specifically in the legislation. The question of over-payments by the Department of Social and Family Affairs arises from time to time in the Committee of Public Accounts. These over-payments can arise for a number of reasons, including fraud and so on. While I have raised the issue on a number of occasions, significant progress has not been made in this regard. The relationship between the Minister's Department and Revenue needs to be much tighter. I am dealing with a constituent of mine who is a lone parent. She has been working in a supermarket and making up-to-date PAYE and PRSI contributions. I understand it was her responsibility to make her situation known to the Department, but she failed. When I discussed the matter with her, she was able to show me all her tax certificates and other details. Therefore, she could not understand why the Department of Social and Family Affairs did not automatically get these details from the Revenue Commissioners. As people who have been receiving these payments may be vulnerable and may not always know what their entitlements are, Departments should communicate with each other in that regard.

That individual owes in excess of €20,000 as a result of over-payments over four or five years, which was just discovered a few months ago. That woman will be paying back that money for a long number of years. From an administrative point of view, the Department should be able to track these over-payments that are not fraudulent and occur because someone is earning and has gone over the limit.

I acknowledge the significant change in increasing the period of carer's benefit by nine months to two years. This time last year I spent a significant amount of time in Our Lady's Hospital in Crumlin. Very often, when we talk about carer's benefit, we think about people who are caring long-term for an elderly relative or someone with a disability. However, I came across a significant number of people in Our Lady's Hospital who had children who would require treatment not for life, but for six or 12 months. Many of these people were unaware that they were entitled to carer's benefit. More information should be made available to these people because it is not always easy to access this information at such a traumatic time in one's life. Once they access the service and realise what is available to them, it can make a significant difference. I welcome the increase in the respite care grant.

I would like to refer briefly to the one-parent family payment. Lone parents often fall into the poverty trap, and one piece of legislation is not sufficient to deal with the issue. However, significant progress is being made in this area. While the increase in the income limit for the one-parent family payment from €290 to €375 a week is significant, it is not sufficient in its own right. While other initiatives must be undertaken, in particular, the rental accommodation scheme, the Minister must consider dealing with lone parents in a much more holistic way. The rental accommodation scheme, in conjunction with the lone parent allowance, family income supplement and so forth, will tackle some of the poverty trap issues. While it is still early days, the new guidelines for medical cards mean that people who traditionally had problems and were living on the margins will now be able to access them more easily by taking into account the cost of child care, mortgage payments, rental payments and so on. These changes will address what were previously referred to as poverty trap issues.

Photo of Dan NevilleDan Neville (Limerick West, Fine Gael)
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I welcome the opportunity to speak on the Bill. The objective of any social welfare Bill is to ensure that people on lower incomes will have a reasonable standard of living and will not have to live in poverty. I would like to deal specifically with child poverty because, while we might be recognised internationally as trying to maintain a reasonable standard of living for those on social welfare and those living in poverty, there is gap in regard to child poverty.

I am sure the Minister is fully aware of the excellent report by the End Child Poverty Coalition which was published last year. Despite a buoyant economy and increased wealth, child poverty remains unacceptably high in Ireland. Many find it difficult to believe that poverty exists for children at a time when this country is perceived to have great financial wealth. Government statistics indicate that one in seven children live in consistent poverty and almost one in four children live in relative poverty.

Poverty among children manifests itself across a range of areas that go beyond income. The longer a child is poor, the greater the impact on the life chances of the child and the subsequent deprivation in later life. Growing up in poverty affects the natural development of a child, including his or her social, educational and personal development. Many children who live in poverty drop out of education at an early age. Speakers already pointed out that the route out of poverty is through educational opportunity and being in a position to use the opportunity presented by the education system.

Child poverty has been repeatedly described as a denial of the basic rights of a child to an adequate standard of living. The UN Convention on the Rights of the Child is often referred to in this Chamber. It refers to the right of all children not to live in poverty. The convention provides that every child has the right to an adequate standard of living, adequate income and accommodation, education and health care and the necessary supports and services. All children have a right to the material and other resources necessary to allow them to experience a childhood free of poverty and deprivation and to reach their full potential as adults.

