Tuesday, 24 April 2012
Social Welfare and Pensions Bill 2012: Motion to Instruct Committee
That it be an instruction to the Committee on the Social Welfare and Pensions Bill 2012 that it has power to make provisions to amend and extend the law relating to the Social Insurance Fund, employed contributors and employment contributions, supplementary welfare allowance, offences, miscellaneous control provisions and proceedings, claims and payments, jobseeker's benefit, appointments and duties of social welfare inspectors, social welfare, miscellaneous provisions on budgeting, and occupational pension schemes"
I welcome the opportunity to outline to Deputies the range of important provisions to be included in the Social Welfare and Pensions Bill 2012 by way of Committee Stage amendments.
First, I wish to explain why it is necessary to introduce so many proposals by way of Committee Stage amendment, rather than having them included in the Bill as published. As Deputies will know, the Bill gives effect to a number of social welfare measures announced by the Ministers for Finance, and Public Expenditure and Reform in budget 2012. Unlike the powers available to the Minister for Finance, as Minister for Social Protection I have no powers to bring forward budget day resolutions enabling social welfare measures to take effect immediately or from an early date. Deputies will be aware that the Minister for Finance can bring forward such budget day resolutions to allow for the implementation of certain taxation matters with immediate effect or from the beginning of income tax year on 1 January and for the subsequent enactment of the relevant legislative amendments within a four-month period. However, the necessary amendments to the Social Welfare Acts must first be enacted by the Oireachtas before the relevant budget changes to the social welfare code can come into force.
Given the very tight timeframe between the finalisation of the measures to be included in the annual budget package, usually early in December, and the implementation date of many of these measures in early January, and given also that the Oireachtas usually rises for the Christmas recess the week before Christmas, there is an extremely short period of time available in which to draft the required amendments to the Social Welfare Acts and to have these amendments enacted by the Oireachtas before they are due to commence. This reduces the scope of what can be included in the Social Welfare Bill that is presented to the Oireachtas in early December.
Budget 2012 delivered on our promise not to cut primary social welfare payments. To deliver on this promise and at the same time make a contribution towards the tax and spending adjustments required in 2012 to meet the €16 billion shortfall in the Government's finances, it has been necessary to provide for a range of reforms and other adjustments in order to restore sustainability to the social protection system. Many of these reforms were provided for in the Social Welfare Act 2011. However, given the extremely tight timescale for the passage of that Act, it was not possible to include all of these reforms in that Act. As a result it has been necessary to introduce the Social Welfare and Pensions Bill 2012 to provide for the enactment of the remaining reforms by early May 2012, so as to comply with the implementation deadlines provided for in the budget.
Owing to the complexity of some of the measures, it was not possible to have all of the legal and legislative issues resolved in time for their inclusion in the Bill as published. In addition, following recent discussions between my Department and the Department of Finance arising from recommendations received from the Comptroller and Auditor General, it has become apparent that changes to the legislation governing the operation of the Social Insurance Fund are necessary. Accordingly, it has been necessary to include these items in the Bill by way of Committee Stage amendment.
I fully recognise the difficulties this poses for Deputies in scrutinising these measures. It is for these reasons that I ensured that these amendments were circulated to all Deputies as soon as they had been finalised by the Office of the Parliamentary Counsel. I have also arranged for detailed briefing on each of these items to be sent to the various Whips for distribution to Deputies, as necessary. In addition, I arranged for a briefing session for the Opposition spokespersons, at which the various departmental experts were available to provide detailed explanations and clarifications on each of these measures.
It is very important to balance the reforms of the social welfare system being provided for in the Social Welfare and Pensions Bill 2012 with other measures to provide for the control of social welfare expenditure by strengthening the powers of social welfare inspectors to tackle fraud and abuse of the system. While social welfare fraud is often perceived by some as being a victimless crime, this is clearly not the case. As well as being unfair to other recipients of social welfare payments and to taxpayers, those abusing the social welfare system also undermine public confidence in the entire system.
I will now outline the main provisions contained in the various Committee Stage amendments that are covered by this motion. The Social Insurance Fund is financed on a tripartite basis, from contributions paid by employers, contributions paid by employees and the self-employed, with any shortfall being made up by way of an Exchequer subvention. This Exchequer subvention is provided for through my Department's Vote, Vote 38, as sanctioned by the Oireachtas. The Comptroller and Auditor General and the Department of Finance want a clear delineation between borrowings for cash-flow purposes for the Social Insurance Fund and extra funds required to meet additional expenditure requirements to deal with an overall annual shortfall in PRSI receipts or an increase in expenditure on benefits paid out of the fund. Accordingly, the amendment being provided for is for the drawdown of funds from the Exchequer, via the central fund, to address the cash-flow requirements of the Social Insurance Fund. This will complement the periodic drawdown of funds from Exchequer subvention, as provided for through my Department's Vote.
