Dara Calleary (Mayo, Fianna Fail)
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I thank the Ceann Comhairle for allowing me to raise this issue, about which we have all probably received representations since Christmas and particularly in the past week, as correspondence has arrived from Eircom and Electric Ireland in particular relating to another of the bombshells from the Minister for Social Protection, Deputy Burton. It was sneakily announced in the budget but it is only having an impact on people now.

With the telephone allowance, there has been a 63% reduction in the contribution, meaning a figure that was €25.78 has been reduced to €9.50. For many older people this was a complete subsidy on line rental. The younger generation is moving away from landlines but that is not happening for the older generation. They need landlines for the traditional use of the phone and in many cases to allow use of monitored alarms and personal security. For many, this cut is forcing a reassessment of the need to have a landline and maintain security. The Minister of State knows there has been a surge of burglaries and robberies in my part of the country over the past three months, and this is replicated across the country. There is genuine fear and concern among people, and this cut will be felt by older people in particular.

There has been a complete change in the manner in which the electricity allowance works. It used to be a unit-based allowance that was directly related to usage but it is now an automatic payment of €35 per month. Such a payment is substantial but at this time of year - from January to March or winter in general - people and especially older people use much electricity for heat, light and a range of activities. I object to the manner in which the allowance is being changed from unit-based to a cash basis.

Was any consideration given to staging the change, allowing the biggest impact of the change to happen at a time when people could adjust electricity usage? We have just come through some cold days and one can imagine how bills will be increasing. The change comes at a time when electricity prices have increased by 15%, which is substantial, and this has come about because of oil price spikes. These increases are passed to the customer and we all see them in our bills, although it affects older people in particular. For some time the household benefits package has been a very important support for people over 70, providing security and assistance for necessary costs which rise as one gets older.

What consideration was given to staggering the introduction of the new system? Will the Minister, Deputy Burton, review the change and perhaps look to introduce most of the impact in April, particularly with regard to the electricity allowance? There are a number of issues that must be clarified. Many people may not have used all the units in their allowance, depending on the time of year, and they could carry forward those units. The Minister has indicated that negotiations were under way with Electric Ireland in that regard so is there an update?

How will the social welfare benefits package be affected with regard to Eircom? The company has advised that there will be further cuts in addition to those notified by the Minister because it is precluded from offering discounts to people by the telecoms regulator. Will there be further cuts to the telephone allowance? What advice is the Government giving to people and what communication has been issued to people about the cuts? The Minister is well able to talk and use volume when she wants to but is she bringing the power of her office to the negotiation with the various providers of energy and communications products to try to come up with better or more competitive packages for older people, reflecting their usage and need for these products?

John Perry (Sligo-North Leitrim, Fine Gael)
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I thank Deputy Calleary for raising this important issue, which I am taking on behalf of the Minister for Social Protection, Deputy Joan Burton. Any reduction in social welfare payments or benefits is difficult for those affected. The overall concern of the Government in budget 2013 was to protect the primary weekly social welfare rates. To allow us to protect the core payments people receive, including pensions, disability allowance and carer's allowance, the Department had to examine carefully other additional payments such as the household benefits package. This package comprises the electricity and gas allowance, telephone allowance and free television licence. The package is primarily available to older people, those with disabilities and carers.

Following budget 2013, the structure of the electricity and gas allowance has changed and is now aligned with the best average market rate currently available from energy suppliers for an unchanged 150 units per month. For customers who receive a bill, this amount will appear as a cash credit of €35 on their bill. Other customers will continue to receive a cash allowance.

Between 2005 and 2011 the number of people in receipt of the electricity and gas allowance increased by 20% to reach 405,000. The cost of the electricity and gas allowances has risen from €110 million in 2005 to an estimated outturn of €201 million in 2012, an increase of 83% in seven years. In the current economic climate these increases are unsustainable. The change to the electricity and gas elements of the household benefits package will bring significant savings, with estimated expenditure in 2013 of €176 million, while aiming to encourage customers to achieve better savings through greater mobility.

