Tuesday, 7 June 2011
Social Welfare and Pensions Bill 2011: Second Stage
I move: "That the Bill be now read a Second Time."
Reforming the social welfare system so that expenditure in social welfare is targeted to those who are most in need and to those who have contributed to the system is one of the key challenges facing this country. Maintaining citizens and taxpayers confidence in the fairness and effectiveness of the system is vital. Social welfare is a social contract between the citizen and the State. People contribute to the social welfare system during their working lives. They are supported by the State when younger and in school and education. They are supported again when older and retired or throughout their working life if they have a specific disability or need.
For those who are unemployed, social welfare should be, in the popular phrase, "a hand-up, not simply a hand-out". It is important that as a society we do not accept a situation where a young person in their teens or 20s drifts on to social welfare and a year becomes two years and then a decade or more. As Minister I want to emphasise the value of work and the value of opportunity. In every society being financially independent through employment is critically important for adults, particularly for young adults.
That is why, as Minister, I am today introducing a national internship scheme which offers qualifying people the opportunity to get valuable work experience for six to nine months and break the catch-22, where people who have found themselves surprisingly unemployed as a result of the financial crash and the collapse of the construction sector cannot get a job because they have no experience and cannot get experience because they cannot get a job. We have to reform the system so that work does indeed pay and that is why today's Bill provides for the restoration of the minimum wage by €1 per hour from 1 July.
The purpose of the Social Welfare and Pensions Bill 2011 is to provide for changes to the social welfare code, to the Pensions Act and to a number of other enactments. The measures contained in this Bill can be grouped into four broad categories: changes to give effect to three of the measures announced in the jobs initiative; a phased increase in the State pension age to 68 years by 2028, in line with the national pensions framework; implementation of Article 17 of Directive 2003/41/EC on the Activities and Supervision of Institutions for Occupational Retirement Provision; and a number of other changes to the social welfare code and to the Comhairle Act 2000.
The Government places significant importance on building an environment for the creation and retention of sustainable jobs. Keeping people in work as well getting people into work through positive activation measures is essential. In last month's jobs initiative we took the first steps towards enhancing the functioning of the labour market to better facilitate the return to work of those who are currently unemployed.
This Bill gives effect to three of these measures. First, we are restoring the national minimum wage to its previous level of €8.65 an hour from 1 July. Second, we are halving the lower rate of employer's PRSI contribution from 8.5% to 4.25% from 2 July this year until the end of 2013.
For people to stay in work there must be an incentive to do so in the form of adequate pay. Low-paid workers are most at risk of becoming unemployed and falling into poverty. The restoration of the national minimum wage is a pledge made by the Labour Party during our election campaign and one I am pleased to be able to honour. The Social Welfare and Pensions Bill provides for the necessary legislative changes to the National Minimum Wage Act so as to increase the minimum hourly rate by €1. This will increase the minimum wage from €7.65 to €8.65 an hour and constitutes a full reversal of the 2010 cut to the national minimum wage by the previous Government of Fianna Fáil and the Green Party.
Reducing the rate of the minimum wage was a cut that had the most impact on low paid workers, specifically women and young people. It imposed hardship on households at greatest risk of poverty who could least afford it. As a result of the reversal of the €1 per hour cut, workers on the minimum wage stand to gain more than €40 a week. This makes employment more attractive to people claiming jobseeker's allowance and provides a greater incentive to find work. Section 22 provides for this change which will come into effect from 1 July 2011.
The Government is conscious of the need to regain and enhance competitiveness within the economy if we are to be able to begin to create the levels of employment required to meet the challenges posed by our very high level of unemployment. With this aim in mind, we have indicated that any adverse effects on employment which may arise through the restoration of the national minimum wage to its previous level will be mitigated through targeted reductions in the level of PRSI contributions. As a consequence, the jobs initiative announced the halving of the lower 8.5% rate of employer PRSI contribution until the end of 2013 on jobs that pay up to €356 per week. This measure, which is in line with the commitment given in the programme for Government, is being provided for in section 3 and will take effect from the start of July. Section 23 also provides for a related halving of the national training fund levy to give a new lower employer PRSI contribution rate of 4.25%. It should also be noted that the employer PRSI exemption scheme will remain in place until the end of this year for businesses that take on workers under the scheme.
The programme for Government provides for the establishment of a new national employment and entitlements service under the management of my Department, with the objective of integrating into a single service the employment support services currently being provided by my Department and FÁS. The integration of employment services and related benefit payment services within the Department of Social Protection will provide a one-stop shop for people wishing to establish their benefit entitlements, seek employment and obtain advice about their training and work experience options. A key objective of the new service is to offer users a high level of personalised employment support and prioritise the provision of more intensive support for those most at risk of long-term unemployment. It will mean that the day a person signs on for a social welfare payment will be the day on which he or she starts on the road to find options and opportunities to return to work or enter training or education. This is critical to the reform of the system.
A number of pilot projects have begun to develop a case management approach to identify those most at risk of falling into long-term unemployment and provide appropriately tailored responses to their needs. These projects will be completed and evaluated in the coming months, after which approaches will be developed for their roll-out nationwide as part of the national employment and entitlements service.
To help break the cycle of jobseekers being unable to obtain a job without suitable experience or gain the necessary experience to obtain a job, the Government is introducing a new national internship scheme. The scheme, which will start in July, will provide up to 5,000 work experience places for jobseekers in the private, public, community and voluntary sectors. Internships will range from six to nine months and during this time participants will receive a top-up allowance of €50 per week in addition to their existing social welfare entitlement. The national internship scheme will apply to people entering the labour market after education or training and unemployed workers whose existing skills are no longer in demand.
Providing pathways to employment or re-employment is vital. The national internship scheme will help young people to get the essential first step on the employment ladder and allow them to build a relationship with prospective employers. From the perspective of employers, the scheme allows them an opportunity to train and develop potential employees at low cost and bring in new skills to enhance their workforce. To facilitate the introduction of the national internship scheme, the Social Welfare and Pensions Bill provides for a number of amendments to social welfare and employment legislation. It also extends to the existing stock of social welfare recipients the current requirements for new claimants to provide additional information that would be useful for profiling purposes to support people to return to work, education and training. It is planned to implement enhanced activation arrangements based on a profiling system developed in conjunction with the Economic and Social Research Institute, ESRI, which will facilitate early targeted interventions for those who need them most, resulting in better outcomes and potential programme savings.
I am introducing a number of amendments to both the State and occupational pension provisions in the Bill, the most significant of which is the phased increase in State pension age to 68 years. The challenges facing the Irish pension system are significant. The population share of those aged 65 years and over is expected to more than double by 2050, from 11% to 26%. Thankfully, people are living longer and healthier lives, with average life expectancy set to rise even further to 88 years for women and, for some unknown reason, only 83 years for men. In contrast, the share of the working age population is projected to decline gradually from 68% to 58%. There are currently six workers for every pensioner and this ratio is expected to decrease to less than 2:1 by mid-century. The task of financing increasing pension expenditure will, therefore, fall to a diminishing share of the population who are at work.
Spending on public pensions, that is, social welfare pensions and public service occupational pensions, is projected to increase from approximately 5.5% of GDP in 2008 to almost 15% by 2050. Growing numbers of people want to work or may need to work beyond State pension age. Increasing the State pension age is one of the ways in which we can sustain the pensions system, maintain the value of the State pension and support people to remain in the workforce. The approach I am legislating for today is for the gradual increase of State pension age to 68 years. This will begin in 2014 with the standardisation of State pension age at 66 years. State pension age will be increased to 67 years in 2021 and to 68 years in 2028. It is worth noting that, until the early 1970s, the qualifying age for the State pension was 70 years.
