Wednesday, 4 November 2015
Social Welfare Bill 2015: Second Stage (Resumed)
Before the adjournment, I outlined some of the social welfare cuts the Government had implemented since taking office. They include cuts to illness benefit, the diet supplement scheme and the fuel allowance scheme. I was dealing with the fuel allowance and the household benefits package when the debate was adjourned. The Government cut these schemes, affecting some of the poorest households, including the elderly and people with a disability who depend on the fuel allowance to heat their homes. The payment period was cut by six weeks, amounting to a reduction of €120.
Even with the increase that was announced, because the weeks have not been reinstated, it still leaves those who depend on the fuel allowance at a loss of €54.50 on the payment made prior to the Government coming into office. Let us not forget that in addition, a water charge and property tax were heaped on many of the same people, pensioners who have worked all their lives, paid their taxes and who should be able to have some comfort in their twilight years instead of having to choose between heating their homes or feeding themselves. Many of those who pay the property tax have already paid several times over, in particular those who paid significant amounts in stamp duty. In addition, there are water charges. As if that was not enough, the Minister also cut the electricity and gas components of the household benefits package for pensioners by 25% and 20%, respectively, at a time when fuel prices were rising. Sinn Féin would not only abolish the water charge and the property tax but we would also increase the fuel allowance by the full six weeks over a period of two years.
The telephone allowance was abolished when the Government took €271 from the annual budgets of people over 70 years of age and ensured that vulnerable older people, especially in rural areas, had to beg, borrow and scrimp to keep up the payments on the panic alarms they had got. However, that is not just a rural phenomenon as panic alarms do not just relate to anti-social behaviour or criminals trying to break in, they also give people peace of mind that if they fall they will have a connection to an open phone line. That was a poor show by the Government.
The State old age pension was, in effect, cut by 16% when one takes into account the increase in age from 65 to 68 years. In addition, by introducing new pension rate bands, thousands of people, especially women, will find they are entitled to a smaller pension than they had anticipated when they come to retire because they had based their calculations on a previous system. For the Minister to give them a miserly €3 extra a week after years of ignoring them adds insult to injury. This is an attempt by the Government to buy the grey vote coming up to the election. That group, perhaps more than most, very clearly understands how their vote works and they will not be bought by less than the cost of a cup of coffee in Starbucks. They are not stupid and they will not be fooled by empty promises.
The respite care grant was also cut. At the time I condemned and opposed the cut. While I welcome that the full rate is now being reintroduced, for many it was a cut too far and the change is a little too late. The initial cut of €350 to respite care undermined the contribution of carers to society. I accept that in most cases the grant was not spent on respite care and that it acted as a support payment to allow people to pay for expenses such as car insurance or to buy extra fuel as the fuel allowance only covers a certain number of weeks in a year but in many cases where a person is bedridden or stationary one must heat the home continuously at a high temperature. The extra money was less for the benefit of the carer than the caree.
I welcome the extension of the payment from six to 12 weeks after the death of the person being cared for as it recognises the fact that the carer is in many ways out of touch with the jobs market. I have asked for other considerations to be taken into account in the future in terms of the job activation scheme or other training schemes to allow carers to keep up their skills at least for a few hours each week. If one has been caring for a parent for ten or 15 years one will be out of touch with the workplace and in many cases it would be very difficult to re-engage at the same level at which one operated when one gave up work. The cut to the bereavement grant was one of the meanest cuts of all. I still do not understand the logic behind it.
The rent and mortgage interest supplement schemes were also cut by the Government. The contribution of tenants was hiked. Maximum thresholds for rent supplement in most parts of Dublin are too low to secure accommodation. In some ways there is a recognition by the Department that the figure is not realistic given the somewhat under-the-counter manoeuvres it makes to pay a higher rent and keep people in rented accommodation. The problem we now face is that people cannot get the accommodation in the first place. People are under threat as landlords who increase the rent are being protected to some degree. Very few so far have managed to benefit from it. The Minister of State, Deputy Kevin Humphreys, appears to be saying it is 4,600 to date, whereas there are 100,000 in the scheme. I would welcome if the number of those who have been helped is higher but it does not address the fact that the problem we face in Dublin city in particular is that people find it impossible to even find somewhere to rent in the first place let alone the difficulty of paying the rent on an ongoing basis. People cannot even come up with a deposit anymore.
The back to school clothing and footwear allowance was cut in three budgets in a row, reducing it by a total of €100 and, in addition, restrictions were introduced in terms of the number of eligible children. Despite the pre-election promises made by the Labour Party, child benefit was cut severely, not just in terms of the €10 cut but beyond it. In the past two budgets the payment was restored to many beneficiaries but those with more than four children were cut by more than €10 and their payments have not been reinstated. I do not know whether that is the Government’s intention but it has still cut the payment by too much.
Instead of tackling excessive pay and pensions at the top, the Government chose to break its oft repeated promise to protect core social welfare rates. It did cut jobseeker’s allowance, jobseeker’s benefit, maternity benefit and the invalidity pension because all of those payments were subject to reductions in the eligibility criteria. The Government shortened the payment period for jobseeker’s benefit by three months which amounts to a cut of 25% and in some cases up to 33% in the core weekly payment. The number of months in which a person is entitled to gain jobseeker’s benefit has been reduced and a person will not necessarily go onto jobseeker’s allowance at the top rate if his or her partner is working.
There were also cuts to maternity benefit. First, it was taxed and then it was cut. The majority of maternity benefit recipients now see their weekly payment cut by €32. Over the full six-month leave period, that is a cut of €832, which is a substantial one for mothers with young babies.
For many new mothers, the maternity benefit was and is the only income during that time and for those mothers who are fortunate enough to have their maternity benefits supplemented by their employers, the cumulative impact of the Government's benefit cut and the tax measure has seen their payments shrink by up to €128. There is a potential loss of up to €3,276 to new mothers. I have welcomed the new proposal on paternity benefit which is something for which Sinn Féin has argued for years and which was included in its pre-budget submission.
In addition, I welcome the proposed amendment that will address the exclusion of credit unions from the household budgeting scheme. Members have discussed this issue previously and I hope this will address the so-called Lough payment and so on. This is where credit unions in the past gave payments for mobile homes which could then be deducted from social welfare payments. It was an inadvertent result of excluding credit unions in the past and, hopefully, this issue will be addressed. It is something for which the Money Advice & Budgeting Service, MABS, and the credit union movement had argued and I presume the new amendment will allow credit unions to be part of the household budgeting scheme. Consequently, it will allow them to-----
Yes, but these are the microloans which in parts of County Cork are called the Lough payment because the Lough Credit Union used to allow a payment to be deducted from social welfare for Travellers, in particular, who were obliged to take out large loans to pay for mobile homes. Given recent events, it is important that this message is sent out.
There is a lot more to discuss but I will deal with some of the Bill's particular elements in committee. One restriction I always find to be highly frustrating at this time of year when dealing with a social welfare Bill is that neither I nor any other Opposition Member can table amendments that constitute a charge on the Exchequer or on the public. This greatly limits what Opposition Members can do, whether it is negative from the Government's perspective or positive, it makes it difficult for them. I will try my best to frame the amendments in such a way that they will bypass the restrictions in order that Members can have a proper debate on many of the other issues that should have been in the Bill.
Obviously, this will be the last Social Welfare Bill before the general election and consequently, it is appropriate that Members view this Bill as part of a package and consider the legacy of how social welfare has been changed. There has been much spin about what has not been done in social welfare in that one has been told that core rates of social welfare were not cut in the context of some things that happened, particularly at the early stages of this Government. This, of course, is not true and the previous speaker has made this point. There was a cut in respect of those under the age of 25 and similarly, the duration of jobseeker's benefit has been cut to nine months. Moreover, child benefit, which is a pretty basic social welfare payment, has been cut despite the Tesco advertisement and the assurances that it would not be. While there has been a modest restoration of that benefit, which is welcome, it does not restore it to its previous levels. One should call this out for what it is in respect of the spin that was presented.
Some of the other items are not so easy to describe, such as the ongoing reviews, which I understand the Department is obliged to carry out. However, I refer to the number of reviews of people in receipt of invalidity pensions who had thought there was a degree of certainty about their payments. I cannot count the number of such reviews I have encountered in which people were told they were fit for work as they could answer a telephone. Some people could barely walk and one man I met could barely talk due to respiratory failure but he was told he could answer a telephone. These were the kind of cases that were represented as people claiming benefits for which they may not have been entitled.
However, when one examines matters structurally, lone parents have been singularly selected. While it is welcome that people return to work, the nonsense that was spun about the Scandinavian model of child care prior to the insistence on that scheme being introduced really caused a great deal of understandable upset. Similarly, in respect of pensions, people now are beginning to receive reduced pensions where there was no expectation that this would be the case. It is because of the manner in which pensions are calculated on the basis of the very first time somebody worked, perhaps as a teenager with a part-time job, and this is calculated over a person's lifetime. I have seen these cases so the Minister of State should not tell me this is not happening because I know it is.
There are cases in which reduced pensions have been awarded where there was an expectation of a full pension. In some cases, this involves people who had been working for decades. If the Minister of State wishes to see some of those cases, I will send him the details.
However, the area of greatest difficulty has been the head-in-the-sand approach to rent assistance levels. I remember being beside Deputy Joan Collins when raising the issue about how out of kilter they were with market rents, as well as being beside her when she raised the same issue. This was not last month or last year; it was two and three years ago when people were coming through the system and were struggling to find accommodation because the rent assistance levels were far below market rent. The response of the Minister for Social Protection was almost exclusively to state it was a supply-side issue while at the same time, the Government did nothing about the supply of housing. Consequently, that supply-side issue and the resistance to changing those rent caps in any meaningful way has meant this situation has worsened substantially. We now face a crisis that is of a scale that will be incredibly difficult to deal with in the short term. I am quite certain the Minister of State is meeting people in his clinic who are presenting with precisely the same set of problems they are raising with me. Essentially, this was a matter that was foreseeable, predictable and about which something could have been done. If one considers the package of social welfare measures over the past five years, this has been the single greatest failure.