Ireland ratified the UN Convention on the Rights of the Child in 1992, thereby committing itself to implementing the convention's provisions to the maximum extent of its available resources. Repeatedly, in respect of various issues, we have raised the failure of the State and the Government to ensure the commitments under this convention are honoured. Our economic resources have grown enormously in the past decade. Ireland is now in a far better position to implement those commitments in full.

The Government has separately committed to reduce the numbers of children living in consistent poverty to less than 2%. Moreover, a commitment was given in the national anti-poverty strategy to end child poverty completely by 2007. Will the Minister outline how the Government plans to achieve this target? The realisation of this commitment necessitates the implementation of appropriate policy measures. Given that the Government's goal date is 2007, this is the last opportunity to allocate the necessary resources to honour its commitment. I am glad the Minister of State, Deputy Brian Lenihan, is in the House. If he has an opportunity to contribute, he might deal with the attainability of the targets in the national anti-poverty strategy.

The elimination of child poverty should be moved to the top of the agenda of political and economic objectives and it should remain there. Like any other national objective, it requires sustained and comprehensive action, supported by the allocation of significant resources. Achieving the goal of ending child poverty by 2007 is a challenge that can be met, but only if the effort is a matter of national and political priority for the Government.

The most recent statistics on the incidence of child poverty in Ireland, from 2003, indicate 14.6% of children live in consistent poverty. This means some 148,000 children were identified as living in houses with incomes of less than 60% of the national median income and experiencing enforced deprivation in respect of one or more of eight basic deprivation indicators. These indicators are: no substantial meal for at least one day in the past two weeks; no heating at some stage in the previous year; debt problems arising from ordinary living expenses; inability to afford two pairs of strong shoes, inability to afford a roast dinner once a week; no meal with meat, chicken or fish, or the vegetarian equivalent, every second day; inability to afford new clothes; and inability to afford a water-proof coat.

In 2003, approximately 23.9% of all children were at risk of poverty. This represents 242,000 children, almost one in four. This is the official EU definition of income poverty, which in Ireland is referred to as relative income poverty. According to the EU's evaluation, therefore, almost one quarter of Irish children is at risk of poverty. In addition, research indicates that the depth of relative income child poverty has increased, with a greater percentage of children now living in households with incomes of less than 40% of average disposable income.

The statistics I have quoted are taken from the EU survey on income and living conditions, EU-SILC, published by the Central Statistics Office in 2005. The EU-SILC replaces the living in Ireland survey which was conducted by the Economic and Social Research Institute between 1994 and 2001. Within the EU, Ireland performs poorly in terms of comparative child poverty rankings. In 1999, the average EU-15 child poverty rate was 19% but the corresponding figure for Ireland was 21%. By contrast, Denmark and Finland, for example, had levels of 6% and7%, respectively.

For lone parents, the EU-15 average income poverty rate was 38%, compared with the figure of 44% for Irish lone parents. The EU-15 average poverty rate for families with three or more children was 25% and Ireland was again above average with a rating of 27%. We are consistently above average in terms of the EU test of child poverty. Ireland has one of the highest rates of poverty among developed countries, ranking third highest in the United Nations human rights development index for 2005, which measures the extent of poverty in 18 OECD countries.

Children in Ireland are twice as likely to be poor as adults. Once in poverty, Irish children usually remain in poverty well into adult life. The groups of children particularly at risk of experiencing poverty and social exclusion are those who live in welfare dependent or low income households, live in lone parent households, live in families of four or more children, have disabilities, are from the Traveller community; are from asylum seeking families, are from migrant and refugee families; leave school early or leave the justice system or health board care. Two particularly vulnerable groups are children living in lone parent households and in asylum seeking families.

Th EU-SILC survey identified 14.6% of children as living in consistent poverty. However, the percentage of children in poverty varies depending on their household composition. One parent households have the highest consistent poverty rate at 32.6% and are three and half times more likely to live in consistent poverty. A specific difficulty arises in regard to life opportunities and support for children in one parent households. Children in lone parent families also face a disproportionate risk of being in relative poverty. Households with one adult with children face a 42.3% at risk of poverty rate compared to around 15% of households with two adults and one to three children. The children of single parent households are three times more likely to live in poverty than a family with two or three children.

Lone parent families reported the highest deprivation levels for each of the indicators I mentioned. Some 33% said they could not afford to buy new clothes, 31% experienced debt problems arising from ordinary living expenses and 24% said they had to go without heating at some stage in the past 12 months due to a lack of money.