The standardisation of State pension age at 66 in 2014 and the abolition of State pension transition also removes the retirement condition associated with the State pension transition, which acts as an incentive to leave the workforce and has been widely criticised as a barrier to older people remaining in employment. There is no retirement condition attached to the contributory State pension, which is currently payable from age 66.
By gradually increasing the qualifying age for State pension, people will be further encouraged to remain in employment beyond 65 years of age. The numbers currently at work drop dramatically at 65 years of age. The Quarterly National Household Survey showed that 77.2% of people aged 45-54 years were at work. This drops to 64.3% for 55-64 year-olds and to just 8.7% for people aged 65 years or older.
For the future, arrangements are being examined which would enable people to postpone receipt of a State pension and receive an actuarially increased pension at a later date. In addition, changes are also being considered which would allow people with a shortfall in their PRSI contribution record at pension age to continue to make contributions beyond State pension age, if they continue in employment or self-employment.
The continued participation of older people in the labour market must be encouraged and facilitated to meet the challenge of an ageing society. Employees and employers need to be persuaded to change their attitudes to working longer. In the workplace, employers should try to retain older employees and create working conditions which make working longer both attractive and possible for the older worker. Where this is not possible and people leave paid employment before State pension age, they may be entitled to apply for another social welfare payment until they become eligible for a State pension. Opportunities for older people to participate in education, employment and other aspects of economic and social life must be maximised.
Article 17 of the IORPS directive is designed to ensure a level regulatory playing field between insurance companies and pension schemes, referred to in the directive as institutions for occupational retirement provision, which offer similar pension products. Insurance companies that offer pension products which underwrite death or disability benefits or which provide guaranteed benefits, are required under their regulatory framework to maintain additional solvency margins. Such additional solvency requirements do not currently apply to institutions for occupational retirement pension provision offering similar products. The purpose of Article 17 of the IORPS directive is to ensure that institutions for occupational retirement provision are required to meet the same additional solvency margins as insurance companies offering the same products.
The Bill contains a number of other changes to the Social Welfare Acts and to other enactments, some of which are simply clarifying existing legislative provisions. I would now like to outline the main changes involved. The occupational injury benefit scheme provides for a range of payments for people who are injured at work or who contract an occupational disease. Among the benefits available are pensions for the surviving dependants of a person who dies as a result of such an accident or disease, including pensions for surviving widows, widowers and civil partners, as well as for surviving dependent parents. However, with the development of the social welfare system over the years, the dependent parent's pension scheme has effectively become obsolete. There are now only three people receiving this pension, with no new applications having been received since 1987. In the circumstances, section 5 discontinues the dependent parent's pension scheme for new applicants. Existing recipients will continue to be paid for the duration of their claims.
Sections 6 and 7 provide for the necessary amendments for a phased increase in the State pension age up to 68 years by 2028, in line with the national pensions framework. This involves the discontinuance of the State pension transition, which is paid at 65 years subject to a retirement condition, from 1 January 2014. The State pension age will be increased from 66 years to 67 years from 1 January 2021 and it will be further increased to 68 years from 1 January 2028. The legislative changes being included in sections 6 and 7 also fulfil one of the commitments in the EU-IMF programme of financial support for Ireland that the previous Government agreed with the IMF.
Section 9 makes a number of amendments to the one-parent family payment to clarify the operation of the revised qualifying criteria for that payment following the change in the conditions to restrict the payment to families where the youngest child is under 14 years of age. The changes in section 9 ensure that payment of the one-parent family payment will continue up to 16 years where the domiciliary care allowance is being paid in respect of the youngest child. They also ensure that the general qualification criteria will apply to cases where one-parent family payment is retained for limited periods under transitional measures and in the case of recent bereavements.
Section 11 amends certain means assessment provisions as a consequence of the abolition of the income levy and the health contribution. In addition, the provisions of the family income supplement scheme, which is calculated by reference to the net income of the family, are being amended to include the universal social charge in the list of deductions when determining the net income of the family.
Section 14 clarifies the provisions relating to the allocation of personal public service numbers so as to allow parents and guardians to apply for PPS numbers for children under 18 years and to allow personal representatives to apply for PPS numbers on behalf of people who are unable to act, for example, because of a disability. Section 15 strengthens the provisions relating to the use of public services cards by providing for the cancellation and surrender of these cards where evidence becomes available that they are being misused. It will also be an offence to fail to surrender a public services card, without reasonable excuse, when requested to do so.
Section 16 makes a number of amendments to the social welfare code in order to facilitate the introduction of the national internship scheme. It extends to recipients of this new scheme provisions that deemed participants on the proposed skills development and internship programme, which was announced late last year, not to be employees for the purposes of labour legislation generally. Following advice from the Revenue Commissioners, the provisions deeming participants on the new internship scheme not to be employees will not apply in the case of the Tax Acts.
Section 20 extends the list of bodies that are authorised to use the personal public service number for the purposes of carrying out transactions with members of the public to include the Probate Office and the Sustainable Energy Authority of Ireland. Section 21 amends the Comhairle Act 2000 so as to apply to the Citizens Information Board the standard provisions disqualifying people who have been nominated for or elected to the Oireachtas, the European Parliament or to a local authority from membership of State boards and agencies. This section also applies these standard disqualifications to staff members of the Citizens Information Board. These changes will apply to the Citizens Information Board in the case of anyone who is nominated for or elected to the Oireachtas, the European Parliament or to a local authority on or after 1 July 2011.
Section 24 provides that section 7 of the Official Languages Act 2003 does not apply in regard to this Act. This will enable any necessary orders and regulations that need to be made under the Bill by early July, including the order to restore the national minimum wage to its former level, to be made without having to wait for the Irish translation of the Act to be made available.
Tá mórchuid altanna sa Bhille seo agus deirtear liom nach mbeidh leagan Gaeilge ar fáil le roinnt seachtainí. Dá bhrí sin, tá sé beartaithe againn Alt 24 a chuir chun cinn chun a bheith cinnte de go n-éireoidh linn an íosphá náisiúnta a árdú ó thosach na mÍosa. Tá aistriúchán Gaeilge den Bhille á reachtáil faoi láthair agus beidh leagan Gaeilge den Acht ar fáil ar an idirlíon agus i gcló go gairid. Ní bheidh aon mhoill ar sin. The text of this Act will be made electronically available in each of the official languages as soon as practicable after its enactment and it will be published in hard copy in both languages as soon as possible.
Part 4 provides for the necessary amendments to the Pensions Act to implement Article 17 of the IORPS directive. The substantive elements of Article 17 of the directive are provided for in section 35. The existing provisions of the Pensions Act require defined benefit pension schemes to satisfy a funding standard by maintaining sufficient assets to enable them discharge their accrued liabilities in the event of the scheme winding up. Where schemes do not satisfy the funding standard, the sponsors or trustees must submit a funding proposal to the Pensions Board to restore full funding within three years. This period can be extended at the discretion of the Pensions Board.
Section 35 builds on this process to secure the additional reserves required to implement Article 17 of the IORPS directive by inserting a new Part into the Pensions Act which provides for the application of the provisions of this new Part to regulatory own funds schemes and to regulatory own funds trust retirement annuity contracts, subject to certain exceptions that are provided for under Article 5 of the IORPS directive; the preparation and submission to the Pensions Board of technical provision certificates by regulatory own funds trust retirement annuity contracts; a requirement for relevant schemes and trusts to hold additional reserves; and the amount of regulatory own funds required.
