Dáil debates

Wednesday, 22 April 2009

7:00 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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I move:

That Dáil Éireann:

— deplores the mean-spirited decision of the Government to cancel payment of the long standing Christmas bonus paid to most social welfare recipients;

— notes that this represents an effective 2% cut in social welfare payments over the full year;

— recognises that those on social welfare have come to depend on the extra payment to meet the additional costs associated with Christmas;

— expresses its serious concern that the decision will drive families dependent on social welfare into the hands of moneylenders or high-interest loan providers;

— calls on the Government to reverse the decision and make the payment at Christmas 2009 as usual; and

— believes that the €156 million revenue required for the payment this year could be raised through further restriction on interest relief on rental property, including restriction of relief on commercial properties.

With the agreement of the House, I wish to share my time with Deputies Burton, Sherlock and Morgan.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Is that agreed? Agreed.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Government decision not to provide for a double payment to social welfare recipients this Christmas is, in the Labour Party's opinion, mean-spirited and unnecessary. The traditional bonus payment has been paid since 1980. Not everyone on welfare receives it, just those who are most heavily dependent, namely, those on pensions or long-term welfare payments. People affected include those receiving blind pension, carers payments, disability payments, farm assist, guardians payments, invalidity pension, jobseeker's allowance, one-parent family payment, pre-retirement allowance, deserted wife payments, prisoner's wife allowance, State pension and widow's and widower's pension Claimants stand to lose up to €240.30 each or approximately 2% of their income. In the case of most married couples, the combined loss will be well over €400.

Since more than 1 million people are affected by this move, everyone knows someone who is affected. Everyone recognises the seriousness of the economic situation in which we find ourselves and that the Government's back is to the wall, but it is when backs are to the wall that one sees the true priorities of Government and what it is really made of. For goodness' sake, if as a country we could afford a Christmas bonus in 1980, how on Earth can we not afford one in 2009?

The Minister for Social and Family Affairs has stated that the choice was to cut the Christmas bonus or to cut welfare rates generally, but this was not the choice. The Government had other revenue raising options available to it, but ignored them. Evidently, the Government would rather hit pensioners and the poor than phase out what amounts to a €700 million tax relief subsidy for landlords of commercial and residential properties. Evidently, it is fine in an emergency to suspend payments to long-term welfare recipients, yet leave untouched the hundreds of millions of euro in tax relief for the pensions of rich company directors. Evidently, people on low fixed incomes can afford to take a hit next Christmas while the 6,000 tax exiles remain untouched by tax reform. There were many other options, such as seeking reductions in the rent paid out by State bodies and Departments, capping public sector pay or the famous text tax, but none was taken.

In practical terms, suspending the Christmas bonus will mean that older people and poorer people will struggle to heat their homes this Christmas because, in many cases, the bonus is used to pay for a refill of the oil tank, to stock up on coal or briquettes or to pay off the larger gas bills at that time of year. For some, scrapping the bonus will mean there is less available for presents for the family or money for the little things that matter a lot, like sending Christmas cards to family and friends or taking grandchildren somewhere special, like to a pantomime or to the cinema.

I hope the Minister will take in my next point. For the economy generally, it will mean even less money being spent in our shops this year at Christmas because no one saves the Christmas bonus.

Deputies:

Hear, hear.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Effectively, the cut will take millions of euro out of the economy and threaten jobs further.

We are constantly hearing that the cost of living is going down. Yes, it is going down for some. If one has a large tracker mortgage and has managed to hold on to one's job, then one's cost of living is clearly declining. However, most people who receive the Christmas bonus do not have a mortgage. In most cases, they are either pensioners and their mortgages are already paid up or they are local authority tenants and their rent is related to their incomes. These rents have not decreased.

We accept that the reduction in interest rates by the European Central Bank in recent months has impacted heavily on the consumer price index. However, when one measures inflation without mortgage interest, prices are at a similar level to last year. In fact, they are down by just 0.3%.

Research by the Vincentian Partnership for Social Justice tells us that many people on welfare are already struggling to make ends meet. Its detailed analysis of the weekly budgets of typical family types, such as a pensioner living on her own, shows that, even at existing levels of welfare support, incomes are often not matching outgoings. This is why the Society of St. Vincent de Paul, instead of our social welfare system, has become the safety net for people at the lower end of the spectrum in recent years. If not for the Society of St. Vincent de Paul stepping in, many people would be having a dreadful time.

The Vincentian Partnership for Social Justice research also shows that, for a lone pensioner on a non-contributory pension without a car, the weekly shortfall is €43.61. That is the shortfall between what such a pensioner needs as a minimum essential budget and what he or she gets on his or her old age pension. In this instance, taking away the Christmas bonus means taking away Christmas. The same research shows that for most people on welfare discretionary spending is very low.

There is an obvious point about the demands of Christmas. Even for families that can withstand the pressures of advertising, there are still significant costs involved in even a modest Christmas celebration. Without extra income at Christmas, some of those families will be forced into the hands of moneylenders. There has been a 30% increase in the number of clients attending the Money Advice and Budgeting Service, MABS. In the first three months of this year, MABS dealt with more than 5,000 new clients, of whom 75 had sub-prime loans, 363 had moneylender loans, 254 had overdraft problems, 1,258 had credit card difficulties and 2,671 were in trouble with personal bank loans. Crucially, two thirds of these MABS clients were social welfare recipients. This statistic alone shows how dependent welfare recipients are on every cent they get and just how vital is the Christmas bonus.

In concluding, I wish to address my remarks to the many Fianna Fáil backbenchers and Independent Members who have run for cover tonight. Regrettably, not a single Government backbencher has turned up for this debate. I hope some of them are listening in their offices, as I intend to address my remarks to them. Members such as Deputies Lowry and Healy-Rae, who have been supporting the Government, as well as Fianna Fáil backbenchers who habitually proclaim their commitment to the less well-off, now will have the chance to decide where they stand on this crucial issue.

Photo of Michael D HigginsMichael D Higgins (Galway West, Labour)
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Hear, hear.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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I have spelled out what the suspension of the Christmas bonus will mean in practical terms but the backbenchers probably know that already. I have cited the types of families that will be affected and how they already are struggling, and the backbenchers know that too. However, they also must know what the public is saying about them, which is that they would rather defend their long-service increment than the Christmas bonus for long-term welfare recipients. For the most part, I do not believe this is true because when a rumour circulated late last year that the Government would not pay the 2008 Christmas bonus, several Fianna Fáil Deputies spoke up and showed just whose side they were on.