Recent studies highlight the level of poverty and indebtedness experienced by lone parent families. Some 70% of Money Advice and Budgeting Service clients are in receipt of social welfare and, of those, nearly one third are in receipt of the one-parent family payment. This is a major issue related to the one-parent family payment which often is not highlighted. Society often perceives one parent families as almost living off the State. I have often heard people referring to such families as sponging off the State. That perception is totally at odds with the real position in terms of the life opportunities and poverty levels experienced by the children of those families. That is also the experience of the parents in those families but we are specifically dealing with statistics developed to show the level of poverty experienced by children of one parent families. Support to increase income for lone parents is vital. As matters stand, most lone parents cannot afford to work while remaining on the one-parent family payment and due to low educational attainment will not get work which pays enough for them not to be in receipt of the payment.

The Minister has stated on numerous occasions that the Government views employment as the key route out of poverty, a view with which I agree. However, one third of children in relative income poverty in 2001 were living in households headed by a person in employment. While parental employment has to date successfully lifted many children out of poverty, there are limitations to this approach. Some parents cannot work or are only able to obtain low waged employment which does not yield sufficient income to adequately support their families.

Research clearly shows that Government intervention to combat child poverty can make a major difference. Societies which do most to look after people will, over time, improve the capacity of people to look after themselves. The countries with the lowest child poverty rates in the OECD are those which allocate the highest proportions of GNP to social expenditure. Ireland currently lags behind the OECD average in its expenditure on key services such as education, housing and health care. For example, in regard to expenditure on early childhood education and care, Ireland invests less than 0.2% compared to the OECD average of 0.4% — only half the level of investment of the OECD average.

The Combat Poverty Agency concludes in its 2005 report, Ending Child Poverty, that:

—Ireland invests relatively little in subsidised services for families with children

—Ireland's comparative ranking on child support plummets after services are factored in, and

—Housing costs are disproportionately burdensome for families with children. . .

The agency calls for improved services for families with children in the area of early childhood education and development, health care, housing and family services.

Concerns that cash transfers to households on behalf of children may create work disincentives for parents and-or be siphoned off by adult members for their own use are not substantiated by research. This was discussed earlier in the debate. Income support measures which protect people from poverty appear to empower people to get back into the workforce rather than create a disincentive to their doing so. The real position does not gel with the often accepted view that if cash incentives are given to people in receipt of lower incomes, they hive it off their children; rather the opposite is the case, it incentivises them to improve their position.

I urge the Government to prioritise the introduction of a new mechanism to support the most vulnerable children. As an interim measure, supporting children through the child dependant allowance must become a key focus. I pay tribute to the End Child Poverty Coalition for its excellent report, Child poverty in Ireland 2005: An Overview, which was available last year.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I wish to share time with Deputy Carey.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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That is agreed.

3:00 pm

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I am pleased to address this House and welcome the provisions of this Bill, a number of which impact directly on the new National Childcare Strategy 2006-2010, announced by the Minister for Finance, Deputy Cowen, in budget 2006. I welcome the Government's decision to introduce the new child care strategy in advance of the expiration of the previous one and the subsequent announcement by the Taoiseach of establishment of the new office of the Minister for Children.

Deputies will be aware that I have worked for some time across the Departments of Health and Children, Justice, Equality and Law Reform, and Education and Science. My experience made me keenly aware of the complexity of the cross-cutting issue of child care policy, the difficulties surrounding the delivery of multi-agency programmes and the need for a more integrated approach through the location of child care under the remit of a particular Minister.

An important part of the Government's child care package announced on budget day is the novel decision to introduce a major new payment to parents of young children in the form of the early child care supplement and this Bill gives effect to that decision. The early child care supplement which will be administered by my office is an additional payment of €1,000 to parents in a full calendar year, in respect of all children aged under six years. The payment will be effective from 1 April and will be a direct, non-taxable payment of €250 paid per quarter year, in respect of each eligible child. For the purposes of this calendar year, three payments will be made because the legislation is now before the House. The payment is intended to assist parents with the high cost of caring for children, especially in their early years. The administrative arrangements for the new payment, affecting some 350,000 children, are being put in place and I expect the first of the payments, which would be due at the end of June 2006, to be paid in August. In general, payments will issue early in the month following the end of each quarter. It is the intention to issue the first payment in August 2006 for the quarter from April to June with a further payment in October for the quarter from July to September. Every effort will be made to make payments for the last quarter of 2006 which runs from October to December in December. That is the hope but that period does not expire until the end of December. It is expected that similar arrangements, although somewhat more rapidly executed, will apply in the calendar year 2007. I thank my colleague, the Minister for Social and Family Affairs, for the extensive discussions we have had on this subject and for the fact that his Department has put in place a payment mechanism for the payment.

