Wednesday, 8 June 2011
Social Welfare and Pensions Bill 2011: Second Stage (Resumed)
I want to make a few brief points in the two minutes I have left. This Bill does not provide for the additional staffing that is needed so that a proper social welfare service can be made available to the public. I am sure the Minister is aware that it is taking an average of 20 weeks to process social welfare applications. It takes 20 weeks for an application for carer's allowance to be approved or refused. If one appeals a social welfare decision, it takes between six and 12 months to get a decision. Those issues should be addressed in this legislation.
While I welcome the restoration of the old minimum wage rate, I find it odd that the Government is providing for that measure in this Bill. The minimum wage was originally provided for in a Finance Act. I suggest this provision has been included as a smokescreen to give some cover to Labour Party Deputies who are being asked to vote for an extension of one's working life before becoming eligible for the old age pension.
The internship scheme needs to be closely monitored. I hope applicants under the scheme will be treated as employees and will be subject to and have the benefit of labour law. It is important that those who are hired as interns under the scheme should not replace existing workers. I hope they will not be used to fill vacancies that have arisen from the non-filling of full-time posts under the recruitment moratorium. This scheme needs to be monitored carefully to prevent abuse.
As I said earlier, this Bill is significant because it includes some very serious measures. It will ensure older people have to work longer and harder, and for less money. I hope Labour Party Members will oppose this measure completely, just as I do. It is significant that certain matters, for example relating to resources and staffing, are not being dealt with in the legislation. During the recent general election campaign, Labour Party candidates throughout the country promised that social welfare cuts would be reversed. I refer particularly to the introduction of the universal social charge and the reduction in carer's allowance.
I welcome the opportunity to speak on this Bill. The previous Government missed a huge opportunity to overhaul the social welfare system in a radical way during this country's boom times. At a time when the system was being exploited and loopholes were being created, the Government of the day failed to tackle many of the anomalies in the system. We are now being forced to look at many of these anomalies at a time of recession. It is important that they are reviewed and overhauled. I wish the Minister, Deputy Burton, the best of luck as she tries to reform the social welfare system.
One of the anomalies to which I refer is the failure of the system to encourage unemployed people to sign off from their jobseeker's allowance if they are offered a couple of weeks of work. If one signs off to take up work, it might take one 14 weeks to get the allowance back after one's period of employment has come to an end. The failure to encourage people to take up an offer of two weeks of legitimate work is fuelling the black economy. By the time they take up the work and get back in receipt of their payment again they have lost any benefit from taking up that employment.
There are also significant problems in applying for various schemes - the one that comes to mind is the supervisory role in the Tús scheme. I encountered one young man who has been unemployed for the past two years and was lucky enough to get eight weeks' work with An Post. He was delighted to get the opportunity to do eight weeks' work but because of those weeks, he is deemed ineligible for the Tús scheme.
There are many other schemes for which a person is deemed to be ineligible where that person breaks his or her time on the live register. That system needs to be overhauled. In so far as possible, we should encourage the taking up of a week's work or a couple of weeks' work. In another case, a young girl who took up ten hours' work experience for which she was paid at the end of last year has only now got a decision back from the Department of Social Protection after reams of paperwork. She would have been better off had she not been paid in that case. There is a need for reform of that aspect of the social welfare system.
We also need to get away from the position where people are being forced to sign on the live register in order to become eligible for schemes. There are people who want the opportunity to get onto a training scheme or an education course but who cannot be given priority to access such schemes or courses unless they are on the live register. There are people who for one reason or another, many of which are principled, do not want to be on the live register but the way the system is structured they are being forced into that situation or else they will not be able to avail of the various training courses that may arise.
Another anomaly concerns the self-employed. We have all come across situations where self-employed persons acting as employers have been paying PRSI, maybe for 20 or 30 persons all of whom are eligible to claim jobseeker's benefit, but when the employers themselves fall on hard times they are entitled to nothing. Surely it makes sense, from the point of view of the Exchequer as well as those who are self-employed, to allow them to make voluntary PRSI contributions. It will bring additional revenue into the Exchequer and provide them with a safety net if they fall on hard times.
There are difficulties and challenges associated with this issue but they have been addressed in a system that has been introduced in the UK. If they have been able to solve the problem in the UK, surely we can also address that here and at least put a safety net in place for the self-employed who are the ones who will get us out of the economic mess we are in. It is they who will create the jobs in the future and get this economy going again.
Some of the previous speakers raised the issue of delays in processing applications. I would ask the Minister to look seriously at the backlog in processing initial applications and appeals. If someone is deemed ineligible at the end of that process and he or she has been in receipt of supplementary welfare allowance in the meantime, then the taxpayer is the one who is losing out because of that delay. If the person is granted scheme approval at the end of that process there is no net benefit one way or the other to the taxpayers because they would have had to pay it out in the first instance in any event. However, where those applicants are deemed ineligible, the taxpayer is paying over money through supplementary welfare allowance or in excess of the rate of supplementary welfare allowance that should be paid.
On the question of child benefit I commend the Deputy Burton for being the first Minister to take the initiative of raising this issue in Brussels. We have had Minister after Minister in this House who stated that it was terrible, and all the hand-wringing that was done about child benefit going out of this country in the case of EU citizens residing here but where their children residing outside of the jurisdiction.
I ask the Minister to look at introducing a child attendance payment through the Department of Social Protection rather than a social security payment, which, I believe, would get around the difficulty that has arisen in this regard.
I commend the Minister and her staff in the Department for bringing this Bill to the House. We are living in changing, uncertain and challenging times but what we need now is courage to do the many tasks that should have been done previously. The Bill is the first step to bring reform to the social welfare system.
I welcome the reversal of the cut in the minimum wage, the 5,000 jobs initiative and the State pension being pushed out to the age of 67, of which I myself will be a beneficiary when the time comes. It represents a thinking in advance for the benefit of older persons.
A thought that struck me about the programme on fraud in the country last night on TV3 is that there was no remorse shown by anybody, they saw nothing wrong with what was happening and there was a mentality that they were well within their rights to do what they had done because others have done so before them. What a message to give to the country, to the people outside and, above all, to our children.
There are many flaws in the social welfare system and the Minister might address some of these in the future. One of the biggest issues I face on a daily basis is rent allowance and its abuse. Last year the Government provided €600 million in rent allowance and I cannot understand this because in our communities there are a considerable number of apartments and houses lying idle. Perhaps this money should be put into something that will benefit people in the long run, not just a quick fix. We have all heard the stories of persons renting out rooms even though they themselves are on the rent allowance, which is fraud and needs to be tackled.
Deputy Naughten spoke about small businesses and the fact so many hard-working people who find themselves unemployed were keeping three and four persons in jobs in the local community and now their jobs have gone by the wayside. As he stated, such employees were able to claim social welfare but many of those with small businesses now find themselves struggling on a daily basis even to put bread on the table. Many of those are well into their 50s and believe there may not be anything for them. For many of them who cannot receive social welfare there is no possible chance of them going on a FÁS scheme or even being able to avail of a back to education programme. That must be looked at.
As a mother I understand how difficult it is to bring up children but it is even more difficult to bring them up on one's own. I ask the Minister to consider in the future in the social welfare code that we look at the role of fathers in lone parent families. Some fathers have no contact at all with their children. They do not want contact. They are not even interested in making any small financial contribution to bring up the children they have helped to bring into the world. For instance, in a case in my area a young man has five children, all with different partners, and has never contributed anything to the raising of them. It is a significant problem for young people to believe that they can just walk away. Having children is a responsibility and one must take on that responsibility when one has them.
We need to support those who are in need, not to support those who think they are in need. There are many who believe they are in need, yet when all the pages are turned and everything about them is looked at, they are the ones who are not in need at all. There are many who for the first time must sign on the dole and seek jobseeker's allowance. They have never done it previously. We need to protect these people even at a time when the State is being defrauded by many who are going out to work on the black market.
Many who are over 50 are being means tested if their partner has had an income or been working and many of them now feel they are being left on the scrapheap. They have no social welfare and no proper cover if they want to take up a FÁS scheme. They cannot even avail of back to education facilities. This must be tackled.
I firmly believe the Bill is the first step in the direction we need to take. We need to be more accountable and transparent and we need to watch how we use and avail of our funds in future. Many who have never been in the social welfare system are reluctant to continue receiving payments because they believe they are well capable of working. The Minister must do everything within her power to ensure that in future we have an opportunity to give those people an education, whether through FÁS schemes or job initiatives.
I welcome the Bill and I hope the Minister will continue in her endeavour to reform the social welfare system.
I welcome the Bill and I commend the Minister on her stewardship of it. I share the Minister's objective that the social welfare system must be focused on those most in need. The job of Government, the State and especially the Department of Social Protection is to protect and assist those who require the help of the State. In keeping with the comments of Deputies Naughten and Catherine Byrne I maintain it is important to reform our social welfare system and to have a focused social welfare system which protects and assists those who most need help.
It is important to assert in the House the importance of having a value on employment and of having people in work who are not dependent on social welfare. The job of Government is to prevent people from being dependent on welfare, to move people off welfare into employment, to allow people to have respect, dignity and self worth and to empower people. In her fine address Deputy Catherine Byrne made reference to people in need of help. We must empower people and give them hope and opportunity to be employed and to be in employment.
Job creation should be a pivotal axis in the Government's future policy direction. This axis is contained within the Bill, which has several activation measures that anyone who is serious about people and community would deem praiseworthy, including the restoration of the minimum wage, the halving of the lower rate of employers' PRSI contributions and the national internship programme.
In her speech, the Minister referred to social welfare as being a contract between citizens and the State. The Minister is correct; it is a contract. People enter into a contract and act to honour the responsibility that they take up when they sign up for social welfare. A society should be judged by the way it treats its most vulnerable members. The provision of social welfare is one mechanism we use to assist those most in need. However, the payments we provide come with responsibilities for those who make claims, including the responsibility to comply with the regulations set down and not to make false claims. We do not need or require TV3 or RTE to inform us that there is a need to tackle social welfare fraud. The previous Government made an attempt to start the process and it is the duty of this Government to continue it. It is fair to say society will not look favourably on those who breach their responsibilities.
It is important to encourage people to come forward, to be honest and to stand up and be counted. Deputy Catherine Byrne made reference to the issue of rent allowance. There must be reform and transparency in the system. This year more than 1,000 welfare fraud tip-offs are being made every month. Last year, some 12,000 tip-offs were made, double the figure for 2009. Therefore, as our resources become tighter people are beginning more and more to self-police fraudulent claims. There should be greater activity in the elimination of fraud and in activity related to the policing of fraudulent claims. In 2008, almost €476 million in social welfare payments was saved through fraud control measures, an increase of €29 million. The target we set was €600 million. In the context of our significantly reduced resources savings can be made.
The measures to combat social welfare crime will assist in the fight against the hidden economy and the black market, which is flourishing. People are doing very well in the black market. The measures we will introduce will ensure value for money is delivered to the taxpayer. Those who abuse welfare payments provided by the State deserve to be held to account. This must be part of what we do as a Government. The Minister's proposals will assist in this while at the same time ensuring that those most in need of our assistance will benefit as required. We will be judged on the delivery of the way in which we look after those in most urgent need and on social welfare.
Yesterday, Deputy Cowen made reference to me in one of his remarks and quoted me. This is a coalition Government, a Government of two parties committed to serving and to working for the people to bring about real, meaningful change, which will deliver in terms of unemployment benefit, jobs and political reform.
There can be no red line or blue line issues. Our interest is the national interest. The Minister, Deputy Burton, has led the way in regard to social welfare. Those of us who are privileged to be elected to this House must bring about reform of the system and of the Government of our country. The Fianna Fáil - Green Party and Fianna Fáil - Progressive Democrats Governments funked that; they did not have the bottle to do it. They made a complete mishap of everything they have done. When I hear lectures from Members opposite about what is in this Bill and in the jobs initiative I laugh. I reflect on what happened during the past decade and I see the missed opportunities and the people who are now impoverished as a consequence of the failed policies that those Governments pursued. That is the reality. Before they come into this House and lecture us, they should stand up and scrutinise their record on how they dealt with people and the money they wasted during the past decade.
There are no red line issues and there are no blue line issues. We will act in Government on behalf of the people. The people have put us into this job to govern and we are here to represent them. We will not pander to friends in the developers' tents above in Galway. We will not be developers' friends.
We will be the friends of the people. That is what the people want; they want political accountability, reform of social welfare and a Minister who will come to the House and deliver on the programme for Government and the promises made in it. That will happen with this Bill. To be fair to her, in her remarks yesterday and as part of her policy platform the Minister has been strong, assertive and courageous in what she has done. We are not simply about garnering votes. This is about delivering to the people who have put us in here and it is about the implementation of plans and activation measures which will get our people back to work.
It is also important to consider the issue of personal public service cards and the way in which the Bill will allow for the cancellation of such cards. We must examine the composition or role of investigators of social welfare fraud and the extension of powers of social welfare inspectors is important as well. The sharing and fraudulent use of PPS numbers is a loophole in the system which, I understand, is proposed to be tackled in the Bill. This is long overdue. We must examine the fraud of PPS numbers and determine how we can eliminate the scourge. I commend the Minister on the work she has done and for the Bill she has brought before the House. It is important that the Bill is supported and that our people are given hope. There must be an elimination of dependency on welfare and the creation of jobs and employment opportunities. This is what our people want us to do.
With the permission of the House I wish to share time with Deputy Kelleher. In addressing the Bill I refer to some of the comments made by the previous speaker, for whom I have good regard and respect for his general discourse and banter in the House. However, I remind Deputy Buttimer if he is concerned about the record of the last Government that with regard to employment during a ten year period there were an extra 800,000 people at work. I do not suggest for one moment that this is entirely the responsibility or to the credit of the previous Government. However, the policies that were followed for many years were largely supportive of enterprise and have led to a transformation of this economy. There are problems and we are going through a crisis, some of which is of our own making and some of which, as the Deputy is well aware, is the result of international pressures and measures. To suggest that the previous Government is responsible for all ills and that it somehow took an entirely reckless approach in the management of the economy is far wide of the mark. We will have an opportunity to debate the matter in greater detail.
