Joan Burton (Dublin West, Labour)
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I move: "That the Bill be now read a Second Time."

Just over three years ago in the programme for Government, we pledged to change the social welfare system to make it fairer, better structured, more transparent and less open to abuse. We pledged, among other things, to provide a fit-for-purpose system, provide better services, remove poverty traps and, critically, focus on providing opportunities for jobseekers. In the Social Welfare Bills I have introduced over that time, many significant structural reforms and changes have been implemented, as acknowledged by the European Commission, the IMF and similar institutions. These reforms have helped us maintain a very strong social welfare safety net, despite being in an EU-IMF bailout programme up to the end of last year and having to reduce State expenditure to get the public finances in check.

Research conducted by the Economic and Social Research Institute, in tandem with my Department, and published last December shows that approximately 87% of all households in Ireland receive social transfers, such as jobseekers' payments, pensions and child benefit. We pay child benefit in respect of every child, we have a strong support system for those unfortunate enough to lose their job and we have a State pension structure that has dramatically reduced pensioner poverty. Ireland's system of social transfers remains the most effective in the EU in reducing poverty and is far superior to that of the other countries most affected by the crisis. The fact we maintained this safety net throughout the worst financial crisis this country has ever seen is one of the key reasons we are now emerging on the other side and I am not the only one who believes this.

In its Society at a Glance 2014 report on Ireland, which was published earlier this year, the OECD said: "Income losses in Ireland would have been far greater without a functioning and adequately resourced social protection system". It also said that the "focus now needs to be on helping people get off benefits and back into work". This is precisely what the Department is doing.

Since coming to office, I have focused on transforming the Department from a passive benefits provider to an active and engaged public employment service through the Pathways to Work strategy. Through Pathways to Work, we are getting people back to work and that is the single best way of reducing welfare expenditure. Every 10,000 people we help to leave the live register saves approximately €95 million in welfare expenditure per year. That in turn creates the room to protect key services, supports and schemes in other areas of the Department. People at work, through their taxes and PRSI, fund the system safe in the knowledge that it will be there for them or their families when they need it. We need to thank the people at work who are paying the taxes and contributing the PRSI for this system which ensure we have adequate social safety nets. This is a key element of the social bargain and I am grateful that the public has continued to support a very strong social protection system in Ireland when the mood in some other countries has been notably different. However, to maintain that public support, it is essential that we ensure every euro of the welfare budget is properly spent and where fraud or error arises, that we recover the overpayments as appropriate.

In this Bill, I am building on the reforms made to date to further improve the system, safeguard its sustainability and ensure Ireland continues to have a very strong welfare state to protect those who need it. I have introduced a comprehensive package of changes in the area of fraud and control over the past three years. Effective debt recovery is a key aspect of the Department's control policy as outlined in the new compliance and anti-fraud strategy 2014-18, which I launched in April this year. It is an integral part of the deterrent approach to control fraud and error. It ensures that people who have been overpaid realise they have a responsibility to repay and that the Department will take appropriate steps to obtain recovery. I make no apologies for this, because it ensures that the social welfare budget is there for those who need it most.

Most social welfare customers receive only the payment to which they are entitled. However, where overpayments arise, whether through fraud or error, it is essential that these moneys are recovered. The Department now has greater powers to recover money that has been erroneously paid out or claimed fraudulently. In 2012, I introduced legislation which allows for up to 15% of the personal rate of the person's social welfare entitlement to be deducted where there is an outstanding overpayment. Last year, I introduced additional powers for the recovery of social welfare overpayments by way of notice of attachment to earnings and-or money held by an overpaid person in a financial institution. This measure was designed to improve the Department's ability to recover overpayments from persons with disposable assets or earned income and who are generally are no longer dependent on social welfare payments.

The Bill further extends the powers of the Department to recover social welfare overpayments. Notice of attachment provisions are being extended to allow recovery from payments being made or to be made by public bodies such as Government Departments. In this way, we can ensure that one arm of Government is not paying out lump sums to individuals who owe significant amounts of money in respect of welfare overpayments.