The other measures contained in Chapter 2 of Part 4 make consequential amendments to the provisions contained in the Pensions Act relating to regulatory own funds schemes and regulatory own funds trust retirement annuity contracts. These include, for example, the exemption of regulatory own funds schemes from the requirement to submit funding proposals or to restructure scheme benefits where a scheme fails to satisfy the funding standard under Part IV of the Pensions Act. The requirement to submit funding proposals and to restructure scheme benefits is set out in a new Part of the Pensions Act, which is being introduced by section 35.
In addition, Chapter 3 of Part 4 clarifies the responsibility of the Pensions Board in regard to the certification by the board of certain policies or contracts of assurance as being suitable for pension purposes. Sections 40 to 43 amend the Pensions Act to provide that such policies or contracts of assurance will now require to be certified by the Pensions Boards instead of getting the approval of the board.
I want to inform the House that I intend to table a number of amendments to the Bill on Committee Stage. The Minister for Finance announced in the jobs initiative that the extension of PRSI liability to income arising from share-based remuneration would only apply to the employee element of the contribution and not to the employer PRSI contribution. Details of the operation of this measure are being finalised with the Revenue Commissioners and I intend to bring forward any necessary amendments to the Social Welfare Acts by way of Committee Stage amendment, if the details are finalised within the timeframe for this Bill.
I will also bring forward two further Committee Stage amendments, first, to ensure that participants on the Tús programme cannot concurrently receive a jobseeker's payment and, second, to align the commencement dates for the halving of the lower rate of employer PRSI contribution set out in the tables to sections 3 and 23 with the commencement date of 2 July 2011.
I look forward to an informed debate on the Bill and to hearing the Deputies' views on the measures contained it over the next two days. In regard to the national internship scheme, many employers have called for such a development to provide opportunities for people who are unemployed. This scheme presents an opportunity for everybody, whether in the private, public, voluntary or commercial sector, to give an opportunity to people who have qualified - be it a qualified apprentice, a graduate, a postgraduate or somebody who has done specific training perhaps to change his or her career orientation - to give them a foot on the ladder, to get vital job experience to enable them present a CV to an employer. It is a system that has been used in many countries quite successfully.
I have done a huge amount of work with a wide range of groups and bodies to ensure that this will be valuable work experience for qualified people and to ensure in particular that people who have been unable to get any work experience in the current climate will be able to do this and that this will constitute the first step for them in getting a job. The experience in many other countries shows that if people do a good internship it is often a route to permanent employment, even with the company with which they have done their internship. This is an important step forward in terms of our attempts to give people, particularly those who have found themselves unexpectedly unemployed because of the current crash, an opportunity.
As the Minister said, this Bill addresses various measures contained in the jobs initiative, the EU-IMF programme, the pensions area, as per the national pensions framework, and items pertaining and relating to civil partnership legislation. As the Bill covers predominately matters of a housekeeping nature, I support it, its contents and the measures within it to address those items. However, I would like to go further and speak about some of those items in respect of which we believe the Minister has not gone far enough and where more could have been done.
The Minister might take on board some of the proposals in the coming years to address various issues. For example, the jobs initiative does not go far enough. I do not believe it does exactly what it says on the tin. The restoration of the minimum wage in its own right is not vindication that the Government is championing the lower paid. The national internment scheme is a repeat of the scheme announced in the previous budget, only a slighter poorer relation of it. The other issue I wish to address is that of other social welfare rates, including child benefit, and I would like to get a response from the Minister on where she stands on these important issues in the context of statements that have been made both here and outside the House by other members of the Cabinet.
The jobs initiative was a far cry from the jobs budget promised by Fine Gael prior to the election. During that election campaign it promised to create 100,000 jobs by 2015. It has avoided setting targets and figures under the jobs initiative, putting meat on the bones of the proposals, but it was not afraid to tell the electorate about the huge aspirations it had in setting targets for job creation.
The jobs initiative is to be funded by a pension levy which is discriminatory, inequitable and proving to be socially divisive. The €1.9 billion attack on private pension funds will hit current and future pensioners very hard. Many of the other measures within the initiatives simply involve the reallocation of funding from within departmental budgets. In total, additional capital expenditure will amount to €135 million. However, €106 million of this will come from reallocating existing resources.
The Government and the Minister should have recognised the value of schemes like housing aid for the elderly and housing adaptation grants in addition to the retrofitting proposals. As a local authority member of almost 20 years, I am like many others in that I recognise the value of these schemes and the fact that many of those who benefit from them never intended to benefit, that is, when they first entered their houses many years ago, they never believed such changes would ever be necessary. Where these schemes are concerned, local councils have been the lead authorities. Not only do the schemes benefit applicants in dire need, they also benefit the employment and job creation situations.
When I stated that I would support the Bill, particularly in light of the issues it addresses by virtue of the jobs initiative, civil partnerships and the national pensions framework, I did not omit the reversal in the cut to the minimum wage. The Government is trying to portray itself as the champion of the lower paid. This cannot be the case. On the one hand, the Government boasts about restoring the minimum wage and, on the other, introduces proposals via the Minister for Enterprise, Jobs and Innovation that could have an impact on up to 250,000 low-paid people working in the hotel, restaurant, retail and other sectors. These are the very sectors the Government sought to protect by restoring the minimum wage. I agree and accept this desire. The people have spoken where this issue is concerned and I will not be found wanting in my support of it, but I cannot support the Minister's proposals of recent weeks in respect of the lower paid. I have serious concerns about them. The changes to overtime and Sunday rates seem to go so much further than the recommendations of the independent Duffy Walsh report. The Minister's proposed changes would have serious consequences for the living standards of low-paid workers. The Duffy Walsh report concluded that lowering the basic joint labour committee, JLC, rates was unlikely to have a substantial effect on employment. Therefore, it cannot be said that the Minister's proposals would lead to greater employment in this sector.
If the Government is serious about its commitment to transparency and honesty with the people, it needs to publish its proposals in full and let the same people adjudicate on the potential effects. The Dáil should also be consulted on the Duffy Walsh report, but it seems the proposals will be presented as a done deal after what will be seen to have been much procrastinating and grandstanding by Government backbenchers who, despite being in their so-called honeymoon period, are already unnerved by these murmurs.
The Minister for Social Protection needs to clarify her stance on these proposals. Recently, she spoke on RTE about the need for reform. She stated that, if one reduced the incentive to work, more people would lean on social welfare. She refused to say whether there would be pay cuts despite the fact that the proposals set out by the Minister for Enterprise, Jobs and Innovation, Deputy Richard Bruton, clearly suggest wage adjustments. She spoke about doing an assessment of the proposals' impact. Is such an assessment by her Department's officials necessary? I am sure she is in touch with her constituents and reality. When I returned to my constituency last week and the previous week, I met people from these sectors at advice clinics and so forth or was contacted by them through all forms of communication. They know only too well the proposals' consequences. I take the Minister's word that she will ask her officials to carry out the assessment. When will she respond to the assessment in the House on the public's behalf? Will she make the findings available to the public or will she discuss them in the Red Rose Cafe with her Labour colleagues while those in the Blue Lagoon Restaurant await her deliberations, after which we might see a whole-of-Government decision that none of us on the Opposition benches will be allowed to discuss?
The national internship scheme is similar to the one proposed in the last budget, albeit potentially with less favourable terms. In response to a parliamentary question submitted by Deputy Brendan Smith, the Minister for Education and Skills, Deputy Ruairí Quinn, admitted that the internship programme announced in the jobs initiative would replace the skills development and internship programme announced last December. These are not 5,000 additional places. They are just replacing the 5,000 already announced and budgeted for in December.