Deputy Buttimer remarked on the record of the current Government and the speed and haste with which it has sought to address many of the problems and issues which exist. The issues of electoral reform and the banning of corporate donations were discussed a good deal in the run-in to the election but the Government has been hesitant, despite the fact that we prepared two tranches of legislation. One tranche related to an amendment to the Constitution and a Bill to allow that to take place. The other tranche of legislation would have served to act in an interim capacity. Deputy Buttimer's party in particular has sought to avoid that. I can only draw the conclusion that the Deputy believes there is some stock and a capacity within his party to continue to draw corporate donations during the interregnum until such time as the Deputy's party introduces legislation. That speaks volumes for the Deputy's views on electoral reform.
The Deputy then spoke about promises that were made. I remind him that his party and his partners in government made many promises in the run-in to the election, particularly on how they would renegotiate the programme that was agreed by the previous Government with the EU and IMF. The new Government has fallen well short in that regard, failing to renegotiate any aspect of it. Members opposite seek to take credit for changes to the national minimum wage, which I will return to presently. The situation in regard to the interest rate on the bailout speaks for itself. Moreover, in recent days we have seen a debacle emerging through the difference of opinion between the Taoiseach and the Minister for Finance.
The Minister, Deputy Burton, suggested during the election that she would support low-paid workers by reversing the reduction in the minimum wage. She has followed through on that undertaking in this legislation. However, nowhere along the way was there any suggestion from the parties in government that they would target a much greater number of low-paid workers through an attack on the joint labour committee, JLC, process, which will reduce the take-home pay of up to 200,000 workers. At the time the previous Government reviewed the minimum wage, representatives of various sectors put forward a coherent argument that a reduction in the rate would open up opportunities for new employees and would not affect existing workers. One particular enterprise within the private sector sought to test that but failed in the courts. The process that was put in place by the previous Government protected existing workers and gave an opportunity to employers to live up to their commitments. In other words, the reduction in the minimum wage was justified at the time in order to provide an opportunity for employers to take on additional staff. Unfortunately, they did not live up to their commitments in that regard.
The reality is that changes to the JLC system impact on a much broader group of people than would a reduction in the minimum wage. Minimum wage employment is usually transient and short-term, often taken up on a casual basis by students and other young people before they embark on their career proper. By contrast, the dismantling of the JLCs or a reduction in the rates payable under the system would have a much greater impact, particularly in the hospitality sector where large numbers of employees are regulated through JLCs and employment regulation orders, EROs. For many of these workers their job is their career and they intend to remain in the sector in the long term.
Ireland has always prided itself on the quality of its employees in the tourism sector and on the friendly and competent way in which they do their jobs. Eroding the pay scales in that sector will impact significantly on the quality of the service offered. Ironically, we have already seen something of that decline even with the higher pay rates that were available during the boom years. Employers in the hospitality sector have told me they had to pay more than was required under the ERO in order to secure good staff. Even at that, many of the jobs in the sector were filled by eastern Europeans, which is not to suggest in any way that the work done by the latter was anything less than perfect. However, visitors to this country come in the expectation of meeting a friendly Irish face and enjoying an Irish-delivered and Irish-provided service. There are potential losses to the country if we do not ensure that is what they get.
An important element of our tourism offering has traditionally been its delivery by staff who are up for the interaction with guests and prepared to involve themselves in banter and who are, in turn, well looked after and achieve a sense of satisfaction from their work. Unfortunately, if we engage in a race to the bottom in terms of wages we may damage the product we are offering. I acknowledge that the Minister is committed, as she was as Opposition spokesperson, to representing lower-paid workers. As such, I hope she can in some way alleviate the worst ravages of the measures identified by the Minister for Jobs, Enterprise and Innovation, Deputy Bruton. I see other friendly faces in the House who I have no doubt will work assiduously to ensure these proposals are modified.
The Minister will recall the Duffy-Walsh report which was initiated by the previous Government on the basis of its concern that any dismantling of wage structures under the JLCs might have a detrimental impact on various sectors, particularly the tourism sector. That approach was taken in the face of calls by some of the employer groups for the system to be dismantled immediately. We have been proved right in our caution. Most of the recommendations in the report are appropriate and commensurate with what needs to be done, but the most important finding is that there is no appreciable evidence that there is job creation potential in dismantling the JLC structure. It is important that the Government acts on reports such as this rather than apparently drawing up calculations on the back of an envelope. When we on this side of the House were in government we were accused on occasion of not following the advice of certain reports. Of course, we were also accused when we did follow the advice of certain reports. That is one of the joys of being in government.
During the election campaign much was made of the desire of the Labour Party in particular to protect workers on the lowest pay. The Tánaiste, when he was on this side of the House, came in here on a daily basis and, with great indignation, castigated and chastised the Government - as did the Minister, Deputy Burton - for what was presented as a desire by the then Government to force lower-paid workers to take the greatest brunt of the cuts. I hope the Minister will recall her views at that time and user her negotiating skills to ensure the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, does not get his way on this particular issue.
I have talked about job satisfaction and the capacity to retain people in the hospitality sector. If it becomes the case that tourism and catering jobs are seen as merely transient, with people doing them for a while before moving on, it will not be good for the industry or for society at large. There is a need to develop levels of skill and craft within the sector, but we can only do that if there is a proper wage structure where people feel they can develop a career rather than merely taking a job as a filler.
The Bill also gives effect to the Government's internship programme. I welcome the concept set out in the Bill, but I remind the Minister that I have already spoken about it in the House because it is very similar to the provision set out by the previous Government in the 2011 budget. The latter was referred to as a skills development and internship programme and it too set out to provide 5,000 places for interns. However, the most significant difference in the Government's proposal is that it is not quite as beneficial to the participants, with only €50 per week-----
The Minister will recall the period of last December and January when the Government effectively collapsed. I assure her that provision was made for the programme and it would most certainly have commenced had the election not been called. This Government is benefiting in many ways from programmes we identified and funds we set aside. I note that some of the Minister's colleagues indicated in advance of coming to power that they would not be running around to the opening of various events, cutting tape and so on. They have done very well at that in recent weeks and I wish them well in it.
I am delighted to see such activity, and there is a certain burden lifted in that regard. The sad reality is that the Government has taken a substantial amount out of this particular programme and I wonder if it will be clearly announced that only €50 rather than €100 per week is now available to participants.
I wish the Minister well in the difficult period ahead.
In respect of the Social Welfare and Pensions Bill 2011, I was led to believe that the legislative changes required to bring about the proposed jobs initiative were included in this Bill. Unfortunately, the jobs initiative is quite limited in its scope and while I do not wish to be overly negative, it is important to highlight the point that the jobs initiative as announced by the Government recently started out before the general election with an initial figure of 100,000 jobs. It included NewERA and other components in a proposal that 100,000 jobs could be created within a short space of time. This commitment was given before the general election and many Members who have been around this House for a long time will have learned that politicians' promises before general elections quickly recede in their aftermath. That is fine and is done and dusted. The Taoiseach has stated that the recent general election was the ultimate ambush but the only people who were ambushed by the Opposition manifestos were the people of Ireland. Nevertheless, the people have spoken and one must live with the consequences of that decision. However, the jobs initiative undoubtedly was paltry in its efforts to address what is a huge challenge facing this country, namely, the issue of unemployment.
All Members of all hues and colours and none accept this to be the biggest challenge facing the current Government. Equally, however, it is important to be honest with the people and if one analyses the provision of funding made available in the jobs initiative, one finds quickly that it simply comprises the transferring of moneys around the various departmental subheads. It involves measures such as cutting back on capital expenditure, and Members have yet to learn exactly what programmes will not go ahead, to fund the jobs initiative. It will be of critical importance for any serious analysis of the potential impact of the jobs initiative to ascertain what moneys, which originally were intended to be drawn down this year, have been transferred from such programmes to expenditure on the jobs initiative itself. Members still await a response from the responsible Minister, although they are not quite sure whether the relevant Minister is Deputy Noonan or Deputy Howlin. In any event, they wait in anticipation to find out which Minister is responsible for this particular area in the context of public expenditure.
As for the broad thrust of the Bill, obviously Fianna Fáil welcomes aspects of it. Demographic challenges exist at present in respect of the changing age profile as the nation ages and this is a subject about which Members could debate at length. Serious challenges to ensure adequate funding is made for pension provisions in the years ahead are coming down the tracks. In this context, I recall being told some years ago, by Labour Party Members in particular, that the National Pensions Reserve Fund, in which it was proposed to set aside 1% of GNP per annum for a number of years, was a waste of time. Instead it was suggested there should be investment in capital projects, which would have further inflated the economy and would have driven matters even further out of kilter. While it was bad enough as matters stood, to put further fuel on a fire that already was alight would have undermined the economy even further. When the economy ran into trouble and huge problems arose in respect of the bank recapitalisation and the budget deficit, at least a provision was in place that could be accessed to help the economy to get through the current challenging times. However, had the then Government adopted the policies that were being advocated at the time of the fund's inception, the National Pensions Reserve Fund would not have existed in the first place. Moreover, I note that the Government has been quite happy to raid it recently to fund other aspects of its pledges and promises.
While I do not wish to engage in too much rewriting of history today, it is important to highlight that the Government is one of UFOs, that is, U-turns, fudges and obfuscation in almost everything it has pronounced recently. For all these reasons, it is important that Fianna Fáil holds it to account and highlights the promises and announcements it made before the general election. For example, I consider the minimum wage to be one of the greatest stunts of all time.
-----have a negative impact on lower-paid people and those who were governed by the minimum wage. Equally, we also were led to believe at the time that it would only apply to new entrants. This point has been conveniently forgotten by the other side of the House while explaining away the proposed JLC reform put forward by the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton. All Members accept the JLCs should be reformed and the Duffy-Walsh report clearly states there should be a number of reforms.
Fianna Fáil seeks a full and open debate in this House in which all Members will have an opportunity to express their views or to highlight concerns they may have regarding the proposals set out by the Minister, Deputy Bruton, which will come before the Cabinet soon. For all these reasons, I genuinely believe that if the Government is to be honest, accountable and transparent in the context of the promises that were made before the general election about ensuring that this Chamber would be the place in which policies would be announced, debated and pronounced, then the Duffy-Walsh report certainly should be placed on the floor of the House in order that Members can have a proper and open discussion in which everyone may express his or her view. This may help the Minister in the context of the agonising decisions he must make to try to keep some of the Labour Party Members on side and will give them an opportunity to express their views to enable him to water it down.
However, the most significant point in this regard and the issue I find most hard to accept is that the proposals regarding the JLCs and the reduction in pay and premiums for people who work on Sundays also constitute an attack on the lowest-paid people. Just as the Minister and many others asserted that the reduction in the minimum wage was an attack, this proposal constitutes a fundamental attack on more than 200,000 people who are governed by the JLC payment system. Each Member must decide on this issue in the future, when these proposals come to the House by sleight of hand to be rammed through by a Government with a massive majority. This will take place without providing an opportunity for Members to debate the issue before the decision is made to change the JLCs and to reduce the pay of the lowest paid, as already has been asserted by many Members on the Government side of the House when they were over here in the comfort of the Opposition benches. There should be honest and open debate on all these issues.
I wish the internship programme well, because it is a worthwhile initiative that I genuinely hope will be taken up and implemented as quickly as possible. It was announced by the previous Government and I do not mind who announces such initiatives, provided that they are implemented and have an impact. I encourage the Government to move forward the initiative as quickly as possible to give 5,000 people the opportunity to take up the aforementioned internships. The current Administration's continuance of a programme announced by its predecessor in the budget last December constitutes a positive aspect. Much material relevant to this Bill, which will implement the jobs initiative, has been omitted from it and, to date, I can only find the changes pertaining to PRSI, the minimum wage and a few other issues. It really is a paltry announcement and response to what is a serious issue, particularly given the commitments and promises that were made when the Government parties were in opposition.
While listening to the Opposition Members, one would think they had no hand, act or part in any of the heartache the poor people of Ireland are obliged to endure. I wish to take this opportunity to acknowledge the great work being done by the Minister, Deputy Joan Burton. This jobs initiative is good legislation and I welcome the reversal of the reduction of the minimum wage. I wholeheartedly encourage the Minister to continue her work in respect of fraud. I also greatly welcome the lowering of the 8.5% rate of employer PRSI. Deputy Kelleher should acknowledge that to be a highly transparent measure which is making a major difference to people engaged in the tourism industry, especially in the region in which I live. I wish to acknowledge its importance and warmly welcome Deputy Kelleher's welcome for the internship scheme. While the welcome was couched as though the measure was simply an initiative of the previous Administration, I wish to ensure the Deputy realises it is an initiative of the current Government.
I have discussed the matter of social welfare appeals with the Minister on a previous occasion. It can take up to 14 months for an appeal to be processed. I ask the Minister for her help in the case of an elderly gentleman in my constituency who is 90 years of age. He has appealed his pension and it will take 18 months to come to a hearing. I acknowledge the good work of the appeals office in Sligo in dealing with the massive back log. This elderly gentleman has an infirm wife and he was crying when I met him a few days ago. We must protect the most vulnerable in our society. Social welfare is in existence to protect the most vulnerable people in society. I welcome the Bill and, in particular, the proposals for the jobs initiative. I look forward to these measures making a positive difference for both employers and employees alike.
I welcome this Bill and a number of its initiatives. I wish to highlight a number of the worthwhile decisions by the Government contained in these measures which, in my view, will benefit a number of areas including employment growth, the counteracting of fraud within the system and the streamlining of the system. As a previous speaker noted, the decision by the Government to halve the lower rate of employers' PRSI from 8.5% to 4.25% will ensure that the environment will be more fertile for employers considering expanding their business. The actual cost to the employer has been reduced and this is to be welcomed.