I am also bringing in changes to ensure that money can be recovered from employers or former employers. It is the responsibility of an employer to make statutory redundancy payments to its eligible employees. Where the employer cannot afford to make these payments, lump sum payments can be made by the Department from the Social Insurance Fund. This creates a debt against the employer for the amount paid and I am now proposing that these debts be recovered by deduction from any refund of employer PRSI to which that employer may be entitled. I firmly believe that all possible steps should be taken to recover moneys due to the Department and these measures will add to the measures I have already put in place to achieve this.

These new powers have significantly improved the Department's ability to recover moneys from individuals who do not make reasonable efforts to repay their debt while having due regard to their financial circumstances. In 2012, just over €53.3 million was recovered in overpayments, while the amount recovered in 2013 was approximately €70 million. Bear in mind that free travel, for instance, which our pensioners, in particular rightly value, costs the State approximately €77 million per year. The scale of the recoveries really allows certain vital areas to be supported financially.

I am also making changes to ensure that people must continue to be habitually resident in the State to receive certain social welfare payments. Until now an evaluation of the person's habitual residence was only made at the time of application. From now on, habitual residence may be reviewed after the date of award to ensure that residence conditions continue to be satisfied. Also, to clarify the application of the habitual residence test, the presumption that persons are not habitually resident in the State if they have not been present for a continuous period of two years in the common travel area at the date of making the application is being removed. This is what people often call the two-year rule.

I am also taking the opportunity in this Bill to transpose the provisions relevant to the social welfare code of EU Directive 2010/41 on the principle of equal treatment between men and women engaged in an activity in a self-employed capacity.

I am also taking the opportunity in the Bill to transpose the provisions relevant to the social welfare code of EU Directive 2010/41 on the principle of equal treatment between men and women engaged in an activity in a self-employed capacity. The social welfare provisions of the directive mean ending the exclusion from social insurance of spouses or civil partners of a self-employed worker who participate in the activities of their self-employed spouse or civil partner performing the same or ancillary tasks. The effect of the provision is to allow those categories of worker access to social insurance for the first time. The majority of people who will be affected by the measure are women. It is particularly important that spouses - many of whom are women - of self-employed people, or self-employed farmers, will be eligible to have social insurance cover. In other words, this Bill will extend social insurance cover to spouses or civil partners of a self-employed contributor in cases where the spouse or civil partner is participating in the person's business and earning more than €5,000 a year. Up to now only one of the couple could be insured as a self-employed worker for social insurance benefits. This means that the spouse or civil partner will, under the social insurance system, be able to establish entitlement over time to maternity benefit, widow's, widower's or surviving civil partner's contributory pension and State pension contributory in their own right. This is a very important and welcome reform and will provide excellent value for those involved. I am very pleased to be able to introduce the measure.

As the Actuarial Review of the Social Insurance Fund 2010 pointed out, social insurance benefits "offer excellent value for money" for the self employed. The review stated:

The self employed achieve better value for money compared to the employed - when the comparison includes both employer and employee contributions in respect of the employed person. Self-employed contributions are charged at the rate of 4% of reckonable income over €5,000 or €253, whichever is the greater. Self-employed contributors who pay the minimum contribution of €253 and build up a sufficient contribution history to qualify for the State pension contributory are getting exceptional value for money. To put the matter into context, individuals paying at the minimum €253 per year over a full working life will receive a pension of €230.30 per week during retirement.

I hope the measure will be availed of by the spouses of the self employed, especially as many of them are women.

In this Bill I am also strengthening the residence requirements relating to entitlement to means-assessed social welfare payments by requiring the qualified adult of recipients of those payments to be resident in the State or not in prison in order for the qualified adult increase to be paid. This means that increases in jobseeker's allowance, pre-retirement allowance, supplementary welfare allowance, disability allowance or farm assist in respect of the qualified adult of the recipient will not be payable for any period during which the qualified adult is resident, whether temporarily or permanently, outside the State, or in prison or otherwise detained in legal custody.

In regard to family income supplement, FIS, the Bill will ensure that, in general, once a family qualifies for FIS, payment of the supplement will continue for 52 weeks regardless of a change in circumstances, such as an increase in weekly earnings. As Deputies are aware, FIS is a weekly tax-free, top-up payment for employees on low pay with children. It is one of the major incentives and supports to people with children in low-paid work to bring up their income. At present, more than 44,000 working families with more than 98,000 children benefit from the scheme. The Department's spend on FIS will increase to more than €280 million this year - a 25% increase since 2012. I have placed a very high priority on FIS because all the evidence shows that families are better off in work and FIS helps them to continue in work and build towards financial independence. FIS is crucially important to working families, and the measure in the Bill is about ensuring that families in receipt of the supplement have security and peace of mind about the length of their payment - that it is a full 52 weeks.

