Wednesday, 12 December 2007
Social Welfare Bill 2007: Second Stage (Resumed).
Perhaps the Leas-Cheann Comhairle will let me know when there are 14 minutes remaining.
Much of the Opposition comment has been to the effect that this budget was mean-minded, lacked generosity and was not cognisant of issues of poverty and people on lower incomes. I made the point that the value of the social welfare was in the region of €12 billion but it is actually €17 billion, up from less than €5 billion in 1997. This is in the context of unemployment being halved in the same period. It runs counter to the direction one would expect social welfare payments to go.
This is a measure of Fianna Fáil's commitment to lower income families and to people in the margins of society. Much has been made in the debate about those in consistent poverty or at risk of poverty. It is worth noting that the office of social inclusion set down guidelines last year that were updated this year. They were designed to assess policies and their impact on those in poverty or at risk of poverty. That precludes the suggestions made by those in Opposition of the possibility that those on lower incomes have not been considered.
These poverty impact assessment guidelines assess the possible negative and positive impact of decisions made in this area, both on social inclusion and welfare issues and taxation. It is based on the ERSI switch model, a tax benefit model. According to the budget figures, there is a 5% to 6% improvement in the income of those in the lowest 20% bracket of income earners and a 0.5% to 1% increase for those in the top 20%. It is clear that in this budget and the previous five this process has been stitched into the assessment of increases and how increases would be brought about. As such, it runs contrary to the possibilities described by Opposition Members. An example is the early child care supplement which, in being assessed by the poverty impact assessment guidelines, passes muster because it has a much more positive impact on those on lower incomes in receipt of the flat-rate payment than those on higher incomes. Accordingly, the €100 increase is worth considerably more to those on lower incomes. The same could be said for a range of the benefits outlined in the Social Welfare Bill.
There have been great benefits in the area of child care in recent years. However, great reform is still necessary. The provision of community-based child care facilities is too limited. Most other countries have a much wider range of community-based child care facilities than we do. Child care is provided privately in the vast majority of cases and, accordingly, very expensive. The average EU percentage of income spent on child care is 12%, whereas in Ireland it is 20%. Nevertheless, there have been very significant increases, which indicates we have been dealing with a very low historical base in terms of direct support for people with children. In 2008 those with two children under the age of six years will receive direct payments of more than €6,000 during the course of the year.
We need to consider the issue of benefit-in-kind. Naturally, the benefits that an employee receives from an employer are taxed. There are provisions, whereby if an employer provides child care facilities on site, the cost can be discounted for tax purposes. However, this is not used in this country. It is virtually a redundant provision in the tax code. If the matter were approached in a more sensible way and we had a new system of ownership linked to the benefit-in-kind system, we would begin to get to the level of child care provision on a community basis in other EU countries. In the meantime, I welcome the increases and commend the Bill to the House.
I welcome the opportunity to speak on the Social Welfare Bill. I would like to discuss the benefits of budget 2008 in terms of social welfare contributions to senior citizens and those who dedicate their lives to caring for people who are ill or infirm. We can never do too much for senior citizens who have played a very important role in making this country the pride of Europe. They have served our communities for many years as neighbours, employers, workers and parents. When times were tough, it was our senior citizens who made sacrifices. It was they who laid the foundations of the economy through hard work. They made sure that their children, the workforce and the leaders of society today, got a decent education. As a member of Fianna Fáil, I take very seriously the responsibility of looking after senior citizens. Our commitment to deliver for them has always been apparent. We have consistently refined and improved the services and payments for them. We will continue to improve benefits because we owe it to them, Ireland's parents and grandparents, to provide them with a decent quality of life. I am very proud of what we have achieved in the past decade which is continued in the budget. The welfare package of €900 million will benefit more than 1.5 million people. It will bring the total welfare spend by the Department of Social and Family Affairs in 2008 to a record €17 billion.
I commend the Minister, Deputy Cullen, for including in the budget a special provision for the spouse or partner of a person receiving the weekly contributory pension. The weekly payment to the spouse or partner, defined in the Department of Social and Family Affairs as qualified adult dependant of contributory pensioner, will increase in 2008 by up to €27. This will bring the qualified adult rate for those aged 66 years or over to €200 per week. The spouse or partner will now receive a substantial special increase where he or she is aged 66 years or over. It will be of special benefit to women who do not have an entitlement to a contributory pension in their own right because of home responsibilities. This gives due recognition to the work that has been done and continues to be done by women working in the home. When these payments are combined with the increase in the personal pension rate, the impact of this measure means that more than 42,000 pensioner couples will see their household income increase by up to €41 a week or nearly 11%.
I am honoured to be part of a Government providing a €336 million package of supports specifically for older people which will benefit almost 420,000. Next month pensioners will receive an increase of €14 per week to €223.30 in the State contributory pension and an increase of €12 per week to €212 in the non-contributory pension. Since 2002, the level of the State contributory pension has increased by more than 50% from €147.30 to €223.30 after the budget. Fianna Fáil continues to deliver on its commitment to improving the living standards of older people enabling them to face the future with a greater sense of security.