As has been mentioned, this Social Welfare Bill will be the last such Bill before an election is held and must be seen as part of a package over the past five years. I intend to vote against this Bill, not because of opposition for the sake of opposition - I disagree absolutely with the Tánaiste, Deputy Burton, in this regard - but because the Government has just produced its fifth regressive budget in a row. By regressive, I mean yet another budget that favours the well-off, as opposed to those on the lowest incomes. In her contribution, the Tánaiste, Deputy Burton, stated this budget was carefully designed and it certainly was. It was carefully designed to try to win votes but it will not work and certainly will not save the Labour Party's bacon. The people the Labour Party claims to have protected while in government cannot wait for Labour Party Members to come knocking on their doors next spring or whenever the election is called. Those people are not waiting to thank them for all they have done for them but are waiting to give them the electoral kicking of all kickings and they could not deserve it more.
I wish to concentrate on the issue of core welfare payments, such as jobseeker's allowance, jobseeker's benefit, the one-parent-family parent payment and disability benefit. These are the key welfare payments provided by the State. They were reduced drastically between 2009 and 2011-12 and have been frozen since then. To restore these core welfare payments to their 2009 level, taking account of inflation, would require an increase of at least €27 per week for a single adult and €40 per week for a couple. This makes a joke of the Government's repeated claim to have protected core welfare payments, quite apart from the range of cuts it has made in non-core payments.
The reality of budget 2016 is that a single unemployed adult will gain €95 per annum, while a single person earning €75,000 per annum will gain €902. An unemployed couple will gain €157 per annum, while a couple jointly earning €125,000 per annum will gain €1,400 per annum.
The number of people living in consistent poverty which currently stands at 376,000 has doubled since 2008, while 1.4 million people are experiencing deprivation, an increase of 128% since 2008. There are 700,000 people at risk of poverty, including 211,000 children, which equates to one in six children. In other words, there is widespread endurance of poverty. For the Government to have done nothing in the Bill in terms of increases in core welfare payments is an utter disgrace. For example, repayment of half of what was lost owing to inflation would have meant an increase of €6.50 per week. This could have been done as part of a commitment to restore rates to 2011 levels, consistent with inflation, with a further commitment to restore rates to their 2009 levels over a number of years. However, the Government chose not do this.
Other factors in the high poverty rates are low pay and insufficient working hours. Taking into account those who are out of work and those who want and need additional hours, the unemployment rate is 20%. Approximately 80,000 people living in or at risk of poverty are in employment. The 50 cent increase in the minimum wage is extremely limited. A minimum wage of €9.15 per hour is 25% below the proposed living wage of €11.50. Again, the Government should have committed to increasing the minimum wage to the level of the living wage over a number of years. This would have meant an increase of at least €1 per hour this year, followed by a similar increase next year and the year after.
Overall, in terms of the provision of good public services, a health service that works and a strong social security safety net, the Government has continued the failed approach of the past. In 2016 Ireland will spend one of the smallest shares of national income of any developed country, with only the United States spending less. However, this is nothing new. Between 1995 and 2000 the percentage of GNP spent on public services fell dramatically to 36%. This model of low pay, low income taxes, low corporation taxes and resulting poor social services, including a crisis-riven health service, has been imposed by successive Governments. Nobody voted for it. Out of this will come a new political movement that will offer a real alternative.
Child care payments have also been drastically reduced in the past few years, despite a commitment from the Labour Party that such payments would not be touched. I recently tabled a question to the Minister on the reintroduction of child benefit for children who continued in education up to 19 years of age. This measure would have cost €58 million. However, the Government chose not to address the issue.
Even the Title of this Bill is wrong. Rather than being titled the Social Welfare Bill it should be titled the corporate welfare Bill because that is what social protection has become in this country. Rather than it being a necessary safety valve for citizens when they fall on hard times or find themselves out of work, it is a vehicle to transfer wealth and line the pockets of big business, in part, through the facilitation of labour activation schemes which have given rise to an almighty race to the bottom.
I want to read an email I received from a constituent which really struck a chord with me. The catalyst for it was the protestations of the Taoiseach and his Government that a recovery was under way; that we had all taken great strides forward; that the number of people unemployed had fallen and that we should all be proud of what we had achieved. The man is sickened by the impact of what the Government has done on his health and it led him to compose the following email. It reads:
I've done what these people and their kind have told me to do for the last 15 years, I'm no better off now than I was then: in fact, in terms of my mental health and general demeanour, I'm decidedly worse off.
The Establishment told me to get an education. I asked what I should do. They advised me to do what I was good at. I am good at philosophy ... I got a first class degree and Masters in philosophy. The goal posts then changed. I was told that employers didn't want philosophers and that I needed to add more strings to my bow. I told them I had no money. They said I should take the dole for a few weeks and then do a Jobbridge Internship. And that's what I did, winding up in a policy section of a Government Department where I produced tightly argued papers that recommended scheme changes that I knew to be wrong - all for the princely sum of €200 per week and no PRSI contributions. The Establishment seemed happy, but not happy enough to give me a job. Well, it couldn't given the recruitment embargo.
The email continues:
I was told to hold tight for some temporary clerical work ... In the meantime, they tricked up another internship that saw me at the front-line. I was told I couldn't be soft and would have to treat the customers hard. Of course, they did not put it that frankly but still the message was clear: the customers, all of the customers are chancers and must be treated accordingly.
I then got moved to a section in a different Department, the job in question being slightly more humane. I was then told I could maybe hang on for another temporary job. At that stage, I'd had enough. I walked out of the Department and the Jobbridge scheme and into a zero-hour contract with an English language school.
This is the Ireland the Government has created. That is the process it has facilitated with its misnamed social welfare system which has resulted in millions being taken out of a budget that should be in place to support people rather than facilitate employers to not offer decent jobs. Advertisements have been placed for qualified veterinarians, teachers in private schools, qualified chemists, medical scientists in the HSE, shelf stackers in Tesco, administrators in the Department of Health, social media administrators in RTE and kit assistants in the FAI. That is what we are talking about in the context of labour and job creation. Hundreds of under-employed and short-term working teachers have to rely on the social protection budget to obtain a decent working week's wages. Casual and part-time work is utter lunacy. It is facilitating a transfer of wealth from the taxpayer to those at the top.
The Minister's reference to the maintenance of core social welfare rates is an insult against the backdrop of rising inflation and the appalling inaction of the Government in its failure to deal with the glaring disconnect between rent supplement payments and the actual cost of renting. The current rent supplement for a single person is €520 per month and for a couple, €750 per month, despite the fact that the cost of renting a two bedroom property in the city is €1,700 per month. How are people supposed to make up the deficit? They cannot do it. In 2010 alone, the Department of Health transferred, by way of rent supplement, €2.5 billion of taxpayers' money into the pockets of private landlords. That is what the Government has stood over. The Social Welfare Bill does not tackle any of these structural injustices that are now built into the system.
The Government has given pensioners a pittance of an increase and at the same time robbed those in private pension schemes. The Bill is a joke and the people will see through it. It is scandalous that it is being put forward under the stewardship of the Labour Party in government.
This Bill and budget 2016 are thread-bare attempts at making it appear that the Government is giving something back when it has given back next to nothing against a background of having slashed social protection payments to the degree that the levels of poverty and deprivation among the most vulnerable sectors of society have spiralled through the roof. The small give-backs, including the €3 increase in pensions and the €5 per month increase in child benefit, are pathetic, given that rates have been frozen for the past four years and that the groups hit most have been the victims of other cuts in so-called non-core social welfare protections and payments.
There are many people who, against a background of spiralling levels of poverty and deprivation, received nothing in the so-called "give-back" budget, including widowers, those in receipt of invalidity pension, carers, people with disabilities, jobseekers and carers under 66 years of age.
There is nothing in it for people with a disability, for the one-parent family payment, for the deserted wives' allowance or for the supplementary welfare allowance. There is no increase in the living alone allowance. All the people in those groups who have had their incomes slashed and battered with cuts and austerity and who have had their core payments frozen or cut over the past four or five years get absolutely nothing back. It is that which puts us in a situation where we have doubled the number of people living in consistent poverty to 376,000, where 1.4 million of our population, which is an increase of 128%, are suffering deprivation and where 211,000 children are living at risk of poverty or in poverty.
All those situations have deteriorated or, in many cases, are still deteriorating because of the biggest failure of all of this Government, which is its failure to deal with the housing and homelessness crisis. That crisis has resulted from the Government parties' decision to reduce social housing provision from the trickle that it was under Fianna Fáil, which had already generated a crisis, to stop it all together in the first year they were in government. They ceased the building of social housing and compounded that by slashing rent allowance in 2012 and that has led directly to the homelessness and housing catastrophe we have now, which is getting worse on a daily basis.
Let us consider the rates of rent allowance, on which the Minister, Deputy Burton, refuses to budge. The rent allowance for a single person, under the rent allowance scheme, is €520 per month, for a couple, it is €750 per month, for a couple with one child, it is €950 per month, for a couple with two children, it is €975 per month and for a couple with three children, it is €1,000 per month. Where on this planet, not to mind in Dublin where rents have gone up by about 16% in the past two years, would one find accommodation for those amounts? It simply does not exist. We begged the Minister to increase those rent allowance thresholds or even to give real flexibility, but it is not happening.