Three separate amendments affect PRSI liability on share-related remuneration, one of which follows on from a change in taxation provided for in budget 2012. The other two items relate to changes in the operation of PRSI liability on share-related remuneration arising from clarifications and new administrative arrangements provided by Revenue. The recent Finance Act provided for the introduction of a new special assignee relief programme, SARP, to reduce the cost to employers of assigning skilled individuals in the companies who are based abroad to take up positions in Ireland. The change that I am providing for is to clarify that the income tax relief, as provided for in the Finance Act 2012, does not extend to liability for PRSI contributions. In other words such people will continue to be liable for PRSI contributions on all of their income.
PRSI liability was extended to share-related remuneration in budget 2011. While most PRSI contributions are collected together with income tax through the PAYE system, it is not possible to collect PRSI contributions on certain gains from share options through this system. In the circumstances, provision was made for the collection of PRSI contributions on such share gains through my Department's special collection system. Revenue is now in a position to collect PRSI contributions on such gains through its relevant tax on share options, RTSO, system and I am providing for the necessary amendments to facilitate this collection mechanism.
In addition, I am clarifying the relevant legislative provisions relating to employer PRSI liability on share-related remuneration. As part of the jobs initiative launched last May, the Minister for Finance announced that employers would not be liable for PRSI on such remuneration. The purpose of the amendment is to ensure that all share-related remuneration, including remuneration that is taxable under the PAYE system as well as remuneration that is taxable under the self-assessment system, will be exempt for the employer element of the PRSI contribution. The provisions relating to refunds of PRSI contributions are also being amended to provide for the refund of any employer PRSI contributions that may have been paid by employers in respect of share-related remuneration.
The purpose of the mortgage interest supplement, which is payable under the supplementary welfare allowance scheme, is to provide short-term income support to eligible people who are unable to meet their mortgage interest repayments in respect of a premises that is their sole place of residence. This supplement assists with the interest portion of the mortgage repayments only. The capital element of the repayment is not taken into account in calculating the amount of the supplement. Budget 2012 provided for the curtailment of access to this supplement for the first 12 months while the person is involved in the mortgage arrears resolution process, as set out in the code of conduct on mortgage arrears, which applies to mortgage lenders. The underlying principle is to ensure the mortgage arrears resolution process functions alongside State supports such as the mortgage interest supplement, and that the forbearance arrangements implicit in the mortgage arrears resolution process are reflected in the eligibility criteria for the mortgage interest supplement scheme.
Given the significant cost of the rent supplement scheme, at over half a billion euro last year and an estimated €430 million this year, specific powers must be available to ensure that expenditure on the scheme is adequately controlled. While existing powers allow for the general investigation of rent supplement claims, this does not include any specific power of inquiry with regard to the landlord of a premises where a rent supplement is being paid to ensure the supplement is being correctly paid - for example, that it is being paid to the correct person. I am providing for a new power of inquiry with regard to landlords by social welfare inspectors to ensure rent supplement is being correctly paid. In addition, I am further strengthening the powers of social welfare inspectors to enable them to make inquiries at ports and airports. It is a condition of entitlement for certain payments, such as jobseeker's allowance, that the claimant must be living in Ireland. My Department's special investigation unit has found an increasing incidence of non-residency in the State by a small minority of social welfare claimants. Some people are entering the jurisdiction solely for the purpose of continuing to claim social welfare payments to which they are not entitled. In the last two years, it was found that 1,400 people were continuing to claim social welfare payments despite not being resident. This detection has resulted in Exchequer savings of €13 million. The new powers that I am proposing for social welfare inspectors will be of particular use in tackling this type of social welfare fraud. Many Deputies and Members of the other House have referred to this on a number of occasions.
I am also providing for new powers with regard to the provision of information to establish a person's identity for social welfare purposes. The Department has commenced the phased introduction of the new public services card, which will act as a key for access to public services in general and for identifying and authenticating the identities of individuals. In the case of social welfare claims, the existing legislation is being amended to make it a condition that a claimant's identity is appropriately authenticated. This provision also allows for a photograph and electronic signature to be taken, retained and reproduced where required.
In line with the announcement in budget 2012, the basis for calculating entitlement to jobseeker's benefit is being changed from a six-day week to a five-day week. This will mean that a person who works for three days in the week will in future get two fifths of the weekly rate of jobseeker's benefit instead of three sixths of, or half, the weekly rate of jobseeker's benefit as at present. In other words, the social welfare week will move from six days to five days.
The household budgeting facility currently operated by my Department enables social welfare recipients to budget for various utility bills by allowing for a fixed amount of their weekly payment to be deducted and paid over to various utilities such as the ESB and Bord Gáis. This facility also extends to telephone companies. While the facility was originally available only to Eircom customers, following the deregulation of the telecommunications market, this facility has been extended to the other telecommunications operators. The household budgeting facility is also being extended to cover other regulated energy providers such as Airtricity and Flogas. I hope that will be of assistance to a number of people in organising their household finances.