In the area of pensions, the Bill provides for an amendment to the Pensions Act to clarify the notification procedures on a direction from the pensions authority to the trustees of a pension scheme to restructure their scheme. I will table three amendments to the Bill on Committee Stage to allow for the implementation of the Youth Guarantee, to allow secondment of gardaí to the Department of Social Protection, to allow Irish Water to use PPSNs, and to facilitate the transfer of data on households with children to enable the provision of a water allowance for children in the context of the huge data we hold on child benefit.

I will now outline the main provisions of the Bill. Section 1 provides for the Short Title. Section 2 defines a number of common terms. Section 3 provides for changes to enable functions relating to payment of benefit or assistance and related payment services to be provided under arrangements with selected payment service providers. Section 4 provides that only gains from share option transactions which result in the employee actually receiving shares will come within the definition of "share-based remuneration" in order to benefit from the exemption from employer PRSI liability.

Section 5 clarifies the powers contained in the Social Welfare Consolidation Act 2005 enabling the Minister for Social Protection to provide for refunds of employer PRSI contributions in the case of certain seafarers employed onboard vessels that are registered in a member state of the EU or European Economic Area and are providing scheduled passenger services between ports within those states.

Section 6 provides that where an employer has a debt owing to the Minister in respect of redundancy lump sum payments and the employer qualifies for a refund of PRSI contributions, the debt owing to the Minister can be recovered from the PRSI refund. The Redundancy Payments Act 1967 provides for lump sum payments by employers to their employees upon their dismissal by reason of redundancy. Where an employer does not pay such a lump sum payment to his or her employees who have been made redundant, the Redundancy Payments Act provides that such payments can be made by the Minister for Social Protection to the employee. The Minister can then recover such amounts from the employer.

Section 7 provides that increases in jobseeker's allowance, pre-retirement allowance, supplementary welfare allowance, disability allowance or farm assist in respect of the qualified adult of the recipient will not be payable for any period during which the qualified adult is resident, whether temporarily or permanently, outside the State, or in prison or otherwise detained in legal custody.

Sections 8 and 9 clarify the rules on entitlement to family income supplement and set out the circumstances in which a claimant who is living apart from his or her spouse or civil partner and children can still claim the supplement; and ensure that, in general, once a family qualifies for family income supplement, payment of the supplement will continue for 52 weeks regardless of a change in circumstances, such as an increase in weekly earnings. Section 9 also provides that where payment of FIS ceases to be paid to a family during the 52 week entitlement period and the family requalifies for FIS before the end of the 52 week period, then payment of FIS will recommence for the unexpired portion of the 52 week period at the rate that was payable at the start of the 52 week period. That is to facilitate people who might go in and out of employment.

Section 10 provides for changes in respect of the application of the habitual residence condition, HRC, for entitlement to certain social welfare payments. The presumption that persons are not habitually resident in the State if they have not been present for a continuous period of two years in the common travel area at the date of making the application is being removed.

In addition, a person must satisfy the habitual residence condition for the duration of his or her claim in order for entitlement to continue. This also allows for the review of habitual residence in respect of persons who were not required to satisfy such conditions under EU law at the date of application for the schemes concerned. Habitual residence is just one condition of these payments. A person must also satisfy other conditions to receive a payment.

Section 11 provides for a number of amendments, consequential to the changes in section 11, to uncommenced provisions contained in the Social Welfare and Pensions Act 2008 relating to the transfer of responsibility for the blind welfare allowance scheme from the HSE to the Department of Social Protection. Section 12 is a minor technical amendment to correct an incorrect reference.

Sections 13 and 14 extend the powers for the recovery of social welfare overpayments to include recovery from certain lump sum payments made by the Minister for Social Protection to that person, that is, refunds of PRSI contributions, lump sum payments made under the Redundancy Payments Act 1967 and the Protection of Employees (Employers' Insolvency) Act 1984. Section 15 extends the provisions relating to the recovery of social welfare overpayments by way of a notice of attachment to include situations where the person who has been overpaid has sources of income from payments made from State funds, for example, grants, refunds and repayment of tax.