To make matters worse, the new scheme offers less than the original. Last December's scheme was significantly more generous in offering participants an up-skilling bonus of €100 alongside their social welfare entitlements compared with the €50 top-up now on offer. That the employer would pay half while the Government stuck to its commitment on the €50 top-up could have been proposed. As the Minister, Deputy Burton, stated, the people in question are greatly skilled and have much to add to the economy and to those who take them on under these schemes. In light of their value to employers, surely the latter could match the €50 that the State is proposing.
Now that the Bill is before the House, I have a question regarding what was described as a dark red line issue, that of child benefit. Is it even possible to have a red line issue anymore? In The Irish Times yesterday, Deputy Buttimer, the Minister's colleague, stated: "It is important that people calm down and recognise that we have a job to do in the national interest." That is the responsibility with which the Government has been charged by the electorate and it should be privileged to exercise that responsibility. The final sentence of Deputy Buttimer's quotation states: "There can be no red line issues." While in this regard he was speaking about JLCs, this could apply to any issue.
I wonder where we are with regard to child benefit. The Taoiseach and Minister previously stated €250 million in savings could be achieved without touching child benefit. The Minister has since said she will refer the matter to the Commission on Taxation and Social Welfare for deliberation. She has also said that social welfare and child benefit rates are matters that can only be discussed in the context of the forthcoming or following budget, which is a far cry from her saying prior to entering Government that these payments were hurting the poor and the weak and were red line issues for the Labour Party. Are they no longer red line issues now that the Labour Party is in Government?
It is time now to belt up, move on and make the tough decisions. It is time to stand up and be counted and to be honest with the public. If the Labour Party now wishes to tell the public it is in a different place to where it was prior to the election so be it, let it be straight and lay it on the line for the public. Let us not continue the charade that has been evident in the past number of weeks. The Government and Cabinet should be concise, clear and definite in terms of where it is going. If that flies in the face of the Government parties' stated position some months ago, so be it. The Government will have to suffer the consequences and move on. I do not wish to engage too much now on those issues as I will be able to ascertain from the Government, by way of parliamentary question, etc., where it stands and proposes to go.
I acknowledge that this Bill is as a result of the jobs initiative and the measures contained therein in regard to PRSI, the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 and so on, which are to be welcomed. I acknowledge also that the Government is in this Bill honouring its commitment in regard to pensions. Fianna Fáil will not be opposing the Bill despite, as I stated earlier, our we having great difficulty with the background to its implementation, the manner in which certain decisions were arrived at and the portrayal of the jobs initiative as something we do not believe it to be. However, it is up to the Opposition to be constructive and to offer the public a different side of the coin. Members of the Government will know much about that, having been in opposition for 14 years.
It would be helpful to me, Fianna Fáil, other Members of the Opposition and the public if the Government could, in so far as it can, take note of some of what I have said and respond accordingly. If it does so it will be doing its job. We will then take it from there.
I thank Deputy Cowen for sharing time with me. I welcome the Bill which provides us with an opportunity to raise issues relating to social welfare and to comment on some of the issues put forward by the Minister in her speech.
I have been a Member of this House for a long time. I am always concerned when I hear the words "reform", "rationalisation" or "amalgamation" in the context of schemes as they inevitably mean reductions in payments to people on social welfare. It is often said that social welfare rates in this country are reasonable and are better than they are in the UK or other parts of the EU. However, people on social welfare are only surviving on their current payments. When economists hear of a €20 billion spend by the Department of Social Protection, they rush to recommend reduced payments to people on social welfare. However, these same economists are usually on incomes of €150,000 to €200,000 per annum and are not caught in the poverty trap in which many people on social welfare in this country are caught.
I welcome the reversal of the €1 cut in the national minimum wage. It was perhaps a mistake to reduce it in the first instance. However, the previous Government was told by employers that it would result in the creation of a significant number of jobs. I doubt it has resulted in the creation of one job. I welcome that the Government is reversing the cut. I wonder, however, how it will fit with the proposal from the Minister for Enterprise, Jobs and Innovation, Deputy Richard Bruton to reduce wages in the retail, restaurant and hotel sectors and the proposed introduction by the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, of water charges and a site valuation property tax, all of which will result in severe hardship for many families throughout the country. Perhaps, when responding, the Minister will clarify if people in receipt of social welfare will be exempt from water charges and the property tax or if a special concession will be put in place for them? I would like the Minister to clarify if such proposal has been given consideration.
I understand that local partnerships throughout the country will administer the Tús scheme introduced by the former Minister for Community, Rural and Gaeltacht Affairs, Deputy Éamon Ó Cuív. A letter I received from the Wexford Local Development states that there will be 180 participants and nine supervisors on its Tús scheme, which is one supervisor per 20 participants and if replicated countrywide will result in 400 supervisors. All participants will be involved in work improving buildings such as community centres and sporting, caring, cultural facilities and will, therefore, be supervised within the organisations to which they have been allocated. Is it necessary to have these supervisors? It is important money allocated to this scheme is spent on providing places for participants rather than supervisors.
I welcome the internship programme. However, perhaps the Minister will clarify how it will operate. Will it be flexible and will it be open to chambers of commerce, town, county and urban councils wishing to promote their towns in the context of tourism and so on?
How does the Minister square the pitch with the fact it was intended to be €100 per person under the announcement made by the previous Government whereas it is now to be €50? If people take this up, will they pay some of the money as well or is it expected that the Department would pay the €50 and the organisations or groups that employ the people will not make any contribution? The Minister might clarify this when she replies.
When the Minister was on this side of the House, on several occasions she raised the issue of those who sign on for jobseekers' payments and who then get a few weeks work. When they try to get back on the jobseeker's scheme, they encounter great difficulty, which means many people will not take up a job lasting just three or six months. There is a need for a major examination of this issue to find how we might develop a more adaptable and flexible scheme as the current system is causing problems.
While I will not criticise the Minister as she has been in the job less than 100 days, the appeals system as it existed under the previous Government and as it still exists is a problem in that it takes anything from six to nine months to process an appeal, whether in regard to disability benefit, jobseekers' payments, invalidity pension, domiciliary care allowance or other payments. I do not know whether this is a result of the scarcity of appeals officers or for another reason but the delay in hearing appeals is an area of major concern. I find that an appeals officer will come to a county and hear perhaps three or four appeals in a whole day and then go back to Dublin. Moreover, there are many cancellations of appeals hearings, whether the problem is on the side of the client or the appeals officer. I get telephone calls regularly to tell me an appeal has been cancelled or has been put back for a week or two, or perhaps for two or three months until the appeals officer returns. This is causing problems and the issue needs to be clarified.
In the ten pages of the Minister's script, there is not one reference to job opportunities for people with disabilities. It is an area in which I have an interest as I have a daughter who uses a wheelchair. Many people with disabilities now go on to second level and even third level education. They are very well educated and in many cases do all kinds of courses, including FÁS courses and courses specifically for people with disabilities. Yet, at the end of all that, they find it very difficult to secure a job. Not enough is being done to encourage employers, and perhaps employers themselves are not doing enough, to employ those suffering from a disability.
The Minister might take a direct interest in the 3% target for the number of people with disabilities whom Government bodies are supposed to employ. To take the local authorities and Government bodies in my own county, the target is a bit of a sham. There is no way 3% of the workforce are people with disabilities and it is certainly an area that needs to be examined. Many of those with disabilities, whether they are in a wheelchair, use a walking stick or otherwise, are well educated and highly skilled, and they would make excellent, committed workers. We have been hiding behind the 3% target for a long time and we need to reconsider it.