In my Second Stage speech I advised Deputies that I intended to introduce a Committee Stage amendment to make it a requirement that local authority tenants who have consented to their differential rents being deducted under the household budget facility and paid over to the local authority could not withdraw that consent without getting the permission of the local authority. Following advice from the Office of the Attorney General, it has not been possible to proceed with this amendment in the form agreed with the Department of the Environment, Community and Local Government. However, as I am anxious that this proposal be implemented as soon as possible, I have asked my officials to explore with the Office of the Attorney General and the Department of the Environment, Community and Local Government alternative approaches to achieving this objective, with a view to the inclusion of a workable amendment in the next available social welfare Bill.
Finally, I am proposing to introduce a number of Committee Stage amendments relating to occupational pension provision. These amendments include a new provision with regard to how the accrued pension rights of deferred members, that is, former employees, of defined benefit pension schemes are revalued. The other changes I am proposing will clarify a number of the provisions in the Bill as published. I commend this motion to the House.
I reject this motion emphatically. Everything about it is wrong. It should not be here. Such a mess has been made of this legislation that the only decent thing for the Minister to do is to withdraw it, take a few weeks out and, when she has had proper time to consider what she is doing, reintroduce the legislation so we can discuss it here in a proper manner. The only good thing that happened here today was the Ceann Comhairle's statement that he had asked, under Standing Order 141, that a revised explanatory memorandum be produced. That arose as the result of a request I made when I was Chairman of the Joint Committee on the Environment, Heritage and Local Government during the last Oireachtas. I wrote to the then Ceann Comhairle requesting that where substantial and significant amendments are proposed, to help Members discuss them on Committee Stage, a new and revised explanatory memorandum should always be produced. I am pleased that the Ceann Comhairle invoked that this morning.
We will not have time to discuss all the details of the amendments on Committee Stage, because not only did the Government guillotine Second Stage, it has also guillotined this motion tonight and it will guillotine Committee, Report and Final Stages. The Minister has been in office for 14 months. I am personally shocked that within such a short period of time she has become so unfair and unreasonable towards Members of the Oireachtas. If this had happened more than 14 months ago and she had been sitting on this side, she would rightly have been giving out about how the Dáil was being treated with disrespect.
Yes. I am amazed that within 14 months the Minister has followed down this road.
It is five months since budget day. Nobody believes there was not enough time to draft this legislation. Maybe the person who wrote the script believes it, but nobody else does. When the budget was announced we knew the Finance Bill would be introduced, but we also knew the social welfare Bill would follow. There is no reason the preparation work could not have been carried out over the last five months.
The Minister published this legislation on 3 April, just over two weeks ago. In it, she provided that one-parent family payments were to cease when the children concerned reached seven years of age, to commence in a couple of years' time. Within a fortnight of publishing the Bill, however, she announced in her Second Stage speech:
I entirely agree that seven is too young for anyone to seriously contemplate any of these things without there being a system of safe, affordable and accessible child care in place, similar to what is found in the Scandinavian countries [...]. That is why I am undertaking tonight that I will only proceed with the measures to reduce the upper age limit to seven years in the event that I get a credible and bankable commitment on the delivery of such a system of child care by the time of this year's budget.
That is some eight or ten months away. The Minister published her legislation, intending to do something on 3 April. Within a fortnight she came to the House and stated she did not agree with what she had published earlier this month and would reverse it. The following week the Minister returns with the same amendment. I have heard of U-turns and double U-turns and pirouettes, or whatever the word may be, but I cannot believe the Minister has done this. Last week, some people actually thought the Minister was making a great announcement. I spoke to some journalists who praised the Minister but I said: "Hold on. The Minister is not doing that. She is saying she would like to do it if the Minister makes a change in the budget next year to give her a bankable commitment." In the meantime, as I noted last week when the Minister announced this, she is using young children and their parents as a pawn in her budget negotiation for next year. That is unacceptable.
Essentially, we are back to square one. I find it extraordinary that a few short weeks after publishing the Bill the Minister is back in the House with a whole range of new amendments, many of which will be out of order under the terms of this House because what is being planned within them is not in keeping with the Bill as published on Second Stage only two weeks ago. I could understand this if the economic or the budgetary situation had changed or if something had happened over a period of months, making it necessary to revisit legislation before it went to Committee Stage. The legislation was published only a few weeks ago, however, and already we have to deal with motions to allow us to discuss these amendments on Committee Stage. To use the Minister's own phrase, she has made a right banjax of the legislation. She used that phrase about the country last year.