The Minister may have heard on the news about a man, with whom I was dealing, who was living in a tent on the beach. He has now moved out of the tent but he may be back living in it after only moving out of it two weeks ago because the Department is still refusing to sanction rent allowance for him. The Minister will be getting an e-mail from me begging for this money to be sanctioned, otherwise that man will end up back living in a tent along with seven other people who are living in tents on Killiney beach, and that is only the tip of the iceberg. When is the Minister going to stop giving tax breaks to the multinationals in this country and start giving some real protection to the people who are homeless, who are without houses and who are suffering poverty and deprivation?
While I welcome the general increases in the Social Welfare Bill 2015, they do very little to alleviate the very difficult situations in which some of Ireland's most vulnerable people find themselves. Some 160,000 people have turned 65 since the recessionary 2009 budget and yet since then the telephone allowance has been abolished, the fuel allowance season has been cut by six weeks and the household benefits package has been reduced to a single rate.
The cutting off of the telephone allowance in recent years has been a very serious development, particularly for people in rural Ireland. It has forced thousands of pensioners to remove their vital landline service. The community alarm mechanism is connected to the landline phone. With the ongoing continuing wave of rural crime, the alarm system is of the utmost importance for the safety, well-being and security of our senior citizens. In many cases, those people are worried, live in fear and have sleepless nights and that is having an affect on their health and well-being. That is not satisfactory, given that they have contributed to the State and have been very good citizens. They should not be forced to live under these conditions without proper security alarm systems. They are in danger of assault, not to mind in danger of criminals breaking into their homes and taking their valuables. This is a particular concern as we face into the winter, with the long winter nights providing cover for those marauders who prowl round the country. I urge the Minister to amend this Bill to reinstate the telephone allowance. Some increase could also be made to the fuel allowance. Statistics show that Irish telephone costs are the sixth highest in Europe. The alternative to the landline is the mobile phone, which is not the answer, having regard to the intermittent coverage in my county of Kerry. Half of the county is a blackspot for mobile phone coverage. Therefore, people cannot rely on such coverage to contact the outside world.
Another issue is the prescription charges. Many older people are crippled by the imposition of prescription charges. They are a direct tax on our sick and the Government has done nothing to rectify that. A person living on the State pension is down €700 since 2008 in allowances and benefits and that is without taking account of the rising cost of living increases, charges and general taxes.
On the issue of the number of people living in consistent poverty, according to the most recent Central Statistics Office figures, the number has doubled since 2008. It is estimated that the number is now a staggering 376,000 people with an estimated 1.4 million people suffering deprivation since 2008. Overall, 700,000 people are at risk of poverty and of that number, unfortunately, 210,000 are children.
There has been a comprehensive analysis of this budget across the political spectrum but one consistent point has been made, namely, that this is the fifth regressive budget in a row. In saying it is regressive, I refer to the fact that there was more for the better off in our society than those at the bottom. A simple example that highlights that is the fact that a single person earning €75,000 a year is more than €900 better off while a single unemployed person is better off by €95. Unfortunately, this is widening the gap and it is very wrong.
I want to take up where Deputy Tom Fleming finished, which is the notion that this Social Welfare Bill is part of the fifth regressive budget in a row. It takes some doing by the Labour Party to stand over five budgets throughout the course of a crisis that managed to increase the gap between rich and poor and, in reality, increase the gap between the rich and the rest and transfer wealth to those at the top of our society. The Government is obviously very keen to sell this Social Welfare Bill and sell this budget as a recovery budget, one that is sensible and one that will deliver stability. The truth of the matter is that it delivers stability and recovery for those for whom there already was recovery, those at the very top of our society, the bondholders, the big corporations and the wealthiest who have managed to increase their wealth by more than 60%, the richest 300 people in our society between 2010 and 2014. For the rest, the majority, all those who have struggled throughout the course of the crisis with job losses, precarity, low pay, poverty and homelessness, this budget offers almost nothing and will not deliver a real recovery for the majority. This budget increases the rich-poor gap in Ireland by an incredible €506 a year. According to Social Justice Ireland, over the past two budgets, the gap has been increased by over €1,000. It comes at a time when the Government is crowing about a full-blown recovery but the figures illustrate who the recovery is currently benefiting and why a majority in opinion polls consistently say they do not feel it.
What people have got at most is crumbs off the table, delivered by a petrified Labour Party looking at the prospect of a coming election. The reality is that people are sitting under the burden of cumulative austerity of over €100 billion in cuts. In this budget, however, €1.5 billion is presented as some sort of giveaway. Unfortunately, it is treated by elements of the Opposition as a giveaway too, when in reality it is nothing of the sort. No real giveaway has been given to those who carried the heaviest burden of austerity and continue to carry it.
Instead, what we have is an insult to most people. There is a €3 increase for pensioners. While any increase is better than nothing, it is measly and is rightly perceived by pensioners as such. The increase of child benefit of €5 is, again, better than nothing, but it will not bring the payment back to pre-crisis levels or even to the same level when this Government came to power. It shows how out of touch with the majority the Government has become, in particular the Labour Party, if it thinks it can sell this as a real recovery for ordinary people. Those who get these extra €3 and €5 increases know it will be wiped out if they choose to pay their water charges. Thankfully, the majority continue not to pay their water charges. These increases will also be wiped out by rent hikes and property tax.
The aim of these increases is obvious, of course. It is to save the skin of the Labour Party as it faces electoral oblivion. However, it will not work because it cannot wipe out the devastation of austerity measures over which the Labour Party has stood. It has created a nightmare situation where 376,000 people live in consistent poverty, twice what it was in 2008. Up to 1.4 million people experience deprivation, an incredible increase of 108% since 2008. Up to 211,000 children, one in six, live at risk of poverty, along with one in ten pensioners. Those people are in poverty because this Government, as well as the previous Government, chose to inflict cuts on working people and on the poorest in society rather than tax the rich or wealthy. That was all the time while saying it was making the hard choices. In reality, the Government made the easy choices which was to protect the Apples, Starbucks and Googles, while going after the most vulnerable.
Unfortunately for the Labour Party, this Social Welfare Bill will not save it. Above all, there is what is not contained in the Bill. There has been a refusal to reverse the cuts in rent allowance. The leading housing agencies have said the number one cause in the rise of homelessness is the cut in rent allowance. That is empirically felt by anybody who has been contacted by those who are homeless. For weeks, the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, has spoken about bringing in rent certainty. Once again, however, Fine Gael has beaten the Labour Party into submission rather than take on the vested interests of landlords or of the market. That is no real surprise, however, when 41 Deputies are landlords.
The Labour Party has stood over and implemented policies in social welfare that saw payment upon payment slashed. It stood over the introduction of forced free labour through JobBridge and Gateway. It stood over using emigration as a policy to deal with the unemployment crisis. This budget and the Social Welfare Bill do nothing to change any of that. Rather, they copper-fasten the recovery for the rich and big business.
I welcome this debate on the Social Welfare Bill 2015. This is our fifth social welfare Bill in government. The first three of these were particularly difficult, with hard decisions that had to be made and, unfortunately, cuts that had to be implemented. This is the first opportunity we have to reverse those cuts and give back to people. It is not by accident that we are now in a position to do so. It is not an accident that the economy is growing and creating jobs with people leaving jobseeker payments which allows us invest that money in other social welfare benefits. This is due to the work and decisions of the Government and the sacrifices made by the people. There are still sacrifices, however, as long as we are still correcting the books.
This Bill is a welcome improvement. Budget 2016 contains €770 million of new spending measures, of which the Government has allocated €251 million to social protection, almost €1 out of every extra €3 the Government will spend in 2016. The total budget allocation to the Department of Social Protection for 2016 is €19.6 billion, over 38% of all government spending. In effect, €2 out of every €5 that the Government will spend in 2016 will be on social protection schemes and programmes. This figure is in keeping with the budgets of the past several years. It is a colossal sum of money, representing a substantial investment in society.
It is important to keep in mind the purpose of social welfare is to act as a safety net for all. Most of us will, at some stage in our lives, benefit from the social welfare system. It is important that it is in place and is properly funded. The social welfare system supports the most vulnerable in society and enables people to participate in it. The social welfare system does not operate in a vacuum. The system depends on the overall management of the economy to provide the funding necessary for the support schemes and programmes. The country cannot spend indefinitely what it does not have. Borrowing will only last as long it is sustainable. The aim over the past number of budgets, framed in an extraordinarily challenging and difficult time for our country, has been to protect core rates of payments, while ensuring the continuation of supports for the million and more citizens who depend on the Department.
It is a cliché but it costs money just to stand still. Demographic pressures will drive up the allocation needed just to continue with existing supports and schemes. This can be seen from the State pension schemes. In a decade, the number of recipients of the contributory pension has effectively trebled. In 2005, there were 156,000 recipients, while in 2014, there were 417,000 recipients.
These democratic pressures add extra costs not just to the Department of Social Protection but other services such as education. Increases in the population with high birth rates equate to a much increased budget necessary for child benefit payments. Carer’s allowance recipients have almost doubled in the past ten years from 48,000 in 2005 to almost 95,000 in 2014. Carers perform essential work and should be supported by the State. The restoration of the carer’s support grant is one of the most welcome measures in budget 2016.
These figures exemplify the growing demands on the social protection budget. The system, however, cannot stand still. Society changes as do the needs of the people. The best time to reform the social welfare system is when fewer people depend on it. There was an opportunity for reform in the late 1990s and early 2000s when our country had a budget surplus. That opportunity was missed and it has fallen to this Government and the current Minister to focus on reform in the context of fewer resources. Specific issues include the focus on identifying and eliminating welfare traps.
For example, the introduction of the housing assistance payment, unlike the rent supplement scheme, allows recipients to maintain portions of the payment for that crucial time after starting a new job. However, following a meeting with the management of Galway City Council last Friday, I learned delivering the scheme there will cost an additional €300,000. This is a concern for this local authority as it is dealing with budget cutbacks and 83% of the cost of running the council is borne locally rather than by central government.