Section 16 provides for the transposition of Directive 2010/41/EU on the application of equal treatment between men and women engaged in self-employment activity, in so far as that directive relates to ensuring that the spouse or civil partner of a self-employed worker can benefit from social protection in accordance with national law. Section 17 provides for the deletion of three uncommenced amendments to the Social Welfare Consolidation Act 2005 which are no longer necessary. Section 18 provides for a number of minor amendments to the Social Welfare Consolidation Act 2005 to correct minor typographical and textual errors.

Section 19 defines the term "Act of 1990", which is used for the purposes of Part 3, as meaning the Pensions Act 1990. Section 20 clarifies the detail to be provided by trustees to scheme members in the notification, including the right to appeal to the High Court in situations when the Pensions Authority issues or proposes to issue a unilateral direction to the trustees of a scheme to restructure a scheme. Section 21 provides for similar clarification regarding the notification of scheme members in advance of the Pensions Authority making a direction to wind up a defined benefit scheme. Section 22 amends section 50C of the Pensions Act to cross-reference the new section inserted.

In the Bill, I am making a number of important changes to the social welfare system to ensure that money continues to be spent on those in genuine need, and every opportunity to recover money owing is explored and used. The requirement for a strong and sustainable welfare state has been a lifelong conviction of mine and despite inheriting the worst economic crisis the country has seen in modern times, the Government has maintained a strong sustainable welfare safety net to protect those who need it most. I firmly believe that the safeguarding of the very strong social welfare safety net helped preserve social cohesion throughout the crisis, which is now thankfully coming to an end as we have exited the bailout and seen a return to economic growth and a welcome surge in employment, but continued public confidence in the welfare system is essential to maintain it in the long term. This is why I am bringing forward the important changes in the Bill.

In 2014, the Department of Social Protection will spend almost €20 billion in social welfare payments and will provide income support to approximately 1.4 million people every week. The simple truth is the Department will impact on almost every person in the State at some point in his or her life. We therefore have a great responsibility to our customers or clients, be they children, jobseekers, people with disabilities or pensioners, to ensure their entitlements are paid in full and on time. Equally, we have a responsibility to citizens to ensure their taxes are properly spent, and that the money is there to ensure the social protection system meets its obligation to protect those who need it when they need it.

I commend the Bill to the House and I look forward to an informed debate and to hearing the views of Deputies on the measures contained in it.

Willie O'Dea (Limerick City, Fianna Fail)
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One of the greatest myths perpetrated in Irish politics since the foundation of the State has been the notion that changes, or should I say reductions, in social provision for the past three and a half years have been dictated by the troika. We all know this is a gross distortion. The fact of the matter is that the members of the troika - I had occasion as part of my party's delegation to meet them several times - were and are interested in the bottom line and reaching certain financial targets. They were not unduly prescriptive about how the targets should be attained. For the past three and a half years the Government has chosen quite deliberately and consciously to reach these targets in a regressive manner.

Progressive budgeting means taking more from those who can most afford it and taking least from those who can least afford it. What has been done for the past three and a half years is precisely the opposite. The greatest burden has fallen on those least able to afford it. The House need not take my word for this. Look at what Social Justice Ireland, an independent private organisation, has stated; look at the Government's own organisation, the ESRI, which has confirmed it; the United Nations has also confirmed it, as have the EU and the OECD, which the Minister quoted in her speech. They have all confirmed that the approach of the Government has been regressive in budgetary terms.

The net result of these regressive budgets is that 16%, which is one in six, of our people are still at risk of poverty. This is despite the fact the income level by which one measures poverty risk has fallen. Approximately one quarter of the population experienced two or more enforced types of deprivation, the consistent poverty rate is almost 7% and approximately one in five children up to the age of 17 are in the risk of poverty category, which is double the OECD average. The basic social welfare rate for a single person is €25 per week below the internationally accepted poverty line. If one is under 25 this shortfall can reach as much as €113 per week. This is not a very attractive legacy.