For example, the new Minister of State, Deputy Áine Brady had something to say in this regard. When it was finally confirmed that a payment would be made, Deputy Brady declared, "The Government ensured that this Christmas bonus payment would be protected as so many people rely on that extra money at Christmas and use it to plan their finances over that period." This point still holds true now and there is something ironic about the fact that the Deputy in question, who understood last year the importance of the Christmas bonus, now has responsibility for the elderly. I hope she still understands its importance. The Minister of State, Deputy Killeen, described the Christmas bonus as a €200 million boost for the Irish economy, which it was. The economy needs it more than ever in 2009, as nothing has changed except that matters have worsened. Deputy O'Flynn reminded those who had been calling him with regard to the Christmas bonus that, "I have been pressing the Minister for Social Welfare on this matter". Deputy O'Flynn can stand up tomorrow in respect of this issue when it counts.

I believe most Fianna Fáil Deputies, and perhaps even some from the Green Party, are secretly angered by this cut. I believe that most of them do not consider it to be fair and that many realise it is not necessary and constitutes a huge political mistake. If this is the case, why do they allow those who are at the top dictate to them? How can they tell their constituents that cutting the Christmas bonus is an act of social solidarity? How can the backbenchers stand behind a Cabinet that ignored them on medical cards for the over-70s and now is ignoring them on this issue? I urge each Government backbencher to use the hours between now and the vote tomorrow to convince their Cabinet colleagues that this is not the correct course of action and that other options are available to the Government.

If backbenchers can turn around the Government before tomorrow's vote in the interests of the poor, their constituents and their party, they should do so, as this is their chance. However, if backbenchers cannot force a change before tomorrow's vote, why do they still support the Government? If the Cabinet cannot reinstate a Christmas bonus for pensioners, on what are Members voting? Will the backbenchers make clear where they stand? They either are silent lobby fodder or are in this House to represent their constituents' views. If they cannot change this measure, what power do they have? While the social conscience of the Fianna Fáil party may be switched off, surely the backbenchers' political gut tells them this is wrong. The choice for such backbenchers is simple. They must change this proposal overnight or join with the Labour Party to vote against the savage cutting of the Christmas bonus.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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In its second emergency budget since it came to office, the challenge for the Government is to find the way out to perform one more U-turn. For a Government that does so many U-turns, particularly on budgetary matters, this should not be difficult, especially as my colleague, Deputy Shortall, has given the Minister detailed argument as to how taking some interest relief from landlords would more than pay for and cover this cut.

The Holy Week emergency budget has been haunted by the ghost of Christmas future. Removing the Christmas bonus will cancel Christmas for tens of thousands of pensioners, carers and others who have come to rely on it to supplement what are for the most part meagre and modest Christmases. Many older people use the additional Christmas payment to buy presents for their grandchildren. This is part of being an active citizen and yesterday I saw the former Minister of State, Deputy Hoctor, launching the Bealtaine Festival that celebrates creativity in older people. Everyone recognises that the active engagement of older people, and old age pensioners in particular, in plotting and planning small gifts for children, grandchildren, nieces and nephews constitutes a huge part of their social life from September onwards, when the pre-Christmas shopping season begins. For many people, the Christmas bonus will put a turkey on the Christmas dinner table. The Christmas bonus is a much-needed financial lifeline and not a frivolous bonus that is akin to not buying a Prada handbag because one has lost a couple of thousand euro in tax. This issue is at the core of many people's lives.

As for economic stimulus, Paul Krugman, the Nobel laureate who commented on how he did not wish to see America go down the Ireland route, wrote about European economies recently and made the point that social welfare in European or social democratic economies constitutes an important form of economic stimulus because it keeps minimum levels of income and spending capacity in the economy in a manner that obviously does not happen in the United States. While I do not know whether the Minister has conducted scientific studies in this regard, the vast bulk of the Christmas bonus is spent locally in local shops. As my colleague, Deputy Shortall, has noted, this cutback could be paid for by restrictions on landlords' interest relief. Much of the landlords' money goes abroad, whereas the pensioners spend the money in their local shops and with local businesses.

Moreover, many pensioners will now take the train to the North to do their shopping there, to make whatever little savings they can. The Minister may have seen the recently broadcast RTE "Prime Time" programme, which showed that for shopping which cost approximately £160 north of the Border, the equivalent cost for exactly the same items in a southern supermarket was approximately €280. A pensioner who takes the train to the North probably can save the Christmas bonus equivalent by shopping there. However, that is not what the Government wants to happen. I have heard the Taoiseach, the Minister for Finance and other Fianna Fáil Ministers suggest that people might be patriotic by shopping locally and in the Republic.

I also was shocked when the Minister for Social and Family Affairs confessed recently that the control process in her Department to target social welfare fraud had collapsed for a time in the recent past. The Minister acknowledged a loss of approximately €50 million in respect of the Department's long-standing fraud control procedures because the Government could not get its act together. It took experienced social welfare staff, such as inspectors, from fraud control measures and put them to handling claims. This is at a time when the Government tells us there are civil servants in various Departments who could be redeployed. It seems an extraordinary act of bad management by the Minister that she should partially abandon control measures to the extent that she publically acknowledges, in parliamentary questions, and up to €50 million has been lost by the failure to continue routine and expert checking by social welfare inspectors in respect of deterring fraud and clarifying and confirming the identity of claimants. It is astonishing.

I offer the following to the Minister as a way out of her difficulties. If she takes an active interest in her Department and revisits the control measures, I predict she could make the savings and restore the Christmas bonus by that alone. Just as we are talking about going after delinquent bankers and tax defaulters, we need to ensure there is no sense that social welfare fraud is being tolerated because inspections are being abandoned. We have had enough of that on the tax side, where there has been a significant limitation on the number of inspections to deter tax fraud. Claiming entitlements to which one is not entitled is a serious breach of the social contract and a cost to law-abiding taxpayers that they should not be asked to carry. It undermines confidence in the social welfare system and in the tax system if Ministers acknowledge that control measures break down and that some people may be able to claim benefits to which they are not entitled. Rather than relying on tip-offs about welfare fraudsters, the number of anti-fraud checks should be increased. Like tax evasion, welfare fraud may have been acceptable during a time of economic plenty but we cannot allow social solidarity to be undermined by what people on very modest incomes paying many extra taxes and levies feel is being taken out of their pockets simply by the failure of competent management on the part of the Minister.

We have seen this Government row back on measure after measure in the past six months. The bank guarantee was to be the cheapest in the world, at no cost to the Irish taxpayer. That was followed by recapitalisation, then nationalisation of Anglo Irish Bank, a second recapitalisation and, as of yesterday, a third go at recapitalisation. Some €3.5 billion was not enough for a bank that said it would die if it had to raise extra capital. Yesterday, the Minister blithely announced an extra €1.5 billion for AIB. The levy was first to be on all incomes but is now on incomes over €15,000. The over-70s medical cards were to be withdrawn from all seniors but then they were not. Following a question from my colleague, the leader of the Labour Party, the pension levy became tax deductible overnight. The Government is full of examples of U-turns over the past eight months. All the Minister has to do is put together a plan, as suggested by Deputy Shortall, by curbing tax relief on interest for landlords or going after social welfare fraud and then she can restore Christmas to pensioners, carers and to people who are long-term unemployed, and let them have that little bit of cheer at Christmas.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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Was it not a very cynical move to introduce such a measure at this time of the year, knowing it would not affect people until the winter? It speaks volumes about how this Government treats older people that it did not have the guts to try this in December, during normal budgetary times, because if those who marched when the Government tried to take medical cards from the over-70s numbered thousands, they would be out in their hundreds of thousands during December.