I would like to highlight the important role carers play in society. As a public representative, visiting households in Dublin Central, I see the work these unsung heroes carry out quietly every day of the week. There are no headlines, or radio and television coverage. They are the son or daughter, neighbour or relative who devotes his or her time to looking after a person with a disability, an illness or a senior citizen requiring assistance due to old age. It is fitting, therefore, for the Government to continue to support these carers and increase payments in order that all carers will directly benefit from budget 2008. I thank the Minister for increasing the rate of carer's allowance by €14. This will bring the rate for carers over the age of 66 years to €232 per week and the payment for carers under 66 years to €214 per week. I am also glad to see that the rate of carer's benefit will also increase by €14 per week. These increases represent a continuation of the Government's commitment to improving the lot of carers. Last year the important respite care grant increased from €1,200 to €1,500; this year the Minister has included a further €200 increase, bringing the grant to €1,700. I see the benefit of the grant every day. Sometimes the person being cared for benefits just as much as the carer. Some 48,000 carers will benefit from this payment and it is a positive step towards our commitment to increase the respite care grant to €3,000 per year over the lifetime of the Government.
The Minister also announced an increase in the level of the income disregards for carer's allowance to €332.50 per week for a single person and €665 per week for a couple. This is very important, as it will ensure all those on average industrial earnings will continue to qualify for a full carer's allowance.
Although we can never do enough for senior citizens and carers, the Government has genuinely contributed to improving their quality of life. The welfare improvements announced in budget 2008 must not be seen in isolation. The budget focuses on improving health services, roads and public transport, security, education and training. Investment in these key elements also contributes to the well-being of senior citizens and other vulnerable sections of society. Our ability to manage and maintain a strong, growing economy means that we can continue to improve and develop the supports put in place for all senior citizens and carers.
I fully support the changes being introduced by the Minister, Deputy Cullen, in the Social Welfare Bill 2007. The increase of €900 million in next year's social welfare support package will benefit more than 1.5 million people — one third of the population of the State — and will bring total social welfare expenditure to a record €17 billion in 2008. I am proud to live in a country with a Government that places such importance on social welfare and equality. It is a great time to be Irish because the Government is ensuring that the weakest and most vulnerable people in society are protected.
Critics of Fianna Fáil sometimes suggest that it does not prioritise welfare and justice. They argue that it is more interested in economics than in people. Anyone who examines the provisions of budget 2008 will see that the hallmark of this Fianna Fáil-led Government is its willingness to protect the incomes of vulnerable people and support ordinary working people. Approximately 76% of the money allocated under the recent budget will be spent on health, social welfare and education. The provision of public goods in such a manner will be of direct benefit to lower-income families. This budget clearly puts people first. It makes significant improvements in the supports given to pensioners, carers, families, children and people with disabilities, all within the overall framework of the programme for Government, Towards 2016 and the national action plan for social inclusion, which sets out a long-term strategic vision and a road map for the future.
A generous €336 million package is to be put in place to support older people. The contributory pension will increase by €14 per week and the non-contributory pension will increase by €12 per week. Almost 420,000 pensioners will benefit from those pension increases. The increases being made in this Bill represent the first step towards achieving the target, set in the programme for Government, of increasing the old age pension to €300 per week by 2012. As Deputy Brady said, older people deserve to be treated well and with respect and dignity. It is important that we protect the status of older people in society by ensuring they receive decent pensions. A more generous pension system will also ensure a higher standard of living. At a time when loneliness and social exclusion are constant threats, of which we always have to be vigilant, we must continue to ensure that older people receive recognition for what they have already contributed to society.
I support the work of the National Council on Ageing and Older People. I welcome the appointment by the Government of Deputy Hoctor as Minister of State with special responsibility for services for older people. The Minister of State has demonstrated her commitment to working in that role to help older people. There is a vibrant community of active retirement groups in my constituency of Dublin South-East. For example, the Ringsend active retirement group does endless work to build on the supports which are provided by the Government. This Bill will extend the duration of the €18 fuel allowance season by one week, to 30 weeks, which will benefit older people and those who are less mobile or housebound. The extension of the fuel allowance season is welcome at a time when we are experiencing a more unpredictable climate. As the percentage of the population over the age of 65 will increase rapidly over the next two decades, it will be more and more vital to continue to protect older people.
As Deputy Cyprian Brady said, this year's budget recognises the importance of the input of carers, who contribute a great deal to society in a quiet and understated way. They work hard in difficult circumstances without always receiving the recognition they deserve. I am pleased to welcome the increase of up to €14 per week in the rate of payment for all carers. The earnings threshold for carer's benefit will increase by €12.50 per week, to €332.50, which is to be welcomed. Carers are critical for the support of older people, persons with disabilities and those with long-term illnesses. The recent improvements in the carer's schemes mean that 34,000 carers will receive carer's benefit or carer's allowance.