The changes to the jobseeker's allowance announced in the most recent budget mean the casual debasement of young people continues unabated. These changes were supposed be introduced as some type of character building exercise to compel people, or encourage them very strongly if I can put it like that, to avail of employment opportunities, even though for every vacancy there are 30 applicants, or to take up a training place, even though the number of training and education places is grossly inadequate for those who need them. The reality is the sole and exclusive purpose of the changes was to speed those young people on their way to the nearest airport.

The Minister has a technical amendment to enable the Youth Guarantee scheme to be brought into existence. I have no problem with the technical provision. The Minister has gained great publicity in various newspapers and electronic media from one end of the country to the other about her commitment to the so-called Youth Guarantee scheme and her great work at European level to get the EU to agree to it. On the other hand it is actions that count and not words. The Government has ring-fenced €14 million when all the experts state that a proper youth guarantee scheme, which would cost €6,000 to €7,000 per head for unemployed youth in Ireland, would cost something between €250 million and €300 million.

In addition, the Government's treatment of the elderly has been contemptible. I could refer here to the fuel allowance, the emasculation of the free schemes, the abolition of the free telephone rental allowance, changes in pension entitlements that have made people worse off. Not to mention the abolition of the bereavement grant, the slashing of home help hours and the medical cards fiasco.

In view of the Government's stated objective of encouraging lone parents to enter the workplace, its treatment of these people is quite incomprehensible. The amount one can earn and still receive the lone parent allowance has been progressively reduced. Therefore, the Government appears to be proceeding on the extraordinary proposition that the less a lone parent has to gain by going out to work, the more likely he or she is to go. It is unsustainable. I will not mention issues pertaining to respite care grants and so on, as I wish to turn to some of the Bill's provisions.

While examining the contents of the Bill this morning, I noted an apparently innocuous section of the Bill, namely, section 3. It appears to be an innocuous technical section referring to amendments to amendments and to insertions of new sections and subsections into various items of legislation. However, this may be the most significant section in the Bill, albeit concealed in the appropriate legalese. The significant point about section 3 is that it provides for the amendment of section 242 of the principal Act, which is the Social Welfare Consolidation Act 2005. If one reads the appropriate section that is being amended in the aforementioned Act, it is interesting that it makes specific reference to An Post as the service provider for the Department of Social Protection. However, this legislation quite deliberately is taking out the reference to An Post and is replacing it with something called the payment service provider, whoever that may be. In other words, the way is being cleared to provide a payment system for social welfare other than through the traditional route, namely, post offices. This is despite the Government's repeated commitments to the Irish Postmasters Union and its various representatives, in public statements both inside and outside this House, that the post office network is safe and that the contract for the social welfare payment system will remain with the post offices, because this is absolutely necessary to preserve the post office network. Without the social welfare contract, the post office network will fall apart. While the Government has given repeated assurances that the network is safe, it is safe because the rock on which it rests - namely, the social welfare payment system - will remain as is. However, this legislation is deliberately clearing the way to change this, which gives the lie to many of the reassurances the Minister's colleague, the Minister for Communications, Energy and Natural Resources, has given both inside and outside this Chamber. Consequently, Fianna Fáil will be opposing the section on Committee Stage.

Sections 13 to 15, inclusive, deal with the collection of social welfare, and the Minister referred in her speech to the change she brought about which enables overpayments to be collected at up to 15% of the principal rate. When speaking here today, I do not refer to recovering overpayments that were made due to fraud, because more than 70% of overpayments are due not to fraud but to simple error. Sometimes, these errors were honest mistakes on the part of the individuals but, as often as not, they were on the Department's side. Even though last year's legislation specifically refers to collection of "up to 15%", there is compelling evidence that the Department of Social Protection is interpreting that provision differently. It is interpreting it as 15%. I have come across numerous cases through my constituency office in which the Department is insisting on a payment of 15%. Its representatives are stating that they are entitled to seek 15% and that is what they will take. I have encountered individual cases in which this has caused great hardship and appears to me to be a departure from the actual wording of the legislation under which the Department is operating. At the very least, Members require a commitment from the Minister to give a directive to the Department to exercise some discretion in this regard.