We now live in a society with a breakdown in the intergenerational solidarity that always sustained the communities in this country. That a Government would take away an economic measure that gives comfort to older people, at a time when people spend extra on their families and themselves, was miserly and unbelievable. No Fianna Fáil leader, such as Lemass or de Valera, would have countenanced such a move during their tenures. It is a measure of how far right this Government has moved in distancing itself from the very people who would ordinarily have supported it.

The philosopher Bertrand Russell stated, "To be happy in this world, especially when youth is past, it is necessary to feel oneself not merely an isolated individual whose day will soon be over, but part of the stream of life flowing on from the first germ to the remote and unknown future". This Government is increasingly isolating our older people, taking measures that are dumping people in nursing homes who cannot get nursing home subvention, putting older people into penury in respect of how they pay for care in their autumn and winter years and now the Government is taking away a measure that gave some small assistance to see them through the winter months.

Those who I represent are not upper middle class people living in urban conurbations. They are living in rural areas, in older housing stock, have modest pensions and must have the fire lighting all day every day to keep the back boiler going to run the radiators to ensure there is heat in the house. By reducing this payment, the Minister is telling us these people can pay for their heating costs but when they go to the community welfare officer to ask for a supplementary payment they will not be given it. They would ordinarily have used the bonus to pay for the extra bag of coal or other such simple measures that sustained them through the hard winter months. I ask the Minister to think of the intergenerational solidarity we always had in this country, the social solidarity to which previous Fianna Fáil Governments adhered, and I ask her to reverse this miserly, mean measure. To introduce it at this time of the year, when it is not so high on the political agenda, is a cynical move. It is symptomatic of the cynical politics that inhabit this country.

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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I thank the Labour Party for sharing time and commend it on tabling this motion, which homes in on one nasty element of the recent emergency bankers budget. I am not surprised it was not until after this debate had commenced that the Government could cobble together an amendment to it. It is worth reading one paragraph of the amendment in which the Government "acknowledges that in the context of very tough decisions having to be made across the whole range of Government expenditure, the provision of €21.3 billion for social welfare services in 2009 – 20% more than the amount spent in 2008 – is a clear demonstration of the Government's commitment to protecting the vulnerable". The focus of Government activity in recent years, certainly since September, has been on saving the banks and pumping taxpayers' money into the banking structure. If the Government were serious about helping the vulnerable, one of its first actions would have been to ensure no more people would become unemployed by introducing policies which would deal with issues such as job retention and creation. It is worth saying again that it is much easier for the Government to step in with measures to prevent job losses and retain jobs rather than having the current scenario of us just drifting along rudderless with no Government policy on job retention and creation.

I wish to cover a number of categories of people - if that is an acceptable term to describe anybody - in this proposal, including pensioners and lone parent families. Ireland has the second highest rate of pensioner poverty in the EU and if there are any further cuts to welfare, elderly people will be plunged into deeper poverty. Nearly nine out of ten older people could be at risk of poverty if welfare supports are cut in next December's budget, according to a warning by an alliance of non-government bodies. Why should we be surprised at that?

I will first consider the pensioners. A great number of pensioners are struggling to make ends meet, although we know there is a percentage on the other side of this who have made reasonable pension provisions and who do not have those concerns. A significant majority of pensioners will suffer greatly because of the withdrawal of the Christmas bonus. The debate on this issue, since its announcement in the emergency bankers' budget a few weeks ago, has revealed people talking about taking Christmas away from pensioners, as well as Christmas presents. The issue is not just about Christmas presents.

This is about pensioners trying to get a few bob together in this bonus to pay the overhang which was discussed just a moment ago by one of my colleagues on the Labour benches. For example, there is an issue regarding fuel. I know many pensioners who have an overhang of a coal or gas bill and they depend at least partly on the Christmas bonus to clear up that loan. In the winter, pensioners are colder and more vulnerable, with some surviving on very little food in order to try to keep themselves warm. This withdrawal of a reasonable contribution to pensioners is mean-spirited in the extreme.

The withdrawal will also lead to greater numbers of people ending up in hospital, leading to costs which are greater than any savings from the withdrawal of the payment in the first instance, even before we speak about additional crowding in hospitals and people spending more time on the infamous trolleys in accident and emergency units. That would be most unfortunate.

It should be acknowledged that the payment could also help pay for a small Christmas present that a grandparent can buy for a grandchild who may have helped out by cutting the lawn over the course of the year, for example. Such a small gesture is worthy of note and I am glad that it has been part of the debate on this issue.

I also wish to speak about the consequences for increasing loneliness because many pensioners will become very isolated as a result of this action. Deputy Burton mentioned people who have significant income and decent pensions, who can choose between Prada handbags. I do not know what such handbags would look like but maybe I am grateful for that. I know that most pensioners' choices are more likely to be between the yellow pack on the supermarket shelf and the ordinary pack. I have no doubt that significant numbers will have no option but to reach for the yellow pack.

We are told the decreasing rate of inflation will be of significant assistance to these pensioners. We all know that in the consumer price index, the biggest move in the measure of inflation has been in mortgage rates. As a significant number of pensioners do not have mortgages, the benefit will not come to them easily. It is unfair to use the inflation or deflation argument to justify this unjustifiable withdrawal of services as it will take a long time for that deflationary move to reach pensioners.

The budget was misleading and the Government amendment mentions the provision of 20% more expenditure for welfare payments. This is a result of more people going on the dole. If the Government had brought forward proper job retention policies, that would not be necessary and we would not have that additional expenditure. It is not an increase in expenditure, as we know.

It is important in this context to discuss the significant shift in wealth in this State that will take place under the proposed national asset management agency, NAMA. This is not about shifting wealth from the wealthy to the poor, quite the opposite - it will be shifted from the poor to the wealthy. It will cover the bankers and speculators as they were caught out, which is grossly unfair. It is some Celtic tiger for pensioners.

Lone parents are more likely than any other social group to be living in poverty. Data from the EU survey on income and living conditions conducted by the Central Statistics Office show that in 2006 alone, 33% of one-parent families were living in consistent poverty compared to 7% of the population as a whole. Among the reasons lone parents are more likely to be poor are lower levels of educational attainment, with 47% of lone parents under 35 only having junior certificate level of education; the poverty trap, which makes it financially difficult to move from welfare to work; and low paying jobs or unemployment. Lone parents who work are more likely to be in low-paying jobs, partly as a result of a lack of qualifications and partly because of the difficulty in accessing affordable child care.