The respite care grant is to be increased to €1,700 from next June. The recognition of carers is a priority for the Government. It can be emotionally and financially difficult to care for someone who needs long-term care. It is vital that carers are given as much support and recognition as possible. Many areas and groups deserve extra financial support. It is not always possible to achieve all our targets immediately. The Government will have to make difficult choices when it prioritises key areas in the medium and long terms. Significant resources will be used to protect the weakest and most vulnerable people in society under the recent budget and this legislation. As an aunt of mine says, a good start is half the work. This Bill represents a good start in implementing a five-year strategy. It will ensure that our recent economic growth is used in a sustainable and socially responsible manner.
I would like to make a few points on the Social Welfare Bill 2007. Like all other parties, Fine Gael will not oppose social welfare increases. It is reasonable to acknowledge that the increases sanctioned by the Government in recent years, particularly in the pensions sector, have certainly kept pace with inflation and have probably kept pace with wage growth. However, rather than tackling the opportunity presented by this Bill to bring about real reform, the Government has chosen the soft option of more of the same, just as it did in the budget. In previous years, social welfare legislation was used to make real changes — I refer to the introduction of the early child care supplement, for example — but there are no innovations in this Bill. It provides for the same old system, with a couple of euro more in certain areas.
Some aspects of our welfare system need to be reformed, obviously. The social welfare budget now stands at €17 billion, which is a huge amount of money. It is becoming increasingly financially unsustainable, outmoded and, in some cases, socially regressive. I consider the family income supplement scheme, which works very well, to be an exception in that regard. Not everyone who should claim the supplement does so, unfortunately. That our welfare system is becoming financially unsustainable is clear when one considers that 49% of this year's increase in the Government's current spending will be accounted for by social welfare. Such a considerable share of the increase in current spending will not be sustainable in the long term, when we will need to find resources for education, justice and health, etc. The social welfare system accounts for one third of our current expenditure at a time when we have virtually full employment and a relatively young population. Serious issues will have to be considered as we move away from full employment and the population gets older. Will we be able to keep the system as it is, with 40% or 50% of current expenditure in this area?
When one compares our welfare system to the social welfare models which exist in places like Israel, Singapore and the Nordic countries, it is clear that it is becoming outmoded. The systems we use are old-fashioned and socially regressive, with exceptions like the family income supplement scheme. Our social welfare system condemns many people to a life of welfare dependence and poverty. The Government and the social partners are happy to give people in certain groups €210 per week and to forget about them after that. We should not tolerate such an approach to welfare. It is about time we had a grown-up and reasoned debate on this matter. I hope the Deputies opposite are willing to have such a debate about the crying need for real welfare reform. That debate was initiated to an extent when the Green Paper on Pensions was published. However, I have little confidence that we will see any real pension reform during the lifetime of this Government.
We need to pay particular attention to the needs of jobseekers and those on unemployment allowance. We have a hard core of long-term unemployed people. No effort seems to be made to address who they are, the reason they are long-term unemployed and what is to be done about it. I make a comparison with many of the Nordic countries which have a much higher percentage of labour force participation than Ireland. It is not only because they have more women in the workforce but also they do not wash their hands of the long-term unemployed but rather do something about them. This is an area where we in Ireland are doing very little.
FÁS needs to be radically reformed. Most of its budget is currently expended on community employment schemes which are essentially a form of sheltered employment. We should accept them as such and call them what they are and fund them in that way. FÁS should be moved towards supplying more valid training so that it becomes an organisation that brings people from unemployment into work and from welfare into work which it does not do now, even though it costs €800 million.
The area of disability benefit should be examined. I do not think anyone would argue that the Irish race is less healthy than any other race yet we have a very high proportion of people on disability benefits and the reason for this must be questioned. I refer to Denmark where rather than condemning people on disability benefits to a life of relative poverty, they train them for jobs for which they are fit and help them to enter the economy and become workers in their own right. This is not the practice in Ireland. We decide that people are disabled and they are given €200 a week for the rest of their lives and they are forgotten about. This is the wrong attitude.
Benefits for one-parent families need to be examined. I note that 32,000 one-parent families do not have any children under seven years. Whereas the one-parent family benefit is very justifiable where there are young children, there are questions to be asked when they are aged eight, nine, 13 and 16 years old. I respect the fact that in 60% of one-parent families the single parent is in the workforce. A lot more could be done to support women participating part-time in the workforce by offering child care assistance and so on.
On another day I might talk about sick pay issues and long-term sick pay which again in Ireland is really out of control. I hope we will follow the Dutch model in that regard. Another time I will talk about the Singaporean personal pension and provident fund which should be emulated by Ireland in terms of welfare reform. I will also speak at another time about the large-scale social welfare fraud being committed by a small number of foreign nationals in particular. That is a bigger debate for another day and it should be discussed at some stage.