As with any other payment scheme, care is taken at the planning stage to ensure that it will operate in a streamlined way. This is done to facilitate the recipients of the payments in order that, for instance, they can have the payment paid directly into their bank accounts or through a post office system if this is their preference. It is also done to ensure efficient administration by Government and keep the necessary operating costs of schemes and programmes to a minimum, in the interests of good government.

The early child care supplement deliberately does not distinguish the income or employment status of parents. Some might be critical of this feature, but the Government believes it is right that parents should have choice when it comes to child care. It is not the role of the State to tell parents which child care arrangements are best suited to their families, rather it is for the State to support them in whichever such arrangements are appropriate.

It has also been put on record that the Government's estimated cost of the early child care supplement was based on the take-up of child benefit and includes migrant workers' children who remain abroad. Like any payment, the future costs of both payments have always been subject to several variables, including future birth rates, the number of children who travel with their migrant parents and take-up of the scheme. Both schemes will be monitored, but the possibility that take-up will increase in the future should not prevent us making a payment now that will support parents.

Deputy Neville cited extensively a document dealing with the ending of child poverty. That is an objective to which we all subscribe realising which requires practical decisions. The commentary on the recent budget, of which this Bill is an aspect, described it as a substantially redistributivist budget. I think I am right in saying that the Combat Poverty Agency confirmed that view and said that it will have a significant impact on those with very low incomes. The early child care supplement is one aspect of the budget's redistributivist character.

I welcome the significant increase in child benefit for which this Bill provides. Child benefit supports all parents towards the cost of rearing and caring for their children, irrespective of income or employment status, and represents a major expenditure commitment by the Government to the cost to parents of child care. The increases will apply from April 2006 and child benefit will increase by €8.40 per month for the first two children, to €150 per month, and by €7.70 per month for the third child and subsequent children, to €185 per month.

Another important measure for parents introduced in the budget was the increase in paid and unpaid maternity leave by four weeks from 1 March 2006. This will be increased by a further four weeks from March 2007, bringing the overall duration of paid maternity leave to 26 weeks, and the total duration of unpaid maternity leave to 16 weeks from March 2007. These increases will enable mothers of new-born children and adopting mothers to take six full months of paid maternity leave from 2007. My colleague, the Minister for Justice, Equality and Law Reform, has signed into law the orders increasing the duration of maternity and adoptive leave.

Childminders are an important sector of our child care services and for many parents are the preferred option. It is important that we recognise this resource and support it. The Government has introduced a new childminding relief which is provided for in the Finance Bill 2006, now on Committee Stage. As a result, where an individual minds up to three children in the minder's own home, no tax will be payable on the childminding earnings, provided the amount is less than €10,000 per annum. If childminding income exceeds €10,000, the total amount will be taxable as normal under self-assessment.

To avail of the exemption, an individual will be obliged to make an annual tax return of the childminding income and to notify his or her local city or county child care committee of the childminding service. The Social Welfare Law Reform and Pensions Bill provides for the inclusion of childminding income in the PRSI system where the income is declared for the purpose of the childminder tax exemption. This has the advantage of including the childminder in the social protection system provided through PRSI.

The Government examined this issue at some length and it was decided correctly that the attachment of PRSI to this income would ensure that many mothers who care for children in the home would not fall outside the social welfare net. It is an important decision in principle and an appropriate signal in this area. While childminding is an informal sector, it is important as a minimum that it be brought into the social insurance scheme so that those who engage in childminding can benefit from the right to earn an old age pension and other such social welfare entitlements.

Child care has been at the forefront of this and the previous Government's policy since taking office in 1997 and much ground work has been laid in that time through the equal opportunities child care programme 2000-06.