A change being provided for in the Bill is that an overpayment can now be snatched back in a single lump sum by the Department from other social welfare moneys the Department may owe to the individual. Alternatively, an attachment order can be issued to snatch back the money in a single lump sum from moneys owed by another agency of the State, such as the Revenue Commissioners or the Department of Agriculture, Food and the Marine. I can envisage cases in which this will cause individual hardship. Again, I do not refer to people who defraud the Department of Social Protection, for whom I have no sympathy. I refer to people who find themselves in an overpayment situation due to simple error. There should be some element of choice in this regard. Members have been told it is the intention of the Department that this will only happen as a last resort, when the person who has been overpaid is proving to be unduly recalcitrant and is not dealing with the Department on a fair basis. However, if that is the Department's intention, why not spell it out in legislation? At present, as far as I can discern, several offices of the Department are choosing to interpret this part of the legislation in their own way. If it is the genuine intention of the Minister and the Department that this will be used as a last resort, this should be spelt out clearly and unambiguously.

The Minister stated that she is delighted to introduce section 16. However, she is introducing it on foot of a European Union directive and Members have no choice but to introduce it. Having been thinking about it today, since first reading it, I do not know how it will work in practice. As an example, one could takes a business which brings in profits of €80,000, owned by an individual whose wife works in the business performing ancillary tasks. If she is an employee who is being paid €20,000 or €25,000 per year, that is fine - PRSI can be paid in the usual way and the individual can get whatever benefits flow therefrom. If she is a 50:50 partner, that also is fair enough, because the profits can be allocated accordingly. Incidentally, while one can have types of partnership other than a 50:50 partnership, I believe the Department has an idea that partnerships must be on a 50:50 basis. However, if the person concerned falls into neither category - that is, is neither partner nor employee - will a certain sum of money be allocated to him or her? There is a reference to the necessity for such a person to be earning at least €5,000. If one is earning money, surely one is an employee? I really do not know how this will work in practice. However, this issue can be teased out on Committee Stage.

The important point in respect of the self-employed is the failure of the Government, once again, to grasp the nettle and deal with the real problem. The Minister is well aware of a report gathering dust in the Department that points out that the contribution system and the benefits system for the self-employed are inadequate. The report contains many examples from throughout the OECD in which self-employed people can pay contributions to insure themselves against falling ill, becoming unemployed and so on. Such measures would encourage people to set up on their own. Ireland, in common with some obscure place such as Lithuania, is about the only country in the OECD that does not allow for this.

The report recommends that the Government do something about it, whether by means of a compulsory system or a voluntary system - I favour the voluntary system - but if it is to be a compulsory system, so be it. There are differing views. The fact of the matter is that three and a half years down the line there has been a detailed report, representations from organisations representing the self-employed, and continuous and very well argued representations by my colleague on the social protection committee, Deputy Ray Butler from County Meath. I can only take the man at his word - he tells us he has received various commitments from the Minister - but three and a half years down the road, with time running out, still nothing has been done to deal with this fundamental flaw, nor is there any indication as to when, if ever, anything will be done. That is what real reform in this area should look like.

Section 7 disallows increases for qualified adults if the qualified adult is incarcerated or abroad for a period of time. My understanding is that this is a repetition of previous legislation. I ask the Minister to explain if this changes the provisions in any material way. I have been advised by the Department that the previous legislation only refers to the principal, not the qualified adult. I am not quite sure that is correct; I will need some clarification from the Minister. Under the 2005 Act, where this provision previously appears, there was a commitment to draw up regulations. A situation cannot be allowed whereby if somebody's wife goes for a week's holidays, for example, the principal loses the adult dependant allowance for that period of two or three weeks. I would like to have sight of those regulations if they are in existence and I would appreciate a copy of them. I want to know whether any material change is being made. The adult dependant provision is already dealt with in the previous legislation, in my view.

Again, this shows the complete reluctance to confront the notion of real reform in this area. For example, everybody knows that the three-day rule constitutes a poverty trap. In effect, the rule means that a person working 15 hours per week over three days might receive a significant jobseeker's payment whereas another person earning exactly the same amount and in exactly similar family circumstances, working for five days a week, is entitled to no payment. Is this fair? Surely the Minister is aware of the numerous representations and submissions made that the three-day rule should be replaced by an earnings-based system to take into account the realities of the modern labour market. However, any move to eliminate this obvious poverty trap would constitute real reform, which is the one thing we will not get.