The budget will take place later in the year. Many people are seeking an increase in free fuel payments as well as other increases. We must examine the whole area of social welfare and not just decide that payments should be reduced. We must seek to prioritise payments for old age pensioners, people with disabilities and those who may require extra payments. It is an area that needs careful consideration before the budget is introduced later in the year.
"Getting people back to work" was a slogan adopted by both the Labour Party and Fine Gael in its five point plan. It is not as easy as making a slogan to get people back to work. The job opportunities available at present are not plentiful. I know people are doing their best to create extra jobs and we are all trying to encourage employers to take on extra workers. In counties like my own in particular, which was very dependent on the building industry, there are huge numbers of young people who left school after their junior certificate or earlier because they could earn high wages in the building sector, and they now find themselves both unemployed and uneducated, with the result it is very difficult to get a job. We have FÁS and will have Tús and the internship programmes, which I hope will play a part in getting people re-trained, re-skilled and, more importantly, get them back into the education system.
The previous Government tried to find a way to marry FÁS and the other training agencies, and I presume the current Government is thinking along the same lines. There is no need for a person under 30 to be drawing social welfare without being on a scheme. It is important that we get people onto schemes as quickly as possible and give them an opportunity to at least have a skill to get them back into the workforce.
Tá sé tábhachtach go bhfuil an deis againn, in ainneoin go mbeidh an deis srianta amárach, labhairt ar an ábhar seo. Is trua go bhfuil sé i gceist ag an Rialtas an t-am chun plé ceart a dhéanamh ar an Bhille seo a shrianadh, ní amháin ar an Chéim seo ach ar Céim an Choiste agus na Tuarascála chomh maith.
Gabhaim buíochas le hoifigigh na Roinne a thug an míniúchán dom ar an Bhille seo Dé hAoine toisc gur Bille casta é. Tá a lán forálacha ann agus thóg sé tamall dúinn dul i dtaithí leis go hiomlán toisc cé chomh tapaidh agus atá an Bille os ár gcomhair. Níor foilsíodh é ach ar an Déardaoin seo caite agus táimid á phlé inniu, i gcoinne an ghnáthchleachtais sa Dáil de laistigh de seachtain ón Bhille bheith foilsithe. Gabhaim buíochas leis na hoifigigh ón Roinn a bhí in ann roinnt de na gnéithe a shíl mé go raibh siad casta a mhíniú dom, rudaí teicniúla lena bhfuilimid ag déileáil agus atá loighiciúil chun fáil réidh leo toisc nár scrios muid iad nuair a bhí muid ag rith an Achta um Páirtnéireacht Shibhialta agus um Chearta agus Oibleagáidí agus roinnt rudaí atá tar éis titim as úsáid, mar shampla nach bhfuil ach tríúr duine ag fáil the dependent parents pension faoin am seo. Is ceart agus is cóir go ndéanfaimid déileáil le rudaí mar sin agus tarlaíonn sin go minic nuair atá athruithe suntasacha ag tarlú ó thaobh Roinne.
Mar sin féin, is oth liom a rá go bhfuil mé chun moladh do mo pháirtí cur i gcoinne an Bhille de thairbhe go bhfuil rudaí ann nach n-aontaím leo agus nár aontaigh mé leo nuair a tháinig siad os comhair na Dála faoi réimse Fhianna Fáil agus na nGlasach. Dá réir sin, cuirfidh mé ina choinne, agus míneoidh mé sin níos déanaí.
Ceann de na príomhrudaí a chuir bac liom a bheith sa Bhille ná alt 24, go bhfuil an Rialtas ag iarraidh Acht dá chuid féin a chur ar leataobh. Tá sé tábhachtach cur ina choinne seo agus beidh mé ag moladh ar Chéim an Choiste go scriosfar seo ón Bhille ach go háirithe. Ní fiú tráithnín Acht a rith sa Dáil má tá sé le cur ar leataobh díreach nuair is mian le Rialtas sin a dhéanamh. Níl an leithscéal a úsáideadh - nach bhfuil sé ar chumas iad siúd atá ag aistriú Billí in ann an Bille seo a aistriú tapaidh go leor - maith go leor. Sílim féin go bhfuil sé ach bheadh sé i bhfad níos éasca d'aistritheoirí, mar a dúirt mé blianta ó shin, agus a dúirt mé arís agus arís eile, dá mbeadh téacs de Bhillí as Gaeilge sa chéad dul síos maraon leis an Bhéarla. Bheadh sé i bhfad Éireann níos tapúla ansin dóibh leasú a dhéanamh agus dá mbeadh sin déanta sa chás seo nó i gcás Billí éigeandálacha eile, bheidís in ann é a chasadh timpeall san am ar ghá dá mbeimis ag iarraidh clói le hamchlár éigin roghnaithe ag an IMF nó pé duine a bheadh ag gabháilt leis na coinníollacha ón IMF a chomhlíonadh.
Casfaidh mé ar an chuid eile de na forálacha sa Bhille agus déanfaidh mé an argóint sin maidir le halt 24 nuair a bheimid ar Céim an Choiste. The contents and purpose of this Bill have been flagged by the Government to the Oireachtas and the wider public for some time. The Bill was to have had two purposes - to reduce an employer's PRSI contribution on low wages and to raise the pension age to 68. In the eleventh hour the Government cynically and inappropriately dropped the restoration of the minimum wage into the Bill, a measure that should have applied to a stand-alone Bill or, at minimum, to an amendment to a Finance Bill. The decision to include it in the Social Welfare and Pensions Bill is contemptuous in that it seeks to cover up an attack on older people. It is a fig leaf to cover a cut of 16% in pension entitlements. That was the intention in this Bill and it was flagged by Fianna Fáil in particular. In this instance, the Labour Party leadership is cynically using the minimum wage to bully its own Deputies into supporting the single biggest cut to pensions ever contemplated.
The Bill before the House was supposed to have been about social welfare and pensions, not about the minimum wage. I examined it to make sure; it is a Social Welfare and Pensions Bill, with no mention of the minimum wage. Its definition is: "Bill entitled an Act to amend and extend the Social Welfare Acts and the Pensions Acts 1990 to 2010, to amend and modify other enactments and to provide for related matters." The minimum wage must be merely another related matter. In fact, however, the changes to it were introduced in a Finance Bill and they should be restored in a similar Bill. My colleague, Deputy Pearse Doherty, has tabled an amendment to the Finance (No. 2) Bill which would restore the minimum wage more quickly than this Bill can and that measure would be more understandable in a more appropriate Bill.
There is near unanimity in the House on this issue, except, to date, on the part of Fianna Fáil. However, the Deputy who spoke before me indicated he would not oppose the restoration of the minimum wage, which is a welcome sign. The drafting has been done. If the Government were more honest in its approach on this issue, I am confident the measure could be passed within a matter of hours and do not believe there would be any opposition. However, it is playing games. The more quickly the measure can be passed the better, because the current system is costing the lowest paid people in our country money, €40 per week in many cases. Since the reduction was applied, it has meant the equivalent of almost €800 lost to the lowest paid in this State, with 50,000 workers affected.
The minimum wage should be restored immediately. It was fundamentally wrong to cut it in the first place and we should not be forced to exchange its restoration for far-reaching cuts to the State pension entitlements. Future generations of older people are being offered to the EU-IMF by this Government as a down payment for its bank bailout. It would be much easier, and more appropriate, for the Government to add the restoration of the minimum wage as a one-line amendment to the Finance (No. 2) Bill, currently before the Dáil. Instead it is holding back, inserting the measure in an artificial manner into a pensions Bill. I shall return to that if I have enough time.