The development of a coherent child care policy in this time enables us to take a long-term view of the issues which need to be tackled and we are in a position to adopt a more strategic approach to the delivery of services and meeting the demands of parents. The Government's recent decisions on child care represent a comprehensive and timely response, both in terms of the even greater commitment to funding for child care and the establishment of a truly cohesive approach to the delivery of child care services under the new national child care strategy for the period 2006 to 2010.

One of the cornerstone elements of the new strategy is the national child care investment programme 2006-10. The new programme is effective from I January 2006 and succeeds the equal opportunities child care programme 2000-06. Unlike its predecessor, the new programme is entirely Exchequer funded and the Government has committed €575 million to the programme over its five-year term. The Government has not waited for the expiry of the previous programme to launch the new five-year investment programme, which further demonstrates its commitment to the provision of quality child care.

The new programme aims to provide a proactive response to the development of quality child care supports and services which are grounded in an understanding of local needs. It will build on the existing programme and has several ambitious targets, including the creation of 50,000 additional child care places, with 5,000 after school places and 10,000 pre-school places aimed at three to four year olds; improving the quality of early childhood care and education services, including part-time, full day care, school age child care and childminding; supporting families and breaking the cycle of disadvantage; and supporting a co-ordinated approach to the delivery of child care which is centred on the needs of the child.

These are ambitious targets which include the creation of many new additional trained child care personnel. I am committed, however, to ensuring that we meet these targets and objectives in a way that takes account of the needs and best interests of children.

Photo of Pat CareyPat Carey (Dublin North West, Fianna Fail)
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I welcome the opportunity to make some remarks on this Bill, some of which others have made but which I will reiterate. The reform aspect of this Bill is long overdue and I compliment the Minister on introducing it. I do not know whether he would like to be associated with Lloyd George as a reformer, but he was the last person to engage in major reform of this area. The pensions aspect of the Bill is also long overdue.

Among the many important statements the Minister made is "payments alone will not solve our social problems, that is why we must go behind the payments and tackle the causes". We must never be complacent or self-congratulatory about what we do in the social welfare area. Much has been done and the targets are ambitious, which is right. There is a danger when talking about social welfare that we automatically mention poverty.

I agree with the Minister of State at the Department of Health and Children, Deputy Brian Lenihan, that the budget has had significant redistributive effects, as many recognise. An elderly constituent of mine told me recently that he could not afford to live anywhere other than Ireland because the supports for the elderly were so comprehensive and good that he would not attempt living anywhere else.

The Department of Social and Family Affairs is among the most progressive, reforming and radical Departments. I have had the pleasure of listening to the insights of many members of the Department's staff over several years and hope they continue the reforming work in which they are engaged.

There are several significant aspects of the Bill but in the interest of using my time productively I will skip over some of the remarks that might have been made earlier to focus on those that interest me.

The Bill aims to ensure that older people, especially those who are most vulnerable, have decent pensions and security in their later years. It also allows for those reaching pension age but who wish to continue working to be encouraged to do so and to be appropriately remunerated for their work.

I draw the Minister's attention to anomalies which still remain, including a matter not directly within his area of responsibility. Those on community employment schemes are precluded from continuing those schemes after the age of 66 years because they have then reached pension age. I am aware of a number of organisations, especially those dealing with elderly people, disability groups in my constituency and the senior citizens' parliament, which campaign in this area. The retention of certain social welfare entitlements while continuing on schemes such as community welfare schemes, needs to be examined. The combining of non-contributory pension payments for those over 66, other than carer's allowance, into a standard and enhanced contributory pension scheme is a good idea.

The introduction of the child care supplement is an important measure. The Minister of State, Deputy Brian Lenihan, has confirmed that those who participate in childminding will benefit from PRSI and other payments. This was a concern expressed to me by the National Women's Council. This has important knock-on effects in terms of maternity benefit and I compliment the Minister.

The Minister is aware of my concern about the short timeframe being allowed for the changeover to the swipe card system. A person changing to the use of electronic collection of their benefits will be forced to collect the benefits between Thursday and the following Tuesday, which is four working days. Not many of us are so organised that we can manage to collect something within four working days. I ask the Minister to undertake further examination of that issue. It has been suggested to me that it was previously possible to allow three months to elapse before the collection of payments. Such a length of time may no longer be required but a number of additional weeks would be appropriate.