I am sure every Member has experience of lone parent families coming to constituency offices. Last week I dealt with a case where a woman had three children in primary school. After she had paid all the other necessary expenses such as rent and essential bits and pieces for the house, she ended up with €40 per week to feed herself and her three children. That amount of money would probably be spent on a round in the Dáil bar without so much as a thought yet that woman had just that to feed herself and children. There are many other examples of that with which I have no doubt Members would be familiar.

The Minister for Social and Family Affairs has moved to defuse the political time bomb by pledging to pay the social welfare Christmas bonus if there is a "windfall" in the Department's coffers or savings targets are exceeded. Where would that windfall come from? Would it come from bankers or speculators? I think not. The Minister's action was merely to throw a lifeline to the candidates of the Government parties who will go around the streets, roads and lanes of this State over the next few weeks to canvass in both the local government and EU elections. Such candidates can argue that the cut may not happen as the Minister indicated that if there was a windfall the cut would not be effected. It is a poor example.

I wanted to make a couple of other points but it is difficult to cram the issue into such a small time. In all of its statements, the Government has indicated that we must protect the poor and look after those who most need it. Yet most of the cuts and much political direction from the Government goes in the opposite direction. When will this Government stand back and listen to organisations such as CORI in the propositions and suggestions they make? When will this Government listen to those who are advocating for poor people and recognise the folly of its way, particularly regarding the circumstances we are discussing here, the withdrawal of the Christmas bonus? It is wrong and should not happen.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I wish to share time with the Minister of State at the Department of Health and Children, Deputy Moloney.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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That is agreed.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"— acknowledges that in the context of very tough decisions having to be made across the whole range of Government expenditure, the provision of €21.3 billion for social welfare services in 2009 – 20% more than the amount spent in 2008 – is a clear demonstration of the Government's commitment to protecting the vulnerable and providing income support to the increasing numbers of people who are losing their jobs;

— notes that both taxes and borrowing had to be increased in the Budget to pay for rising welfare expenditure in 2009;

— further notes that over the past decade there have been very significant increases in welfare payments with child benefit increasing from €44 to €166 per month; State contributory pension increasing from €113 to more than €230 per week and the weekly rate of jobseeker's allowance being raised from €93 to €204 per week;

— notes that payment of a 100% bonus in 2009 would cost in the region of €223 million;

— acknowledges that in deciding on where to achieve savings in welfare expenditure, there were no easy options and that everything had to be considered – including a cut in the weekly rates of payments to all welfare recipients which the Government avoided;

— notes that the October budget provided for increases of between 3% and 3.8% in the basic payment rates and that the inflation forecast has changed substantially since then, with a 4% drop in the Consumer Price Index now expected in 2009; and

— appreciates that the decision not to pay a Christmas bonus in 2009 will be difficult for people but believes that savings in other areas of welfare expenditure could have caused greater hardship;

acknowledges that the Government will:

— reconsider the payment of the Christmas bonus as soon as we are out of the current economic situation;

— prioritise control activities to reduce the incidences of social welfare fraud to effect savings; and

— continue to publicise the supports that are available through the Money Advice and Budgeting Service and to encourage people to contact them early before their debt problems accumulate.".

In framing the recent budget, the Government was obliged to make a number of difficult decisions. Those decisions were difficult because we were conscious of the fact that in raising taxes or cutting expenditure, we would have an impact on people's lives. Nowhere is this more true than in respect of the social welfare budget. The outcome of the budget has been to increase social welfare expenditure. As a result, the social welfare budget will be €21.3 billion this year. Unfortunately, the need for this increase has come about for the wrong reasons - namely, the rising numbers seeking jobseeker's assistance and jobseeker's benefit. However, provision must be made in respect of these people. Those who have lost their jobs are now the most vulnerable and they need our support.

The figure of €21.3 billion represents an increase of 20% on the allocation for last year. At a time when Exchequer income is decreasing at a drastic rate, it was essential that not only should we try to increase that income but that we should also reduce expenditure. To restore stability to the public finances, this meant we were obliged to do both. As are result of our decision in this regard, expenditure cuts were made across all Departments. However, the Department of Social and Family Affairs largely escaped the brunt of those cuts. That is a sign of the Government's commitment to the most vulnerable.

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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It is a sign of rising unemployment.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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It is also a sign that we must make provision for those people who are becoming dependent on the State.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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Hit the elderly again.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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What the Minister is saying is not true. There have been cuts.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Out of a budget of €21.3 billion, we agreed to savings or cuts of €300 million, which is a very small proportion of the overall budget. Each decision relating to these savings or cuts was extremely difficult.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Minister chose to make the cuts there rather than everywhere. She had other options.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Minister should be allowed to continue.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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It is completely disingenuous to say we could have brought more in with regard to income.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Of course the Government could have done so.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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To restore stability to the public finances, we were obliged to cut expenditure and increase income.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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What about the expenditure-----

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Deputy Shortall-----

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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-----on tax relief for landlords and those with large pensions.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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Hear, hear.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Government ignored that expenditure.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Deputy Shortall and other Members who have already contributed will listen in silence and will allow the Minister to make her contribution.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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It is extremely difficult to listen in silence to what the Minister is saying.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy will have an opportunity to make his contribution in due course.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Leaving aside borrowing, some 60% of the income coming into the Exchequer is being paid out on social welfare. Unfortunately, it was necessary, therefore, to make savings within my Department's budget. A large part of this will come from controlled savings, a matter to which I will return later. Savings will be also made in respect of rent supplement and the reduction in payments to 19 year olds. Account must be also take of the positive aspects involved with encouraging people to return to education, etc.

It is wrong to state that we did not make choices with regard to the social welfare budget. One of the choices with which we were faced was whether to cut all of the payments made to more than 1 million people each week. No one wanted to do so. This was particularly the case because we were conscious of the fact that although there is deflation and although prices are coming down, it is only now we are witnessing decreases in the cost of food and electricity.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister is stretching the truth somewhat.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Prices are not coming down for welfare recipients. What the Minister said is a lie.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Deputy Shortall knows that she cannot make such a charge.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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It is untrue.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister is stretching the truth.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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We are conscious of the fact that even though prices have begun to fall, this has happened in areas where, as yet, there has not been an impact in respect of social welfare recipients. There has been an impact in respect of mortgages and such an impact is now being felt in the areas of food and fuel. For the reason I have outlined, we chose not to reduce payments.

The other reason not to cut regular weekly payments is that far more people receive such payments than receive the Christmas bonus. If we had introduced an across-the-board cut, the payments being made to all those people who lost their jobs since last Christmas would have been reduced. It is difficult enough for people to lose their jobs and to be obliged to accept a payment of €204.30 per week without their having to accept a further reduction in their incomes.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Minister should get off the stage.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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That was one of the choices we faced in the context of achieving the kind of expenditure savings that were required. We chose not to introduce an across-the-board cut.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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The easy option.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Another option - many arguments were put forward by people outside the House in respect of this - would have been to reduce child benefit, particularly because it is a universal payment-----

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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We know all about that, Minister.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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-----and because there are those who receive this benefit but who are not dependent on it.