Providing greater support for the transition to the workplace is another welfare reform. The back to work family dividend, an excellent budget provision from several years ago, enables a person to manage better with the continued payment of the child portions of the social welfare payment. Properly prepared and thought through measures are necessary. Previous Governments introduced increases in existing payments and entirely new payments without putting in place a sustainable funding basis. When the crash came and their economic mismanagement caught up with them, major cuts were put in place. Some schemes were cut not once but twice, while others were scrapped altogether. The measures in this Social Welfare Bill and the absence of round numbers, namely, the €3 increase in the pension and the €2.50 increase in fuel allowance, demonstrate the responsible, prudent and sensible approach being taken by the Minister and the Government. The restoration of 75% of the Christmas bonus is a measure which will not only benefit the recipients but also local businesses and local economies in every community across the country.
We have the continuation of innovative schemes such as JobsPlus, which is directly helping people get back to work, and the maintenance of and increase in the payment for participants in community employment schemes. The rural social scheme, Gateway, Tús and other schemes are all important and help people to participate in, and contribute to, communities across the country.
There is a need, however, to examine flexibility in these schemes. A graduate might be underemployed and working in the local corner shop and awaiting a job commensurate with his or her qualifications. As this person is not signing on, he or she is not able to join certain training schemes. Those individuals do not want to sign on and want to work and contribute. They do not want to draw from the State but, at the same time, they are being penalised. We need to examine the possibility of introducing greater flexibility to such schemes. I hope the next Government will be able to examine this possibility more closely as the country's finances improve.
Financial independence through work is the best support that can be given. With an election on the horizon, a raft of promises will be made. We must ask how these promises will be paid for and managed. When we hear people say this is a derisory amount of money, as has been said by others in this House, we have to ask where do these people think the money is going to come from. It is important that all parties, including Fianna Fáil and Sinn Féin, highlight exactly how they intend to fund the extra promises made.
The emphasis of the Government on job creation and support for people in work enables us to invest further in welfare reform and provide targeted, sensible and responsible spending increases for pensioners, working families and vulnerable groups.
I welcome the basis of this budget and that we are in this position. When we debated the Social Welfare Bill at the end of 2011, we were dealing with cuts and the scrapping of schemes. We are in a very different era now to where we were then, and that is not by accident. I commend the Minister for Finance, the Tánaiste and Minister for Social Protection, Deputy Burton, and the Government for their work in this regard. This situation has not arisen by accident. I acknowledge the sacrifices made by the Irish people. There is no shortage of things on which we can spend money. Within social welfare, there is no shortage of worthy recipients. As the economy continues to grow and improve, we will continue to invest in those who are most vulnerable in our society and need the support.
We will also continue to ensure that we do not have situations whereby people are better off on the dole. A start has been made in the preschool allowance from next September. Many individuals must decide if it is worth going back to work given the cost of child care and costs associated with travelling to work. We need to ensure we incentivise work in as many ways as possible. I welcome the back to work divided introduced last year by the Minister and will welcome any other initiatives that will make work pay more than being on the dole. At the same time, social protection is a much needed safety for people. Therefore, the Bill is hugely important. A huge amount of money is being spent. We welcome the increases for this year's budget and hope that as the economy improves, we will not need to spend as much on social protection for job seekers and will be able to spend the money on other worthy initiatives.
I thank Deputy Kyne for being absolutely bang on ten minutes. I join with him and others in welcoming the measures contained in the Social Welfare Bill. Deputy Kyne has outlined a few of those measures and I wish to refer to a couple of them in particular. One of the most difficult cuts and, if I am to be perfectly honest, probably one of the biggest errors the Government made was the decision approximately three budgets ago to reduce the respite care grant. It was a decision made in difficult times to try to make the figures balance. I welcome the fact the grant is being restored to its previous level. I thank the Minister of State and his senior colleague, the Tánaiste, for that restoration. Carers make an extraordinary contribution to society. As well as saving the State billions of euro annually, they are looking after their loved ones, which in most cases is what people want to do if they are in a position to do it. The restoration of the respite grant to its previous level is to be welcomed.
The initiative in the legislation to extend the period for which carer's allowance is paid after, for instance, the person who was being cared for has passed away from six weeks to 12 weeks, is to be welcomed. Ongoing expenses after someone has passed away are a fact of life and this is, therefore, a welcome initiative. I also agree with Deputy Kyne on the Christmas bonus. There has been a 75% restoration of the Christmas bonus and that is also welcome.
Members of the Opposition said the announcement in the budget of a €3 increase in the State pension rate was not enough. In an ideal world, we would like to increase it by more but it is a step in the right direction and an acknowledgement from the Government that pensioners living on fixed incomes and who have had to endure hardships over the past seven or eight years since the downturn in the economy should see some return. I, therefore, welcome that increase too.
I agree with the point Deputy Kyne made on the back to education scheme and certain difficulties, although that might be the wrong word, concerning the way it operates in practice. Now that we are moving into a time when the Exchequer will have a little more in terms of resources, the adjustment that he referred to in that regard could be made.
It was interesting to listen to some of the previous speakers from the Opposition who have decried the Bill but none of them, from what I have heard, has offered any indication as to where the money for the increased expenditure they wish for in the social welfare budget would come from. Usually those on the left, the hard left or the far left in Irish politics would say we should tax the wealthy. Our taxation system has been judged independently by the OECD to be the most progressive in the OECD. I am referring to income tax and the universal social charge. The top 17% of earners pay more than 80% of the total universal social charge and income tax collected annually. This country has a significantly progressive personal income taxation system. If members of the Opposition want to give wish lists in this House on where spending should be increased, it behoves them to give some indication of where the money for those increases might come from. I would welcome such an approach as being a more realistic contribution to the debate.
The reason the budget, as presented, and the Social Welfare Bill are positive for the first time in many years is the economic situation has improved. People have made many sacrifices and it is only right that some of those who have made sacrifices and are in receipt of social protection payments should see a marginal improvement in many of those social protection schemes.
I am delighted to have the opportunity to speak on this important Bill. In coming into power nearly five years ago, this Government promised it would maintain basic rates in social welfare. This promise has been largely fulfilled despite the fact that we entered government during the most difficult economic times since the foundation of the State. It is worthwhile to remind ourselves that at that time the State finances were badly broken. As we all know, the troika were in town and exploring the possibility of our having to exit the euro.
Portugal and Greece were in a similar situation and many of their social welfare payments have been cut by up to 50%, particularly in Greece which continues to be in crisis five years on. That is very unfortunate for the Greek people and it is compounded by poor political decisions in Greece. In comparison, the Government here maintained basic social welfare rates during that period and continues to do so. Both it and the people faced up to the their problems and pursued an economic policy that concentrated on job creation as the best way of reducing poverty. The Minister, in the most recent budget, is now in a position to begin the process of increasing social welfare payments.
Job creation remains a priority for the Government, as it wants every family to feel the recovery. Thankfully, it maintained a massively strong social welfare safety net throughout the financial crisis. Our welfare safety net is among the best in Europe, as the evidence proves. Now that the recovery is under way, the safety net can be strengthened for the most vulnerable in society, while at the same time expanding measures to help jobseekers to get back to work. From a social and economic perspective, having a job is the most important way to increase a family's values and outlook.
The Bill will give effect to statutory schemes that can only be implemented by way of primary legislation. It provides for an increase in the monthly rate of child benefit to €140 from January 2016, an increase of €3 in the weekly pension for pensioners and carers aged 66 years and over and an increase of €2 for an adult dependant aged under 66 years and €2.70 for an adult dependant aged 66 years and over. We are all delighted to see the new carer's support grant being increased. It replaces the respite care grant. We are all aware of the great work carers do in minding their families and allowing people to remain in their homes. There will be an increase of €5 per week in the family income supplement thresholds for families with one child and €10 for those with two or more children. There are also changes in PRSI rates to benefit lower income families. Separately, the Tánaiste will move a regulation in the coming weeks to provide for a Christmas bonus of 75%, which will be paid in the first week of December.
While these increases are modest and prudent, they give confidence to the more dependent section of society that the worst of the financial crisis is over and that the fear of future economic hardship has eased. These measures, combined with the increase in employment figures, the equalisation of taxation between the self-employed and PAYE workers to encourage entrepreneurship, increased investment in health and education and much needed investment in child care, should be of most benefit to lower and middle income families.
I take the opportunity to compliment the Tánaiste and Minister for Social Protection and the Minister of State at her Department on their work in the Department in the past five years, particularly in sustaining basic payments and reforming the role of the social welfare office through the introduction of the Intreo offices to help people to get
The introduction of the JobBridge scheme, despite the criticism of it, has been hugely beneficial to the long-term unemployed and small businesses in creating employment. Over 61% of all those who have participated in the JobBridge programme have gained full-time employment as a result, which proves the success of the scheme. This is particularly the case when one compares it with other European schemes where the success rate is 34%. Another figure relevant to activation schemes is that when we had full employment there were 76,000 people participating in activation schemes. The current number is 83,000. This dismisses the myth that the activation schemes are decreasing the unemployment numbers. It proves that that is not the case. I commend the Bill to the House.
During the general election campaign of 2011 there was much debate about where cuts would have to be made and which sections of society would have to take the greater burden of the adjustments. One of the key questions asked in several debates and interviews with party leaders was: "What group will you prioritise for protection from cuts?" The Taoiseach and the former Tánaiste, now an author in the fiction bestseller list, Deputy Eamon Gilmore, both promised to prioritise disability services as an issue and said that not only would they defend the disabled, but when things improved they would also prioritise disability services for improvement. How hollow that promise sounds today. Far from defending the disabled, the Government elected in 2011 attacked them. Far from prioritising them, it placed the interests of those on incomes in excess of the average industrial wage ahead of them. Far from understanding it as a fundamental issue of human rights and citizenship, it continued to attack the disabled with the old attitude of taking a charitable approach to the issue, not one of rights. If there was a little extra after looking after other interest groups, the disabled could have the crumbs that fell from the table.