The affordable energy strategy drew attention to the fact that customers in receipt of household benefits were much less likely than other customers to switch energy supplier to obtain better value. Only 16% of social welfare customers have switched companies compared to 42% nationally. The Commission for Energy Regulation, CER, following discussions with officials from the Department, has been liaising with the National Consumer Agency with a view to ensuring that information is available for our customers to help with switching companies. In August 2011, the CER published a paper which set out a framework for accreditation for price comparison websites, CER/11/144, following which a website, www.bonkers.ie, a good name,was accredited. The website presents comparison data which can greatly assist those wishing to switch companies and achieve the best value.

The number of people in receipt of the telephone allowance has also increased significantly in recent years in line with increases in customers receiving qualifying payments, as well as the increases in those aged over 70 years. Demographics are such that this number will continue rising. In 2005, some 311,000 customers were in receipt of telephone allowance. This figure had increased to 397,000 in 2012, a rise of 28% over seven years. The allocation for the telephone allowance scheme has been reduced by €61 million in 2013. As a result, the monthly allowance has been reduced from €22.60 to €9.50. This is a cost saving measure.

In recent years, the nature of the telephone market has been transformed, with deregulation, mobile services and bundled services, including television, broadband and telephone. A wide variety of deals is available, for example, it is possible to purchase a standard pay-as-you-go brand name mobile telephone for as little as €19.99 in large retailers.

The Department is keenly aware of the impacts on customers. In this regard, it should be noted that Ireland's older population has the lowest rate of consistent poverty and, as a group compared to the rest of the population, is least likely to be at risk of poverty. This points to the adequacy and importance of the State pension. Between 2004 and 2010, consistent poverty for people aged over 65 years fell from 3.3% to 0.9% and the at risk of poverty rate for people in this age group fell from 27.1% to 9.6%. In addition, the fuel allowance scheme was protected in budget 2013 and recipients will continue to receive this payment of €20 per week as part of their weekly social welfare payment for the duration of the fuel season, which runs until April 2013.

If a customer of the Department is experiencing difficulty, an exceptional needs payment may be made to help meet an essential, once off cost which an applicant is unable to meet out of his or her own resources. There is no automatic entitlement to this payment. Each application is determined by a community welfare officer based on the particular circumstances of the case.

Dara Calleary (Mayo, Fianna Fail)
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The Minister of State is a businessman. If 405,000 customers were to contact him tomorrow seeking a deal, he would fall over himself to give them a discount. Some 405,000 people are in receipt of the energy allowance, with a further 397,000 in receipt of the telephone allowance. The Minister of State referred to the increase in the costs of these schemes, which is also a reflection of a substantial increase in profits for energy companies and those of the telecommunications companies that are well run. Surely it is within the capacity of the Department of Social Protection to seek a deal on behalf of almost 500,000 people.

As the Minister of State is aware, older people do not like change. Whereas he and I may change providers regularly, our older peers have more loyalty to their providers and will not change. Surely, given the numbers who receive these allowances, the Department should be able to negotiate better deals and improve its understanding of usage.

While I concur that demographics will dictate that the costs of these schemes will increase, choices were available to the Government. If it had taxed those earning higher incomes, specifically those with salaries of more than €100,000, those on the lowest incomes, including pensioners, would not have to take cuts in the household benefits package. While I am aware this matter does not come within the Minister of State's brief, I ask that the Minister revert to me on the position regarding discussions with Eircom and Electric Ireland on unused units and the social benefits package. I will resist the temptation to comment on the Minister for Social Protection, Deputy Burton, and bonkers.ie.

Bernard Durkan (Kildare North, Fine Gael)
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We will not go there.

John Perry (Sligo-North Leitrim, Fine Gael)
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I will raise with the Minister the Deputy's point on carrying over units. On the issue of doing a deal, I am certain the Minister is very conscious of the need to obtain best value for money. The previous Administration worked with the providers of electricity, telephone services and so forth. Many people switch providers.

Dara Calleary (Mayo, Fianna Fail)
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Older people do not switch.

John Perry (Sligo-North Leitrim, Fine Gael)
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I disagree. There is no better example of a population that obtains value for money than the older generation. They did not get carried away in the silly season and have always kept their feet on the ground. While the Deputy makes a good point, the Minister is conscious of the position of those who are in need. An allowance is available in cases of inability to pay. The Minister is doing everything possible to retain the benefits provided to the elderly and needy to whom we owe a duty. I will raise the Deputy's concerns directly with the Minister.