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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The Government is going to reduce it in December.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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We chose not to reduce child benefit-----

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Yet.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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-----because the Commission on Taxation is examining how child benefit might be brought within the tax code or means tested.

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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The Government is hiding behind the commission.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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The Government did not want to reduce child benefit before the commission makes its determination in this regard.

Carers, who make a valuable contribution to society, engaged in heavy lobbying to ensure none of the benefits they receive - which amount to approximately €640 million per year - would be reduced. We chose not to cut these benefits.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That is because these people provide a service to the State.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Minister should be allowed to make her contribution.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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It is disingenuous for people to say that savings should have been made from within other Departments. The savings had to be found within my Department's budget-----

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Why was that the case?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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-----but we chose not to make the cuts to which I refer because the impact would have been felt by far more people if we had done so.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Minister is misleading the House.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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We were faced with the dilemma of identifying areas where savings of €300 million might be made. No one has referred to the fact that the Christmas bonus for 2008 cost the taxpayer €223 million. We would have been able to identify savings of €20 million or €50 million elsewhere but not savings of €223 million.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The loss of that bonus will have a direct impact on the recipients.

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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PPARS was more expensive.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I am aware that the bonus is only worth a couple of hundred euro to recipients.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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And its loss will have a major impact on them at Christmas.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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The Minister's attitude is typically dismissive.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I know how hard it will be for these people. This was probably the most difficult decision the Government was obliged to make in framing the supplementary budget. It is correct to state that we would not have made this decision next November. At that stage, people would have had a reasonable expectation that they would receive the money in December and it would have been completely unfair to dash their hopes.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Government was flying a kite.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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We were extremely fortunate that, despite the fact that money was tight, we were able to provide a 100% bonus last Christmas. I accept that the removal of the bonus will make matters difficult for those who require extra money at Christmas. At least in making the decision now, however, we are giving them advance notice.

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Of what the Government is going to save.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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The saving in the context of the Department's budget will be only €156 million. This is due to the fact that provision is only ever made for 70% of the overall figure. We always seek the remaining 30% in September or October. As already stated, however, the overall cost of the bonus last year was €223 million. If I could find that amount anywhere else, I would do so. However, I do not want to raise people's expectations at this point.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Why do the savings have to come from within the Department's budget?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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We have already set ourselves an increased target on what we are going to save in respect of control and fraud measures. Deputies will be well aware that I have taken this issue extremely seriously.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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We are not so aware.

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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The Minister's Department did not achieve its target last year.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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We are setting about targeting an additional €85 million this year. This is over and above the increase we had already anticipated.

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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The target was not achieve last year.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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We had set a target of more than €500 million for this year and additional money will now be coming in.

There are different ways in which one can tackle control. The first of these is to ensure that a person who is not qualified for payment does not receive such payment.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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If it takes two months to issue payments in the first instance, then something is wrong.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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Or three months.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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On what are people supposed to live in the meantime?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Moving the inspectors into the area of processing claims ensured the processing times were reduced and that people received their payments in time for Christmas. It also ensured there was due diligence in processing so that the wrong people did not receive a payment.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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There is no danger of that happening.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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We saved almost €30 million more last year than in the previous year but we are setting ourselves an even higher target this year.

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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The Minister did not reach the higher target.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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There is no way, despite all our best efforts, that we will get another €223 million over and above the €580 million. I said on the day of the budget that if there was any sort of windfall, this would be the one area the Government would like to reinstate by Christmas but I do not want to raise expectations. We will continue with anti-fraud measures and controls with our normal four-pronged attack: prevention at the early stages, detection through review of claims in payment, deterrence of fraud and pursuit of those who have taken money they are not entitled to, either in error or deliberately, with prosecution where necessary.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Another punishment beating.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Some of the initiatives introduced in the past year include the scheme established in July where a person must personally turn up in the post office to get the payment instead of receiving the money by electronic transfer. That measure was a success. Another was the certification of child benefit because we are all aware of people who claim child benefit after leaving the country. There were working here legitimately but they have now left the country and we want to be sure that if they have gone, the money has not gone with them.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Government caused that problem.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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The bankers could be included in that category.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Significant, high profile, successful work has been done to prevent cross-Border fraud, with multi-agency approaches that stopped people from coming across the Border.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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How many?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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The whole country knows at this stage that we succeeded in finding young people under the age of 25 who could get four times more in the South than in the North.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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A handful of people.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Why was that? Because the Government was always boasting about how much it would give away.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Deputy Durkan must allow the Minister to make her contribution without interruption. Members will be allowed to make their contributions afterwards.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I apologise but I get upset.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Perhaps the Deputy could find something useful to do elsewhere instead of continuing to disrupt the debate.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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It also had a strong deterrent effect because people knew they would be caught. They were caught and stopped. The increased controls were a success.

Recently photo identification has been asked of those who are collecting to ensure the right person is getting the payment. Social welfare inspectors are working in the Garda National Immigration Bureau in the airports to check people coming through. Those measures are over and above the regular reviews of control and fraud. It is crucial we continue to make savings in this area. We have set ourselves a target of more than €580 million in savings to ensure we clamp down on fraudulent claims. There are 600 staff in the Department working on control activities at local, regional and national levels. Each of them, within their field of responsibility, is doing important work and criminal prosecutions are carried out. By the end of last year 357 cases of social welfare fraud were forwarded to the Chief State Solicitor's office. A further 328 cases were finalised in court last year.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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There were no pensioners among them.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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The message has clearly been sent out that we clamp down on fraud and we make savings. We will continue to prioritise control savings within the Department so we do not have to make the type of difficult decisions we had to make in the last budget.

The dependence of people on social welfare payments was mentioned and I accept that. There are people who are losing their jobs, lone parents, carers, pensioners or any of the other 1.2 million who receive a social welfare payment. They have become dependent on those payments but it is opportune to note those payments have increased significantly over recent years. I am not saying any of us would like to be living on them - far from it - but they are more generous payments than those in Britain or the rest of the EU. In recent years child benefit has increased from €44 to €166 per month, the State contributory pension has grown from €113 a week to €230 a week and the weekly rate of jobseeker's allowance has risen from €93 to €204 per week. Our commitment has been that in times when there has been sufficient funding, we have put it into social welfare to support the most vulnerable.