We all welcome measures in the Bill which increase payments to those who are dependent on social welfare. I wish to focus in my contribution on the areas of concern to me.
The old-age pension has been increased, with the contributory pension increased by €14 per week and the non-contributory pension by €12 per week and this is to be welcomed. However, anyone in contact with elderly people dependent on social welfare will be aware that much of that increase will be eaten up by food costs and inflation and fuel costs. I recognise the fuel allowance has been extended by one week but I do not believe the contribution matches the real cost of heating for those elderly people, many of whom are living in old houses that are not equipped to retain heat. I have raised this matter with the Minister for the Environment, Heritage and Local Government and will do so again.
I wish to raise the issue of qualified adults who should be entitled to claim their payments in their own right. Many of the 123,000 qualified adults are elderly women. If they wish their payments to be paid directly to them, this must be signed off by the adult on whom they are dependent. They are not really recognised as independent adults in their own right. It should be recognised in this day and age that many of these people are women who have been at home rearing their families or working in the community but they have not been in recognised employment. At this stage in their careers, it behoves us all to recognise them as individuals. The State should pay them directly, considering funding is being given in their name to another person. I have strong opinions on this issue and we should recognise that people deserve this form of recognition.
There is a very low take-up of family income supplement. It is a payment designed to support those in employment on low incomes with families to help them bridge a gap that may exist. According to the ESRI, there is a less than one in three take-up of this payment which I find amazing. I constantly encounter people looking for support from their community welfare officer who are not aware of this payment and who have not been made aware of it. There are ways and means of communicating with these people, particularly if they are in employment. Revenue knows what their income is and they probably pay a low rate of tax. We are living in an era of information technology and information is available on the system. I suggest some joined-up thinking should be used and people should be informed of their entitlements in this regard.
Lone parents are not necessarily women; they may be lone parents following a marriage break-up or they may be widows or widowers. Census 2006 showed 121,000 lone-parents with at least one child under the age of 20 years, making up 22% of all families. As one would expect, the breakdown of lone-parents show that 90% are female and 10% are male. This category of parent is more at risk of poverty. It is estimated that approximately 7% of the population is in consistent poverty. In households headed by a lone parent, figures show that approximately 27% are living in consistent poverty. This is an area which needs attention. Many negative comments are made about lone parents and not all such parents are young women. A total of 2% of lone parents are younger than 20 years of age and the majority are between 35 and 39 years of age. It is not necessarily a young person's issue. Lone parents need to be supported in education. I welcome the changes in the rental accommodation scheme that allows them to take up work. Funding for lone parents is an investment in their children and will ensure those children will break out of the poverty cycle while also facilitating the parent to develop themselves and to enter employment and so reduce their dependence on welfare. The issue of lone parenting needs to be addressed on a consistent basis.
That means three and three quarter minutes each. I will try to deal with as many points as I can quickly.
It is good to welcome all increases and nobody wants to be a killjoy in saying the increases announced in the social welfare package are not welcome. The qualifying adult entitlements which are long overdue give recognition at last to people such as mothers and women who have stayed at home just as the Family Home Protection Act granted them protection. For many years women were glorified slaves. I refer to Deputy Clune's point about allowing women to apply for benefit in their own right. This would complete the recognition of their rights as individuals.
The increases are based on a couple of basic principles announced by the Minister for Finance. He stated he would pin inflation next year to 2.4%, a halving of this year's rate of inflation which is 4.8%. From January to October 2007, the price of bread increased by 17.3%, milk and butter increased by 16.4% and eggs increased by 16.9%. That has already happened. We would be foolish not to acknowledge that this has a disproportionate effect on the poor and lower income families in society than on higher income families. I spoke to members of the local St. Vincent de Paul organisation who said that this year they are looking for food, not toys, in their collection. We collected food to send to Kosovo and other places but there is a need for this at home now. The increased cost of groceries is beginning to impact on poorer families.
Ireland has the sixth highest consumer debt ratio in the world at 154% of disposable income. That is an indication of the sticky wicket we are on. In announcing the social welfare package, the Minister referred to "below trend growth". That is an acknowledgement that things are slowing down. Approximately one third of people in or close to the poverty trap are from families where at least one person is at work.
Young carers sometimes take care of both parents. While these people are cost-effective for the State, they are not being rewarded. Approximately 40,000 people receive the carer's payment but it is estimated that 160,000 people provide over 3.5 million hours of work, which underlines the fact that the majority of carers are not paid.
Inclusion Ireland stated it is disappointed that the cost of disability is not related to people's needs, as opposed to their income. I asked a parliamentary question about the provision of medical cards to families with children with autism, to which the Minister replied on 5 December that she has no plans to provide for the granting of medical cards to any particular group as a whole, yet it was announced in the budget that the issue would be reviewed by the end of 2008.