I welcome in particular the provision related to the use of public service cards by providing for the cancellation and surrender of these cards where evidence becomes available that they are being used illegally. It will be an offence to fail to return a public service card without a reasonable excuse when requested to do so. This will enable civil servants to develop a resource in the bid to fight fraud in the system. Information can be scanned or swiped and this will prove beneficial in cases of double claiming or where claimants have crossed the Border to claim benefits. The proposal originally introduced by the former Minister, Deputy Éamon Ó Cuív, was a welcome initiative and this Bill ensures that it can be developed further. I wish to acknowledge the work of the previous Minister, Deputy Ó Cuív.
I commend the Minister, Deputy Joan Burton, for the provisions to facilitate the transfer of the administration of the supplementary welfare allowance scheme from the HSE to the Department of Social Protection. This will stop duplication where two separate organisations of State are gathering information. In our efforts to combine resources, this ongoing move by the Government to bring community welfare officers under the umbrella of the Department of Social Protection will result in significant progress in streamlining the public service. Slowly but surely, we are heading for a one-stop shop in which unfortunate people who have to claim benefits will not have to make their case to several organs of the State. This is a recurring complaint, that people are forced to go from one place to another and must be interviewed many times. Shared information is a better use of resources. In many cases, people are means tested by the local social protection office only to answer the same questions from the community welfare officer. I am pleased with the proposal in the Bill to extend the Minister's existing powers to make regulations specifying information to be provided by claimants for social welfare benefits that would be useful in determining entitlements to that benefit or in assessing the training or other educational or development needs. This extension will allow such information to be provided also by existing recipients.
The current level of unemployment at 441,000 is extremely worrying and is especially of concern when one considers the ongoing progress of our exports in the pharmaceutical, computer software and the food and drinks industries. Further measures to facilitate training in growth sectors such as the pharmaceutical sector should be provided by State agencies as any existing training in this sector is only available in-house in the various companies. Training and retraining of the unemployed must go hand in hand with the social payments system whereby claimants must be assessed on their educational and training needs.
The proposal for a national internship scheme is most welcome. This scheme will provide 5,000 work experience opportunities for jobseekers in the private, public or community and voluntary sectors. During this time, participants will receive an allowance consisting of a top-up payment of €50 per week on their existing social welfare entitlements. The period following the building boom has left this country with people who have to be reskilled and this is particularly the case for the age group of under 40 years because, otherwise, the prospects of long-term unemployment for such people is imminent. This proposal will be a start in the quest for tackling the plague of long-term unemployment because the system ignores those people, offering nothing only the weekly payment and no prospects of retraining.
The measures contained in this Bill are vital at this time as we start on the road to tackling the scourge of long-term unemployment. They support the continued streamlining of government and the necessary changes to State pensions in line with the national pensions framework.
This Bill restores the minimum wage to €8.65 an hour. In my view, as an employer, this should not be regarded as a level that can be worked down towards but rather as a minimum that can be worked up from. Businesses are based on having people working with them and not against them. It is important to make going to work an attractive option and this is the aim of the jobs initiative. The payment of €8.65 per hour is equivalent to €346 a week or approximately €18,000 a year. This is very small money and it is hardly enough for a family to survive on but families do and in many cases there is little or no money left for mortgage loans which were taken out in the so-called Celtic tiger years.
I recently had a meeting with the Minister for Finance, Deputy Michael Noonan, to discuss a possible practical solution to the mortgage problem and I hope that some or all of my suggestions may be of use. People are leaving this country and they will not be back again, contrary to some views, if the huge debt hanging over their heads is not addressed. The worry of the debt is sending them out of the country and unless this is dealt with, they will not be back. Why should they come back? The pension age is being moved upwards and while we would all aspire to early retirement and living longer, this upward move cannot be avoided. If good government is in place over the next decade, the situation with regard to pensions might be completely different. Ten years is a long time; it took ten years for the previous Government to destroy this country so it is hoped that in the next ten years we might reverse that situation.
In farming, which is a cyclical industry, many people never saw the price downturn that happened in 2009 and very few saw the surge which happened last year. Thankfully, that is one of the positive aspects that is pushing our exports up in this country. I would like to remind those speakers from the previous Government that one in ten of the jobs they aspire to have created in the past few years was created in the public sector, hence we have a bloated public sector which has no productive work to do.
The national internship scheme is a fabulous idea and will get skilled people back to work, but will also get them back into employment that matches their skills with a particular job that they are good at. It is knowledge-based in that respect. People will receive an extra €50 in their social welfare payments which is not a huge amount of money but the scheme will get them into the workforce.
Once a person enters the workforce, if he or she can add to the productivity of a business - I see it myself - one tends to hold on to him or her because he or she has proved his or her worth. It is a great initiative. It is simple but most good ideas are simple. Halving the lower rate of employers' PRSI provides a chance for employers like myself to make sure that we can employ extra people. Not only does it help employers, but people who are looking for a job.
Social welfare fraud is another issue which needs to be and is being tackled. I am glad the Minister stated that social welfare is being targeted at those who are most in need. That should be the case. We need to get rid of the jet set community who arrive in, sign on and collect payments because the more we tackle fraud, the more money will be available for genuine recipients.
People complain about JLCs. They are agreements that were written for a different country at a different time. They are not relevant today and need to be addressed. There is no point in political point scoring or saying that people are not living up to their expectations. I welcome the Bill.
I also welcome the jobs initiative and the Minister's determination in implementing the aspect of it which pertains to her Department, namely, the 5,000 internships and Tús places and 3,000 back to education places. While we always hope for more it will provide confidence. We have said we are going to do something and we do it. It will be welcome news to the Irish people that we say what we mean.
However, we might go further. I refer in particular to community employment schemes. Approximately ten or 12 years ago some 40,000 people were involved in community employment schemes throughout the country. Now there are 22,500 participants. The places were reduced during the boom times when we had full employment.
The ethos of community employment schemes are different from that of Tús because an element of the community employment scheme involves the participants applying to be involved but, as I understand it, in the Tús scheme local development companies find placements and the social welfare officers decide where people should be placed. There are community employment schemes in place throughout the country. I have made inquiries and learned that the current schemes are oversubscribed.
I am involved in a local theatre company in my town and we cannot get people involved because there are no participants, yet we have suitable jobs and placements for people. From my inquiries I understand 1,000 people could be put into various schemes within four weeks, such is the demand, and over a period of time 20,000 people could be placed. If the duration of the scheme for any participant wer extended to two years after each term 20,000 participants would be rolled over. People would be involved in meaningful placements in work.
A lot of the work in community employment schemes involves tidy towns and local voluntary community projects. The work is tangible and meaningful in places throughout the country. A lot of the emphasis is on training and so on but we know that people who have been trained or retrained now find it difficult to get work. The solution is not to send our people abroad. Rather, as many placements as possible should be opened up for those currently in receipt of payments because work needs to be done in communities.
Instead of setting up the new schemes and so on, we should work with what we have. I am from Ballina, County Mayo, and we have 14 projects with 365 participants which is administered by one officer. FÁS is criticised a lot with good reason because of cronyism, etc., but that is an efficient way of dealing with schemes. We already have a system and structure. In a short period of time people could be put into placements where there is work for them to do.
Community employment schemes deserve to be examined because there are a lot of benefits for communities and participants and they have a place alongside Tús. I ask the Minister to consider the issue seriously.
I asked Deputy McLellan where Deputy Barry was from and she told me he was from Cork. I wondered if he was related to the famous Kerryman that we loaned to Cork back in 1919 and 1920 but she said he was not.
Deputy Barry referred to the public service being oversubscribed. Is he referring to the workers in this institution which over the past number of months has had its staff numbers depleted to such an extent that the so-called oversubscribed workers are being run off their feet and have not been replaced? It is something which the Government should take into consideration. The people who work for the State in this building and provide fantastic service are being strung out and are oversubscribed in terms of work but not manpower.
As others have pointed out during this debate, inserting the minimum wage into the Bill is a cynical ploy to cover the cuts to the old age pension. What is clearly an attack on people who have worked hard all their lives is disguised or attempted to be softened by including the welcome restoration of the €1 cut to the national minimum wage. When Fianna Fáil cut the national minimum wage it was an absolute disgrace. It should be restored and its restoration should be fully supported because the cut took money out of local economies and contributed to the growing problem of unemployment in this country.
The two matters should have been separated and dealt with in two Bills rather than in this manner. Alternatively, the restoration of the minimum wage could have been dealt with by way of an amendment to the Finance Bill. Let there be no doubting the significance of the change to pension entitlements. In effect, raising the age at which a person qualifies an end to a 16% cut to a lifetime pension entitlement, apart from the other effects the change will have on people reaching the end of their working lives.
The right to a pension is a fundamental worker's right and must be seen as such. Resistance to any attacks on the basic pension entitlements of ordinary workers should be a priority for the trade union movement. It is certainly a priority for Sinn Féin. The right to a pension is a long-standing Irish republican principle. The 1919 democratic programme promised to provide for the care of the nation's aged and infirm who shall not be regarded as a burden but rather entitled to a nation's gratitude and consideration.
All those who subscribe to this principle must defend and extend social protection for older people, rather than cutting it back. In particular, cuts to pension entitlements and the other cutbacks being implemented should not be introduced to pay for the failures, incompetence and corruption of a small, discredited elite. It is wrong that low income workers, people on the minimum wage and old age pensioners should pay for the developers and bankers who have robbed the country and should be before the courts. Unlike in Iceland, where those responsible for the economic crisis are before the courts, the individuals responsible here were given a golden handshake paid for by workers and the poor.
We all know who is responsible for the current mess. The two parties opposite spent the past few years in opposition declaiming those responsible. This was the basis on which they won a majority in the general election. During the election campaign, Fine Gael and the Labour Party spoke about the manner in which those involved in banking and speculation brought about the crisis that resulted in the EU-IMF bailout and its associated austerity programme. The arrival of the IMF was partly the responsibility of the previous Government and the current Government's sin is one of complicity rather than agency. Fianna Fáil and the Green Party facilitated the disastrous manner in which the so-called elite undermined the economy but failure went well beyond that. While that Government is gone, we are still left with the hangover from the financial collapse and, unfortunately, its successor, the Fine Gael-Labour Party coalition, is continuing to implement exactly the same policies as its predecessor.
Despite much talk during the election campaign of renegotiating the terms of the bailout and burning the bondholders, the Government continues to place the burden on ordinary people who were not in any way responsible for the disasters for which they are expected to pay. The Government is implementing the same austerity measures agreed by the previous Administration and following the template laid down in the EU-IMF memorandum of understanding, albeit one which was slightly modified recently, including the timetable for raising the pension age, as provided for in the Bill.
The Government is clearly following the timeframe laid down by the European Union and International Monetary Fund, hence the guillotine to be applied to the Bill. Can any of the Deputies opposite, specifically those from the Labour Party, honestly state that they would have seriously considered introducing legislation to raise the pension age if they were not obliged to do so by the terms laid out in the memorandum of understanding? This measure completely contradicts everything the labour movement stands for. While Labour Party Deputies may wring their hands and claim they do not have any choice in the matter, rather than pretending they would secure a radically improved deal, they should have been more honest during the election campaign.
In the early days of industrialisation older workers could expect to enter the poorhouse at the end of their working life when their bodies had been broken by years of hard physical labour. After generations of struggle we progressed to a point where most people recognised the value of the system of income protection which the State financed through the collection of taxation revenues. Clearly, we can no longer take this system for granted. By raising the pension qualification age, the Bill cuts pension entitlements by 16% and will force older people to remain at work despite the potential consequences for their health and well-being. This proposal was originally made by the Fianna Fáil Party when it was in government in 2010. At that time, the head of the largest trade union, SIPTU, described the proposal as worse than expected and an attack on State pension provision. I call on the trade union movement to resist the proposed reforms to pension entitlements. The trade union movement in France correctly brought the country to a standstill last year when the French Government proposed raising the minimum age for a state pension from 60 years to 62 years. The Bill raises the age at which people are entitled to a State pension to 68 years. Is anyone in the leadership of the trade union movement prepared to give the leadership required at this juncture to defend low income families and the rights and entitlements for which old age pensioners paid over many decades?
As has been noted, it is a cynical move to include in the Bill the welcome restoration of the national minimum wage alongside a proposal to raise the pension age. I have no doubt that attempts will be made to use the opposition of Sinn Féin and others to the Bill as a means of suggesting we opposed the restoration of the minimum wage. This tactic will be employed to circulate a message that Sinn Féin is against the minimum wage. We were the first party out of the blocks on the need to restore the minimum wage. While that remains our position, we are against linking its restoration with the other measures proposed in the Bill.
During the election campaign, Sinn Féin's stance on the Communications Regulation (Postal Services) Bill, which was taken on the basis that we understood exactly what is entailed by the postal services directive, was spun by a certain political party to suggest my party opposed the Bill because it sought to protect postal services. As was the case in Britain where the Labour Party hoodwinked the postal unions by selling the directive as a guarantee of postal services-----
-----the reality is now dawning on postal workers that the directive is a charter for all the things the Labour Party claimed it was not. I look forward to revisiting this issue shortly and hope the Labour Party in government will take cognisance of my comments on it.
As I indicated, the restoration of the national minimum wage is welcome. No one who knows my party's record on the issue will be fooled into believing that our opposition to the Bill is because we support lowering the minimum wage. While the restoration of the minimum wage is welcome and fulfils at least one of the Government parties' election promises, low paid workers continue to be under threat. The recently published Duffy report on joint labour committees and wage orders was supposed to form the basis for consultations involving the trade unions. However, comments by the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and others indicate that it is intended to go beyond the report's recommendations. Low paid workers could still find their hard won rates and conditions undermined in one way or another. The Duffy review arose from the EU-IMF bailout. It is clear that when the IMF and EU ask for or order a review, whether of employment rights, credit unions, pensions or the sale of State assets, they have in mind a specific outcome which will not benefit the majority of citizens. As with the Duffy report, the findings of a review can be set aside if they are not as the IMF and EU wish and measures that are more inimical to workers' interests can be pressed ahead with.