Those are just the basic payments. The secondary payments, such as household benefit, rent supplement and mortgage interest supplement, free travel and other schemes which we never hear about, cost huge sums as well. People say the Christmas bonus withdrawal will put pressure on the elderly when they are paying their heating bills but that is why in the last budget we increased the fuel allowance and increased the number of weeks for which it is payable. Fortunately the price of fuel is falling substantially. It is interesting that a third of all those who receive household benefit do not use all the electricity units.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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They are afraid to use them.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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They can use that for extra heating in December, January and February - they are free. The household budget package amounts to €540 a year for those people. It is in place for them but they are not using it. Perhaps I can encourage people not to be afraid to use what they have.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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They are trying to be responsible. They think they are doing the right thing.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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The motion refers to the possibility that people might turn to moneylenders at Christmas. There is not much evidence that there is a greater incidence of people turning to moneylenders, although I accept there is a danger it will happen at any time when people are vulnerable. That is why the money advice and budgeting service, MABS, exists to give advice to people about budgeting. More than 5,000 people have contacted MABS in person in the first three months of the year and more than 6,000 people have contacted the telephone helpline. It is interesting that 90% of those who contact the helpline can now have their issue dealt with over the phone.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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They get their money over the phone?

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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So are we to forget about the remaining 10%?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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The service is of assistance to people. If people have a credit problem with a utility provider, it can be dealt with. People are coming around to an appointment system so there is no reason for people to feel more vulnerable. These are difficult decisions.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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The Minister is very brave. Very brave.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I would much prefer to be a Minister for Social and Family Affairs who could give the sort of increases we saw over recent years. It was a lovely position to be in during the budget before Christmas to be able to give such increases, although they were less than in previous years. They were still substantial increases that people did not expect. We certainly did not want to reduce those for them now.

The choices before us were far more difficult. Many more people would have been affected had we cut rates. Savings had to be effected in the Department.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Why?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Because expenditure must be reduced. We certainly must ask whether it is sustainable that €6 of every €10 that comes into the Exchequer goes back out in social welfare payments.

8:00 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Government underestimated how much it would need.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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If the Government did something about jobs, that would not be the case.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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That is why our priority is to get people back to work. Our priority is to get people into training and education so they can be prepared for work. Getting them back into work is the best way of reducing the social welfare budget.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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What is the Minister doing about it?

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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She is talking about it.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Minister is doing nothing.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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In the meantime, difficult choices had to be made.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Minister is jeopardising more jobs.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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There is no doubt that we regret having to make these difficult decisions. However, as soon as there is a turn in the economy, this Government will reconsider the payment of the Christmas bonus.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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The Government will not be able to do that. It will not be there.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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In the meanwhile, we will continue to try to effect savings through social welfare controls-----

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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On the backs of the weakest.

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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-----against fraud. We will continue to try to protect and defend the people who have come to depend on their regular payments, not just the bonus payment at Christmas.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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I pay tribute to the Minister who, despite having to introduce this cut, has come to the House to explain it in great detail. Nobody wishes to propose or support cuts in social welfare but this is a time when, unfortunately, all Departments are expected to try to deal with the current state of the public finances. The Department of Social and Family Affairs is not safe from the cut as well.

I accept the point about the importance of the Christmas bonus. However, it should be put in context. I have difficulty accepting the tag of being mean-spirited when I consider the total amount of funding for the Department of Social and Family Affairs and the Department's expenditure. I hope people will understand that while this is a serious measure, the Minister has suggested that it is not a measure the Government proposes to keep into the future. The commitment has been given that as soon as the public finances are restored this cut will be dealt with.

The choice for the Minister and the Government was to cut rates across the board.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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No, it was not.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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It was.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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That is untrue. You are pedalling lies.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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I am not pedalling anything. I am making the clear point-----

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I must intervene. The Deputy knows she cannot accuse a Member of lying. I ask her to withdraw it.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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I am saying they are pedalling a lie.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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I do not mind what description the Deputy uses. It is not true anyway.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy cannot accuse the Minister of State of pedalling a lie.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Okay. He is pedalling an untruth. It is not true.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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Regardless of whether we are accused of misleading or pedalling something, the reality is that the difficulty for the Minister was a choice of cutting rates across the board or dealing with the issue through a temporary measure-----

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Hobson's choice.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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-----which will be given recognition when matters improve.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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What about the big pension funds that are untouched?

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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Rather than talk about mean-spiritedness, it is important to recognise what has been achieved over the years. In the good times, people accepted the need to ensure we could support people in need of social welfare. There is also the context of the overall reduction in expenditure of €153 million in a total budget of €21.3 billion. People who wish to be fair-minded about this recognise the huge demands that exist on the Department of Social and Family Affairs. Rather than cut the rates, the fairest way of dealing with it was to specifically examine an area-----

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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Hit the vulnerable - the old and the needy.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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No, it was not to hit the vulnerable. Unfortunately, in a recession many people are vulnerable, even those who have not lost their jobs.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Some people are untouchable.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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It is a matter of recognising the needs. Every Deputy who conducts a clinic will hear people, not just in the clinic but on the street, discuss the issue of how many Ministers over the years have not dealt with the areas where savings can be effected. I presume that the savings effected through the clampdown on social welfare fraud and a stronger inspectorate will go towards removing the cuts that unfortunately had to be made this year.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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There will not be much from that.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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For years Members of the House have talked about the huge waste in the social welfare system. The Minister is to be commended for recognising that it is not just a matter of cutting and saving but also a matter of ensuring the budget of the Department is properly managed and used. I believe this was a brave attempt on the part of the Minister to recognise the choices before her.

I do not wish to use the cliche "tough decisions" but-----

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Thank God for that.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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-----there should be a sense of reality. There is a recession facing this country the like of which we have not seen in 40 or 50 years. The sad reality is that the response to it requires tough measures, coupled with tough decisions. It should be recalled that last October this House welcomed an across-the-board increase of 3.5% in social welfare payments. Why would a political party or Government go out of its way to become unpopular? They do not do that. The Government has consistently increased social welfare over the years, particularly last October by 3.5%. The difficulty now is that the revenue-----

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The time has come to take it back.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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-----this Government has supported and generated is unfortunately no longer available, so the cut was made.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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It hits the pensioners when it is in trouble.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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No. I am saying that across all the Departments expenditure choices were made.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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Easy options.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That was the choice.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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No, I would not say easy options.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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The Government made the choices.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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In my opinion, many people in receipt of social welfare benefit, be it supplementary welfare, disability benefit and so forth, would also recognise that the maintenance of their benefits is of the utmost importance to continue their way of living. The fact that the Minister did not even consider a cut across the rates in itself demonstrates that the least possible pain has been inflicted in this area.

It is worth pointing out that €21.3 billion is provided for social welfare services in 2009, which is 20% more than the amount spent in 2008, yet there is little talk about it. This shows a clear commitment to protecting the vulnerable and providing income support for the increasing number of people who are losing their jobs. For years we implored various Ministers to increase carer's allowance, pensions and so forth. That has been done, not just in good times but also in lean times. This is the first time a Government has been confronted with the need to reduce the social welfare budget.