I welcome the changes in the family income supplement in so far as they go. I still do not understand why, if a person's circumstances change materially for the better or worse during the 52-week period, the FIS cannot be adjusted accordingly. With respect to the structure of FIS, there have been numerous recommendations and submissions that FIS be changed because, as currently structured, it can constitute a poverty trap. This arises from the requirement that in order to qualify one must work at least 38 hours per fortnight. That means, for example, that a person earning €100 per week under the FIS threshold for his or her family size would receive an income support of €60 per week from the State - 60% of the difference - whereas a person with a smaller income and therefore a greater need for State support, working a half an hour less per fortnight, would get nothing at all. That is obviously wrong. I do not have to spell it out in any great detail in the limited time available to me. Why is this wrong not being confronted?

The Minister announced to some fanfare that the habitual residence rules had changed. I think this provision will change very little. I refer to the programme for Government, which contains a reference to habitual residence:

We will raise the issue of payment of Child Benefit in respect of non-resident children at EU level and seek to have the entitlement modified to reflect the cost of living where a child is resident.

I asked the Minister for Finance on Leaders' Questions today whether this had been raised at European level and, if so, what the result had been. He informed me that I should not be asking him that question on Leaders' Questions because it was a matter appropriate for the Minister for Social Protection. I am asking the Minister that question now and she will have the opportunity to explain to me in her concluding reply. The Minister may correct me, but in my opinion the new provision means that any child benefit payment to a non-Irish national currently in receipt of benefit remains unaffected. It also means that the payment of child benefit to EU migrant workers whose children are living in their home countries remains unaffected. I need confirmation that I am correct on those matters.

I refer to the previous Social Welfare and Pensions Bill 2013. I mentioned that sections 13 and 14, which provide for reckonable benefits and loss of earnings claims, would cause difficulties in practice, but I did lament the fact that we had not had time to discuss it properly. Now, for once, the Law Society has come to my rescue. It has made submissions to me and, I presume, to my colleagues. The society has provided concrete examples of how this provision could work horrendously in certain situations. I can say as a member of the legal profession that there is no doubt that it will be a powerful disincentive to out-of-court settlements. If anything is done in this country to disincentivise the practice of settling out of court then the whole system will grind to a halt. It has taken long enough already - although not as long as it used to take in certain circumstances - but if out-of-court settlements are disincentivised it will have horrendous consequences. I remind the House of the old adage that justice delayed is justice denied. There will be a hell of a lot of justice denied if this provision works out as envisaged and as it will work out. The Law Society has expressed this concern much more clearly, and, I am sure, more intelligently, than I could ever put it.

Those provisions have not been commenced yet, thank goodness. They were due to be commenced last month. I wish to ascertain the Minister's intentions in this regard. For example, will these provisions be reconsidered? Will the views of interested parties be sought? Will the new provisions - if these are to be reconsidered and recast - reflect the reality of claims settlements? Has the Department looked at what has been done in this regard in Northern Ireland, which seems to have an eminently more sensible scheme than the one we are trying to implement?

The Bill contains a minor reform to pensions. As a result of this legislation, if a directive has come from the Pensions Board then the trustees are under an obligation to communicate that directive to their members. There are various provisions for people to go to court, for example. I refer to the Pensions Act 1990, which in my opinion contains that obligation. It is implied in the terms of the Pensions Act 1990. I have no objection to putting it down in black and white in legislation in specific form rather than saying it is there by way of implication.

Where is the penalty? The legislation specifically states that the trustees are obliged to communicate this information to their members. From a reading of the section, however, it appears they will not face a penalty if they fail to do so. What is the point of introducing an obligation without penalties? The obligations on trustees provided for in various Pensions Acts, including the 1990 Pensions Act, are accompanied by specific sanctions for failure to comply.

The position in respect of pensions extends beyond this relatively minor point. The major point is that a pensions crisis has been looming for some time. While the entire public sector is covered for pension purposes, only 50% of the population as a whole has pension cover. This means that employees in great swathes of the private sector do not have any pension cover and will rely completely on the State pension on retirement. As the dependency ratio decreases, as is forecast in all available projections, the current position will become steadily unsustainable.