On this issue, I will quote another phrase the Minister has used several times, namely, rushed legislation is guaranteed to be bad legislation. There will be flaws in this Bill. The Minister is stating that even though we had five months to know what we wanted to do, we were all rushed during nights in the past week or so, trying to publish amendments. There are amendments going through the Bills Office and the staff do not know whether they are coming or going. In addition to the list of amendments the Minister sent in, I understand the amendments for Committee Stage cannot be published until this motion is passed. We have seen some drafts that were e-mailed to us but I have not yet seen the full list of amendments for Committee Stage which is starting tomorrow morning. As the Minister stated, some of the amendments she is making are more substantial than original sections of the Bill. How are we, as an Opposition, meant to have an opportunity to amend the Minister's amendments? There is no time allotted yet in the Order of Business for Report and Final Stages, only a mention of Second and Remaining Stages to be concluded by 3.42 p.m. on Thursday. We do not yet know if there will be a separate Report Stage. I would hope there will be. Several hours should be set aside for it.
I urge the Minister to allow us an opportunity, even right up to the last minute, to make amendments following Committee Stage. This might involve a sos in the Dáil for a couple of hours or some other such arrangement in order that we can make some amendments on Thursday. Again, this is on the basis of the Minister forcing a guillotine on the debate. I still do not know why it must be finished on Thursday. If it is so important, the Minister might have taken it into committee for some days instead of taking up the entire proceedings of the House. We could have given it extra time in committee, as happens with the Finance Bill which has a full three day period on Committee Stage, returning then for Report and Final Stages in the Dáil. To rush all this in the Chamber in one fell swoop is totally unfair not only to us, but to the people who are trying to follow it and who have an interest in this legislation.
There is further confusion. I do not know the status of an article in the Sunday Independent by an eminent journalist who obviously spoke directly to the Minister. She gave him the impression that under the terms of a new Bill to come before the Dáil this week social welfare inspectors will have powers to access bank accounts of people on the dole without their consent. I presume the article followed a personal interview with the Minister by this reputable journalist. She must have said something to that effect. I looked for those provisions in the amendments that have come across my desk by e-mail in recent days but have not seen them. I do not know whether the provision is included. Was the Minister thinking of including it when she gave the interview last Thursday or Friday and did she then draw back? Are the powers already there? I am not sure but I know it was another spin from the Minister. Perhaps she felt she was getting flak about the seven year olds and wanted an article in a Sunday paper that would show how she would tackle welfare fraud by introducing these new powers. She might confirm whether they are to form part of this Bill or that she was only flying a kite in the media over the weekend to detract attention from the substance of the Bill.
Some of the changes the Minister has proposed today are very serious. The last one she mentioned offers even further confusion in regard to the Bill. She stated just now that she would announce on Second Stage that she wanted to introduce amendments on Committee Stage in regard to a household benefits packages for people who are paying rent to the local authority. These would ensure they could not withdraw their consent without permission of that authority. They have not even tried to do that. Consent is consent; people have to give their permission. This measure would have it that although people give their consent to withdraw from a scheme they voluntarily entered into, they cannot do so without the approval of a State body, namely, the local authority. Thank God the Attorney General told the Minister where to go with that suggestion. Last week, she announced in the House she would do it but she found out the situation very quickly when she checked it out. I wonder if all this legislation is being drafted on the hoof at very short notice. That will lead to flaws in the legislation and in its implementation and management.
In regard to some of the changes coming forward, as mentioned by the Minister, I ask her to consider the following point. I made only a brief reference to it on Second Stage because I saw the Minister's speech only when I was sitting in the Chamber. I mentioned she was ensuring she would get fully chargeable PRSI on the amounts for those people who will work under the new special assignee relief programme, SARP, which was introduced in the budget as an incentive on the part of the Minister for Finance to facilitate assigning skilled workers in companies from abroad to take up positions in Ireland. It gave them a certain substantial amount of income tax-free. The Minister, Deputy Burton, was obviously not happy with that and told the Minister he could exempt such people from PAYE all he liked but she would make sure she got PRSI from them. Right or wrong, she has taken a diametrically opposed view to the Minister for Finance. Under SARP there is a provision whereby the Irish taxpayer will pay the private education fees, up to €5,000, for second level education for the children of those employees. It is a big ask to ask the people to do that and give that special exemption. However, if the Minister is to be consistent, she should also take PRSI deductions from that €5,000 because it is part of the SARP. She might reduce the amount via PRSI or charge PRSI by some other mechanism through the tax system as a benefit in kind. If she believes in what she is doing on the SARP issue she should apply it to the full programme and not be the Minister who will exempt that tax relief from PRSI. I suspect she would have a difficulty with that in the first place given she is ensuring she will get her PRSI from it at this stage.