It should be noted that over the past decade there have been significant increases in welfare benefits. Child benefit has increased from €44 to €166 per month. I am amazed that even when there are historic increases in welfare payments, there is little recognition of it or clamour about it. The State contributory pension has increased from €113 to more than €230 per week. Fair-minded people recognise that the Government has at all times been consistent and insistent on ensuring that the most vulnerable are protected. A very important part of the budgetary strategy has been the increase in the rate of jobseeker's allowance from €93 to approximately €200 per week.

Both taxes and borrowing had to be increased in the budget to pay for rising welfare expenditure. The figures quoted by the Minister confirm the fact that the Government recognises the need always to support the welfare budget through the increases it has made. We regret the fact that social welfare cuts had to be made but it is simply not possible to avoid them. Even though Members on the Opposition benches have said the opposite, I have not heard any suggestion that we could have secured savings of €300 million anywhere else.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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The Minister has not been at people's doors lately.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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I have been at people's doors-----

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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He did not stay too long at them.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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I have been at quite a lot of doors. I have also been able to explain to people-----

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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The Minister did not stay long.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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I often find that the electorate is far more willing to listen than the Opposition. Clearly, when I have time I explain to the electorate the consistent increases in benefits over the years. I recall a time when one could only dream of the old age pension passing £100 per week. That level arrived and was passed. People accepted that. I take particular delight in explaining to people the huge commitment of this Government over the years to social welfare. I put that in the context of explaining the measure that had to be taken this year. That is not to suggest it will be an ongoing measure. It is a matter of waiting until the budget is rebalanced but no further than that. The saving grace, when I am on people's doorsteps, is being able to point out that-----

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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There is worse to come.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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-----regardless of what happens in the recession, there has been no cut across the board. I feel people accept that in the spirit in which it is given and they are happy that the payments are protected. It is worth making the point-----

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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That is not the view in my constituency.

Photo of John O'DonoghueJohn O'Donoghue (Kerry South, Ceann Comhairle)
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Whatever about that, the Minister of State's time has now expired.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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That is most regrettable as I had so many other good things to say.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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I suggest the Government's time has expired.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Literally.

Photo of John MoloneyJohn Moloney (Laois-Offaly, Fianna Fail)
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I do not use the website but I will put the remainder of my contribution on the website for Members to read what has been achieved over the years.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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Is that on the Minister of State's own website?

Photo of John O'DonoghueJohn O'Donoghue (Kerry South, Ceann Comhairle)
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That is very good form on the Minister of State's part.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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I wish to share my time with Deputies Burke, Durkan, Creed, O'Donnell and Enright.

Photo of John O'DonoghueJohn O'Donoghue (Kerry South, Ceann Comhairle)
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Is that agreed? Agreed.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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I am pleased to support the Labour Party's Private Members' motion. I commend the Labour Party on tabling the motion as it reflects the anger felt by people in the community. The eyes of the nation were on Leinster House on the day the budget was announced and people got a big fright when we reached the social welfare section and it was announced that the Christmas bonus was being taken away. That will go down in history in the same way as Ernest Blythe's one shilling reduction in the pension in 1924. How many times has that been thrown across the floor at this side of the House? What the Government has done is equivalent to that.

When one puts it in context, it is most unfair of the Government to take away the Christmas bonus from the unemployed and old age pensioners who have worked extremely hard. At that time of year unemployed persons with young families plan to give their children the benefits of Christmas and to buy extra things for them. I condemn the Government's action as unfair, unjust, cowardly and unkind.

How can the Government preside over that mean action at a time when the HSE has an allocation of €1.4 million in bonus payments for executives and others in the health service who are running a deplorable service? It is not possible for anybody on the Government side of the House to justify the cut because it is unfair. The Government could have addressed other issues or sought reform in other areas. The public service is crying out for reform yet there was nothing about that in the budget. Instead, the Government resorted to the pensioners and those who could ill afford more cuts.

We should encourage those on the back to work and the back to education allowances who have travel and other expenses at a time when the economy is going through such difficulty. We need people to access retraining and education. We should encourage those people who have been forced onto the dole queues by the high cost economy this has proven to be. I live in a constituency where jobs have been lost in three different areas in recent months. People are being encouraged to go back to education or to retrain and it is of the utmost importance to encourage them. It is unfair to cut a bonus at Christmas.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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I am pleased to have an opportunity to support the Labour Party motion before the House. When one considers the senselessness and severity of what the Minister has done in the case of the Christmas bonus it suggests that the Government does not realise the implication of the measure.

The Minister, Deputy Hanafin, stated on 27 October 2008:

Even with the challenging budgetary situation, the payment of this additional money to social welfare customers is a clear sign that helping those most in need of support remains the key priority for the Government. We all recognise that there are significant pressures for families and individuals around Christmas time, and this funding will go some way towards meeting their needs.

Why is that no longer a priority?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Because I do not have €223 million.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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Fair enough. The Minister is putting it in context now. She is admitting that the elderly and those in need will pay for her mistakes.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That is correct, they have to pay.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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If it was a priority for the Government last October, why is it a necessity to impose cuts on those vulnerable people?

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Because we had the money then.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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In 1955 a predecessor of the Minister, the late Minister, Mr. Moran, was the first to introduce a double payment at Christmas time, albeit for a selective group. If the Minister can tell social welfare recipients, especially old age pensioners, that times are worse now than in 1955 then the Government has failed to tell the public how deep is the recession.

The Minister for Finance has made many changes to the budget to date and he blustered in regard to some of the mistakes he made but changes have taken place. There is room for change. There are suggestions in the motion as to where the Minister can find the money she needs. Many other suggestions were made by other Opposition Members about where the funding could be found, but nobody had anticipated that the Government would again seek to make old age pensioners a soft target for further cuts given that they had already been hit in the October budget.

Everybody in the House, including the Minister, has probably received a letter from the Irish Senior Citizens Parliament, the voice of the elderly. It has been forced to put pen to paper in disbelief to express its concerns. The Minister more or less made the excuse to the House tonight that some elderly people were so well off that they did not use the free fuel allowances allocated to them. It is scraping the bottom of the barrel to use that as an excuse. It is unbelievable that a Minister would make such a hurtful assertion. I hope the Minister will change her mind on this measure before the Bill is implemented. What is hurtful in April will be much more so next November prior to Christmas.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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In the short few minutes remaining I wish to state that I am appalled that we have reached this juncture, coming as it does after the so-called Celtic tiger about which we boasted in this country. Inside and outside this House, nationally and internationally, we have heard the mantra in recent years that we were the richest country in the world, the most powerful people in the world and people expected a great deal of us. We would have expected a lot more from the Government in office than a punishment beating for the recipients of social welfare. Bearing in mind that the Christmas bonus payment is for long-term social welfare recipients only, one should note that the number of people likely to be affected by the proposal is much greater than has been indicated to the House. The pain and punishment likely to be inflicted on those who are vulnerable is considerable. They are dependent on a payment and have budgeted for the year on the basis of receiving it but had no knowledge of what was coming down the tracks.