An increase of €14 per week can be considered meagre in the context of inflation and other factors. I have more to say——
Many of the issues have been touched on already. The key point for me is that the contributory and non-contributory old age pensions have increased by 6%. On the face of it, that appears fine. However, when one views this in the context of inflation on food and heating, which is as much as 17%, it is grossly inadequate.
There has been no increase in the living alone allowance since 1997. People living on their own, be they unmarried or widowed, are one of the most vulnerable sectors in society. If a spouse passes away, the person who remains faces a significant loss of social welfare income. The living alone allowance must be increased.
The carer's allowance has only increased by €14 and the disability allowance has increased by €12. The costed disability payment, which was sought by Inclusion Ireland, was not given even though many costs are associated with having a disability.
The Government made a commitment to raise the income limits for medical cards to double the limit for parents with children under the age of six and also to treble the income limit for parents of children with a disability under the age of 18. We must put more resources into the area of disabilities.
The next issue is one I raised previously in the House. I refer to a change that could be introduced without great difficulty. When a person reaches 65 years, he or she is entitled to a contributory old age pension and at the age of 66 a person is entitled to a non-contributory old age pension. People should be given prior notice approximately nine months in advance of retirement age, as it is taking five or six months to process these claims. In the case of late applications, no arrears are paid on non-contributory pensions. In the case of contributory pensions, one year's full payment is paid in arrears but otherwise the payment is made on a pro rata basis. We should be able to link with PPS numbers so that a person coming up to retirement age is notified. The increase in social welfare pensions is not high enough but if there were a linked system at least people would get paid from the date on which they are entitled to receive the payments. I feel strongly about this issue.
We should find a way to ensure that everybody who is entitled to FIS claims it. This is about delivery of service, which harks back to public sector reform. A proper delivery of service is required for people who are entitled to benefits. These are the keys points I wish to make. Obviously there are other areas to which I would like to refer but time is limited.
I welcome the Bill and the overall size of the social welfare package which is just short of €1 billion. This would certainly be one of the larger packages of recent years and has allowed increases to be made substantially ahead of inflation, giving a certain margin of safety, even allowing for the fact, as has been pointed out in contributions opposite, that certain items are rising disproportionately.
The measure I welcome most of all is the increase for dependant spouses of pensioners. This means a couple will get €423.30 which is up from €382.30. In 2009, the dependant spouse will be on an equal level. This increase represents 11%, which is certainly far ahead of inflation.
We are on target to hit one of the most important of our election pledges, which is to increase the pension to €300 by 2012. As the Minister pointed out, this is having an impact, in that there has been a decline in the risk of poverty among the elderly from 30% five years ago to 13.6% in 2005 or 2006. The figure will probably be lower again next year.
An extra week of the free fuel allowance worth €18 per week has been announced. Given the rise in energy prices, I would like to see a focus on this in the future also.
I welcome the increased carer's allowance. Carers do an enormously important and valuable job which deserves recognition.
Child benefit, which used to be called children's allowance, is also up to €166 a week, which compares to just over £30 in 1997. I am also pleased to see the grant of €1,000 has been increased by 10% to €1,100. Since 1997, child care costs have risen considerably and nobody is pretending this covers all or most of the extra cost but, nonetheless, it is a valuable contribution in what was up to ten or 12 years ago a very neglected area.
Deputy Varadkar referred briefly to community employment schemes. He correctly stated that they are in some respects sheltered employment, but they are valuable, not alone for the participants but for a variety of community and non-commercial organisations. There are artificial rules applying to the older cohort, rather than the people in their 20s or 30s, where they are happy in employment doing an invaluable job. Their positions should be secured as they can be difficult to replace.
I would be interested in a debate on social welfare reform. To be fair to Ministers dating back over 20 years to the Commission on Social Welfare report, there has been a good deal of social welfare reform and the present project will bring qualified dependants to the levels of spouses.
This debate has been peppered with comparisons between pay rises for the Taoiseach and Ministers and welfare. Much of this has been driven, not just by the Opposition but by the media. Today's Irish Independent referred to lavish rises being foolish and so on. I got out from my horde of cuttings an article from 6 May 2002, "O'Reilly's salary more than doubled in a year", which states that Independent News & Media executive chairman Dr. Tony O'Reilly was paid a total of €876,000 last year, up from €390,000 in 2000. There was a row in The Irish Times two or three years ago about the basic salaries of the editor and the manager of approximately €323,000 — more than we are speaking of. I do not object to what those organisations pay themselves, but could they please spare us some of the hypocrisy and craw thumping of the editorials? I regard the editors of those newspapers as having no moral authority to speak on the subject.