I refer to some of the changes she is announcing tonight. The employer is not liable to deduct employment contributions in certain situations. We will have to tease out the details of this tomorrow. The Minister mentioned very many amendments but one I wish to highlight is the entitlement to mortgage interest supplement. I understand that for people who are in arrears a logical question arises as to how they will get this supplement. I want to see an amendment to the legislation so that when the person comes out of arrears - one hopes this is the objective of this exercise - and into some form of low-paid or other employment, the Minister will make a statutory mechanism to reinstate the mortgage interest supplement for that person. I have not checked the details of the scheme but presumably people can get the supplement once only, in respect of their first home or the first house they buy. This may be cancelled if they fall into arrears or have to make an arrangement with their bank but after a year or so they may be back to the same level of income they had in the first place. They should be entitled to receive the mortgage interest supplement and get back into the scheme. I suspect there may be a rule somewhere in the system that states a person cannot re-enter the scheme if he or she has availed of it previously. I put the question; I do not know if that is the case. The Minister might clarify this during the course of the debate tomorrow when we come to that particular issue. There are occasions when people cannot apply for a local authority house without a certificate from the tax office. I cannot remember the name of the form but it is attached to housing application forms and confirms the applicant has not received tax relief at source on a mortgage. If a person has received it, it proves the person owned a house before and the local authority would check to see what happened to that house and why the person was on the housing list. People get caught out in various ways. It is good to know that one can go in and out of the mortgage supplement scheme although I do not know how many times one can do so. It must be clarified to ensure people can avail of it.
A major problem is that the Minister is attacking part-time workers by cutting their jobseeker's benefit. It is a nasty and insidious day's work and many of the Minister's party members will be very sore at this. When the Fine Gael Party said it would not reduce income tax, the Labour Party had to trump it by promising not to touch mainline social welfare payment rates. That is why there are insidious plots on people receiving mortgage interest supplement and lone parents. In order to make necessary savings in the budget, the Minister must go after some of the most vulnerable people. I am not suggesting there should have been a small cut across the board but it is an option. Fianna Fáil did it twice and, although people did not like it, they found it fair. Attacking lone parents and those in part-time work by cutting jobseeker's benefit for those in the lowest employment categories is not a nice way of doing it. The Minister is preserving payments for many people but she is making severe attacks on certain groups. This motion and the Bill should be withdrawn. The Minister should come back to us when she has had time to consider it and provide us with an opportunity to consider it in further detail.
I acknowledge that the Ceann Comhairle asked for an explanatory memorandum on the significant changes to this Bill to be produced. I acknowledge the work of the officials in producing a detailed document on the amendments. The briefing on this Bill gave an indication of the expected amendments and their purpose. Hopefully we can tease out the amendments further on Committee Stage.
The Bill was published on 3 April and the briefing was held the day before the debate on Second Stage commenced, one week ago. The briefing indicated the level of amendments that would be tabled, some 23 pages. There are also 23 pages in the Bill, which shows the scale of amendment. In previous Governments, Members of the Opposition were critical of any Minister who produced another Bill in the form of amendments. Several were guilty of such a practice. I always hoped that a different Government would not proceed in the same way. Then, the Minister spent the first few minutes of the debate trying to excuse the fact that the Bill was not ready. The Minister said that on April 3 that the Bill she produced was not complete. The amendments address 12 or 13 areas of social welfare code that are not addressed in the Bill. The original Bill was produced to address the separate issues of pensions and the disgraceful attack on lone parents and children between the ages of seven and 14.
I would have been happy if we were discussing a motion to recommit based on the fact that the Minister was withdrawing the Bill or had produced an amendment to give effect to her road to Damascus conversion we heard about last week. I would have been delighted if she had tabled an amendment to withdraw the odious section. Last week in the Dáil, the Minister acknowledged that seven years of age is too young. The excuse given at the start of the debate does not stand up. I have not come across this procedure so perhaps the Minister can enlighten me. I presume the deadline of May 2012 could be extended. A small legislative measure would have allowed an extended timeframe so that a proper Bill could be published with Members having enough time to peruse it. If that was not possible, as may be the case, the Minister for Social Protection should ask the Minister for Finance not to set unachievable targets. In the past, the Social Welfare Bill was passed in June or July. Why was it brought forward? Is it to gain an extra two months of penny pinching and robbing the poor to pay the IMF? I do not know.
I will address some of the amendments signalled in the 23 page document, which we will discuss one by one tomorrow on Committee Stage if this motion is passed. Some of the amendments are logical and flow from changes in recent years but in respect of others, such as the amendment to the lone parents payment scheme, the Minister should have used the opportunity of her conversion last week and yesterday to introduce a sunrise clause. The reduction from 14 years to seven should have been made conditional on the provision of after-school care. The Minister said this is what she would like and there is no opposition to the use of schools or clubs for homework clubs or the non-academic use of schools. That has been discussed but we have not heard the proposals of the Minister for Education and Skills. Did the Minister for Social Protection bounce the Minister for Education and Skills into these proposals, telling him they had to be in place in six months? If the Minister is not going to withdraw this Bill, she should have a sunrise clause on this measure. She promised she would not introduce the provision in the absence of a bankable commitment on child care. The commitment is not in writing and is not binding. There is nothing in the motion or the Bill to make the commitment bankable. The way to make it bankable is that specific provisions will fall unless certain measures have been put in place based on evidence from the Minister, a committee of the House or an external oversight group. The Bill does not say the reduction to seven years will start after the Government has made a credible and bankable commitment on the delivery of child care. It certainly does not say the reduction will take place after additional funding or additional affordable child care places have been provided. What it says is that the cut-off will start to be reduced from 3 May, in a few days. The Minister has not sought to change the legal reality, despite her promises. I said last week that this is just a fig leaf and have heard nothing that contradicts this. It is just another review to kick the issue to touch and then when everything is quiet they will say sorry, but they are going to proceed with it and the Minister has given a commitment to produce after-school and summer holiday care for seven year olds to ensure that those in receipt of lone parents' allowance have access to training, work, education and other opportunities that will allow them to go back to full-time work. We already have the figures on one-parent families and know that the majority of these parents are in some type of paid employment. Every one of them wants to get back to full-time employment so that they can fully provide for their children and their future. Their social welfare benefit is not the "lifestyle choice" people keep talking about. The Minister herself has spoken of a "lifestyle choice" in the past. One only needs to speak to the organisations representing these people to know that or to talk to the parents in that situation. They will tell the Minister that they would much rather be working full time and be sure their children are cared for.