Anything I have seen by way of legislation or innovation from the Government for the past three and a half years has constituted a disincentive to people to provide pensions for themselves. Having changed the name of the Pensions Board, the number of members on the board and the title of its chief executive, the Government is now imposing on trustees an obligation to communicate with members that is not subject to any penalty or follow-up. What is being done to confront the major problem facing the country, namely, the need to provide a pensions structure that is financially sustainable and socially adequate? While various proposals and suggestions have been made and reports gather dust, the Government has decided to issue an ineffective directive to trustees and change the name of the Pensions Board. Nothing is being done to confront the real problem.

I am aware that an election is taking place for the leadership of the Minister's party. Far be it from me to get involved in the internal affairs of another party, although I wish the Minister well on a personal level, but I cannot help noticing, given the blanket media coverage it is receiving, that the buzzword in the Labour Party leadership election is "change". The party is experiencing a catharsis as a result of the recent exercise of the franchise by the electorate, which means change is required. If one examines the Minister's record of change, however, one finds she has not changed anything of consequence. Defined benefit pension schemes are still in a mess and in terminal decline. No attempt has been made to place the national pensions scheme on a sustainable footing or allow the self-employed to insure against illness or unemployment, nor has any effort been made to deal with a major report that recommends recasting the entire system of child benefit. The Minister has not made any effort to confront real reform or make hard choices.

Given the need to be balanced, I should point out that the Minister is certainly associated with change. When she entered office, for example, she found a system in place for providing free telephone rental allowance to vulnerable elderly people. She changed the system by abolishing it. She also emasculated the system of free electricity allowances, which were concentrated primarily on the elderly in an effort to target expenditure towards the vulnerable, by reducing the payment to approximately one third of its previous value. The Minister also reduced the period for which fuel allowance was paid from 32 weeks to 26 weeks per annum and drastically cut jobseeker's allowance for persons under the age of 25 years, much to their detriment. She changed pension rules to make pensioners worse off who had paid contributions for many years and readjusted child benefit downwards, despite having made specific promises to the contrary. The Minister changed the respite care grant by reducing it by 25% and cut the amount lone parents in receipt of social welfare payments can earn, thus creating a disincentive to work. She also changed the position whereby those who paid social insurance were entitled to a bereavement grant by simply abolishing this payment.

Notwithstanding the administrative changes it introduces, what does the Bill do for social provision? The clue is on page 5 of the explanatory memorandum which, under the heading "Financial Implications", states the following: "The measures contained in sections 6, 13, 14 and 15 of the Bill to strengthen the powers to recover social welfare overpayments will lead to savings in overall social welfare expenditure." This is another cut and yet another missed opportunity.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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In the short time available to me this evening, I will deal with only one aspect of the Bill before returning to its main provisions tomorrow. This is, in the main, innocuous legislation. Its only urgent provision is in section 16, which deals with an EU directive from 2010 and, therefore, addresses an outstanding matter that was not addressed when other parts of the directive were adopted previously.

I propose to discuss an issue to which Deputy O'Dea alluded and to which neither the Bill nor the explanatory memorandum explicitly refers, namely, An Post or, for that matter, post offices. According to the explanatory memorandum: "Section 3provides for changes to enable functions relating to payment of benefit or assistance and related payment services to be provided under arrangements with selected payment service providers." When one trawls through social welfare and pensions legislation, including the principal Act of 2005, one finds that the purpose of this section is to delete all references to "An Post". The removal of references to An Post as the named service provider for social welfare payments could have devastating implications for the survival of local post offices. The Department has explained that this deletion is being made to remove the privileged position - those are the words it uses - of An Post in the consideration of service providers in future. This measure does not feature in any of the documents before us. There is nothing privileged about hanging on by one's fingertips, as many of our post offices are doing.

An Post should have a principal position to reflect the important role local post offices play in the community. The post office network is crucial to the social fabric, especially in rural areas, but also in urban neighbourhoods. Post offices have played a key role in the anti-fraud measures of the Department and could probably play a greater role in this regard if all payments made by the Department were facilitated by An Post and its services. The removal of An Post's status creates the possibility of a multinational company, bank or other entity with no connection to our communities swooping in and acquiring the contract for social welfare payments. The manner in which the Minister has acted in this Bill opens up this possibility, which would not be in the best interests of those who receive payments, post office workers or the wider community. There is no reason we should not retain An Post as a preferred bidder, if one wishes, rather than removing all references to "An Post" and placing it on the same level as all other financial institutions and all that would entail.