Worst of all, the proposal is tempered by the threat by the Government that there is worse to come and that tough decisions must be made. The theory is that if one experiences enough pain, it will solve the problem. I have bad news for the Minister in this regard. She knows the proposal in question is doing nothing for the economy, the recipients of social welfare or those who recently applied for social welfare payments. The payment cut has only one objective; it is to compensate for the recalcitrance in recent years of those who did not do the job they were given to do or did not run the economy properly. Like the Sheriff of Nottingham, the Government is now roaming the land punishing people at will for having the misfortune of having voted for it.

The saddest point of all is that, unfortunately, people who are vulnerable, dependent on the State and watching the postman to ensure events occur when expected are now being told by the Government that the cut to the bonus was better than making a cut across the board. They are told it is a punishment to be meted out to them and that the medicine is good for them. They are told they will enjoy it later on because the sun may shine at some stage in the future, at which time the Government may be able to hand them back some of the money.

This is a sad time and I do not know if the Minister is really au fait with what is happening. The real reason for the cuts is that the budget was short changed. There was an insufficient Estimate to meet the requirements of the Department of Social and Family Affairs at the beginning of the year. The €223 million the Minister will save will probably help to pay for the rent of the storage space for the e-voting technology. It will go towards rent that, in some cases, will have to be paid for the next 20 years unless the machines are melted down or sold to another republic.

Sadly, as I have mentioned before in the House, the application of the habitual residency clause at present is appalling. If a founding member of the main Government party were alive in this country today, having returned in the past two years, he would not qualify for a social welfare payment. This is a sad reflection on our society. The provision was made for one purpose, to which of course the Government will not admit.

Consider the position of many people who were self-employed and self-sufficient but who now find themselves unemployed and dependent on social welfare. It is humiliating and sad enough to have to line up and apply for social welfare and supplementary welfare but it is really awful when those doing so are led to believe they qualify for nothing. This is not true. They are entitled to a payment, be it a sickness allowance payment or unemployment assistance. These are means-tested payments to which they are entitled and there should be no obstacles to their receiving them provided they meet the requirements.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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Politics is about choices and it is undoubtedly true that the choices made not by the Minister opposite, Deputy Hanafin, but by the previous Government, were very significant contributors to the financial predicament in which the present Government now finds itself. It is abundantly clear that the choices made today are the mirror image of those that led us into this difficulty. The current Taoiseach, as Minister for Finance, was a cheerleader for the construction industry. Tax incentives were created which threw petrol on a fire that was already burning out of control. This ethos was best summarised by former Minister for the Environment and Local Government, Deputy Dempsey, who said in respect of the e-voting machines that €50 million was but small change.

When the Minister of Social and Family Affairs stands up without a script, there is always a danger the mask will slip. She stated in respect of the bonus that it is only a couple of hundred euro to the recipients. I almost expected the Marie Antoinette of Cabinet to say, "Let them eat cake." The couple of hundred euro represents Christmas for the recipients. The chauffeur-driven Minister in her ivory tower operates mostly from a script but unfortunately walked into the mire this evening without one, thus exposing the real philosophy underlying the Government's approach. It is abundantly clear that the Government has nailed its colours to the mast. When the proverbial hits the fan, the Government stands four-square behind all those who led us into this debacle, the banks and the developers-----

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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It must be considered in the context of-----

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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It plans for the recovery of the economy at the expense of those who contributed by their sweat and tears to build it.

I want to localise the issues and refer to my constituency. In the Macroom social welfare office, 664 people were signing on in March 2008. There are now 1,473 doing so, representing an increase of 121%. In the Newmarket office, where 660 people were signing on in March 2008, there are now 1,844 doing so, representing an increase of 179%. Many of these people are forced to experience the indignity of standing in queues in rain and inclement weather and are being forced to wait many weeks before obtaining their entitlements. Included among these are many from the agricultural community who, by virtue of the collapse in the agriculture sector, now qualify for a farm assist payment. Why does the Government fail to recognise the position on the €230 million, which I accept is a lot of money in difficult times? It must not be spirited out of the country to offshore bank accounts but spent on regenerating local economies. The problem with many of the analyses carried out by the Government and outside commentators on the economic difficulties is that they all focus on the macro level. We need to focus on local economies and communities. The money in question would drive these. I wish the Marie Antoinette of Cabinet would take into account these matters.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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When the budget was delivered by the Minister for Finance, the abolition of the Christmas bonus stood out clearly. Did the Government consult its backbenchers on this? It is effectively taking what could amount to €200 from social welfare recipients. The Minster for Social and Family Affairs is focusing on soft targets. Did she make the decision on the bonus herself or was it made collectively by the Cabinet? When she was considering savings with her officials, did she decide to opt to abolish the Christmas bonus?

The cut affects the most vulnerable, including those in receipt of the disability allowance, jobseeker's allowance, deserted wives' benefit, carer's allowance and the lone-parent allowance. The Minister should consider what will happen to them at Christmas. In my constituency of Limerick East, the cut will affect the most vulnerable. In many cases, they are living in sub-standard accommodation and paying considerable electricity and fuel bills over the winter months just to keep warm. The Christmas bonus contributed towards these bills. The money is not saved by the recipients but spent on necessities, including food, clothing, fuel and children's Christmas presents. I have racked my brain and cannot understand why the Minister considered the cut to be legitimate. She should think about people's needs in the approach to Christmas. The bonus represents a considerable amount of money to the recipients.

For the sake of €156 million - the Minister stated she did not have €230 million-----

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Two hundred and twenty-three million euro.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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The Minister is hitting a growing group. People who are currently on jobseeker's benefit will be going on to jobseeker's allowance by Christmas. People who will have been drawing on their PRSI benefits will be going on to long-term unemployment. Consider it in the overall context of what we are putting into the banks. We already have put €7 billion into the two main banks and we are looking at a potential further €1.5 billion. We are looking at coming up with funding in all of these areas.

This is another defining moment. Who are we elected to represent? We are elected to ensure the economy works well and to look after the most vulnerable. In one fell swoop the Minister has defined what this Government is about. It is about the quick fix. They are so long in Government and so far removed from what is happening on the ground that they do not understand the impact, or if they do, it is extremely callous in terms of the effect on ordinary people in their daily lives.

In the budget debate I said to the Taoiseach that the Government will have to reverse this decision. I wait to see how the Government's backbenchers will vote on this tomorrow. They will probably be fully aware of the impact of this on the lives of ordinary people, on the lone parent who is trying to buy toys for her children at Christmas and on the elderly person living in a damp drab apartment in terms of heating bills. I hope this will be reversed and I expect it will have to be.