I will now turn to deal with some of the other amendments suggested in the amendment pack before us in this motion. Last week I said that we were absolutely and resolutely opposed to the cuts proposed to jobseeker's benefit. Jobseekers have had their hours reduced as a consequence of the recession, but the Minister is punishing them for being in this predicament. She claims that some of these people are nervous about entering or re-entering the world of full-time work, despite the fact that columnists of various views agree that any growth in full-time work and full-time job opportunities is a long way off. I have cited the figures in this regard on a number of occasions. Even without the single working age change suggested by the Minister, there are currently 50 people on the live register for every vacancy. In Germany, that figure is 6 to 1. This just shows that Irish money is going to create jobs in Germany for its people and economy. We are not benefiting but are suffering greatly. Justifying her decision to cut jobseeker's benefit when launching the Pathways to Work document, the Minister said: "I am trying to ensure that people do not find the security of the social welfare system more attractive than the risky world of work."
The Minister and others have talked of economic thinking and have spoken about lifestyle choices, but that mantra is getting old and needs to be put aside. The Minister must look at the reality. She must recognise that in many cases employers have been forced to reduce workers' hours as a consequence of the recession. The people whose income this Bill will cut are not plodding along happily in part-time employment. They are in enforced under-employment. Through no fault of their own, they have lost part of their jobs. Does the Minister think it is easy to go out and find a second employer who will be delighted to offer them hours that will fit neatly and precisely into the days they are not currently working or does she think it is easy for them to find full-time employment? It is not and it will not be any easier for them to get jobs just because the Minister has decided to cut the jobseeker's benefit. Perhaps the Minister is suggesting divine intervention and that by cutting jobseeker's benefit, these new jobs will appear magically.
The only consequence of cutting this benefit is that people who are suffering because of the downturn will be hit in their pockets. Jobseeker's benefit is an insurance-based scheme. These cuts are an insult to the hard-working people who have accrued entitlements and have now hit hard times. Our social system needs simplification and I will come back to that when dealing with the amendments. Will the Minister confirm for me that currently, a person whose working week has been reduced by two days as employers seek to make payroll savings, may be entitled to a jobseeker's benefit top-up each week of €62.66 and that following these cuts, these people will only be entitled to €37.60? That is a cut of €25 per week or €1,300 annually. That is a sizeable drop for any family already suffering as a consequence of reduced hours.
I will address the issues of mortgage interest supplement and the changes being introduced there and the issue of rent supplement and control measures on Committee Stage. With regard to the Pension Acts, the whole pension component of this Bill is a missed opportunity. We could have gone further on this. Irish pension funds need to be invested in Ireland and I have submitted an amendment in that regard. Hopefully, we will get to that amendment tomorrow. I suggest how we can use Irish pension funds and how we can force the pension industry in Ireland to invest more in Irish industry, particularly in a green fund that will ensure, for example, retrofitting can happen. This would benefit not only the State, but would help address fuel poverty in Ireland and the fact that many homes here lose heat continually. Retrofitting would also help address our Kyoto commitments.
I oppose the motion before us on the basis that the Bill should have been withdrawn and a new Bill submitted that would address the Minister's concerns and those of Deputies.
I reject this motion and the Bill out of hand. It is difficult to stand here and listen to a Minister introduce this Bill and this series of cutbacks and attacks on people who are very poor. A little more than 12 months ago this Minister would have been on the Opposition benches and would have been hopping mad and dancing a jig in opposition to these amendments and proposals. It is equally difficult to sit here and listen to the Minister and her party claim some common cause with James Connolly, the great Irish socialist. There is no doubt in my mind that if James Connolly were to read this Bill, he would turn in his grave. He would certainly have nothing in common with the Labour Party of today.