People should not be lulled into believing that the restoration of the minimum wage means that the threat to low paid workers has been lifted. When the restoration was announced, some employers' spokespersons let it be known that it would be much more valuable to them if the outcome of the review of the JLC rates was favourable to their view. Given that the JLC rates affect 200,000 people, one can see the reason they adopted such a position on the matter. Approximately five times as many workers are covered by wage orders as by the minimum wage. The financial gains to employers if wage orders are undermined and other conditions are altered, for example, those governing overtime, are much greater than those that would accrue to a small number of employers who pay the minimum wage. If linked to legislation to allow employers to opt out of an inability to pay clause, such measures could result in a race to the bottom in which tens of thousands of workers find their already modest incomes slashed.
I will give an example to the types of workers covered by the current arrangements to cut through some of the propaganda being spread by those who advocate going beyond the recommendations of the Duffy report. Under the employment regulation orders set out in July 2008, a hairdresser in Dublin is entitled to a basic rate of €303.59 for a 39 hour week or only €268.07 if under the age of 18 years. This amounts to €7.07 for a person aged over 18 years, which is less than the national minimum wage. The rate set in June 2007 for contract cleaners was €370.50 for a 39 hour week, which is marginally above the restored minimum wage. I could list several other areas, including security, clothing and the hotel sector, where special rates apply.
Even with the modest increases that have occurred since then and with overtime of time and a half and a Sunday rate of double time, we are not talking about people living in the lap of luxury. They are simply trying to exist. It is hard to imagine that Dublin hairdressers will be sponsoring any Fine Gael gold classic in the K Club any time soon. These are the type of people who, it has been decreed, are to bear the brunt of paying for the gamblers' debts. While those responsible have been pensioned off, protected and allowed to escape the consequences of their actions, low-paid workers are being targeted at the behest of the IMF. Under this Bill they will have the dubious pleasure of working longer for less.
I welcome the opportunity to speak on this Bill. When I was on the campaign trail in the towns and villages of east Cork last November, December and January, like most candidates, I was able to see at first hand the effects of our broken economy. I had an opportunity to call to those, young and old, in rural homes in Cloyne, Carrigtwohill and Killeagh, as well as in urban settings like Mallow, Midleton, Cobh and Youghal. I met young men and women struggling to make ends meet and pay their mortgages and household bills. They could not pay the ESB and could not afford their heating bills. I met a man who had no food in his fridge and a woman who had a leaking pipe. She could not afford the luxury of a plumber because it was a case of either hiring one or having enough money to eat.
Meeting weekly or monthly bills was possible for such people, but only by making sacrifices. Raising the age of eligibility for the State pension, as set out in this Bill, will undoubtedly create a poverty trap for many older people. Many of those lucky enough to have work, for example, will be contractually obliged to finish at 65, forcing them to seek alternative employment. They will most likely be in the dole queue where they will be joined by many jobseekers in the 50-plus category who have already lost their jobs and who will find it notoriously difficult to be re-employed. So a situation will be created where the proportion of the population receiving the jobseeker's allowance will increase.
Critically, the fuel allowance which helps people to meet their fuel costs is currently available to those on the State pension transition, but is not available to those on jobseeker's benefit. Poverty among older people, especially those living alone and those who do not own their own homes, is disgracefully high. Individuals and families on the margins between struggling to survive and going under, will be further penalised by this Bill.
I cannot but think of those elderly people I called to last November, December and January. Anyone who votes for this Bill is voting to condemn thousands of older people to an existence in the darkness and cold. It is estimated that between 1,500 and 2,000 avoidable deaths occur each year as a result of extreme winters. The State pension and associated benefits are the most effective tools in reducing poverty among this group. If older people are forced to go on jobseekers' payments instead of a pension, they will be hit by a cut of €40 per week. Once again it is older people on the margins who will be disproportionately affected.
On its election, the Fine Gael-Labour Government promised a new dispensation in politics: out with the old and in with the new. That, however, is not what we are being presented with. Rather, this Bill is laden with the political cynicism of two parties who have learned how to play the game based on the rules of the past decade and more.
I thank the Minister and commend her, and her Department, on the work and thought they have put into this Bill. This legislation, along with the Finance (No. 2) Bill, will introduce measures to promote the Government's jobs initiative, as well as changes needed in the social welfare code and in the Pensions Act. I view this Bill as a reaction to restore equity for the lower paid by the re-introduction of the hourly rate of €8.65 as the minimum wage from 1 July. This is something we hold close to our hearts as a protection for those who are most vulnerable in society. The Labour Party and Fine Gael considered this had to be done as a matter of the utmost importance, so we are dealing with it within our first 100 days in office. I commend the Minister on that and I am delighted to be part of it.
This reinstatement of the minimum wage is a reaction to a harsh and unfair decision by the previous Fianna Fáil Government to drastically cut €40 every week directly from the pockets of our lowest-paid workers. The sum of €40 may not seem like a lot of money but it amounts to 11% of their take-home pay. The previous reduction left workers on the minimum wage with €306 per week, thereby questioning whether it was worth their while to work. We must reward those who work. The Government's decision to restore the minimum wage shows that it is committed to the lowest-paid workers and those who are most vulnerable in society. We must do this at all times during the Government's tenure in office.
We need to stimulate the economy but the reduction of the minimum wage was doing the opposite. People on the minimum wage spend every penny they earn in order to survive and sustain any standard of living. To reduce that wage further puts working people into poverty. If people are asked to live off €306 per week they will ask what society is trying to achieve and will question its sense of decency.
This timely reversal will vindicate the Labour Party's position that the lowest-paid workers should be protected first and that work should be rewarded. Work has to be rewarded but the cut in the minimum wage was not an incentive in that regard. The reversal of an ill-conceived attack on the lowest earners in our society will make a real difference to those who join the workforce and decide to do so on those grounds.
The Bill will also establish a national internship scheme, which I am happy to see. Throughout Europe, Canada and Australia, one sees people seeking to join such internship programmes with a view to getting real work. The proposed scheme will assist those who have been on jobseeker's allowance for more than three months to gain valuable experience and combat long-term unemployment. People want to work because the prospect of long-term unemployment is both demoralising and unfair. The internship scheme is a step in helping people to re-enter the workplace and is a positive development. People throughout the country will regard this scheme as a way of staying in Ireland and developing experience, as well as having pride in themselves. They will thus participate in developing businesses and voluntary organisations in the public and private sectors.
Overall, the scheme will put skilled, educated people to work. We have such people in abundance but an additional sense of energy will emanate from the new scheme which, to begin with, will provide 5,000 opportunities for jobseekers. We can even take the scheme further and, to this end, I am currently working on related issues with some of the relevant Departments. It is important to keep the unemployed close to the work environment and this scheme should be viewed as an opportunity to train and get hands-on experience that may be crucial to their success in finding work in the near future. If this internship scheme gives any young people such opportunities, it is to be commended.
While considering the lowest paid in society, the Government must also aid employers. The halving of employers' PRSI rates, as set out in the Bill, is a welcome development because small businesses around the country are finding it hard to survive, given the crippling rents and rates that arose from what was a false economy. They are getting a break in a direction which will entice them to employ people again, particularly in labour intensive industries which will help tourism, agri-business and micro-enterprise, three areas in which we have particular proficiency. The easing of the costs on employers in this way will help job creation and improve labour cost competitiveness.
Many Deputies have made comments that are not cognisant of the fact that IMF is here. We have lost our financial sovereignty. There will be very few good days until the IMF is gone from our shores. We are taking small and gradual steps to improve the country. To those who can contribute to it, I commend them for doing so. Everybody has a part to play. This is a good day and a good step in the right direction.
I am pleased to have this opportunity to speak on the Bill. There are important provisions in it, not least the reversal of the cut in the national minimum wage, which all sectors of the House have welcomed, although it is not that long ago since IBEC and the outgoing Government said it was essential to reduce the minimum wage to increase our competitiveness and foster job creation.
I have not heard a single word of evidence that one job was created by the reduction in the minimum wage. I would love to hear the evidence to that effect but I do not believe that measure made us one whit more competitive. It is that type of message that comes across from vested interests that is not challenged and that can result in an entire community whose members are dependent on the minimum wage finding themselves in extreme poverty. By reversing the cut in the minimum wage, the consequent increase in income of up to €40 per week can make a difference between people not being able to make ends meet and being able to do so.
It is extremely important that we have put down this marker in our society that we will not have a race to the bottom - that we will not condemn our least well paid to poverty. That is very important in these recessionary times.
Every cent that is spent in terms of the increase in the minimum wage will be spent in the community in the local shops because it is there that people on low income spend their money. They do not have surplus disposable money to spend on a luxury holiday or a car. They spend their money in the community on bread and butter issues.
This Bill is generous to employers in providing for a halving of the lower rate of the employer's PRSI contribution from 8.5% to 4.25% where reckonable earnings in a week do not exceed €356. That is a significant concession to employers in the catering and tourism sectors. It will cost costs and should help to incentivise them in terms of their workforce. That combined with the reduction in VAT rate from 13.5% to 9% means that employers should have no reason to complain and should recognise that the Government is taking their interests carefully into consideration.
The activation initiatives in terms of the national employment and entitlements service that will be implemented under this legislation are extremely welcome. I particularly welcome the national internship scheme which provides for 5,000 work experience placements for jobseekers. The terms of reference extend to private, public, community and voluntary sectors with a top-up of €50 per week. That is extremely broad. Employers in every sector will be able to avail of this scheme. As Oireachtas Members, we should show good example and lead from the front by taking on interns and giving them work experience for up to nine months. It would be desirable for us to avail of that initiative.
Perhaps the most controversial area is the question of the increase in the State pension age. The EU-IMF bailout deal negotiated by the previous Government requires substantial adjustments to the State pension age by the end of June 2011 so there is not much time to deal with these adjustments. State pensions will be standardised at age 66 in 2014, increased to age 67 in 2021 and to age 68 in 2028. We recognise the reasons this has been done. It is due to the rapid growth in our ageing population and because there will be a decreasing workforce comparatively, with the ratio of six workers for every one pensioner at present compared with two workers for every person over the age of 65 in 2050.
Ironically, a former Minister for Finance, Charlie McCreevey, had the right idea. He wisely put aside 1% of GNP in 2000 or thereabouts into the National Pensions Reserve Fund to prepare for the rainy day but through the mismanagement of the previous Government virtually all of that money has been transferred to recapitalisation of the banks and the EU-IMF bailout.
Raising the retirement age is a little like a curate's egg, it is not all bad - there are good aspects to it. We have a healthier population now and many people would like to work to a greater degree if they had the choice but there are considerations to note. I believe anomalies will be created in terms of people's income and entitlements. The Senior Citizens Parliament has expressed concern at the discontinuance of the transitional State pension prior to age 66. It has also expressed concern that many State agencies such as the VHI, the Drivers Licensing Authority, the Passport Office and CIE, as well as many companies in the private sector such as Aer Lingus, have different rates, benefits and concessions which become applicable at the age of 65. Equality legislation may be required to address some of these issues to ensure that we do have various anomalies created by the legislation which would disadvantage the elderly.
In speaking in favour of the Bill I want to begin by saying I see it as a small step towards a more inclusive society. I congratulate the Minister on her imaginative way of using a relatively small amount of money. The previous Government sought to downgrade the standard of living of our most vulnerable by cutting the minimum wage and I am delighted to see it is being restored to its original rate.
Given that we live in recessionary times it is important that Government initiatives are driven by a desire to make Ireland a fairer and more equal society. There are two reasons for doing that. First, it is the right way to treat people and, second, as an excellent book entitled The Spirit Level by Richard Wilkinson and Kate Pickett demonstrates, more equal societies work better for everybody, whether they be rich or poor. I recommend that every Deputy read that book because it is a comparative work and demonstrates what is happening in various countries around the world.
Unfortunately, the Government will have to introduce painful cuts in the days ahead and the only way this will be regarded as broadly acceptable will be if the Government is seen to be acting fairly. This means that on the one hand the better off will have to take the brunt of the cuts while on the other hand, the less well off and excluded will have to be protected as much as possible. I see this Bill as addressing the second point. The Labour Party stands for a more equal and more caring society and to that end I very much welcome the reversal of the shameful decision to cut the pay of those on the lowest wages who go to work every day.
I want to address the national internship scheme and put some points to the Minister that I would like her to consider before the passage of the Bill proceeds further. I very much welcome this proposal and hope that it will help to keep some of our best and brightest people from emigrating, and will also help other people throughout society. However, the scheme must be reviewed on a regular basis to ensure that employers are not taking advantage of vulnerable interns. To that end, I ask the Minister to clarify the provisions that have been made to ensure that employers are not taking on interns, using their labour for the duration of the stay and then not taking them on as full employees at the end of that time but taking on another new intern and repeating that process indefinitely.
As I understand it, the scheme proposed by the previous Government provided that placements would last for six to nine months, which an employer could fill a maximum of three times. I suggest that the duration of placements be increased from nine to 12 months so that an employer can only replace an intern once. This would be better for the intern and ensure that the scheme is not used by employers.
Sections 17 and 18 will ensure that social welfare fraudsters will pay the full price for ripping off the country, something that should lead to more resources being made available for those who really need them. I am surprised that there has not been more focus on this aspect, given the number of complaints I received about the issue during the general election campaign.
I thank the Leas-Cheann Comhairle for the opportunity to contribute to this debate. I welcome the introduction of the Social Welfare and Pensions Bill, a crucial first step in calling a halt to the economic crisis inherited by the Government. I am confident it will mean good news for employers and workers. I would not claim to be an economist but the Government is trying to simulate the bottoming out of the crisis. The implementation of the Bill will help to achieve that aim. Given the resources available to the Minister in this regard, the Bill is a modest step but it is necessary that we start tackling long-term unemployment. We must consider the human cost of doing nothing.
Previous contributors who have since absented themselves from the debate engage in what may be described as the "Chicken Licken" politics of "the sky is falling down". For example, Deputy Martin Ferris referred to our refusal to be tough on bondholders. We have limited resources because the Deputy worked in cahoots with Fianna Fáil during the last Dáil in terms of the bank guarantee. It is also the reason our arrangement with the EU and the IMF is a stern one.