Despite the restoration of the respite care grant, which Fianna Fail welcomes, there is little in the Bill, or in the broader measures announced in the budget, for people with disabilities. They have seen their incomes and services eroded under the Government and the Bill offers very little to a group that is already vulnerable to poverty and social exclusion. The €3 increase in pensions does not apply to invalidity pension. The Minister, Deputy Joan Burton, appears to believe those already struggling with the higher costs associated with their disability are immune from an increase in the cost of living. Based on figures provided for me yesterday by the Minister, the annual cost of increasing their payments in line with other pension payments would have been just €9.8 million. An increase of €5 per week, an increase that would have come closer to matching the cost of living, would have cost €16.4 million per year. This is evidently the value the Minister and the Government place on those living with a disability. This was the price they were willing to make such people pay to ensure the Government could cut taxes for those on almost twice the average industrial wage.
In her written response the Minister boasts that while she did not increase these payments, she increased the Christmas bonus, which I welcome. However, does understand people must live for 12 months of the year? The bonus will not spread over 52 weeks. That this should be offered in place of a general increase is an insult to the intelligence of the people working and surviving in the disability sector. It is shameful how little regard the Government has for people with disabilities. From my engagement with the sector, I can tell the Minister that the anger is growing and that those involved are now starting to realise their electoral strength. They are not victims but citizens who are demanding their rights and they will make their voices heard.
The Government has failed to restore the housing adaptation grant for people with a disability, for which Fianna Fáil called in its pre-budget submission. This failure has consequences. Some people with disabilities are now trapped not only within their homes but within parts of them. Does the Minister have any comprehension of the difficulties some people face in performing simple tasks such as cooking and maintaining their personal hygiene? Does she appreciate how her failure to restore the grant for the most vulnerable in order that it could be sacrificed for tax cuts is a blatant abdication of recognition for those who have been excluded from society?
The budget offered no alternative to the mobility allowance and the motorised transport scheme which were closed in 2013. People with disabilities have been overlooked in recent budgets and will not see their living standards improve in 2016. Once the cost of living is taken into account, including all of the extra charges and taxes payable, people with a disability will continue to see their standard of living fall.
The Minister's own failings have been compounded by the failings of her colleague, the Minister, Deputy Varadkar, who has obstinately refused to support an increase in personal assistant hours for people in wheelchairs.
Much of the infrastructure required for people with disabilities to lead full and independent lives has been dismantled by the current Government. Budget 2016 and this Bill are missed opportunities and constitute a failure to enhance the lives of people with a disability. Over and over again, the Government has attacked the capacity of people with disabilities to participate fully in society. It has failed to advance the ratification of the UN Convention on the Rights of Persons with Disabilities and it has failed to advance by one whit the cause of human rights and equality for people with disability.
The motto of this Government has been "yes to equality", but only for some. Orwell's Animal Farmcomes to mind: all are equal but some more equal than others. Economic equality, if it costs the Exchequer 1 cent, will be resisted and, ultimately, refused. The Government pays lip-service to equality but, ultimately, has no real commitment to it, as we saw with the failure of commitment in response to the Sinn Féin Private Members' motion on the Travelling community. The commitment to equality is very much that of the Sandymount liberal sect; if it does not cost money then yes, we can have the equality but if it disrupts the economic power relations within our society, if it affects the upper and middle classes, we cannot have that equality, because it is a cost to the Exchequer. In the same week Ministers were busy having themselves photographed in PantiBar and tweeting of their joy at the victory for equality, we had the Taoiseach and the Minister, Deputy Howlin, acting as apologists for pubs that shut their doors to the grieving Travellers in Wexford.
Those with disabilities have been told their place is to wait at the back of the queue, and the Bill reinforces that. Even at this late hour, as the Government stumbles forward, could the Minister not reconsider the shameful abandonment and disregard for those with disabilities by her and her Cabinet colleagues and make some gesture that indicates people with disabilities are valued as citizens of this republic? If she were to do so, she would find no shortage of support in the House. I invite her now to face down the Tory element of this Government and insist that this group be enabled to participate as full citizens within our society.
Our past in this country with regard to people with disability has been shameful. We have an opportunity in this Bill to address that. I believe it is past time we began to address it and to ensure that all of the children of the nation are cherished equally.
I welcome the opportunity to speak on the Bill. What the Government presented in the budget, and which will now be brought about in this Social Welfare Bill, is certainly tokenistic. The Bill underscores the Government's lack of commitment to the less well-off in society and its pursuit of an agenda that punishes the less well-off and the vulnerable while it looks after the wealthy.
Very little thought or vision has gone into the Bill. During my time in the House, we have had many new ideas from different governments. We had the introduction of free fuel, the respite care grant, the carer's allowance and other initiatives that were brought forward by different Ministers through the years. However, nothing new has come from this Minister during her time in the Department of Social Protection other than reductions and cuts for people who cannot afford to carry them.
I would like to suggest to the Minister a few ideas and thoughts that she might consider before the Bill is passed. One of these areas, following on from Deputy Keaveney's point on disability, is that there would be a special rent allowance for people with disabilities to enable them to live independently. I find that people with disabilities who want to acquire a rented property find it very difficult to do so under the present rental regime. This is because most landlords who have to make a property wheelchair-friendly or suitable for people with disabilities would have to spend a lot of money and, as a result, they look for increased rent. I would ask the Minister to include some measure in the Bill that would allow an increase in rent subsidy. The current operation of rent allowance throughout the country means people with disabilities must remain in institutions whereas if they received a substantial rent subsidy they would be able to leave the institution and have a certain amount of independent living.
I recently visited the community workshops in Enniscorthy with the Minister of State, Deputy Paul Kehoe. One of the strong points that was made to us on that occasion, which was attended by some 300 people with various disabilities, was that they would like to leave the institutions and live a normal life in an independent manner. However, because of the exorbitant rents they are not able to do so.
The €3 increase for old age pensioners is certainly a start, although it is not a huge amount. From meeting people throughout my county, I find they are disillusioned with the €3 increase because there has been a reduction in the fuel allowance and the telephone allowance, as well as the abolition of the bereavement grant. When the property tax and the water charges are added to that, it certainly takes away from the weekly pension people receive. The Government makes great play of the fact it did not touch the amount of money old age pensioners have received weekly over the past four years but if we take all the other reductions into account, the overall reduction is substantial and the €3 will go nowhere near meeting that. I believe the Minister should seriously consider increasing the old age pension by more than €3.
In particular, the increase should have been extended for those on invalidity pension or disability allowance. These people have a very small weekly income and could do with an increase. It is mean-spirited of the Minister not to increase those two payments along with the old age pension. However, as I said, the €3 increase is a start, if a paltry one, and I hope it will be substantially increased in the future.
To return to the issue of rent subsidy, there seems to be logjam within the Department of Social Protection, the Department of Finance and the Department of the Environment, Community and Local Government in regard to how they deal with the rental issue. As we know, there have been huge rent increases in the past year to 18 months for one simple reason - the scarcity of property. Not only in Dublin but in my own constituency of Wexford, rents have shot up by 25% and 30% in some cases, particularly in the north Wexford area around Gorey, which is adjacent to Dublin. We now have a situation where people who had houses rented to councils under the rental accommodation scheme, RAS, are taking them back because they can get €200 or €250 a month more by renting them in the private sector.
There is a need to re-examine the amount of money allocated for the rent subsidy scheme. As I said, there is a huge scarcity of property and I do not know how this is going to be dealt with because no matter what building programme the Government introduces in the next few months, the houses will not come on stream for the next 12 to 18 months.
We need a mix of private, social and local authority housing to deal with the problem. In the meantime, it is urgent that the rental subsidy is increased so as to enable people meet the demands of property prices.
In regard to the living alone allowance, single people living alone are finding it very difficult to survive. This is an area the Minister must revisit. There is an issue in regard to lone parents and these people come in droves to my constituency office and clinics to complain about the changes the Minister introduced in last year's budget. These changes are causing increasing poverty for lone parents. I do not know whether the Minister intends to revisit the issue and make changes, but she still has an opportunity to do that through the Social Welfare Bill. It is not just my view but that of all of the agencies that deal with the issue of poverty that lone parents are being driven below the poverty line by the changes made by the Minister in last year's budget. This year's budget does not promise much change, but the Minister has an opportunity to revisit this issue in the Social Welfare Bill. She should take another look at the issue and increase the threshold from seven years of age. We suggested a cut-off at 14 years, but the Minister does not have to go along with that. The seven years of age cut-off is far too low and causes hardship and poverty.
The FIS scheme was an enlightened initiative by a previous Minister and it works reasonably well. However, some increase or change in regard to the first and second child should be considered. The payment is beneficial to families on a low income. I have always and will continue to support the FIS scheme, but perhaps some changes could be made to provide an increase in the amounts allowed per child. The scheme should continue.
We all make our views known in this House on the direction that should be taken in regard to social welfare overall. However, the main purpose of social welfare is to support less well off people. These people and families are surviving on the minimum income and cannot afford reductions in their social welfare payments. While the Minister allocated an increase of €3 for old age pensioners, she should take into account the gain of from €20 to €25 per week if we add up the reductions in the water charges and property tax.
I know the property tax is a contentious issue, but there is something seriously wrong with how it operates. An old age pensioner lives next door to me and she pays the same property tax and water charges as I do, although she is on a pension of €230 per week while I am a well paid Deputy. Whatever Government we have after the next general election, the water charge should be given serious consideration. We should not have a one size fits all water charge or property tax. If these taxes are to be kept in the future, income thresholds and social welfare payments should be taken into account. It is unfair that millionaires and people on high incomes only pay the same charges as people on disability, invalidity or old age pensions. The Minister of State here, Deputy Ring, is a compassionate man and I am sure that if he sits at Cabinet in the future he will look seriously at changes that need to be made in this area to see an element of fairness is introduced.