First, if I may beg the indulgence of the Acting Chairman, Deputy O'Connor, as this will be my only opportunity before the event to announce that, in my capacity as Chairman of the Joint Committee on Education and Science, in light of the proposed water charge levy on schools which is a concern to all Deputies in this House and having heard the comments of the Taoiseach, the Minister for the Environment, Heritage and Local Government, Deputy Gormley, and Deputy Kenny, I have called an extraordinary meeting of this committee for Tuesday next at 2.30 p.m. to see if we can come to some solution. A solution can be found between the Departments of the Environment, Heritage and Local Government and Education and Science. It is important because schools cannot afford to pay this. I am sure there must be a way of giving a free water allowance and then, if a school went over a certain level, of paying for the difference. I hope the non-partisan debate from all Members will sort that out.
It will be a pleasure to speak about the Bill. Some said I was a little critical of the budget in my contribution last night when I stated it was a little like the curate's egg, good in parts but turning one's stomach in others, when I referred to my education portfolio. The reason I said so was that I felt the investment in education was wholly necessary and it will cost the taxpayer in the long run.
With this legislation, I am delighted to see that the axe did not fall on social welfare. The Minister obviously felt the need to curtail some areas and I brutally disagree with him on education. Thankfully, most of the social welfare increases have exceeded the level of inflation and that will be welcomed.
Deputy Mansergh mentioned pay. I agree with him in some senses and disagree with him in others. Trying to speak about social welfare increases that are lower than the increase Ministers or Deputies get sends out a wrong message, for example, on deliberations in partnership talks. I very much welcome the belated decision to postpone the ministerial pay rises. It provides for more credibility in terms of the smaller increases proposed in this Bill. A couple of years ago when the Deputies' pay rose by 13% I described it as urinating on the less well off, where pensioners were only getting 6%.
This time around we know the economic situation. I agree with the Minister that we must tighten up a little, although it is not quite a recessionary budget. Deputy Varadkar may agree with me on the stamp duty changes, that the measures will not have much of an effect and will result in a net cost to the Exchequer. Next year's provision for stamp duty receipts will be €340 million less. I am not sure how much of that €340 million is as a result of the stamp duty measures, but in a falling market we should have let the market continue to fall, let the first-time buyers pay the lower prices and perhaps include measures for those who will suffer as a result of negative equity. That €340 million, or whatever proportion of it, could have been spent better on education and, possibly, on increasing the social welfare measures.
That said, on the whole the provisions made were good and were necessary, and particularly, for example, the contributory pension which increases by €14 per week to €223.30 per week and the non-contributory pension which increased by €12 per week to €212 per week.
Another measure I welcome is the family support programme, which is now being revamped and will have a €6.5 million budget for projects run by third parties to assist welfare recipients and members of their families to enhance their employability through education, training and personal development.
I would include there a point made by Opposition Deputies, that there are those who are entitled to the family income supplement but are not aware of it. Sometimes unfair comments are made about people who are dependent on the State, that they know every scam in the book to get their entitlements. That is plainly not the case. Many people who suffer social deprivation are not aware of half of their entitlements and lose out as a result, and perhaps more needs to be done to ensure that people collect their full entitlements. The better off in this society can claim every tax break in the book.
I welcome the fuel allowance increase, which is almost €2,200 up on the pre-budget position. I welcome the carer's allowance increase, which is necessary and is fantastic.
I take issue with the €2 per week increase in the qualified child allowance, which is not enough. CORI has stated that the momentum in tackling child poverty is lost by not dealing with this issue. The increase is less than the rate of inflation and in that context, perhaps next year we should look at increasing it by a substantial amount.
I thank Deputies Mansergh and Gogarty for sharing time with me.
I welcome this opportunity to speak on the Bill in the House today. With a vibrant economy like ours, it is important to remember those who are vulnerable and perhaps less well off and to look after our carers and the elderly. Carers provide an invaluable service to their loved ones, a care for which one could not possibly be rewarded enough. Our nursing homes are pretty full, and yet we have so many dedicated caring people to care for their loved ones at home or elsewhere. We all have experience of the people concerned as we have them in our community and, some of us, in our families. For this reason, I was particularly pleased to see the hike in the home carer tax credit of €130 per year, to €900, in the budget delivered by the Minister for Finance, Deputy Brian Cowen, last week. There will also be a rise in carer's allowance and carer's benefit of up to €14 per week. The earnings threshold for entitlement to carer's benefit will increase by €12.50 to €332.50 per week, effective from April 2008.
The budget also delivered good news for older people with a €14 increase per week for contributory pensioners, with payments to qualified adults increasing by up to €27 per week. Non-contributory pension rates will increase by €12 per week to €212. Also — importantly for many elderly people — the duration of the fuel season will be extended by one week to 30 weeks, which is very welcome. There will be proportionate increases for those on reduced rates, from the first week of January 2008. The respite care grant will increase by €200 to €1,700 from June 2008.