The Bill restores the cut in the national minimum wage. The cut was a cynical move by the previous Government. Without doubt, we need to try to provide as many incentives as possible for people who want to return to work. Cutting the wages of the lowest paid in society is not the way. It is certainly not the way of the Labour Party. Reforming the social welfare system is a priority for the Government, as clearly set out in the programme for Government.
The Leas-Cheann Comhairle will probably identify with my next comments. Last Saturday, I met a man in my home town of Tuam who owns a coffee and confectionery shop. His first paying customer on Saturday was at 12.30 p.m. His issue did not relate to whether he was paying premium rates on a Sunday because he has never been open on Sundays. Rather, his issue was that there was not a bob in the pockets of the people walking up and down High Street.
The restoration of the minimum rate of pay will have a significant positive outcome for the local economy. We are trying to undo the damage done by the previous Government, which took money from the pockets of the most vulnerable people in society. As Deputy Costello stated, these people are not investing in shares or repaying mortgages on second properties. They only need to survive on a minimum rate of pay. As such, the restoration of the minimum wage will boost local economies and create jobs. I am not convinced that deflating the economy and removing money from people's pockets will create jobs. Indeed, the deflationary tactics inherited from the previous Government have contributed to the significant number of unemployed people. We need to tackle this issue through a combination of education and training and by instilling confidence among the unemployed in their ability to return to work.
Young people and new entrants are also entitled to being confident about entering the labour force. The back to education programme will provide 3,000 places for adults who have not received their leaving certificates. The national internship scheme will, once fully established, offer 5,000 work places to young people in all sectors of the economy. We hope these measures will bring a halt to emigration. As a rural Deputy, the scourge of emigration is tangible and its impact is visible. This is lost on some urban Deputies, as one cannot get the same sense of the impact of emigration when walking around an urban setting. A rural Deputy can see how significant it is.
They might identify with this problem. The reality is that, through the Bill, we are taking an important first step. It is not a means to an end where economic recovery is concerned but it starts to undo the mess we have inherited after 15 years of bad Government. The Leas-Cheann Comhairle would be anxious to close me down.
The Opposition, including the Technical Group, is looking for more time to discuss Second Stage. The reason we will not be given more time is that the Bill must be passed in a hurry to satisfy the deadly duo of the IMF and the EU. Regardless of the argument that the IMF or the EU is doing good things for us, how can it be a good thing that we are being forced to push something through without people being satisfied there has been enough debate on it?
People have been discussing organising celebrations for the 100th anniversary of the 1916 Rising. The more I hear about it, the more I wonder what it is they will be celebrating in 2016. It will not be Irish independence, as we are now a puppet state and the length of debates in the House are being decided by the IMF and the EU, our great friends. If that is the road the Government wants to go down, so be it.
I was not in the Dáil, so I watched the performance of the last Government from the outside. It did a great many bad things but what annoyed me about it the most was its arrogance and lack of sincerity. I am disappointed that the new Government seems to be following the same track. Many Members, perhaps everyone, on this side of the House would want to vote to restore the cut in the minimum wage but its restoration is being lumped in with provisions the Government knows we cannot support. The spin will be that we are somehow preventing the increase in the minimum wage to the previous level. It is unfair and those opposite know it is not true, yet the Government is forcing us into this situation. I will not be able to vote in favour of the restoration because of this approach even though I agree with an increase in the minimum wage.
I also agree with the excellent idea of bringing the services provided by community welfare officers, CWOs, into a one-stop shop. As a county councillor, I needed to deal with CWOs. I also needed to attend a CWO when I was on the dole. The idea is a good one because there are no controls over the current system and it is wide open to abuse. As the Minister of State is probably aware, someone who receives a council house in my area must attend a CWO to have it furnished. Constituents have told me consistently of how they were given no choice but to go to a particular shop. This is strange. Surely someone should be allowed to get the best value for money but this is not the case.
I hope the new system will allow people to take control of the money being spent on them, as it will incentivise them to get better value for money. Under the old scheme, the incentive was to feather the nest of the shopkeeper who knew the CWO. That is a simple fact. I almost out of speaking time. While I have much more to say the EU-IMF cannot unfortunately wait for me.
The Tús and internship schemes are interesting, in particular, as they are being introduced by a Government that contains some of the apostles of James Connolly within. As an intern, a person will work full-time and be paid €50 per week. However, a person who participates on a Tús scheme will be paid only €20 per week. Why is an intern more valued than a person who participates on a Tús scheme? Is it the case that an intern is a better class of person? Everyone should be treated equally. Also, can employers not be encouraged to pay the €50? Having an employee at a cost of only €50 per week is quite good value, particularly when resources are scarce.
I recently heard the slogan "kissing up and kicking down", which is a US expression. To my mind, this Bill is licking ass to the EU-IMF, the wealthy and business elite here and in Europe while at the same time putting the boot in on the most vulnerable, namely, people on low wages, welfare and State pensions.
Like other speakers, I welcome the restoration of the minimum wage, which is badly needed. However, it is not welcome as a sop or trade-off for putting the boot in on workers on JLCs or EROs. JLCs were introduced because of a high level of exploitation and lack of rights in specific areas of the economy. This situation has not changed. If on a low wage, overtime and pension rates are extremely important. Prior to my election to this House I worked as a postwoman and knew many postmen and postwomen who had to apply for FIS and relied on overtime to feed their families and pay their mortgages. The logic behind all these measures, the approach of this and the previous Government and the IMF-EU is clear, namely, to drive down wages for working people, drive down welfare rates to incentivise people to go into low-paid dead-end jobs and to introduce workfare.
I agree that welfare fraud is a crime and that this matter needs to be addressed. However, is it not the case that there is widespread abuse of the welfare system by employers who are paying low wages knowing full well that people are also claiming welfare? Has there been any attempt to identify the scale of this abuse by employers and what penalties are in place in this regard? What resources will be allocated to identify such employers? If these employers did not exist, there would be no social welfare fraud. It seems the only penalties are for those on welfare, the most vulnerable of people who are trying to earn extra money.
I too have concerns in regard to the Tús scheme for the reasons outlined by the previous speaker, Deputy Flanagan. I do not want potential real jobs to be replaced by work experience and workfare, which is another means of driving down wages. We learned this from the FÁS training schemes which were abused over a number of years. I am opposed to that aspect of the legislation. I feel compelled to vote against this Bill on the basis of those elements of it, while supporting the restoration of the minimum wage.
I share many of the views expressed in this House and understand fully that the motivation, thrust and emphasis of Bills like this is always, how much we can give and to how many. It is the nature of political demand that we come here and make representations on behalf of those who are not getting enough social welfare or are being deprived or even victimised by the system. I share those views. Like other Members in this House, I would like too see more rather than less social welfare being paid. I believe that should be the objective of everyone in this House because there are so many in Ireland who are suffering, cannot get jobs or welfare or are disabled and deserving cases.
Parallel with that is an extraordinary policy regarding social welfare, which is thoughtless and is symbolised by the disaster that was and is FÁS, an employment agency paid for by the State. The attitude of successive Governments to FÁS was to give it money to sort out the unemployment problem and to let it get on with it. I do not know if Members are aware that FÁS was getting €20 million every week at the height of its troubles. Some €1 billion per annum was going to FÁS in an effort to pretend the Government was doing something about the unemployment problem. Little thought went into its structures or training. There was certainly little strategy in regard to the end product. The result of this was that people in FÁS pretended they were sorting out the unemployment problem by introducing training courses which seemed extraordinarily good and worthy. However, the problem was that there was no strategy behind them and no jobs at the end.
FÁS became corrupt and corrupted because those courses were not being filled, in some cases were not adequate or up to scratch and did not fulfil the mandate for which they were established in terms of producing qualified people. That was part of the attitude to the unemployment problem here. However, FÁS did not resolve the problem. It only trained people for jobs, some of which did not exist. While some of the courses were good and some of the staff were excellent the structural attitude to unemployment was to give FÁS money and tell it to get on with it. The evidence is that the problem was not sorted out and FÁS simply feathered its own nest. That was one of the biggest problems.
The other problem - it is the elephant in the room and we should not be frightened about addressing it as the Minister did - is that there is something kind of fishy about the unemployment statistics which keep coming out. The most recent figures in relation to unemployment are that there are 300,000 people on the live register but 443,000 people claiming benefit. An OECD official who recently visited Ireland although puzzled by this could not explain it and nor can I. There are various excuses and plausible reasons there is a gap between these two official figures, but it is an extraordinarily large gap which must indicate there are a large number of people who, one way or the other, are earning money while claiming unemployment benefit.
If Deputy Donnelly appears, I will concede to him.
It is clear there is no parallel with these figures in OECD countries. There is no explanation for this extraordinary gap. It is clear that unemployment benefit is, not to put too fine a tooth on it, an easy system to access. It appears that a large number of people who are claiming unemployment benefit are not being encouraged unduly to work.
When my wife was involved in a political campaign on my behalf, she was thrown out of RTE for a short period and was told that she had to claim unemployment benefit. The Minister of State will understand this. My wife was not going to claim unemployment benefit because she believed she would be returning to work in a short time. While she did not actually need it she was told she had to claim unemployment benefit during the period she was out of work, so she did so. The amount was quite reasonable. No questions were asked and she simply signed on.
I cannot remember how long it was as it was a period in which I was in purdah and she was in Coventry. There was no effort during that period from the people in Bray from whom she drew the dole to find her a job, which was a little odd. Perhaps they expected her to get back to RTE where she had been employed, although there was no guarantee of that because she committed the cardinal sin of being involved in a political campaign, which was not allowed at that time. There was no effort to get her a job, which was strange because, given her qualifications - she had a degree and worked in broadcasting and so on - one would have thought the system would have known certain avenues were available to her. All that happened, however, was that she got an amount in cash every week, whether by cheque or in cash I cannot remember, which was given to her willy-nilly with absolutely no strings, pressures or encouragement attached.
Parallel to the real hardship which exists in the social welfare system, there is a need for a more stringent examination of those who are in receipt of social welfare. Questions must be asked as to whether people are exploiting the system. This cannot be resolved by gestures such as dividing FÁS into two parts and putting one part in the Department of Social Protection and the other in the Department of Education and Skills. It requires a serious attack from the top and the bottom on the culture of unemployment so that those who really need it are protected and get more but those who do not really need it do not benefit from the system.
I agree very much with some of the points made by Deputy Ross with regard to abuses of the system in place, and there is little doubt there has been a culture of abuses in this country for a long time. However, some interesting research carried out in Britain last year showed for 2009 that social welfare fraud amounted to between £1.5 billion and £2 billion, which is a lot of money, but it also showed that tax evasion in the same year by the richest people in society, including the large corporations, amounted to £80 billion. While I would of course agree with tackling fraud in the social welfare system, we should also examine the other end of the spectrum, where the State has great potential to reap a good reward.
With regard to the Bill, many of the measures have been discussed at this stage of the debate. As I have said previously, as an employer, I know the VAT change was a huge boost to the restaurant and hotel industry - I am not sure everybody realises how much of a boost it is. The PRSI measure is also a boost, if not by quite as much. One point about the PRSI change is that the Government needs to consider the amount of PRSI evasion in the restaurant and hotel industry. I know from taking on people and bringing them in from working in other restaurants that they are often not registered. There is serious evasion in the industry and while I do not know if work is being done to tackle this, it certainly needs to be done.
In principle, the internship scheme is a good idea although I am aware that some will abuse the system. There is some evidence that Tesco, which made €200 million here last year, has been taking on people under the scheme when too often it amounts to no more than free labour. While the scheme is a good idea, it needs to be monitored.
In checking whether such schemes were much used elsewhere, I found some information from the United States which gives an idea of the thinking there on the issue. The US Department of Labour has outlined a list of criteria that must be met in order for an internship to be unpaid, which is the system to be introduced here. In the US, the training must be for the benefit of the trainee, the trainees must not displace regular employees, the employer that provides the training must derive no immediate advantage from taking on the individual and unpaid work is only acceptable where the future benefit outweighs the short-term absence of pay. If the Irish system is to be in the best interests of society, the State and the people, it needs to be very well monitored.
I will conclude by raising the issue of the age at which a person is entitled to a pension. I regard the proposed change as a retrograde step. If this had been mentioned five years ago when things were okay, we would have been laughed out of the place. At the time I, for one, was being encouraged to get involved in industries that related to providing leisure time activities because we were wondering what people would do with all of their free time as we would be working fewer hours, be more productive and everyone would be in a better situation.
Following the Second World War, there was huge social progress in how society was organised. In the past 20 years, it is unfortunate that the top 1% have garnered more and more of the profits and there is less effort to create a fair society. It was not just because of the bailout that we are considering increasing the age at which one can draw one's pension. We must remember that it is only 12 months ago that the French were on the streets fighting on the same issue. It suits the large corporations and big business for the working age to be increased but it is hardly in the best interests of ordinary people.
I am pleased the Minister, Deputy Joan Burton, is in the Chamber and I thank her for putting the Bill before the House. The mission statement of the Department is to promote active participation in society through the provision of income supports, employment services and other services. The key phrase is "active participation", which we should promote not only among those in need of social welfare, but also within the Department itself.
At a time when we are spending many millions of euro per week in social welfare payments, it is imperative the Department takes measures as set out in the Bill to protect the most vulnerable in our society, for example, the reversing of the minimum wage, the promotion of individual accountability for all applicants. By allowing the Minister to extend powers to request additional profile information from the claimant, we are able to see positive steps towards accountability and individualisation of the social welfare system. This information is used to access training and other educational developments and it is with this care and attention that we must approach social welfare claimants to ensure they do not get lost in the system.
The "one size fits all" approach is not viable in our society. For example, in my own constituency, I spoke to a single mother recently who instead of taking the route to long-term social welfare put herself back into education. However, she is surviving on food stamps from the Society of St. Vincent de Paul. It is time for us to think outside the box in terms of standardised packages within the system.