I welcome the opportunity to speak on this important Bill, introduced by the Minister for Social Protection, Deputy Joan Burton. This Bill gives effect to some of the changes to social welfare which were announced in the budget last month. It is only right that we acknowledge that budget 2016 was a fair budget which saw many positive measures introduced. It was the first opportunity the Government has had to give back to the Irish people after many difficult years following our economic crisis. The Irish people have endured some difficult budgets, but we have now exited the bailout programme and reduced our debts and are seeing a real improvement in public finances.
In the context of this Bill, it is important to note that our social welfare budget is huge - €19.6 billion in 2016. In order to be able to spend this money on important services and supports, we must first take it in through taxation. We are a very small country, although as some would say ours is probably the best country in the world to live in. We have a small population and only a small but growing workforce. Fortunately, as the economy has begun to recover, we see more people return to work and this in turn has contributed to a great financial reserve which can be reinvested into necessary vital services.
I was particularly pleased to see a focus on supporting the elderly in budget 2016. I want to pay tribute to the Society of St. Vincent de Paul and Age Action. They have said they welcome the thrust of the budget in general, but know we are only returning a small element of what the people have lost. I appreciate the welcome they have given. Age Action also welcomed the first increase in the State pension in seven years, although it had reduced by €13 since 2009. We are all aware that has been the case and are aware times have been difficult across the board. However, things are improving and now the budget can give back to people some of the moneys taken from them.
For a number of years now, there have been calls for an increase in the State pension, as it has not increased since 2009. Budget 2016 has increased the weekly pension for pensioners and carers aged 66 years and over by €3. An increase will also be paid for adult dependents. This shows our commitment to our senior citizens and is a recognition of their contribution to society. A 75% Christmas bonus will also be paid during the first week of December, which I know will be of huge benefit for many senior citizens and all welfare recipients. Approximately 1.2 million people will receive the Christmas bonus this year, at a cost of €197 million.
Senior citizens will also benefit from an increase in fuel allowance of €2.50, to €22.50 per week. This payment is a lifeline for many older people and I am glad to see this has been acknowledged in the budget. We are all aware that without the free travel, the TV licence and medical benefits such as medical or GP cards, life would be difficult for many older people. I also welcome the increase in the rate of the respite care grant, now known as the carer's support grant, to €1,700. This will be paid to 86,000 carers at a cost of €30 million in 2016. This payment is very important in supporting our carers, who provide invaluable care and support to family and friends on a daily basis.
Those in receipt of carer's allowance currently continue to receive payments for up to six weeks following the death of their loved one. The Bill proposes to increase this period to 12 weeks, which will again acknowledge the role that many people play on a daily basis as carers.
Budget 2016 is family centred and I know this approach can be built upon in further budgets. The Minister has increased child benefit by €5 to €140 per month. We are the fifth highest out of 17 EU countries in a social payment for children's allowance and I would add that our neighbours are the fifth lowest. The introduction of two weeks of paid parental leave for new fathers, which takes effect from September 2016, has also broadly been welcomed.
While it does not apply to this Bill, I acknowledge the extension of the ECCE scheme, or free preschool year, to children from age three to five and a half, or until they begin primary school. Together with an additional 8,000 community child care places, these measures will support young families, many of whom struggle with child care costs.
The Bill also sees a positive change to the family income supplement, FIS. This payment was introduced in the 1980s as a targeted support for families with children on a low income. It is currently paid to approximately 50,000 families. Budget 2016 provides for an increase of €5 in the earnings threshold for families with one child and €10 for families with two or more children. This measure is aimed at making work pay and ensuring that people can take up offers of employment without being worse off than if they were relying solely on social welfare supports.
The increase in the minimum wage in January 2016 from €8.65 to €9.15 per hour will be an important boost to those on low incomes. The reduction in the universal social charge and exemption of over 700,000 low income workers from it are further steps towards making work pay. Figures this week show unemployment is down to 9.3%, which is good news and shows our strategy and our key policy, the Action Plan for Jobs, of creating 125,000 jobs created since 2012, is working.
On the new Opposition speakers in the Dáil - I mean those who did not make the hard decisions as members of Government and crossed the floor to save their own necks - they are the people who want to lead in the next general election but they cannot even choose a leader among themselves, so God help us all if they are in that position. Regarding Sinn Féin, whose members would class themselves as the people's party and want to be in government after the next election, on a daily basis they say that everything should be free and everything free should be given to the less well off. I want to ask them who the less well off are. They then talk about taxing the rich. Who are the rich they want to tax? Our sons and daughters, who have gone on to third level education and paid dearly for it through saving and through families and who want to become doctors or nurses or just graduate in some other skills, will be the people who will be taking the flights out of this country if Sinn Féin and others are in government the next time around. They will not want to stay because after going to college, the years that they have put will not be recognised and will only be taxed.
I thank the Minister for Social Protection for her dedication to reforming the welfare system and ensuring that those who most need support are helped in every way possible, as shown in the measures included in this Bill. I respect the Minister, Deputy Joan Burton, hugely. She has made huge inroads into changing the social welfare system and will continue to do so when she is re-elected and in the next Government. I thank her and her staff in the Department of Social Protection for putting this Bill together. Above all, I pay tribute to the Irish people, many of whom are my friends, families, neighbours and constituents, who have had cuts to their family incomes but have survived. At long last we in government are now able to give them some benefits back.
I welcome the opportunity to speak on the Social Welfare Bill and join with other speakers in congratulating the Tánaiste and the Minister of State, Deputy Kevin Humphreys, on their very effective stewardship of the largest spending Department in the Government in the past number of years. It is important to reflect on where we were four or five years ago when we assumed office. The country was, in effect, in receivership and every Member of this House knows that a company or a business in receivership has no easy way out. Difficult decisions have to be taken and people, unfortunately, get hurt. The reality is that we live in a very equal and fair society.
Ireland is one of the fairest countries in the world in terms of wealth equality for two reasons. One is that we have the fairest and most progressive tax system in the OECD, which is recognised independently by the OECD, and the second, and the reason we are here today, is that we have this social protection regime. In particular, I welcome the increases in the State pension for those over 66, including qualified adults.
It is not all great news as it was not the giveaway budget that most would have predicted. It was modest in terms of what we could do and that was appropriate. However, there is one cohort of people I would have liked to have seen being looked at more favourably. This cohort is suffering, as I have mentioned several times to the Minister and will continue to do so. I refer to those who are living alone and who are entirely dependent on social protection. It would cost €8 million for every €1 increase in the living alone allowance and as we move forward into a more secure and stable economic environment, we should recognise that there are standard basic household costs, irrespective of the number of people living in a household. The living alone allowance could be an area in which we could achieve a greater balance in the years to come. I ask the Minister and officials to reflect on this in terms of policy in the coming year.
We have increased the rate of child benefit. It is back to €135 per month. That is a message that confirms the universality of child benefit payments here, and it sends a message that we do the best we can to look after families with young children, particularly when there are expenses relative to going to school. It is worth reflecting that in the UK and the North of Ireland, the child benefit rate is €29 per month. It is a different message entirely - and that is also pro rata on State pensions, disability pensions and most other allowances that are paid in that jurisdiction. We do not hear much about it and we do not get much trumpeting from the benches opposite about how brilliant the social protection system is in the North. That is perhaps a reason the institutions of the North are in such a precarious position. When we talk about equality in this State, we hear snide remarks from those who do not look behind and see what they are presiding over in the North.
The family income supplement is one of the most progressive payments that the State has in its social protection arsenal, for want of a better word. I welcome the ongoing increase in the number of families which have claimed the family income supplement over the years. Up to 50,000 families now claim it. That is a positive policy in terms of social protection in that we are supporting parents who wish to work and who have two, three or four children but find that those associated expenses can be difficult.
I firmly believe that not enough families claim family income supplement. An information campaign by the Department would be very appropriate in this regard.
I wish to talk about features of the budget which do not appear in the Bill but which merit welcoming. The almost complete restoration of the Christmas bonus to what it was before the crash is most welcome at a difficult and expensive time. The extra €2.50 for the 26 weeks for which the fuel allowance is payable is a modest increase but, again, sends a message to recipients of social protection that fuel costs and fuel poverty are issues that need to be dealt with.
I will use my contribution to make some suggestions and pose some other questions to which the Department might respond - perhaps in the Minister's closing address or subsequently. I have some concerns about means testing for allowance payments. I want to give two specific examples. One concerns a building worker who has intermittent spells of unemployment, who lives with his aging mother and who started building his own home before the collapse. This house is substantially constructed but will not be habitable for years. It is essentially valueless because under the terms of his planning approval, the individual cannot sell it but must reside in it for seven years after its completion. However, it is valued in terms of his social protection payments and the net result is that he receives the princely sum of €38 per annum despite the fact that he has an asset he cannot deal with and is effectively in limbo. We need to deal with that issue.
The second case is of a man left severely disabled after an industrial accident who has been refused any payment because he has been left a one third share in a house in Germany that his two siblings are not willing to sell. He has no income from the property and is denied any access to social protection. I am highlighting these two examples because the Department needs to demonstrate more flexibility and understanding in how it deals with our citizens.
Before the telephone allowance was abolished, the Department would have sought preferential rates from the operators for senior citizens. The Department has the clout to again fight on behalf of social protection recipients and negotiate fairer terms with all utility providers. Could the Department be proactive in looking at this issue?
The tracking of applications, appeals and target dates to be processed is a minor issue but one that causes Members of this House great difficulty. Officials in the Department are very helpful and I have never come across any official who did not want to be helpful but constantly telephoning Department offices looking for the status of an application is a huge strain on our and their resources. With the IT systems that are available now, we should be able to log on in a similar fashion to Passport Express and have a look at the status of an application. It would save a lot of time and resources over time. The Department should look at this issue in the near future.