This Bill will put in train a framework to raise the age for all State pensions, initially to 66, then to 67 and finally to 68. We shall see whether over the term of this Government the age may be further extended. This proposal to raise the pension age will most adversely affect those on low incomes who do not have the option of an occupational or private pension, or of savings. These older people, who are often in the most physically demanding jobs, will have no choice but to continue working until the later age regardless of the impact on their health. In addition, forcing older people to remain in employment means there will be fewer jobs for young people or for those now being forced to emigrate. The latest CSO figures put unemployment at a yearly high. Emigration figures continue to grow. It is absolute madness even to talk about forcing another swathe of people on to the dole or to emigrate. This Bill will abolish the State pension transition in 2014. When I asked what is being done to support all those whose employment contracts will cease at the age of 55 or 65, the Minister's response was that they can join everybody else on the dole queue. Unemployment for those aged 60 and older rocketed from 2.5% in 2005 to 9% in 2010 and raising the pension age will simply add to this figure.
Those aged 50 who are laid off today could face 18 years on the dole. There is nothing either in this Bill or in the jobs initiative to indicate where jobs will originate for that age category. Such jobs need to be meaningful, not merely the packing of shelves. Age discrimination occurs. We need to see what steps the Government will take to ensure there are opportunities for people aged 50, 55 and 60 who are laid off and end up in the dole queues and that they are not seen as ending up on the waste heap, to finish their employment days on the dole waiting for their pension. I do not see any particular targeted activation measures for those people. So far, most initiatives, of which there are not many for those on the dole queues, are targeted at young people. This is vital too but there must be measures across the board, especially given the enormous growth in numbers of those who find themselves unemployed at a later age. It would be a good move were that to happen because there is a significant wealth of knowledge, experience and expertise not being tapped at present which needs to be tapped and encouraged, although not to the detriment of young people coming to the jobs market. It needs to be encouraged, although not to the detriment of young people who are entering the jobs market. There needs to be a two-pronged approach to jobs activation. There should not be a single approach.
The Minister's defence of the decision to raise the pension age relies on economic theories that are only of relevance to times of strong economic and employment growth. When I tabled a parliamentary question on the matter, I put it to the Minister that the logical outcome of forcing one category of people to remain in employment would be a curtailment in the number of jobs available for young and not so young jobseekers. If the working years are extended and the pension age is moved further away, the availability of jobs will be curtailed. If people in public sector jobs continue to work until they are 65, 66, 67 or 68 years of age, such jobs will not become available. Not many public sector jobs are being offered at present as a result of the recruitment embargo. I hope the time will come when the embargo is no longer in place. The same thing applies to private and semi-State companies. The Minister responded to my parliamentary question by citing the lump of labour fallacy and claiming there is no correlation between the two employment rates. The theory she referred to is of no relevance to an economy that is in recession. It is relevant at times of low unemployment and huge prosperity. I do not know whether the Minister will re-examine the lump of labour fallacy, which she quoted in response to my question. She should reconsider who the economic illiterate is on this question.
The Minister has told me categorically that by 2050, the ratio of workers to pensioners will be approximately 2:1. When we make such predictions so far in advance, we need to state honestly that they are not an exact science. It is simply not possible to predict what the ratio of pensioners to workers, and consequently the level of State pension affordability, will be 40 or 50 years from now. Far too many volatile factors, including employment levels, migration levels, birth trends and economic growth, have to be considered when making any such prediction. As we have seen to our cost over the last decade, all of the factors in question are fluid. Having said that, it is important to be prudent. Nobody is suggesting we should spend unwisely. My party has demonstrated that the State pension would be affordable for many years into the future, from the current ages, if the Government were willing to target Ireland's wealth in a fair and progressive manner. Some €1 billion could be saved each year if the tax reliefs on private pension contributions were standardised. If the cap on earnings from pension contributions were lowered to €75,000, some €100 million per annum could be saved. If it were lowered further, as some people have suggested, a bit more could be raised. We have suggested a cap of €75,000. In the absence of reform on both of these issues, we should not be talking about making a single older person work a day longer.
Since Fianna Fáil first proposed an increase in the pension age in 2010, a range of organisations and voices have expressed concern and, in some cases, outright opposition. Some of them have been careful in their comments on the proposal and others have highlighted their total opposition to it. Age Action Ireland has expressed its concern that the increase in the pension age will introduce a poverty trap at the age of 65. It has highlighted its concerns in some of its publications. It is proposed that the age at which one qualifies for the State pension will increase from 66 to 67 in 2021 and to 68 in 2028. Age Action Ireland believes this combined approach has the potential to create a poverty trap for older workers, especially those working in the private sector with contracts to work until they are 65. That issue needs to be addressed, but that is not happening here. The contracts in question, which were designed with the State transition pension in mind, provide protection to workers until they qualify for the State pension. We also need to address that issue in this Bill. Other people will also be affected by the transitional arrangements.
According to the Age Action Ireland briefing, if this Bill is passed in its current form, many older workers will be forced out of full-time employment at 65 and will have to sign on the dole for 12 months. That would cost the State money. The Government is setting these measures in stone to satisfy a commitment is made under the EU and IMF programme of financial support for Ireland. It must start planning to prevent as many older workers as possible from being caught in this new poverty trap. It is in the Government's own financial interests to do so. This proposal will cause hardship to individual workers and families. From 2014, workers whose contracts end on their 65th birthdays will not be allowed to claim the State pension until they are 66. That age will increase to 67 or 68 at a later stage. They will be left with no option but to sign on the dole. That is the blunt message transmitted by Age Action Ireland when this issue was raised with senior Government officials. At current prices - this is the key issue - the Government will save just over €40 a week, which is the difference between the unemployment payment and the contributory pension. It is not the case that a huge saving will accrue from this proposal, particularly in so far as it relates to those who are under contract until they are 65. Other countries that have sought to change the pension age have provided for much longer lead-in times to ensure people do not end up in poverty traps of this nature and to assist those who are stuck in contracts that require them to retire at the age of 65. The publication of this Bill suggests that the Minister intends to persist with it. I urge her to examine the specific cut-off dates that have been proposed.
Another group, Older and Bolder, has highlighted the dangers of the extremely short lead-in time. It has emphasised that a different lead-in time has been proposed in England and elsewhere. The proposed timeframe will not allow older people in physically demanding jobs to retrain, to take steps to secure more manageable work or to seek a change in the dates that have been suggested. The Minister's party colleague, the Minister of State, Deputy Shortall, was very vocal on this issue when she was the Labour Party's spokesperson on social welfare in opposition. She said the proposal to "raise the State Pension Age to 66 yrs in 2014 should be abandoned". It will be interesting to see whether she stands by that comment when the House votes on this legislation. I doubt it very much. She continued:
The move is particularly crude on those who have worked for nearly 50 years and have paid almost 50 years of social insurance. In such cases they have already met the qualifying conditions for the State pension and will, in effect, be making worthless contributions in their remaining years in the workforce.
I would love to hear what the Minister of State, Deputy Shortall, has to say about those comments at this stage. To what extent has she changed her mind since she stepped into the shoes of Government? Wealthier older people will continue to have options. Many of them will be able to fall back on private pension arrangements and savings until their State pensions kick in. As usual, those on low incomes and those who have been in and out of the workforce will be hardest hit by these proposals.