The Government has reaffirmed its commitment to easing the burden on parents with young children through the budget. There is a hike in child benefit, with the lower and higher rates to increase to €166 and €203, respectively, per month. The early child care supplement is set to increase by €100 per child per year to €1,100. This supplement is of significant benefit to parents and families. The back to school clothing and footwear allowance, of which many avail, will increase by €20 to €200 for children aged between two and eleven years and by €20 to €305 for children aged 12 to 22 years, where appropriate. These measures will take effect from June 2008. Some €2 million extra is also to be provided for the school meals scheme. I am confident more schools will take up this initiative.
There is also an increase in maternity and adoptive benefit of €14 per week in the minimum rate, bringing it to €221.80 per week, effective from January 2008. The upper income threshold for entitlement to the one parent family payment will increase by €25 per week to €425 from May 2008. A single reformed method for assessing benefit and privilege from parents' income for the jobseeker's allowance will be introduced from April 2008. The annual grant payable as part of the back to education allowance scheme will also increase by €100 to €500 from September 2008.
I commend the Minister for Social and Family Affairs, Deputy Cullen, who is well aware of the needs of the more vulnerable members of society, whether the elderly, the less well-off or carers. I know from speaking to my constituents in County Donegal how appreciative they are of the measures he has introduced and the increases in social welfare that have taken effect in recent years. I am sure he will continue in the same vein and I assure him of our support. These measures will help to foster a more secure living environment for those most in need, which has proven to be a priority for the Government. I look forward to further successful years for the Minister in the Department of Social and Family Affairs.
I thank all colleagues for their contributions to the debate on the first of the two social welfare Bills. There is a general welcome on all sides of the House for many of the proposed measures. This is important, as we seek to ensure those in society who need support are given that support and that we target resources to the less well-off. In recent years the Government has done outstanding work in putting together packages in this regard, particularly in the case of old age pensions, carer's allowance, children, etc.
I know colleagues on the other side of the House can pick out some areas and suggest payments should be greater. That may be true and would be all very well if we only had one payment to make. However, we have a significant range of areas to deal with. The budget for the Department of Family and Social Affairs which has risen dramatically during the years is now just under €17 billion. It has risen at a time when unemployment has dropped to almost record lows; we effectively have full employment. This demonstrates that the policy changes made in the Department have been significant and far-reaching and reflected the needs of the country now compared to ten, 15 or 20 years ago when most of the Department's resources and efforts were aimed at the high numbers of unemployed.
We now look to a much more constructive, interventionist approach with specific policies across a significant range of areas, which is an important responsibility. In that context, we have choices to make as to how best to use our resources. While I respect and accept the fact that people will seek dramatic and substantial increases in isolation in certain areas, when one puts together a social welfare package, one must look right across the spectrum to maximise the resources available. I acknowledge and thank my officials for their assistance in doing this and working through the different areas with me to see how we could do it.
Many Deputies raised interesting and important issues. Deputy Shortall spoke about the State contributory pension. One of the main commitments influencing the formation of the 2008 budget package with regard to weekly rates of payment for pensioners was the commitment to increase the basic State pension by approximately 50%, to at least €300 per week by 2012, as set out in the programme for Government. The budget package provides for increases of €14 in the State contributory pension, bringing the weekly rate to €223.30. Increases in pensions over many years have been one of the major achievements of the Government. Since 2002 the level of the State contributory pension has increased by over 50%. It has increased from €147.30 to €223.30 following the budget. By national or international measures, this is a significant increase. I am satisfied the Government will continue to build on this and that the target of €300 a week by 2012 will be achieved over the next four budgets.
Deputy Enright and others referred to the living alone allowance. This allowance is an additional payment of €7.70 per week made to persons aged 66 years or over who are in receipt of certain social welfare payments and who live alone. It is also available to persons under 66 years of age who live alone and receive payments under one of a number of invalidity type schemes. The allowance is intended as a contribution towards the additional costs pensioners face when they live alone. However, the downside is that this is lost when they need to live with someone else.
The policy for many years with regard to support for pensioners has been to give priority to increasing the personal rates of pensions, rather than supplements such as the living alone allowance. This aims to improve the position of all pensioners, which is the correct approach. We have substantially improved the lot of pensioners right across the spectrum, which has been of far greater significance than just increasing the living alone allowance for a smaller number. While colleagues in the House have spoken about this in the past, it has not been raised for some time. There is a logical reason for this. We have done much for the generality of pensioners and the increases have been significant. That was the correct approach. At the time the living alone allowance was introduced pensions were much smaller than they are now and there were not as many resources. This was recognised at the time and an effort was made. Nowadays, however, more effort is put into increasing the size of the pension. As I said, since 2002 the contributory pension has increased by more than 50%. This has been far more meaningful and far better for all pensioners, including those living alone, than targeting of the living alone allowance would have been. I intend to maintain a strong pace towards the target of €300 per week by 2012. That is the correct approach because those living alone also benefit directly.