The Minister has intentions to introduce further reforms in the area of services to lone parents on which I compliment him. I urge him to be progressive and radical in that area. Apart from enduring more than the usual hardships of parents, lone parents endure deprivation which others do not. As a teacher I know that many of them left school early and involuntarily in many cases. I compliment the Minister's Department on the initiatives introduced over the years, such as the back to education allowance and the vocational training opportunities scheme, VTOS. These schemes have proved to be very beneficial in taking people out of poverty and providing them with opportunities for employment and further education. I ask the Minister not to restrict the availability of the back to education allowance because education is the one way of providing greater opportunities for people.

The child dependant allowance is a hardy annual which I raise every year. This allowance is not part of this Bill but I advocate at every opportunity on behalf of that payment. It has not been increased in a number of years. Even though we have had discussions on it, I have not been able to persuade the Minister or his Department of the need to look again at the child dependant allowance. I suggest there are strong arguments for retaining and increasing it. I ask the Minister to use the opportunity in the next budget to do so.

The Pensions Ombudsman reported on construction industry employees. For whatever reason, people working in the building industry are tempted to play fast and loose with the system of taxation and PRSI and this seems to be endemic in the industry. One and two-person operations are being made to register as sub-contractors and self-employed. It is unrealistic to expect such workers to be able to manage accounts and make VAT returns and fulfil the responsibilities of self-employment. A great number of these workers are generally young and, like professional footballers their high earning capacity is short. They are tempted to think there is no life after 40. I ask the Minister to consider closing off as many loopholes as possible to ensure exploitation cannot take place.

The living alone allowance has not been increased in a long time. It is difficult to convince departmental officials that this payment should be increased. There are unique reasons this allowance ought to be increased and it remains to us to persuade people. I ask the Minister to examine this payment. I compliment the Minister on his campaigning zeal in this area and look forward to co-operating with him in further radical measures.

Photo of Michael D HigginsMichael D Higgins (Galway West, Labour)
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I welcome the opportunity to speak in this debate. I welcome those changes which the Minister proposes. It is only proper that I would so. I also acknowledge some of the structural reforms which are particularly welcome. I welcome the increase in child benefit and respite care, the raising of the income threshold for one-parent family payments, and the extension of the duration of carer's benefit. These are important changes in the right direction.

I wish to make some general points about the contribution of the Minister of State, Deputy Brian Lenihan. I will use this as a departure point to some comments which the Minister, Deputy Brennan, will have heard me make before. The Minister of State described the intention of the Bill as favouring redistribution. I hope this is so and that it is but the beginning.

The classical debate on social policy took place in the 1970s and 1980s. The debate in Britain was between Professor Titmuss and Professor Acton and discussed which models of social policy should prevail. Should it be the model that simply dealt by way of residuum with the consequences of an economy which spun away separate from the society and should it pick up the casualties? Should it be merit-based in which people are asked to provide for themselves? Professor Titmuss advocated a model that should be redistributionist. If it was to be such, it accepted that the economy as structured was inherently a creator of inequality in its tendency. This debate was not abstract and only available to and having implications for those of us who were academics in those years. It had a practical implication in regard to how, for example, one was to provide for pensions. That infamous parliamentarian who will go down in history as one of the blackest people of all time, Margaret Thatcher, became involved in the pensions issue as follows.

A problem arose in terms of the market model based on merit in regard to pension contributions, in so far as highly qualified women on high incomes who had left the labour force for the purpose of child rearing found, on returning to the workforce, that their pension entitlements were calculated on an average basis on their latest earnings. In other words, women who had achieved a particular professional point before they left work discovered, on their return to the workforce after rearing their families, that they came back at a lower level than they were on at the point of departure. In turn, the averaging that took place between that point and their retirement left them with unequal treatment in regard to pensions.

This anomaly in regard to averaging arises in regard to the Department of Social and Family Affairs, particularly in terms of those people who worked for a brief period in the 1950s, a point already made by Deputy Penrose. Between 1955 and 1960 one never had fewer than 45,000 people per year leaving Ireland. If one worked in Ireland for a year, for example, in 1954 and then left in 1955, and if pension entitlements on one's return from England 20 years later are calculated under an averaging mechanism, those forced out of the country through the absence of opportunity here in the 1950s will be inevitably penalised. One cannot deal with this either, for example, by arguing one could have acquired credits or benefits in England because, in many cases, some of the people who exploited the Irish in Britain were Irish themselves.