I have come across a number of issues regarding the administration of the carer's allowance. The concept of only being allowed to work for 15 hours per week only allows someone to work for a day and a half. The individual is obviously allowed to work for a day but they cannot work for two days or do two shifts. It is a shift and a half. I ask the Department to have a look at this and to bring it up a couple of hours to allow possibly two eight-hour shifts or two full days for those on carer's allowance and carer's benefit to allow them to work a couple of extra hours in the week. A shift and a half is halfway across the river and is on neither bank. Those on carer's benefit are on it for a limited period of time and people receiving it may suddenly lose it before they are put on to carer's allowance. Clients on carer's benefit should receive notification at least two to three months in advance of the cessation of their carer's benefit so they are given enough time to apply for carer's allowance.
I wish to refer to an issue that is topical at the moment, namely, media reports on the fishing industry. One of the great difficulties people in the fishing industry face is that despite the fact that they work all the time, they do not always get a wage. It depends on their catches. Whatever they do or do not get, I can tell the House what they do not get. They do not get social protection. They have no safety net whatsoever and I ask the Department to engage with the industry once again to see if a proper and workable scheme could be introduced to help those who work in difficult circumstances in the fishing industry.
I will be a bit parochial. I am a postmaster. Decisions taken by the Department of Social Protection about the way it administers payments always have a severe effect on the post office network. I ask the Department officials to reflect on the schemes they administer and to reflect on the net effect on the post office network throughout the country if they decide to move to cashless payments or to incentivise payments through other sources.
I am grateful for the opportunity to speak. I commend the Minister and Minister of State on their work to date.
Austerity has been a political choice for this Government. When Fine Gael and Labour entered government, they promised a democratic revolution - an opportunity to change the way that business was done in Ireland and to improve the lives of all citizens. Instead, what was delivered was a Government that hammered the poor and attacked the weakest in society instead of protecting them. Its record in government shows this. Labour and Fine Gael abolished the €300 cost of education allowance that had been payable to back to education allowance recipients. They introduced legislation in 2011 raising the pension ages in stages to 68, which is effectively a cut of 16% to pension entitlements. These were coupled with many other austerity measures which have caused untold suffering to families throughout the country. This does not seem like much of a democratic revolution but rather reflects a Government that is determined to follow its own path of ideological austerity. We are then told about what is happening in Northern Ireland. If the Irish Government wants to join with us in trying to persuade the British Government to give fiscal powers to Irish people living in Ireland, we would welcome that support but until then, it should criticise the British Government and not Sinn Féin.
There was a clear alternative to the measures imposed that was highlighted not just by Sinn Féin but by many economists, trade unions, charities and voluntary organisations. They highlighted the impacts that cuts were having on different sections of the community but they were ignored by this Government. Sinn Féin produced a costed alternative budget that offered an alternative to the austerity policies of the Government. When Sinn Féin proposed them, the Government benches laughed them off as "voodoo economics". Yet in the this year's budget when the Government offered some relief from austerity, the Government benches paraded around as if they had just discovered penicillin. Where was their caring for the poor and the weak in society over the past number of years?
While it is welcome to see a small rise in the fuel allowance, there has to be more action on helping those who are fuel poor. Fuel allowance has been increased by €2.50 per week for the applicable weeks, which is welcome. However, energy prices for domestic customers have risen by approximately 25% since 2009, so the real value of fuel supports has fallen.
This level of payment was maintained until 2012, when the number of weeks for which the allowance was paid was reduced from 32 to 26, reducing its annual value by €120. Energy efficiency programmes which can be used effectively to aid the fuel poor must also receive priority. The figure for sustainable energy programmes has increased from €43 million to €58 million for 2016. However, this is still well below the €79 million allocated in 2011 but is roughly around the €55 million allocated in 2012. The Government has promised a new scheme to help those suffering fuel poverty, but it must deliver on this promise, especially as the winter approaches.
The Government frequently complains that Sinn Féin opposes everything but does not propose solutions. Let me run this by the Minister of State at the Department of Transport, Tourism and Sport, Deputy Michael Ring: the social protection system seems to be badly designed. It seems to be too labour intensive and expensive to process and administer payments. It lacks cohesion and seems to consist of a series of add-ons rather than being a cohesive whole. I understand following a quick search on citizensinformation.iethat there are at least 58 schemes listed. There are probably more, but why? The system seems to have been designed to be user unfriendly rather than as a clear, simple set of supports people can easily understand. Surely people are more interested in what is shown in the bottom right-hand corner, the amount payable, rather than the description on the left-hand side of the cheque. Perhaps if the whole system was rationalised, although that is a bad word to suggest to any Government because I know what it would do, and streamlined, there might be faster decisions, fewer and faster appeals and we could give a lot more financial support to those who really need it.
The Government has waged nothing less than a war on the poor of Ireland for the past five years. There have been cuts affecting the old, the young and the people who care for them. No one in the State who has to eke out a living and struggle to make ends meet was spared the chop by the Government in its so-called hard decisions. Now it wants us to believe a few crumbs from the table amount to a giveaway. It is not giving away anything, as this is the people's money. It was not made by any Government but by the labour and hard work of the people and they deserve more than crumbs. Those who shouldered the cuts the Government implemented are the ones who are now expected to take the crumbs and be quiet.
Apart from the cuts they have suffered in social welfare spending, working class people have been hurt again and again by the Fine Gael-Labour Party Government. Those who own a home have been forced to pay a tax on it. Everyone is now expected to pay for the right to access clean water, despite already paying taxes. The Government has increased prescription charges, imposed massive increases in the cost of public transport and considerably increased the cost of running a car through motor tax. Ordinary families have been hit the hardest through cuts to social welfare payments.
The Government repeatedly claims that it has not cut core social welfare payments. That has been a successful mantra that the media has taken up, but for hard-pressed families struggling to keep their heads above water, any entitlement they have is core to their survival. That the Government does not consider rent supplement to be a core social welfare payment means nothing to the families who could not make up the rent and are now homeless, living in bed and breakfast accommodation and hotels. That the Government does not consider child benefit to be a core payment means nothing to the child who had to go without. That it does not consider the respite care grant to be a core payment means little to the carer who has been burnt out and the person receiving care who has seen his or her loved one lose hope.
The cut in young person's dole to €100 that has left many a person in early adulthood homeless was particularly low and inequitable. It was another low blow to young people, often in leaving care, especially considering the Government's failure to provide a right to aftercare. The Government's spin means nothing to the real lives that it has hurt by choosing to take from the poorest to protect the richest through tax cuts which disproportionately affected them.
The Government has continued to foster the hateful narrative about working class people started by Fianna Fáil and abetted by the media. It has painted them as spongers, lazy and idle, people who sit in front of their flat screen TVs, having the time of their lives, who stock up on booze and cigarettes, as Deputy Catherine Byrne claimed, and who can be motivated to do a day's work only with a firm sharp shock. They get the stick, while the wealthy and privileged are treated to the carrot.
The issue of housing is a source of shame for the Government, but it does not seem to have the capacity for shame. To save a few million euro on rent supplement payments, it cut the rates twice and refused to consider a cap completely at odds with the market. This massively increased the budget for emergency accommodation. This year alone homeless services will need €73.4 million more than has been provided in the budget for next year, although more people are becoming homeless every day. We have replaced paying for people to stay in private homes with paying many more times to place them in hotels and bed and breakfast accommodation. The concept of social housing has been obliterated under this and the previous Government, with plans to provide just 1,750 social housing units between now and 2018, while 1,500 children sleep in emergency accommodation every night and at least 130 human beings make a bed on the streets of Dublin nightly. The Minister for Social Protection has presided over a carnival of inequality, the consequences of which we will only really understand in the years to come as communities rebuild after the onslaught of Labour Party-Fine Gael austerity.
It is a pity the Minister for Social Protection is not here, but having read the newspaper extracts from Deputy Eamon Gilmore's book, I suppose she did not want to be in that position in the first place. The social welfare cuts the Government has imposed have had a devastating impact on citizens and families across the State. We welcome the small increases in social welfare payments in the budget, with a general election looming, but such tiny money transfers will not tackle the root problem of inequality and disadvantage in our society.
A recent economic survey by the Organization for Economic Cooperation and Development, OECD, has shown that Ireland has the highest level of income inequality among OECD members. Every budget the Government has brought forward has been regressive and disproportionately impacted on the poorest in society. Until we have affordable, high quality and easy access to fundamental public services, the country will continue to be blighted by inequality and disadvantage. One of the cruellest cuts was the cut to the respite care grant. I still cannot understand how any Government, Government member or Deputy could justify or have the heart to implement this inhumane cut, but hurray, there is a general election looming and I welcome its reinstatement. The grant has been described as the difference between sanity and insanity for carers, between carrying on and being burnt out.
There is nothing in the budget for young jobseekers. In our alternative budget we called on the Government to invest €72 million to commence the restoration of equality for young jobseekeers and to reverse cuts for those under 26 years of age, which would entail a weekly increase of €40. The Government decided to do nothing. Young people need careers, not unpaid internships disguised as job activation schemes. I have met many young people participating in the JobBridge and Gateway schemes in my constituency who have been exploited. They have received no training and there is no progression, no chance of securing a real job. Several of the workers on the Gateway scheme who were talking about going on strike said there had not even been a medical check before they commenced training.
That one in six Irish-born people now live abroad should not come as any surprise. If the recovery of which the Government speaks is to be meaningful, it needs to address the issues of inequality and the prevalence of in-work poverty which is the result of low-paid employment.
Family income supplement should not be a prop with which employers exploit workers.