We went through an election a little over 12 months ago and we were told by all the parties contesting it, the Labour Party in particular, that the vulnerable would be protected. We have seen what that promise meant over the past 14 months. We have seen a series of attacks and cuts on the lowest paid, on social welfare recipients and on workers generally. The suggestion and statement that headline rates would be protected was just a shameful and scandalous smokescreen to ensure the dismantling of social welfare benefits hard won by generations of Irish workers and their unions. That is what is happening in this Bill and what the Government is about. It is dismantling the supports and social benefits for people in poverty, people who have lost their jobs, lone parents, carers, the disabled and a series of people under severe pressure due to the policies of this and previous Governments. This Bill provides for reductions in jobseeker's benefit and allowances, with jobseeker's allowance reduced to 12 months and illness benefit reduced to two years. The change from a six-day to five-day week is a direct attack on low paid part-time workers, the majority of whom are women, who are being forced into the workplace and they are now being subjected to further reductions in their weekly income.
The significant increase in the number of contributions required for State pensions is an attack on women workers in particular who have been out of the workforce of necessity and who may have recently re-entered the workforce. This is an attack on very vulnerable people who had been out of the workforce.
The criteria being applied for domiciliary care allowance, disability allowance and invalidity pension are now much more severe with the result that the number of refusals have increased on application or on review. I refer to the proposed new age limits at which the State pension will be paid and which will result in significant losses in income. Persons retiring from employment at 65 years will be subject to applying for jobseeker's allowance which will be means-tested and their employment pension will be means-tested against the allowance which means that for possibly two years they will have no support from the social welfare services. I reject this motion and the Bill.
I too reject this motion and the Bill. I wish to correct the record of the House. The Taoiseach said earlier today that the House would have ten hours of debate on Second Stage of the Social Welfare and Pensions Bill but that is not correct because we had four hours' debate and at the last moment we are presented with a whole raft of amendments which substantially change the Bill and make it, effectively, a different Bill and a guillotine is imposed. This makes a mockery of all the talk by this Government when it came into office of a new type of politics, new transparency and real political change. While I was not a Member of this House at the time, I have been informed by Members who were here in the previous Dáil that the Minister, Deputy Joan Burton, when in Opposition, would have been one of the first to complain about the imposition of a guillotine on important legislation. It is ironic that 14 months on, she is now imposing such a guillotine when Deputies have not had proper time to scrutinise this raft of new amendments. It defies any credibility to suggest that she has not had sufficient time between the December budget and now, to bring forward these amendments earlier or to include them in the main body of the Bill.
The one amendment that everyone wanted to see in this Bill is the one amendment the Minister has not brought forward. The one amendment we would have welcomed, even if late in the day, is the one she has refused to include, to delete section 4, and for her to give up on this disgraceful attempt to cut lone parent payments when children reach the age of seven years. It is not just that seven is too young, as the Minister acknowledged last week, eight is too young, nine is too young, ten is too young, 11 is too young and 12 is too young. There is room for discussion after that age but in many cases 13 and 14 is also too young an age at which to leave children on their own when their parents need to go out to work. It is laughable.
For a moment when I heard the Minister announce we were to have a Scandinavian model of child care, I thought all of our birthdays had come at once. However, when I gave it more thought and I talked to a Swedish friend of mine who told me about Scandinavian health care, I suddenly realised that this statement had little meaning and was no more than a smokescreen to try to soften the blow of this disgraceful cut to lone parents' payments. In Scandinavia, there is free child care, almost from birth, from the age of one right up to the age of 14. It is state-of-the-art child care which is available to everyone. The notion that the Minister will introduce such a model by December - much as I would like this to be achieved by December - is laughable against the background of brutal cuts being demanded under the EU-IMF programme and everything being cut. I hope the Minister will prove me wrong but it defies credibility. The only proposal before us, despite the words spoken last week, is the cut which will take immediate effect when the Bill is passed with the possibility that people may be obliged to leave their jobs. The critical point is that a Government which states it wants labour activation measures is introducing a measure which will drive lone parents out of work and force them into greater dependency on social welfare. Even at this late stage, I ask the Minister to withdraw the Bill, to accept our amendments to delete section 4. Let us deliver the Scandinavian model of child care first before the Minister touches lone parents' payments.
The jobseeker's benefit amendment is another attack on the low paid and which will disproportionately hit lone parents and women workers again. It will mean a €20 to €30 a week cut in the earnings of part-time workers, the majority of whom are women and a very significant number of whom are lone parents. What is the justification for this as it will be a disincentive for people to take up part-time work and may likely force more people out of employment and into dependency on social welfare? It is another disgraceful move and that amendment should be removed also.
In 1990 I was forced to rely on social welfare in order to survive. The worst part of that experience was the constant digs and nagging from the Minister of the time and from politicians, telling people who were on social welfare that they were somewhat useless, not in so many words but, believe me, when I was on it, listening to what they were saying about people on welfare, I pretty much felt useless as all the important people in the country were telling me I was useless because I was on the dole. That does not encourage anyone to try to get a job. If the Minister thinks this method of beating people over the head because they are on the dole will get them off the dole, she is wrong. I have said it before in this House, it is the equivalent of a mother in Africa hitting a slap on her child for not eating its dinner even though there is no food. No matter how many times the child is hit, there is nothing to eat. There is nothing these people on the dole can do because there are no jobs.