The take-up of child income support and family income supplement, FIS, was raised by Deputies Enright, Shortall and Curran. The Government remains focused on substantially reducing child poverty. The level of commitment was particularly prominent in budget 2008, in which I announced a range of targeted measures and supports costing more than €147 million in a full year and €194 million if we include the early child care supplement which goes through the Department of my colleague, the Minister of State at the Department of Health and Children with responsibility for children. This package of just under €200 million is specifically to benefit children in low income families and those on social welfare. The budget provided social welfare dependent families with increases of at least 6% in overall child income support through a combination of child benefit, qualified child increases, back to school clothing and footwear allowance and the early child care supplement. This is well above anticipated increases in prices and earnings for 2008. For example, a social welfare dependent family with two children, one under six years and one between six and 12 years of age, will receive more than €8,000 per year or €77 per week in child support.
Children are members of families and the main route out of family poverty is employment. Therefore, it is important to avoid creating disincentives to employment through child income support measures while addressing child poverty. That was one of the messages stated by the various groups with which I met when we discussed these matters at the forum. There is a fine line which must be carefully monitored between providing support and removing the incentive to go out to work and get back into society, thus making a contribution. It is clear that improving the circumstances of children by facilitating their parents in going out to work is better for everybody concerned.
The revamped activation and family support programme will have a budget of €6.5 million next year. Among other things, the programme will provide or co-fund training and development programmes for particularly disadvantaged social welfare customers and their families, including very young lone mothers. The latter, in particular, is an area that needs to be dealt with. The education of many young parents is not up to a great standard. Many also have low levels of literacy. We need to provide the resources to allow them to return to the workplace. This new programme will seek to address specifically the issues and deficiencies they have in their ability to return to the workplace. As I said, research has shown that poverty is more likely to be concentrated in larger families. In this context, the new FIS thresholds, with substantial increases in all payments, concentrate additional resources on larger families. This year's threshold increase of €10 per child continues the refocusing towards larger families.
Since the 1994 ESRI survey referred to by Deputy Enright, there have been substantial improvements with consequent significant increases in the take-up of FIS. Deputy Shortall also raised this issue. In the period 1997 to 2007 the take-up has increased from under 13,000 families to over 21,000. It is expected this will increase to approximately 29,000 families in the coming period when claims in hand are processed. This is a significant expected increase and due to the efforts made, as mentioned by a number of Deputies, to alert people who are not in the social welfare system but are in low income employment that in many cases FIS is available to support them. This is a definite help to many families. Becasue it is aimed at those in employment, it represents a move away from keeping people in the system and towards supporting them in the workplace, while recognising that they do need the support of the State.
A number of Deputies mentioned carers, including Deputies Enright, Shortall and Durkan. According to the 2006 census, there are approximately 50,000 people providing care for more than 43 hours per week, or just over six hours per day. Of these, 14,068 are classified by principal economic status as being at work. There are more than 34,000 in receipt of carer's allowance and carer's benefit, while approximately 42,000 received a respite care grant in 2007. The 2006 census does not give information on the number of hours worked by persons in employment; however, a significant proportion of the 14,068 classified as being at work are working more than 15 hours per week. As such, they would not satisfy the full-time care and attention requirement for carer's allowance, carer's benefit or the respite care grant.
I will not argue the point, but I would like to see the ceilings change and will continue to consider this. As the Deputy can appreciate, because the base is already so high in many areas, even marginal movement can impose a huge cost on the taxpayer. However, I recognise the value of carers, as care in the home has a positive impact from the point of view of the State. I would like to see an expansion of the allowance schemes for carers, although they have become a lot more flexible in recent years compared to the tight criteria that applied in the past. We must continue to do more.
Deputy Enright correctly pointed out that it would be inconsistent with European Court of Justice jurisprudence to rely on a two-year or any definitive period for determining habitual residence. Since the introduction of the habitual residence condition in May 2004 the Department has used the five European Court of Justice criteria to determine the issue. Thus, the two-year rule does not apply. This approach was set down in published guidelines from the beginning. For greater transparency, the five criteria established by the ECJ were last year included in primary legislation, namely, the Social Welfare and Pensions Act 2007. As with decisions on other aspects of social welfare claims, the customer can exercise full rights of review and appeal.
With effect from 24 September, payment of the qualified adult allowance in all new State pension claims is made directly to the pensioner's spouse or partner. Deputy Flynn spoke about this at some length. This change is in line with the commitment in the programme for Government to provide qualified adults — the wives, husbands or partners of those receiving social welfare allowances — with their own pension payments. From September the allowance has automatically been given to the partner. It is not a matter of someone ticking a box on his or her behalf; the partner is entitled to the payment in his or her own right. If couples already receiving allowances want to receive separate payments, this can be facilitated. However, from now on separate payments will be made automatically.
No, it is more complex than that. Many issues come into play in that regard. Most seem to be happy with the current arrangement, although there are a few who are not. However, if they want to change the arrangement, we can facilitate them.