To seek a reduction on the annual €20 billion social welfare budget, we cannot start by punishing those who are relying on these payments. We must tackle the increasing issues of social welfare fraud and this means creating deterrents for those who have misled the system in the past.
I commend in particular the section of the Bill which promotes active participation with employers to ensure there is no growing black market employment which undermines taxpayers and drains resources. It is necessary for Department inspectors to be permitted to work alongside the Garda and customs officers to investigate such instances and I welcome that measure. Employers should not get away with taking advantage of those on jobseeker's allowance who may be tempted to earn additional moneys fraudulently. This means denying workers a genuine job opportunity that offers a legal contract. The taxpayer foots the bill for this offence, of course, and therefore it must be taken seriously.
Fair employment is promoted in this Bill by reducing employer's PRSI, as was set out in both the election manifesto of my party and the Government's jobs initiative. I refer to Mr. Danny McCoy who stated that this programme "will yield a significant reduction in labour costs and will improve Ireland's attractiveness as a location for inward investment, and will make it easier for employers to take on new staff". That must be welcomed. Contrary to what Deputy Cowen remarked yesterday - I am glad he is present in the Chamber - after the Minister introduced the Bill, this legislation does what it says on the tin and I am very pleased to support it.
By restoring the minimum wage to €8.65 per hour we can continue to reduce our cost base in a bid to restore our competitiveness without starting with the lowest paid and most vulnerable in our society. To promote active participation we must incentivise people to work. Often the social welfare system draw is too strong and it is the taxpayer who loses out. With regard to the agreement set out by the previous Administration, it is encouraging to see there is a better way of doing things.
With regard to the amendments of other Acts contained within the Bill, I wish to mention section 21 which excludes Members of the Houses of the Oireachtas from the Citizens Advice Board. I am strongly in favour of appointing the best person for the job, regardless of his or her politics, gender or social position. All appointments should be decided by the expertise and merit of a person's curriculum vitae and ability to deliver.
In order to restore our country's competitiveness, we must take steps to ensure that the most vulnerable in our society are protected and those seeking employment should be given all the support the State can muster.
I acknowledge the presence of the Minister for Social Protection, Deputy Joan Burton. I wish her well in her role and compliment her on introducing the legislation.
I spoke to the Minister about one aspect of the Bill which was alluded to in recent days in the House, including by the previous Minister. If the area of social welfare fraud was adequately tackled it would be possible to leave social welfare rates as they are. I noted a uniformity in the debate. Tackling social welfare fraud must be a priority for this Government and I wish the Minister well in that process. However, simple measures can be taken from the outset in this regard. Use of PPS numbers is one such measure that should be examined in more detail. I reiterate a case in point. At present if one changes one's car there is no requirement to produce a PPS number when registering the car with the motor tax office. Data protection rules prevent the motor tax office feeding information to social protection offices which, in turn, are prevented from doing the same with local authorities. It goes around in a circle. In the interests of trying to save money we no longer have and protecting the rates for those who are in need, we must iron out such elements.
I strenuously impress on the Minister to consider the whole area of the black economy, particularly in regard to the self-employed. At present in every town, village and city in the country there are self-employed people who are doing their best to ensure they do everything in accordance with the social welfare and tax codes but they are competing against people who are being subsidised through the social welfare system. This is going on and is known about in every town, village and townland throughout the country. The current reality is that resources may not be available within the Department to adequately inspect those who are known to be involved in such practice. I urge the Minister to look at the redeployment of resources within the Department she controls and to ask her Cabinet colleagues to examine whether there are spare resources that might be assigned to this task. Ultimately, the priority must be the protection of the rate for those who need it and to achieve this savings must be made. All of us are acutely aware that this country is a financial basket case, as inherited by this Government. We need to do a great deal more with a great deal less.
The Minister's colleague, the Minister of State with responsibility for housing, was in the Chamber some time ago. I welcome the section of the Bill that deals with community welfare officers but believe it could be taken further and involve local authorities, particularly from the point of view of housing. We have a multiplicity of agencies at present that deal with people who are in dire need and dire straits. A single one-stop shop that would include the local authority housing agencies must be brought into the equation. There is a temptation to overlook this proposal and although it may not be for inclusion in this legislation I ask the Minister to pass the suggestion to her colleagues.
In fairness to some Deputies on the opposite side, there has been a welcome for the internship programme enunciated by the Government. As one who qualified in a profession where it was very difficult to get a first job, and, as a result, to find any job, not having experience, I recognise this initiative on the part of a Government faced with the largest number of unemployed people for a generation. It needs to be seen for what it is, namely, a start, part of an overall package within this legislation. It will not be a silver bullet; there is no great panacea involved nor is it a magic wand that will be waved over the country to banish all the economic ills of the past 14 years. That will not happen overnight. Any Member of the House who believes it will is in some kind of fairyland.
This will be a long-term project. I wish the Minister and the Government well. I welcome some of the comments made, particularly those made by Deputies Mick Wallace and Shane Ross. That is constructive opposition, which one does not often hear around this place. I welcome their contributions in particular.
We all talk about fixing our economy and balancing the budget. There are two ways to do this - we reduce what we spend and increase revenue through taxes. People talk about getting rid of the black economy and getting more people back to work. We can approach this in two ways. The first is to go after the social welfare fraud which occurs. For a number of reasons there has always been a level of this fraud. One reason is that it is not attractive for people to take a job at a certain level of pay nor is it attractive for a person to offer a job at that level of pay because he or she knows it is impossible to compete. Deputy Collins spoke of people competing with employers who employ persons in the black economy. That is true. One hears of taxpaying, self-employed persons who try to employ workers but they cannot compete. This is happening throughout the country. As well as the person who offers those terms of employment, there is the person who commissions the contractor responsible.
Apart from the issue of raising the age for the old age pension, most of the opposition expressed has been about other issues not contained in this Bill which are perceived to be coming down the line, such as the joint labour committee measures. We must get real about the JLCs but that is probably a matter for another day. We are restoring the minimum wage to its original position.
It is proposed to reduce employers' PRSI. All of a sudden, there is a gap between being unemployed and employed, or between giving a job and taking a job. That is what it is about if we are serious. This is a pragmatic Bill. It puts certain steps in place. The pension change that is being made in the Bill is a reflection of the fact that we are all living longer, thankfully. Until 1970, the retirement age for pension purposes was 70. Pension levels were minuscule at the time. Some eminent State employees have been able to extend their working careers. A former President of the High Court extended his term by two years because he was still a young man and wanted to continue in his job.
If one wants to run for President, one has to be at least 35 years of age. There is no upper limit. Any Member of this House can continue as a Deputy until any age he or she wishes, as long as the people keep electing him or her. It is only right and proper that from now on, politicians who continue to work will not be able to draw down a pension. It is public knowledge that I will be 68 in 2028. I hope I will still be active. I predict-----
We will see. When the plans for dealing with this Bill were being discussed on the Order of Business yesterday, many Deputies were anxious that the minimum wage provisions be taken out of it so they could vote against it. I ask Members to take a pragmatic approach to this matter. That involves trying to create work and give people an incentive to stop relying on social welfare. The establishment of the national employment and entitlements service and the one-stop shop will facilitate the profiling of those who are on the unemployed list in a particular area and the jobs that are available in that area. It will be possible to work with those people. It is something that has been requested for a long time. Why should it be opposed? We need to examine the pension proposals in an honest manner. Deputy Wallace will recall that many people in France objected to the proposal to increase the retirement age in that country from 60 to 62. President Sarkozy is telling us to change our corporation tax rate. He can come back and talk to us when he decides to increase the retirement age to 65.
It has to be paid for. As the Minister, Deputy Burton, mentioned yesterday, the demographics mean that rather than having six workers for each pensioner, we will have two workers for each pensioner. That is the reality. We have to pay for it in some way. I recommend the Bill to the House.
I welcome the Bill to the House. I thank the Minister for staying to listen to the debate. I would like to address two points, the first of which is that it is disappointing that we are having to speak once more about the existence of poverty traps and disincentives to going back to work. It is disappointing because we have been here before, as a State. We have learned in the past about what happens when the social welfare system interacts with people on low wages. In the late 1980s and early 1990s, a volume of work was carried out on these matters. Decisions were made in order to remove these poverty traps. We tried to do all we could to ensure impediments to taking on certain roles did not exist.
The late Paul Tansey wrote a book on this subject. He described how this engagement was taking place and prescribed what needed to be done to tackle it. The options are stark and difficult. It is right, from a moral and principled point of view, that we do not want to cut social welfare rates. For reasons beyond our control, average wage rates are falling in the current environment. A gap has been created. The incentive for someone to take up employment has been reduced. If we are to tackle that as a Government, as we all want to do, we have to examine the circumstances in which people access additional and incremental payments. We need to try to find a way of tailoring that to ensure that as people go back to work, they can retain those payments for a period of time.
The second point I want to emphasise, which was made by the Minister in her speech, relates to the establishment of a one-stop shop. She said we need to ensure we have a far more integrated approach to the payment of benefits and ensure people are in a position to go back to work. The observations that were drawn in the recent ESRI report on the operation of those systems were absolutely damning. I would like to refer to three of the report's conclusions. First, the report found that an unemployed person's chances of entering employment decreased by 17% if he or she had participated in a FÁS activation interview.
That statistic is a damning reflection of the quality of the interventions we are making available to people. These organisations - I do not doubt that they are full of good people - are engaging with human tragedies. It is really damning that such an observation has been made by an impartial organisation. The Minister's proposal to establish a one-stop shop is essential if we are to deal with that.
The second conclusion of the report to which I would like to refer is the fact that those who sign on after losing a job, and who have claimed unemployment benefit in the past, are excluded from active assistance in job searches and training. If it is true that those who have been unemployed in the past are disbarred from participating in the processes that are meant to be getting them back to work, one has to wonder what the people in question are actually doing.
The third aspect of the report I would like to mention is the section dealing with the interaction between the Department of Social Protection, FÁS and other organisations that are involved in this area. The report suggests that one in four unemployed people who are eligible for State assistance are not identified by the relevant authorities. Such observations and conclusions castigate, frankly, the spending of so much money on support for the unemployed by organisations that are involved in trying to get them back to work.
I would like to conclude on a positive point. When we speak about those who are coping with the tragedy of being unemployed, we should acknowledge that the 465,000 people in question constitute a great bank of talent and potential for our nation. The fact that the organisations involved with them are failing, as identified in the report I have mentioned, is in itself a reason to support this Bill.
I have to say I was surprised to learn that the Minister, Deputy Burton, believes very little was going on in the Department of Social Protection when I was the Minister in that Department. I will deal with that in a second. I was delighted to note in the five-month Exchequer returns that the departmental Estimates are holding up very well. In fact, the Department of Social Protection is €68 million ahead of profile. It is better than profile because extra income is coming in. At the end of the day, what counts in any Department is the bottom line. The bottom line in this case is that it is €68 million better off than it was profiled for at the beginning of the year. That shows how robust the Estimates prepared by the previous Government were.
At the weekend, the Minister for Social Protection was reported as saying she feels the outgoing Ministers were only there in body during the dying days of the previous Government. She is said to have said: "I have a feeling from my observations in Government so far that Government Ministers mentally departed the space maybe 12, 18 months ago." She went on to speak derisively about the Tús scheme. I will come to that in a few minutes.
I was in the Department of Social Protection for ten months before the general election was called. I was appointed to that position at the end of March 2010. I will set out what I achieved in that time. The day I entered the Department was the same day the Taoiseach announced that FÁS was to be broken up and its employment services were to be transferred to the Department of Social Protection. From a standing start, by the end of the year FÁS was operating under the aegis of the Department with a detailed service level agreement in place.
We had agreement in principle that the staff of FÁS would rejoin the Department once the IR issues were resolved. The activation schemes that were being operated by FÁS came in under the remit of the Department from a policy point of view in September and two of the schemes, that is, the community services programme and the rural social scheme, transferred fully into the Department from 1 September.
We were putting in place a comprehensive approach, on which I hope the Minister will build, to interlink the employment action programme with the activation schemes in a clear hierarchy that I laid out time and again during my time in the Department. Every unemployed person should be contacted, at regular intervals but particularly at the one year crossroads because we know that it is the juncture beyond which people find it very difficult to get employment, and interviewed with a view to getting him or her a job and, failing that, education or training. Failing all of those options that one should be given, one would have the option of going on a work scheme. I recall that I was not a month in the Department when I asked the Chief Medical Officer, a fine doctor, about the ill effects of unemployment. He gave me two page which were quite devastating on the effects on people of unemployment and lack of activity. We were creating a quick, efficient way of facilitating people who were genuinely unemployed, but we were also creating a net that would catch those who were working and drawing social welfare at the same time.
My belief was quite simple, and we had moved tremendously far in this direction, but it all seems to have stopped since because I understand there is nobody on the Tús scheme. My belief was that all those I know who are genuinely unemployed would much prefer to be working in some community project than sitting at home every day but those who are working and unemployed, when one challenges them to take work, suddenly find they are too busy and they sign off social welfare. Before I left the Department, we had started doing primary trials and a new roll-out of the EAP.
The Minister is wondering what the Tús scheme is about and I will explain it. It is a work scheme as opposed to CE, which is a training scheme. My idea was that everybody who is unemployed should get an offer of a place on a community scheme rather than being totally unemployed. The Minister might ask why 5,000. She validated the 5,000 places because it was my belief that I would not roll out more than 5,000 in one year and therefore I could not spend the money. My understanding is that the Minister is way behind the targets I set for the roll-out of that scheme, particularly in the case of the sports scheme which not has happened and where we intended having people employed as coaches in the spring.
Regarding disability, we brought in the partial capacity scheme, but we are still waiting for the regulations, which, I am told, will not be ready until September. The idea of the partial capacity scheme was that for the first time ever, instead of seeing persons with disabilities, we were talking about their abilities while recognising that, depending on the level of disability, one would need to retain some of one's social welfare payment. One could work long term and full-time if one wished. We had passed this scheme whereby we would grade the level of disability and one would retain that payment but could go and get any employment one wanted. There was no limit on it, in either duration or pay, and if one could not sustain the employment, one went back on one's full invalidity pension. We intended following up rapidly, once we had it up and running and got over its trial phase, and extending that scheme to the large number of people who receive disability allowance so that we move away from the negative concept of forcing those on disability payment to stay out of the workforce. As the Minister might also remember, or they might have informed her in the Department, we also made the advocacy services for persons with disabilities permanent in my time in the Department. Unfortunately, I am under time constraints here and there is much to get through.