The Minister talks about headline rates, but what exactly are they? Are they the rates that people see who do not read too deeply into what is happening? What difference does it make to people on social welfare when the Minister says she did not cut headline rates, but their fuel and rent allowances were cut?
Given that this is all about political spin, I have a suggestion for the Minister. Why did she not put social welfare up by 1 cent and cut the rent and fuel allowances? The Minister could then have got a headline which said: "Social welfare rates have risen under this Government. Aren't we wonderful?" That is the way the Government works.
When I heard that amendments would be tabled to this Bill I thought it was brilliant because people like single parents were being listened to. I met them last week and I was impressed by their phenomenally good argument as to why the Minister should not do what she is planning to do. For a start, this measure does not save the Government at all; in fact, it just discourages people from working. There are no jobs for these people to take up in the first place. Without child care, how can they afford to take up a job if it comes their way?
I met yesterday with a group of people on one of these new wonderful courses the Minister has put them on. I asked them if they would be on such a course if they had not been forced to do it, and they said they would not. They felt it was an utter waste of time. The person who was giving the course told me they had to make it up as they went along, but they did it because it reduced numbers on the dole. It may have looked good for the Government but what good did it do for those on the courses? What good will it do for someone who is doing a brilliant job of minding their child at home if they are forced onto a course that is not worth a damn or into a job that does not exist? This does not make any sense whatsoever.
The Minister said that we might get some kind of Scandinavian world-class child care system but I did not think she would do it for a second because it is not possible. At a meeting today, one of the Minister's party colleagues, Deputy Aodhán Ó Ríordáin, said we are starting from a very low base. We are starting from such a low base that this cannot happen within the timeframe the Minister is proposing. She will not only force people to send their children out on the street at the age of seven - although people will not do that - but she is raising their hopes about something that will not happen. If it is not going to happen, it is irresponsible of the Minister to say it will. It has taken the Scandinavian countries decades to get this right, so I do not think the Minister will solve it in 18 months. It is not possible.
If the Minister really wants to help on social welfare, she should try to create some jobs. She should also put in place a decent child care system which people can afford. Instead, however, the Minister is creating circumstances whereby many community facilities are closing down. She is travelling in the opposite direction to the promises she has made. It is not on. She is supposed to be the Minister for Social Protection, not - to steal Deputy Wallace's quote - the Minister for social destruction.
The Dail Divided:
For the motion: 71 (James Bannon, Pat Breen, Joan Burton, Ray Butler, Jerry Buttimer, Catherine Byrne, Ciarán Cannon, Joe Carey, Paudie Coffey, Michael Conaghan, Seán Conlan, Paul Connaughton, Ciara Conway, Noel Coonan, Joe Costello, Simon Coveney, Michael Creed, Jim Daly, John Deasy, Jimmy Deenihan, Pat Deering, Regina Doherty, Robert Dowds, Bernard Durkan, Damien English, Alan Farrell, Frank Feighan, Anne Ferris, Frances Fitzgerald, Charles Flanagan, Brendan Griffin, Dominic Hannigan, Noel Harrington, Simon Harris, Tom Hayes, Heather Humphreys, Kevin Humphreys, Derek Keating, Paul Kehoe, Seán Kenny, Seán Kyne, John Lyons, Michael McCarthy, Dinny McGinley, Joe McHugh, Tony McLoughlin, Eamonn Maloney, Peter Mathews, Michelle Mulherin, Dara Murphy, Eoghan Murphy, Gerald Nash, Dan Neville, Aodhán Ó Ríordáin, Kieran O'Donnell, Patrick O'Donovan, Fergus O'Dowd, John O'Mahony, John Perry, Ann Phelan, Pat Rabbitte, Michael Ring, Brendan Ryan, Róisín Shortall, Arthur Spring, David Stanton, Billy Timmins, Joanna Tuffy, Liam Twomey, Brian Walsh, Alex White)
Against the motion: 37 (Gerry Adams, Richard Boyd Barrett, Tommy Broughan, John Browne, Dara Calleary, Joan Collins, Michael Colreavy, Timmy Dooley, Dessie Ellis, Luke Flanagan, Seán Fleming, Tom Fleming, Séamus Healy, Michael Healy-Rae, Billy Kelleher, Michael Kitt, Pádraig MacLochlainn, Charlie McConalogue, Mary Lou McDonald, Finian McGrath, Mattie McGrath, Michael McGrath, John McGuinness, Sandra McLellan, Michael Moynihan, Catherine Murphy, Patrick Nulty, Caoimhghín Ó Caoláin, Éamon Ó Cuív, Seán Ó Fearghaíl, Aengus Ó Snodaigh, Jonathan O'Brien, Shane Ross, Brendan Smith, Brian Stanley, Peadar Tóibín, Mick Wallace)
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Seán Ó Fearghaíl.
Question declared carried.