The trade unions have been relatively quiet on this issue since the new Government indicated that it intended to retain Fianna Fáil's policy in this area. When these proposals were first made, the president of SIPTU, Jack O'Connor, described them as "an assault on the State old age pension provision". The Irish Senior Citizens Parliament is opposed to the mandatory raising of the pension age. They insist that any increase should be voluntary and my party agrees wholeheartedly with that proposal. I believe that this is being covered up by the inclusion of the minimum wage in this Bill and that Members will try to focus on that to avoid having to explain away to their constituents how the Government is undercutting the entitlements to pensions by 16%.
The employers' PRSI changes in this Bill are also interesting. The Bill proposes to half the employers' rate of PRSI on jobs that pay up to €356 per week. I doubt this change will create many new jobs. Instead it will likely precipitate extensive wage cuts because employers will be strongly incentivised to bring down wages that are currently at or around the €400 mark to €356 because of the savings they can make. The wage cuts that will inevitably ensue will have a serious and negative impact on Exchequer finances because revenues raised from employers' PRSI contributions and the taxes from the employees will be reduced and the State will also end up spending more on in-work benefits such as the family income supplement if, as I believe, there is a reduction in the numbers who will be on the €356 per week cut-off figure.
There are presently 90,000 workers living in relative poverty. It is madness to risk adding substantially more people to that number. Some €356 per week is well below the poverty line for many family sizes and the current employers' PRSI rate is not the reason that there are so few jobs. The collapse in domestic consumer power is a far greater culprit and by incentivising lower wages, this Bill will compound that collapse and, in turn, add to the current jobs crisis. High energy and rent costs are two more significant factors preventing employers from creating jobs and to date the Government has not moved substantially on those matters. There has been no move to date, despite repeated calls by myself and others, to abolish forthwith the upward only rent reviews, and also on the issue of subcontractors who have been suffering continually by the overall contractor walking away from them and abandoning their bills, and subcontractors themselves abandoning others below them. Despite a promise, that latter issue has not been addressed to date. If more time had been put into addressing those two issues then the Government would have substantially more jobs in the economy or at least would see employers being able to hold on to some of the employees that they are having to let go because of the austerity measures and the collapse of the purchasing power of consumers.
At a minimum, we need to prevent the dumping and re-hiring of staff at a lower level, especially those on contracts, to ensure that employers are not availing of the halving of the employers' PRSI rate on jobs. I intend to table an amendment on Committee Stage limiting the new lower rate of employers' PRSI to jobs that are evidenced as being new because that is key. A streamlined panel, including representatives from trade unions and employers, could sign off on posts which can be demonstrably shown to be new to which the new rate could apply. I am not looking to set up a quango. It could be done quite easily and quickly.
I also intend to push for the introduction of a requirement for a review after the first year identifying the number of new jobs that have been created and a sunset clause if that threshold of new jobs has not been reached. The review would also consider the number of complaints made, for instance, by persons who claim that they were let go and somebody new had been taken on at the lower rate of €356 or where they were basically forced to reapply for their exact same job. That is illegal under labour law, but it is something that is happening. We need to ensure that whatever measures we take here do not add to what has been happening in the employment area.
There are other points in this legislation which need to be looked at. One I would also oppose is section 9, which makes a number of amendments. I am opposed not to the amendments themselves per se but to the changes which were made to the one-parent family payment last year by the Fianna Fáil Government. I will clarify my opposition to it on Committee Stage, where I will try to reverse what was intended there because it is detrimental that the proper activation measures are not in place to give effect to what might in another era by quite a progressive change to ensure that there were jobs available for everybody. This is a crude measure to force people back to work even though there is no work for them.
Section 15 strengthens the provisions relating to the use of public services cards by providing for the cancellation and surrender of these cards where evidence becomes available that the card is being used illegally. I do not have a major difficulty with the card itself but before we start strengthening the provisions we need to know how long it will be before we see the cards in full use. Has it gone to tender? What is the cost of it? We need the answers to such questions. I urge the Minister to bring those figures with her to the Committee Stage debate if at all possible.
Section 16 relates to the national internship scheme. I hope that this scheme and the Tús scheme do not become free jobs for employers to use to employ somebody for a year to do work that would otherwise have to be filled by somebody in paid employment. Neither scheme involves any additionality for those who are coming off the unemployment register other than that they are in employment and there is no cost to the employer who gets free labour for quite a number of months or, in some cases, a full year.
The final area I would ask the Minister to look at is the issue of the PPSN. The Bill extends the list of bodies specified that can use the number. I urge the Minister to look at using the Bill to extend their use to the local authority franchise sections. If we then change the law in terms of who is eligible to vote, the local authorities would already have been authorised by this and it might only take a small change to allow us have the electoral register based on PPSN rather than on the current way of having to register continually.
I, too, am delighted to be able to speak here this evening on Second Stage of the Social Welfare and Pensions Bill. Like many others, I am obviously disappointed that the Bill is being guillotined. As mentioned today, it is being rushed through under the auspices of or the time lines laid down by the EU-IMF agreement. However, that is becoming a catchphrase for many issues and I am disappointed. I realise there are strict terms to it but it is a matter of departmental officials reporting and of the Minister's accountability.
I welcome the jobs initiative. We have been a long time waiting for it and high expectations were created. I welcome it, although it is limited. I encourage everyone involved to grasp it and run with it and to try to get some stimulus into our economy because the economic situation is so bad. It is limited to the tourism area but given the two recent visits and the publicity obtained therein, it is a good time for those in the tourist industry to play their part. I believe this is happening.
I welcome the restoration of the minimum wage. I voted against the cut in the minimum wage. At the time I was a supporting member of Government but I voted against the Government. It was a retrograde and foolish step. Any employer - I am one myself - is aware that the minimum wage is there for good reason. The majority of employers pay their employees well in excess of the minimum wage and rightly so. This is proven in the figures. Employers will pay for people. A relationship is built up between an employer and employee and employers are content to pay a reasonable reward for good employees who carry out their work diligently and who are interested in their work. This covers the vast majority of employees.
The reduction in PRSI for the employer is a welcome initiative because employees do not benefit much from the PRSI. They cannot see or do not understand the costs associated with employment which employers must pay. From the point of view of taxation, it is a relief for employers. Often, this is not accepted or understood by the employees.
It is a pity the minimum wage is included in the legislation and the matter was discussed today on the Order of Business and during Questions to the Taoiseach. Previously, this came under the Finance Act. Some clever semantics are being used to get this Bill through and guillotined, including something few Members would wish to vote against, that is, the restoration of the minimum wage. It is being clever politically to have the two tied in together. While there are some good points in this, there are also some bad points.
The national intern scheme is good and could benefit many graduates and people qualified in a broad range of areas or with diverse qualifications. It could also benefit community groups and employers. People have been critical of employers and rightly so. Some employers might try to use this as cheap labour but it has been monitored carefully and this cannot happen. I believe this scheme has the potential to be of great assistance to many organisations including State bodies and, more importantly, voluntary organisations. Local and national voluntary bodies could benefit immensely. Volunteers are busy as well and may not have the required professional qualifications much of the time. The intern scheme could be of great assistance in such cases. I welcome the scheme but I call for it to be closely monitored and I believe it will be. There is scope for straying and for the scheme to be used as a cheap labour support scheme which should not be allowed. I realise this was not the intention and I hope it does not happen.
I am altogether opposed to the pension age increase. I sat on the Joint Committee on Social and Family Affairs in the last Dáil. The Minister, Deputy Burton, is well aware of how vocal she was as a Deputy and a spokesperson in this area and she is aware of the number of times she took to task the two previous Ministers with responsibility for social welfare. She was strongly opposed to this measure.
I voted for the Minister, Deputy Burton, the Taoiseach and the Government and I wished them well. However, the public is bewildered by the fact that there has been a change of seating arrangements here but the same policies have been adopted with even more zeal and vigour than the last Government. That is a disappointing fact of life. I attended meetings of the Joint Committee on Social and Family Affairs, engaged with the Minister and agreed with several points.