When one checks under the pension heading, we had quite a bit of work under way on the issue of bringing the defined benefit schemes into a different spot than they were in; I had extended the date to July. However, we have matched that with the legislation we brought in for the sovereign annuities, the idea of which was quite simple. Insurance companies, instead of buying bonds in Germany and exporting our money to Germany or buying high-risk equities, would buy Irish sovereign bonds over a 30 year period at a better interest rate than they get in Germany. This would mean that defined benefits funds which are now in trouble would become more solvent and the Government would not have to borrow this money abroad because we would be getting the money from our own people. As no doubt the Minister has been informed in the Department, there is €70 billion of Irish workers' money in pension funds. It is all in equities, in a small amount in cash and in bonds worth €20 billion. Those bonds are 95% German or French - the vast majority are German. We had it all ready to go. The NTMA was ready to roll it out and I have heard nothing about it since we left Government.
On the mortgage interest problem and the issue of debt, we received the report in the autumn and I left behind me - I kept a copy of it - a clear path to deal with some of the issues that are in the mortgage interest supplement. It was lined up for the spring - the Bill before us now is a summer Bill - and would have changed the mortgage interest supplement scheme to get rid of some of the unfair rules contained in it, particularly the 30 hour rule. This is particularly devastating for couples where the lower income earner remains in employment but is caught by the 30 hour rule. Some couples are in desperate situations trying to pay their mortgages. However, we have not seen this reform. The Minister stated all the changes she will bring in and that we had been doing nothing. However, we left it ready for her to do and she cannot seem to get it done. There were other changes there but, again, I am running out of time.
The public services card is another matter we had progressed. We had got to the point where the contract was awarded and we were ready to roll it out. The card will be a great way of tackling fraud. We know the three issues in fraud. The Minister identified one of them, the one-parent family payment which is very difficult to police. The second one is working and drawing, which is a challenge. The way to deal with it is not to spend more on inspectors but to challenge people with work. If they take the work then that is perfectly legitimate and if they do not, the Department calls them in, at which point one will find they will sign off fairly quickly.
We also completed the transfer of community welfare officers to the Department. As the Minister will be aware, at present they are departmental staff on secondment. There are some IR issues that need to be tidied up. That had been going on for many years. The transfer happened on 1 January this year. As I stated, that was something that had been worked on by many Ministers before me but in my short time in the Department, we resolved the issues that had been there. They came in to the Department on secondment and there were merely some final small IR issues with which no doubt the Minister will also deal.
We also brought in three social welfare Bills. Those Bills were quite substantial. One was a primary rates Bill but it also contained legislation to do with partial capacity, lone parents, etc. During my time, we made legislative changes to try split up the appeals process, which is a major challenge for the Department. I also worked hard in conjunction with the Department. If the Minister checks with the officials, we held special meetings about this to try look at administrative ways of speeding up the appeals process. Considerable progress was made in that regard during my time in the Department. I hope that such work is continuing but I must say I do not see much evidence of that.
In addition, I resolved the miners' issue. This involved miners who had worked in the coal mines around the country, such as in Arigna, Ballingarry, Castlecomer, etc., but had not in my view - it was a case made by the Opposition at the time - received just reward for the disability they suffered. We set up a mechanism to review their claims on the pneumoconiosis issue.
I understand payments continue to issue because of the swift, prompt and, if I may say, humane attitude I took with the full support of my officials in the Department, especially the Secretary General and the Chief Medical Officer, to deal with the issue. It did not hit the headlines. There was one "Prime Time" programme about it but because we dealt with it speedily and in a practical way, which they recognised as sensible, it did not hit the headlines and they did not have to knock on my door twice. I simply dealt with it when it came my way.
I was also involved in a radical overhaul of the rent supplement scheme. I note the new Government is, rightly, going along the same lines I was developing in terms of transferring people from rent supplement after a fixed time. My belief is no one should be on rent supplement for more than one year. Furthermore, we must ensure that all rental properties are pre-registered. I was working with the then Department of the Environment, Heritage and Local Government on this issue at the time. The idea of the tenancy being registered with the Private Residential Tenancies Board, PRTB, after one had the tenant is like staying in a hotel and when the hotel is being registered with Fáilte Ireland, it receives a standard check after the guests move in. It always seemed bizarre to me. Work was under way on that issue as well.
Also, we worked on the issue of removing payments for non-interactive young people on social welfare to encourage them into activation where we gave them the full payment. All of us know as parents that the worst thing that can happen young people is that they get into the habit of unemployment. This was not to save money. The purpose of this was to encourage young people and to make them immune from peer pressure in this regard.
Many other issues arose when I was in the Department including the issue of the spouses of self-employed people and the problem that arose which, again, was swiftly solved when I went into the Department. It was trying to claw back moneys from women that were to be paid to them as pensioners and that issue was resolved quickly.
I wish to highlight two further issues related to the Bill, including the row back from the €100 payment in the internship programme. We introduced the internship programme, the Tús scheme and so on as extra tools to provide activation and then as a way to chase those who were working and drawing. We were going to pay an extra €100 per week to those in internships. I note that this has gone from €100 per week for 12 months to a nine month to six month scheme, which is regressive.
The final issue I wish to raise amounts to a total sleight of hand. When those in government now were in opposition they were great at referring to stealth taxes. They referred to people doing things in a behind-the-door fashion. I examined the Bill carefully, including section 11, and then I read the explanatory memorandum on section 11. It occurred to me that something awful funny was going on. In the ultimate stealthy way of doing things, the explanatory memorandum outlined that the universal social charge, USC, would be deductible as is income tax and PRSI when one is carrying out a means test for the family income supplement. What it did not outline explicitly and what was carefully avoided was that it will not be deductible in other cases, despite the decision I made.
Let us consider the means test for unemployment assistance. As the Minister is aware, there are many families in which there were two jobs and in which the main income earner is now unemployed and the subsidiary income earner is earning a modest wage. To carry out a means test, one takes the gross means and one subtracts the PRSI - one used to subtract the health levy as well. One should also subtract the USC. Then one takes €60 off the amount if one is working more than three days per week and then one multiplies the total by 60%. That is the means. However, the Minister has declared that it will not be done in this way but that it will be calculated on the basis of the gross income. The PRSI will be deducted but we can forget about the USC which will be left in. If one is paying €20 in USC per week, it will reduce the difference between the two decisions to €12 per week. Why does the Minister not state as much in the explanatory memorandum? Why was the Minister not upfront in stating that we cannot afford it?
I am surprised with the way in which this thing was worded. The Minister was clear that she was deducting it in the family income supplement but it is totally glossed over in respect of the jobseeker's allowance in any of the papers I have seen or in the briefings I have heard about. The Minister should do the honourable thing on Committee Stage and ensure the universal social charge is a deductible charge. I am aware of the arguments those in the Department will make but the Minister should think of the people from whom she is taking the money. All of these people are means tested and not well off. The universal social charge should be a deductible cost in respect of the means test for the jobseeker's allowance.
I refer to the issue of section 13(2) in the Bill. I welcome the strengthening of powers for social welfare inspectors who participate in multi-agency checkpoints. As a representative of two Border counties, I have seen too much participation in the black economy by people outside our jurisdiction over the years. I have seen too many genuine employers suffer because of underpricing by competitors from outside the jurisdiction who have been able to employ people at a lower cost, to put it mildly, than our locally registered employers. No one is keen on a police State but it is necessary to give adequate powers to all people participating in the multi-agency checkpoints, including the Garda Síochána, the Customs and Excise and social welfare inspectors.
It is important that fraud is eliminated as much as possible. Will the Department give some indication of the progress that has been made in the elimination of fraud? Much has resulted from the elimination of cross-Border fraud, if we may term it as such. I realise substantial progress was made during Deputy Éamon Ó Cuív's time in the Department of Social Protection and during the time of his predecessor, Ms Mary Hanafin, as well. I welcome the heightening of awareness. Having come across the multi-agency checkpoints many times while travelling through my constituency, I realise that it sends out a clear message to people that the State will not tolerate fraud. When fraud is tolerated, we deprive genuine people of their due entitlements and we deprive employers and employees. It is not simply about the quantum of money that could be saved, which is important as well, but the message will be sent out that there will be a level playing field. Since we have a land Border and the country is divided, this particular problem exists right along the Border and it is one that must be continually addressed. I welcome any measure that strengthens the ability of our officers from whatever Department or agency they work.
I wish to share time with Deputy Eamonn Maloney.
I congratulate the Government and the Minister for Social Protection, Deputy Joan Burton, on bringing the Bill before the House. I preface my words by stating that fraud does not take place only in the social welfare system. Fraud is at large in the country in general. Most reasonable people would consider that if this amending legislation did nothing other than give legal effect to the restoration of the minimum wage rate from €7.65 to €8.65, then it would be worthwhile.
Most reasonable people would consider that the shameful act of cutting the lowest-paid workers pay perpetrated last year by the previous Government was its final act in a line of similar races to the bottom. A cut in the minimum wage a few weeks before Christmas 2010 was reminiscent of the Dickensian era, to say the least. Employers could have used the opportunity to squeeze the lowest-paid workers in the State by slashing their wages, the episode, in effect, becoming a shabby form of exploitation. To add insult to injury, the official line at the time was that this was all part of an effort to ensure a competitive economy.
The prevailing question on everybody's mind was whether the 11% reduction in the minimum wage implemented last year proved beneficial to businesses teetering on the brink of bankruptcy. The previous Government soon discovered that our economy could not be fixed by cutting the wages of the poorest workers. The measures in today's Bill will offer a huge boost to low-paid families, particularly part-time workers whose numbers include a disproportionate amount of women. They will also boost the morale of non-unionised workers and young people. Equally, they will show how foolish were the cosy captains of some of our employers' associations in claiming that a reduction in wages for the poorest workers would be good for Ireland.
On reading the proposed amendments one is struck by the extent of the difficulties faced by the Minister arising from the EU-IMF deal. Her room for manoeuvre is limited. However, I welcome the stimulus measures included under the jobs initiative. I refer in particular to the halving of employer PRSI and the introduction of a national training fund levy. I recognise the integrity of our national social welfare scheme, which depends on fairness in its allocations to those in our society who have been hit by hard times as much as it depends on the management of scarce resources to prevent fraud. As the net contributor of funds, taxpayers are demanding the best possible stewardship of their contributions so scarce resources go to those who merit them. In this regard, I welcome the inclusion of stronger measures to be extended to the social welfare inspectorate.
I compliment the Minister on concentrating our minds and efforts through her revamping of the national internship scheme. Jobseekers will gain invaluable benefits from placements in the private, public, community and voluntary sectors. Internship, as a mentoring scheme, provides the opportunity for students to be paired with a professional who will act as counsel in aiding their advancement in the working arena. Internship experience will comprise an essential element of their course of study and add practical experience to their academic knowledge.
I assure the Minister of my willingness to work with her in her efforts to reform the social welfare system in a manner that includes jobs and fairness as its cornerstone. As members of the Labour Party and of the Government we must subscribe to the ethos of a people at work. As the Minister stated, we need to emphasise the value of work and the value of opportunity. This programme will provide that opportunity and I greet it as a much welcome departure from the paralysis of the last Government.
I support the Bill. In regard to the minimum wage, there has been much dispute about the rationale for the rate reduction in the first place, but most people have come to their own conclusions about that. One of the best observations I have heard was when a woman who works in the cleaning industry said to me at the weekend that it was a Fianna Fáil Minister who reduced the minimum wage and it took a female Labour Party Minister to restore it. An interesting aspect of this issue is that, traditionally, the bulk of low-paid workers comprises women. We can talk about how scandalous the reduction in the rate was and what an easy target low-paid workers were for the previous Government. However, all of that is over. I congratulate the Minister on the speed with which she has honoured the commitment made in this regard. We in the Labour Party and our Fine Gael colleagues in government are proud that this commitment has been followed through.
Some Members have had stress pains about supporting this Bill because of the provisions regarding retirement age. However, the reality is that this provision relates to business that was done in this House on a September night in 2008. Since the new Dáil met on 9 March this year it has been difficult to have a discussion about any legislative proposal without noting the connection to the decision made that night. Members of Sinn Féin and the Technical Group - the highly technical group, one might call it - have stated they cannot tolerate the proposed increase in retirement age. I remind them, because there has been an attempt in the last three months to rewrite or brush out what happened that night in September 2008, that some of their number participated in bringing us to where we are. Fianna Fáil Members, who have all left the Chamber, are quick to point the finger while forgetting the actions of their party and the Green Party in government. There are members of the Technical Group who were not Members of the House at the time and I do not wish to be unfair to them. However, some of their number were Members of the last Dáil and were quick to come into the Chamber to vote for the blanket bank bailout. Sinn Féin also voted for the guarantee which, incredibly, gave depositors and bondholders the same status. The proposals we are considering today are necessary because of work done by these people in September 2008. They have some explaining to do. It is extraordinarily hypocritical of the architects of our difficulty to point to this side of the House in their objection to the proposal to increase the retirement age.
I am pleased to support this Bill. I very much welcome the restoration of the minimum wage to its previous level. I also welcome the halving of the rate of PRSI to 8.5% in respect of workers whose income does not exceed €356 per week. The hallmark of any Government should be its fairness, and these are fair and progressive measures.
The allocation of resources to social welfare must be viewed in the context of an activation programme. We are already moving in that direction. For example, I compliment the Minister on developments in her Department in recent weeks which have seen a greater integration between FÁS and social welfare offices in terms of finding people jobs.