This is not a party political point — it would arise with any Minister dealing with this matter. When I was in Britain I remember noticing the difference between those who were working on the lump and Irish contractors who drove in Rolls Royces to Old Trafford, dropping off on the way to the Conservative Club but who had not properly looked after many hundreds of their fellow Irishmen in regard to social welfare contributions. This brings me to the point about the Pensions Ombudsman's report which reveals quite a scandal in terms of the large number of construction workers who are left unprotected. This simply has to stop.

I come to the choices facing the Minister and I want to be positive. I regard the spirited intentions of the Minister of State, Deputy Brian Lenihan, to be redistributionist as more idealistic in intention than practical in achievement. One has to make choices. The choices fall to those of us on the Opposition benches as well, as to which model we follow. I get the impression the Minister, Deputy Brennan, possibly shares my view in regard to this. In the same way as Fukuyama has been converted from neoconservatism, the Minister has mitigated his market model.

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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Myself and Fukuyama are very close.

Photo of Michael D HigginsMichael D Higgins (Galway West, Labour)
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The Minister has departed from his market model in an extreme sense and he appears to be moving in the direction of an alternative model. I suggest the best way to approach social policy is from the model of citizenship. From a model of citizenship one will immediately find oneself moving towards the choice between the three options I specified earlier and going towards accepting the principle of universalism. The Government has my support, for example, in regard to the provision of child benefit. Any child in this country, irrespective of where he or she was born, should be entitled to benefit. I think we can agree on that. If one accepts that principle of universalism it is ridiculous to become involved in projected costs.

At the other end of the life cycle is security in old age. If one accepts the principle of universalism and one wants to be able to include all citizens who are vulnerable over a certain age, again one has to make choices. In between, one has special categories, including those with special needs but also those who are in long-term care relationships with those with special needs. It is only by accepting the moral purpose of citizenship and the general principles of universalism that one can provide for all of these categories.

One can do so in the most efficient manner possible. Social policy studies show that every time one starts qualification schemes for different kinds of benefit there is a crucial threshold which one passes where the cost of vigilance begins to exceed the benefit being transmitted. In some cases it is simply wasteful. This argument does not stand up at all — that if one makes universal provision those who are well entitled to make a contribution should be making that contribution and one has operated in a regressive manner. One always has to balance against that, the enormous bureaucratic nightmare one is creating. Even benevolent intentions are frustrated in the sheer cost and mechanism of ensuring vigilance in schemes.

The research is most interesting where this has been studied such as in Scandinavia, for example. I am anxious to be positive in what I say. When one looks at social protection expenditure as a proportion of gross domestic product we are second lowest in Europe but it is very high in countries like Sweden. Studies show that the nearer one goes towards universal provision and to redistribution models, the fairer and more efficient it works out over the long term.

Those who are at the interface of dealing with people who operate the system provided by the Government for those citizens in need have very difficult tasks. I urge the Minister to seriously look at the giving of discretion in regard to particular cases. While we must have full legal accountability and while we may all take Ministers to task — it is correct that we do so — at the same time cases arise that are not just simply anomalies, they are ones in which it is appropriate to have discretion if one is to fulfil the spirit of the legislation.

An interesting shift is taking place in regard to the powers being given to the Pensions Ombudsman, in that he can take a decision without waiting for the completion of the internal dispute resolution mechanism. That should be a model for several other areas in regard to social welfare reform. Given the element of trust involved, this would also improve the quality of the process within regional, district and local offices where people are dealing with citizens often in a very stressed condition.

I have not come across any published evidence that suggests any of the social care environments we need for children, those with special needs, or the elderly, are provided by the market. They simply are not. This is a role of the State, which is incredibly important, and the State must decide whether it will act in an interventionist way by being consciously redistributionist, as outlined in the Titmuss model, which is the one I favour.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Deputy Higgins should move the adjournment. He has nine minutes remaining.

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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It is a pity to stop him.

Photo of Michael D HigginsMichael D Higgins (Galway West, Labour)
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I give the Minister notice that when I resume my contribution I will deal with habitual residence, and the particular position of anomalous working conditions and atypical workers and artists. The Minister has perhaps taken some of my suggestions on board.

Debate adjourned.