The use of the IMF-EU agreement as a big stick is being overplayed. We are aware of how serious the situation is and we cannot blame everything on that.
The displays of cynicism and the U-turns by the Government only a few months into office are truly staggering to behold. The Social Welfare and Pensions Bill is simply the latest and most sophisticated of these displays of cynicism and political U-turning. It is unbelievable that the Bill has approximately 19 serious measures, some complex but all far-reaching with significant impacts for wide layers of our society, especially the less well off, and that the Government is trying to ram through these measures in two days and guillotine a proper debate on what is dense and complex legislation. This is to the point where even the normal facility afforded to Members, whereby they receive a digest of the different issues surrounding legislation, has not been afforded us. The library service has been unable to produce a digest such is the short timespan between publication of the Bill and the debate in the Dáil.
It is obvious in this regard that this is a deliberate attempt to ram through unpalatable legislation. This is first and foremost because the IMF and EU, our masters in Europe, are demanding that the country is sucked dry to pay back the bankers and bondholders who wrecked our economy. They demand that this goes through and, therefore, proper procedure and democratic debate is subverted to ram through the Bill and to ensure there is minimum debate on it. We have seen a display of cynicism by the Government in the way it has tried to create a smokescreen for that fact by throwing the measure of restoring the minimum wage into the Social Welfare and Pensions Bill where there is no proper place for such a welcome measure. It does not belong in this Bill. The Government is well aware of this and the wry grins and smirks from the Government front benches when the matter was being discussed on the Order of Business today was indicative of the conscious knowledge of the members of Government. They know this is an act of political cute hoorism to try to create a smokescreen for what is in fact an unpalatable attack on working people carried out under the diktat of the EU and the IMF.
Furthermore, this is a pathetic substitute for the failure of the Government to deliver on its pre-election big talk about jobs and getting the country working. None of this is being delivered. In fact, everything the Government is doing moves in the opposite direction. We have seen the attempt to try to present all of this in some sort of positive light by playing up the restoration of the minimum wage to cover up the other sins of the Government. All of this is being done but, meanwhile, the Government is planning an assault on the low-paid workers it claims to protect by restoring the minimum wage in terms of plans to dismantle wages and conditions for the lowest paid workers in the country.
In terms of the substantive elements of the Bill, the attack on the retirement age and the demand that people work longer is an outrage and scandal. Ordinary working people will be forced to stay in employment longer in order to pay back the bankers and bondholders who wrecked our economy. That is the bottom line. As Deputy Ó Snodaigh observed, low paid and manual workers will suffer most as a result. Those without private pension arrangements and who work in the most difficult jobs will be forced to continue working for one, two or three additional years beyond the current pension age by the time all of this is phased in.
This will have a detrimental effect in terms of providing jobs for younger people, which the Government claims it is seeking to do, because the more one forces people to continue working in order to qualify for the State pension, the fewer jobs there are available at the other end for young people entering the jobs market. The reduction in employers' PRSI in respect of the first €356 of workers' pay is essentially an attempt to pin down wages to the lowest level. This legislation is about working people being made to work longer and harder for less in order to pay back the bankers and bondholders. The Department is to be given the power to hound and harass people who are unemployed through no fault of their own and who seek to avail of social welfare entitlements in a situation in which there are no jobs for them. The Government should tax the wealthy and invest in real jobs programmes instead of attacking working people and harassing those who are dependent on social welfare through no fault of their own.
I am deeply disturbed and bitterly disappointed by some aspects of this Bill. I followed the Minister, Deputy Burton, very closely when she was in opposition and was always convinced she believed in justice and fair play and would fight for the less well-off in society against the horrendous attacks made on them by the previous Government. However, this legislation does not bode well for the body politic, particularly for those who hoped for a change whereby the Minister would do what she said she would do.
Once again the influence of the EU and IMF is evident in this legislation in the insistence that its provisions are necessary in order to honour commitments made to them. Having said that, I have always said I would acknowledge where the Government has taken positive action. The restoration of the national minimum wage to its previous level is to be welcomed. It was a mean and calculating act of the last Government to reduce the minimum wage, representing an easy attack on those in society who are largely defenceless. Many people earning the minimum wage do not have the back-up of the large trade unions, the main political parties or of Catholic Church, which abandoned everybody during the debacle with the banks. It is down to a few of us on the left to stand up for the less well-off, and we do so every day of the week in the constituencies we represent.
My main concern regarding this measure is that the restoration of the minimum wage should not act as a new floor level for low income workers, thus increasing existing income inequality. The danger is that management will see it as a way of reducing trade union and other rates to the level of the minimum wage. Unfortunately, I have no doubt that an attempt will be made in this regard and that this issue will continue to be raised on the floor of the House in the coming years.
Under the provisions of the Bill social welfare claimants will be required to provide additional information and there will be tougher sanctions for illegal use of public service cards. Why is there this attitude that we must make it increasingly difficult for people to claim social welfare? This has always been the way with successive Governments. I regularly meet people who have worked for 30 or 40 years - the Waterford Glass workers among them - and who experience great difficulty in accessing welfare benefits. People who depend on social welfare are not in that situation by choice. Any person on social welfare will say categorically that they would prefer to have a job. We are talking about decent, ordinary human beings who have spent a lifetime working but are put through the wringer in order to claim their couple of hundred euro every week. It is disgusting and obnoxious. I seem to recall the Minister speaking about this issue some years ago in the Dáil when she was in opposition. Some people - not all, but certainly some - are being humiliated and treated with disdain when they apply for social welfare. Not only that but they must wait two or three months before they receive payment. It is horrendous treatment.
The proposal to increase the retirement age is another attack on the less well-off in society. We are told that we are all now living longer and healthier lives, but there is little evidence that there are sufficient jobs for everybody who wishes to keep working. This policy is not about choices but about cutting costs and making the poorest pay the highest price. The Minister must realise this if she thinks about how the measures in this Bill will play out in the coming years. Are we to ask people to work until they drop? Will we force people who have done a lifetime of toil on building sites, on farms or in factories, working eight hours a day, 40 hours a week, often engaged in shift work, to work until they are 67 or 68? That is completely unacceptable to most people, particularly the workers facing into it.
We must establish the right to a decent period of retirement for those who have worked hard and long. The first step in this regard is to reduce the health inequalities between rich and poor. We must create a fairer job market for older people. Failure to do so will force millions of older people, many of them relatively poor and with a lower life expectancy, to work for longer, while ensuring more young people are trapped for another year or two in an unemployment limbo. I ask the Minister to consider these proposals carefully. I agreed with much of what she said when she spoke on this side of the House about justice and fair play. She stood up in opposition for those who are less well off. Will she reconsider the measure to oblige people to work until they are 67 or 68? It is completely unacceptable.
I welcome the opportunity to contribute to this important debate. Ireland needs to comply with international human rights standards in terms of looking after social welfare recipients. We must ensure people are treated with respect and dignity. Hammering the poor, the elderly or the disabled should never be part of any economic strategy. Those who advocate it should be challenged forcefully because some of them are the same people whose right-wing ideology has caused the economic mess. Let them be told straight that it was not the sick, the disabled, the poor or senior citizens who caused the crisis and that they must not be blamed in this debate. Social welfare is the survival net for many families and a Government that cuts such welfare allowances, particularly in the current economic climate of mass unemployment, will lose the respect and support of the citizens. This should be a red line issue for the Labour Party and there should be no dithering in this regard.