While one must tweak issues in every case, I wish to raise an issue I encountered recently, whereby someone was offered a job by FÁS that involved commission only. This must be re-examined and reformed as such a scenario, in which someone refuses a job that was commission only, is not quite fair. The jobs for which people apply must be seen to be sustainable and must pay a fair and reasonable wage.
I now wish to turn to the self-employed. I was self-employed myself for 14 years and this group will play a key part in bringing Ireland back out of recession and we must encourage an entrepreneurial culture. At present, those who set themselves up as self-employed, many of whom will fail given the current climate, will not qualify for jobseeker's benefit because they pay a stamp S, rather than a stamp A contribution. Although such people will qualify for jobseeker's allowance, that payment is means tested and many such individuals will have assets of a complicated nature. Moreover, the system has not evolved to allow the Department of Social Protection conduct examinations that would allow it to process such cases in normal time. It can take three or four months before such individuals are deemed to be eligible to be in receipt of jobseeker's allowance. A fair system must be developed whereby a person who pays a stamp S contribution can receive jobseeker's benefit for a reduced period, such as, for example, three to six months. Moreover, the process by which the review for jobseeker's allowance takes place must be speeded up.
On the basis of fairness, social welfare fraud must be cracked down on because many people who are in genuine need of social welfare are getting a bad name because fraud also is taking place at the same time. Consequently, one must ensure the credibility of a scheme. I have strong views in respect of social welfare fraud and it is welcome that the Minister is committed to dealing with this issue and intends to examine it in a structured but fair fashion. I wish to make one reference to the subject of social welfare payments and getting people back into work. A system must be found by which people are encouraged to return to work and that avoids scenarios whereby people who are offered jobs will lose many additional entitlements. A period must be established over which people can return to employment, while retaining some entitlements such as, for example, a medical card on a phased basis.
I note section 10 of the Bill provides for the transfer of the supplemental welfare allowance to the Department of Social Protection, which I welcome. I also note the Minister's comments to the effect that administration of the rent supplement scheme is to be transferred from the HSE to the relevant local authority. I wish to make a few comments on the aforementioned scheme. Apart from the issue of who administers the rent supplement scheme, there must be reform in this area. The rent supplement scheme was established as a temporary measure but has become a permanent scheme on which €600 million per annum is being spent.
Members will be aware that if one participates in the rent supplement scheme for more than 18 months, one qualifies for the rental accommodation scheme, RAS, which is administered by the local authority. However, the controls in place for the latter scheme are much more stringent and the same controls should now apply to the rent supplement scheme. I will explain in simple terms how this arises. At present, someone who has a housing need and who seeks rent supplement is directed by the local community welfare officer to the local authority to demonstrate he or she has a housing need. However, at that time, no proper reviews are conducted of those who seek rent supplement and they are taken onto the scheme. Moreover, people can remain in receipt of rent supplement for an indefinite period. However, those who opt for the rental accommodation scheme face Garda clearance and review. A tax clearance certificate for the landlord is required, agreements are made between the landlord and the local authority and between the landlord and tenant and, in addition, an agreement is made regarding anti-social behaviour.
From my perspective, the area in which the greatest number of difficulties arise, certainly within various areas of Limerick, is the rent supplement scheme. I suggest a simple measure, namely, the introduction of the procedures that obtain for the rental accommodation scheme into the administration of the rent supplement scheme in whatever incarnation it appears after coming under the aegis of the local authorities. When dealing with the public purse, one must be seen to be both fair and to have mechanisms in place in respect of social welfare fraud.
I thank the Cathaoirleach agus ba mhaith liom mo bhuíochas a ghabháil le gach Teachta a ghlac páirt sa díospóireacht seo. Go háirithe, ba mhaith liom mo bhuíochas a ghabháil leis na Teachtaí a thug a dtacaíocht do na réitithe éagsúla sa Bhille agus go mórmhóir, doibh siúid a labhair faoin scéim inteirneachta. I thank all Members from both the Government parties, as well as the spokespersons for Fianna Fáil and Sinn Féin, as well as the various Members who spoke on behalf of the Technical Group.
A key purpose of this Bill is to establish a functioning national internship system for those who cannot get work experience. They may have qualified, finished their apprenticeships, primary or masters degrees or other training but cannot get a job in the current economic climate because they do not have experience and cannot get experience because they cannot get a job. Since my appointment, I have been working with a wide variety of organisations and have been visiting and meeting people to encourage organisations in the public, private, voluntary and community sectors to give people who cannot gain experience for their curricula vitae a chance to gain valuable work experience. Such programmes exist in the United States in particular, as well as, for instance, in the European Union and in many European countries. Basically, they constitute a bridge for people who have achieved certain qualifications but who simply cannot get their foot in the door with regard to getting a job. I am happy to note a high level of interest and co-operation has been shown by various organisations in creating the scheme.
I wish to point out there is a difference between this scheme and those which had been announced previously. I acknowledge the former Minister, Deputy Éamon Ó Cuív, has observed that he had set out a national skills development and internship programme and that he also had set out another scheme called Tús. However, although 5,000 places had been allocated to each of the aforementioned schemes, on becoming Minister I was somewhat surprised and disappointed to find that no one was participating in them. While 5,000 places were available in theory on each scheme, nothing had happened. In the case of the internship scheme, the problem was that by the end of April, only 195 companies had expressed an interest. A problem that arose pertained to the scheme's structure and the top-up payment. Under the new scheme, the top-up of €50 will be paid by my Department, whereas under the Fianna Fáil scheme, it was to be paid by the supporting organisation. Clearly, this caused major problems for community and voluntary organisations for example, as well as for many small businesses. Consequently, in this case my Department will pay the €50 top-up and this will clear a number of the technical difficulties that unfortunately applied to the scheme set out by the former Minister, Deputy Ó Cuív. Similarly with Tús, although two small pilot schemes has been set up, no one was actually participating in the scheme.
I am highly confident that under this scheme, which will be innovative and will be a first start in Ireland, many people will gain valuable experience. It is critical to prevent younger people, particularly young men, from going on social welfare where six months becomes a year and one year becomes two years. National and international surveys have shown that long-term unemployment is extremely damaging to the individual and to their families, particularly their children. As a society we want to do everything we can to prevent young people slipping into long-term unemployment. It gives me no pleasure to see young men who were able to get well-paid jobs five or six years ago working on the buildings and who now stroll down together to their local social welfare office and where being on social welfare becomes a lifestyle. We have to try to change that mentality in this country. We have to give people opportunities and alternatives. I am determined that social welfare does not become a long-term feature of the lives of young people, but rather a system which encourages them and offers them opportunity and a chance to go back to education and training or to take on work experience and internship. This scheme will begin in a modest way with 5,000 places and I appreciate the support of Deputies for it.
Deputies on all sides welcomed the restoration of the minimum wage and I thank them for that support. They will have noticed two complementary measures in the Bill, including the reduction by half in employers' PRSI rate for employees on low wages. The reduction of the minimum wage rate hit the people in employment who are most vulnerable. The restoration involved is worth €40 a week to a worker earning the minimum wage. While some might say they would like it to be more, the restoration of €40 a week is very important, particularly for women workers and those in part-time and occasional employment and young workers.
Fraud is another issue that is raised constantly. Section 12 provides for profiling. Shortly after I became Minister I published a report commissioned by the Department some years ago which examined the success rate of those interviewed by the national employment activation programme and who were offered various types of FÁS training. The report was done by the ESRI for the Department. I asked the ESRI to publish it so that all interested parties in this vital area of getting people back to work, education and training could study it. It showed that the success rate of the current system is quite limited either because courses do not suit people or people waiting for interview were never interviewed and for other reasons seem to have fallen through the system. In some cases, having been interviewed, some people's opportunity for getting a job receded rather than expanded. Every party in this House needs to think about how we are spending vast amounts of money on social welfare and employment and training supports. We need to concentrate on the schemes which really help people who have become unemployed, the vast majority of whom are anxious to get back to work.
Deputy Richard Boyd Barrett seemed not to like the idea of profiling; I think he used the term "harassment". I am aware that the current pilot scheme on profiling is being carried out in Dún Laoghaire and there has been only one complaint so far regarding questions about educational background being asked of the people signing on. It does not take a lot of thought to suggest that a young person signing on might, in the current jobs market, consider going back to education to complete secondary education and look for other training so as to be able to get employment in areas and sectors where employment is available. I am happy to say that the individual in question completed the profile.
As Deputy Smith noted, section 13 gives additional powers to my Department to participate in joint teams with Revenue and the Customs and Excise to set up multi-agency checkpoints in some areas along the Border. Every euro saved on fraud is money that could be given to legitimate social welfare beneficiaries and to pensioners who need income support.
I watched last night's television programme on TV3. The people were giving the information anonymously but it was shocking to see people who had been receiving jobseeker's allowance for four years detailing a variety of scams they were using to steal from the State. They are stealing the incomes of pensioners and others in need of social welfare support. Since I became Minister I have met with the Chairman of the Revenue Commissioners and with the key personnel in Revenue who deal with fraud, along with the anti-fraud teams in my own Department, to examine what additional levels of co-operation are possible. Social welfare is a contract and the people paying PRSI and PAYE must have confidence that their contributions to the social welfare system are spent well and targeted at those who need social income support.
The public service card will be rolled out later this year. The Bill provides for additional powers to demand surrender of the card where it is believed it is being used illegally.
The contributions of many Deputies on all sides reflected the need to reach a balance as regards social welfare fraud. We want a system with good social welfare supports for people who need them, but equally we need very strong measures to prevent fraud. I am determined to send out a message that in the next couple of years there will be a progressive increase in measures to deter and detect fraud from its inception.
Deputy Paschal Donohoe mentioned the issue of poverty traps and I refer also to rent supplement, an issue mentioned by a number of Deputies. Rent supplement probably constitutes the biggest employment trap in the system. When I became Minister I asked my officials to work out the figures. A family of a couple with three children who are renting a house with a rent supplement for a figure between €700 and €1,100 a month, an average of €1,000 a month, means a differential of €12,000 a year. If that person gets a job, he or she is looking at a total package of supports, between a social welfare income and various child supports, the rent supplement and a medical card, worth in total up to €38,000 a year approximately.
It is very difficult for somebody in that situation to face losing his or her rent supplement valued at €12,000 a year. I wish to advise Deputies that I am working closely with the Minister and Ministers of State in the Department of the Environment, Community and Local Government to make rent and housing the responsibility of local authorities and transfer responsibility for rent supplement to them.
In regard to appeals, shortly after I was appointed Minister I appointed nine new appeals officers, all of whom are experienced, to significantly strengthen the number of appeals officers in the Department. I hope that over the next few months as they complete their training it will result in a considerable reduction in the time taken to process appeals which I know is a matter of enormous concern to people.
The creation of the one-stop shop framework of community welfare officers and bringing the employment services side of FÁS into the Department will in the next year or two mean that more people will be able to apply and get their benefits at their local office rather than having, as currently happens, to go from a social welfare office to a community welfare office and perhaps even to a FÁS office. We are bringing them all together in one stream at one location.
I commend the Bill to the House and thank those Deputies who have supported it, in particular, the restoration of the €1 an hour cut in the minimum wage.
The Dail Divided:
For the motion: 107 (James Bannon, Tom Barry, Pat Breen, Tommy Broughan, Richard Bruton, Joan Burton, Ray Butler, Jerry Buttimer, Catherine Byrne, Eric Byrne, Dara Calleary, Ciarán Cannon, Joe Carey, Paudie Coffey, Áine Collins, Michael Conaghan, Seán Conlan, Paul Connaughton, Noel Coonan, Marcella Corcoran Kennedy, Joe Costello, Barry Cowen, Michael Creed, Jim Daly, Pat Deering, Regina Doherty, Paschal Donohoe, Timmy Dooley, Robert Dowds, Andrew Doyle, Bernard Durkan, Alan Farrell, Frank Feighan, Ann Ferris, Frances Fitzgerald, Peter Fitzpatrick, Charles Flanagan, Terence Flanagan, Seán Fleming, Eamon Gilmore, Noel Grealish, Brendan Griffin, Simon Harris, Brian Hayes, Tom Hayes, Martin Heydon, Brendan Howlin, Heather Humphreys, Kevin Humphreys, Derek Keating, Colm Keaveney, Paul Kehoe, Billy Kelleher, Alan Kelly, Seán Kenny, Séamus Kirk, Michael Kitt, Seán Kyne, Anthony Lawlor, Ciarán Lynch, Kathleen Lynch, John Lyons, Charlie McConalogue, Shane McEntee, Nicky McFadden, Dinny McGinley, Michael McGrath, John McGuinness, Joe McHugh, Tony McLoughlin, Michael McNamara, Eamonn Maloney, Mary Mitchell O'Connor, Michelle Mulherin, Dara Murphy, Eoghan Murphy, Denis Naughten, Dan Neville, Derek Nolan, Éamon Ó Cuív, Seán Ó Fearghaíl, Aodhán Ó Ríordáin, Kieran O'Donnell, Patrick O'Donovan, Fergus O'Dowd, John O'Mahony, Joe O'Reilly, Jan O'Sullivan, Willie Penrose, John Perry, Ann Phelan, John Paul Phelan, Pat Rabbitte, Michael Ring, Brendan Ryan, Seán Sherlock, Brendan Smith, Arthur Spring, Emmet Stagg, David Stanton, Billy Timmins, Robert Troy, Joanna Tuffy, Leo Varadkar, Jack Wall, Brian Walsh, Alex White)
Against the motion: 25 (Richard Boyd Barrett, Joan Collins, Michael Colreavy, Seán Crowe, Pearse Doherty, Dessie Ellis, Martin Ferris, Luke Flanagan, Tom Fleming, Séamus Healy, Joe Higgins, Michael Lowry, Pádraig MacLochlainn, Finian McGrath, Sandra McLellan, Catherine Murphy, Caoimhghín Ó Caoláin, Aengus Ó Snodaigh, Jonathan O'Brien, Maureen O'Sullivan, Thomas Pringle, Shane Ross, Brian Stanley, Peadar Tóibín, Mick Wallace)
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Catherine Murphy.
Question declared carried.