We are coming into what is likely to be a very cold winter and the amount of people now living in fuel poverty in Ireland is unacceptable. People are going to be faced with choosing between putting food on the table and heating their homes. I am sure the Minister has heard that in her own clinics. There is the real possibility that our elderly citizens living on State pensions will be unable to heat their homes and could die of the cold. The meagre couple of euro with which the Government is trying to buy them off in this Bill will not make much of a difference. I spoke to a number of pensioners who asked that the money be transferred instead to fix our hospitals. Many to whom I spoke said they were afraid of entering a hospital. A 91 year old Parkinson's disease sufferer was left on a trolley for 29 hours in Tallaght Hospital. It is a disgrace. This morning, the Taoiseach, Deputy Enda Kenny, tried to blame the staff for not giving the patient a bed. Does he think the staff are hiding beds? The CEO of Tallaght Hospital warned the Government in 2013 that if the Government continued with its cuts there would be a catastrophe within the hospital. In one week this summer, a 101 year old was on a trolley for 29 hours in Limerick Hospital and a 102 year old woman was on a trolley for 26 hours in Tallaght Hospital. The call from the CEO of Tallaght Hospital does not suit the Government's narrative. We are in supposedly in the middle of a recovery, a recovery that the Government says means more money in people’s pockets. In reality, it means more people on trolleys. More people than ever are homeless and more people than ever are in debt. Budget 2016 is yet another missed opportunity.
Sinn Féin is not going to object to a Bill that puts some money in some people's pockets, even if the sum is paltry, but the general approach would not be ours. My attitude is that it is better than nothing, but that is about it. The Labour Party should be ashamed, but we have stopped expecting that as they hang on for dear life to government hoping that somehow, by the time the election is called, people will have forgotten what they did in previous budgets and the great promises they made on which they did not deliver.
I do not know if the Tánaiste and Minister for Social Protection, Deputy Joan Burton, or any of the people living in a bubble in this House ever applied for a back-to-school allowance but the hoops that people have to jump through to get it are difficult to negotiate. The Labour Party and Fine Gael cut the back-to-school clothing and footwear allowance for three budgets in a row. They cut it by €50 for two years and then eliminated it for 18 to 22 year olds attending college full-time. Perhaps they will come next for the jar beside the bed where people throw their small pennies at night to save for Christmas, but maybe they have not thought of that yet.
This Government has cut everything to the bone over the past few budgets and then calls it "generosity" and uses terms like "sharing the fruits of our recovery" to label giving back paltry percentages of the cuts already made to people who see no sign of any recovery. I travel in rural Ireland on a weekly basis, all over this country, and there is no recovery for those who have to live outside the capital. Fine Gael and the Labour Party took away the Christmas bonus and now call themselves generous for giving back a quarter of it.
Do they really think the people are fooled by that? Do they really think that people are that stupid that they do not know that they are electioneering? Their miserly measures do not hide the cruelty of this Government, which chose to cut illness benefit and the treatment benefit scheme. It took measures like cutting the grants for hearing aids, mainly for elderly people. It took away the fuel allowance and household benefits packages. In the case of Labour the list of broken promises is long and painful. It has moved a long way from its Tesco promises and has betrayed the people most in need over the past four years.
Every cut means that something extra has to be paid for out of either low wages, pensions or social welfare payments. If one takes away, for example, the telephone allowance it amounts to a cut of €271 from the annual budget of people over 70. They can decide not to have a telephone or they can pay for it out of their pension. The Government gave them back €3 - so generous after cutting everything around them for the past number of years. The sham increase of €3 in the old age pension is so small and insignificant that it makes me wonder what was the thinking of the people who sat around the Cabinet table and came up with it, and of those who put the spin on it that it meant they were being generous to our older citizens. The sum €3 is shameful. It is disgraceful and an insult to our elderly who built this country.
The Government has cut basic social welfare payments again and again. Its press office keeps telling it to deny this, but it is true. During the worst of times of severe hardship when poor people needed help more than ever and felt the need of a safety net, the Government denied them that. It acts like there is no society, only the economy. That is what it has practised but what is the point of balancing the books when inequality has grown so much under this Government? The rich are getting richer and for the rich there is a recovery, but the gap is widening with the measures introduced by this Government.
There are nearly 400,000 people living in consistent poverty. There are some people who were working poor or just managing not to be poor but who have been thrown into destitution by this Government, some of them homeless now. Deputy Noel Harrington said we were one of the fairest and most equitable societies in Europe but he is clearly in a bubble, like the other Deputies present. They do not know what it is like in the real world. They do not know what it is like to go into a house and see poor people and children going hungry as a result of the Government's policies. It has betrayed the people who voted for it and its members will get their answer when they go back to their doors some time next year. They are hoping for a recovery but there is no recovery for people who betray the people they are supposed to represent.
It must be miserable to be a Sinn Féin Deputy. It must be the most miserable, horrible job because they are sitting there watching the economy going better, more jobs being created and people starting to get a bit of hope but they are miserable because they cannot exploit people's fears as they could in the past. Their strategy for five years was transparent, namely, to exploit people's misery and fears and say how awful everything was and what a shower we were on the Government benches for not giving a damn about anybody. It was a great little strategy but it is unravelling now and people are seeing through it. We have the Sinn Féin mother of all sorrows in this House but up in the North they are austerity junkies, laying off 20,000 public sector workers, cutting back services and agreeing to budget reductions all over the place. They are chancers. To give them any more credit than call them a pack of chancers would be to overstate things. If they want to continue to engage in misery that is fine but it is not worth any more of my time.
Those of us who actually have to make decisions, to have an input and to bear the responsibility of achieving something, do not look back on the past five years and gleefully say that it was a difficult time for people but it was great to do it and we got a great laugh out of it. We inherited an awful mess but we took difficult decisions and did our best to bring it back to where we started to put people back to work. Then people start to pay taxes and then we can reduce the enormous burden of taxation on other people and put money back into social services and public spending.
What did the Sinn Féin manifesto say at the last election? It said they would reverse every single cut and would tell the troika to go home.
It promised to reverse every cut without any money to do it. What is particularly interesting is that not once did Sinn Féin ever produce a plan or even a vague outline as to how it would fulfil that manifesto. It never proposed in an alternative budget in the first year of this Dáil outlining how it would reverse all the cuts because it was making it up as it went along. It does not want to be in government and does not want to make decisions. Its plan for the next five or ten years is to keep growing and then eventually it might enter government without being responsible, constructive or having some kind of national interest. It does not make sense. It is only self-interest that motivates it - self-interest to grow the party, grow the mission, report back to the IRA and let it know how it is getting along with its little strategy. That is what it is about.
I know nothing about a script. I was not reading a script. Sinn Féin Members came to the House with their press office scripts. I am not reading a script; I am giving it as I know it.
This is a good budget. It is not a great budget, it is not the be-all and end-all. It will not create some kind of nirvana society. However, it will finally give a signal of hope to people that the bad times are over. We can finally start to view the economy as something that is not to be feared, but rather something we can harness and use to create the wealth we need for public services and to give people a break in their take-home pay. It is signalling to many people that austerity is finally over and there is a clearer way forward and a brighter future. Those may seem like lofty goals when we are still struggling as many people are. However, it is a clear intent. For a long time the country had a complete lack of hope and optimism, which was hard to grapple with. There was no plan for the how to get there in the future. Could we get there? Was there any way to get around it? Now, finally, we have a pathway forward. The bad times are over and we are getting people back to work. There are a few extra bob that we can put back in people's pockets to make their lives that bit better.
We need to compare where we are with where we were when we first came to the Government benches. I will never forget canvassing in Renmore in Galway and coming across women and men twice my age crying at the doors. They were in bits because they had lost their jobs and because they were in their late 50s or early 60s, they knew they would not get another job. In some cases savings that they had made and scrimped and put together over the previous 30 years had been wiped out, or their child who used to live at home and used to be an integral part of the family had been forced to emigrate. Those were the situations we inherited. We have now reached a point where we can say, "You know what? We're going to give you €3 on the pension. It's not huge but it's €150 a year. We're going to give you back three quarters of the Christmas bonus. It's not huge, but it's 170 quid on your pension. We're going to increase the fuel allowance by €2.50. We're going to put the child benefit back up by a fiver and the respite care grant back up to where it was because we can now afford to do it". Those things matter to people on the ground.
I am not running away from any doors, rather I am out knocking on doors two or three times a week and I get a very good reaction. People are reasonable, they are not stupid and they can no longer be fooled. They know that things are going to be slow and that we have to be careful because what we have is fragile. The last thing they want is to go back to the bad old days where we just splash out on everything, it all collapses like a house of cards around us and we find ourselves in a terrible position.
I welcome the Bill. It is nice to be able to speak on such positive legislation even if it is a bit late in this Dáil to do it. However, it is good that we are able to do something of this nature and to give a little back to people. In future we need to flesh out where we want the social protection system to be. There is still a bit to go in terms of turning into that fully responsive people-centred individual-focused service that gives people the ability not just to draw payments and eke out a living, but to move to an Intreo option and turn it into an enabler, a place people say go to their Intreo office to get training or information on how to upskill in order to get back into the workforce."
When it comes to people with disabilities, our social protection system defines a very broad category of people too widely. It treats with one brush people who have severe to profound disabilities, who will never be able to work, who will constantly be cared for and loved by their families and the State, as well as people who are capable of working and participating. Simply having one payment called disability benefit and not breaking it down into different categories of people and recognising the individuals within it is something we could work on.
When I knock on the doors in Galway and talk to people about this I present it is as good news and the people are receptive to it. It is great to be able to say that the past four and a half or five years have been worth it, that we have got out of the rut, that we are able to start the process of rebuilding, renewing, giving people something back, improving living standards and continuing to reduce inequality. It is an externally assessed fact that inequality has reduced under this Government because we have a very good redistributive system that transfers money from those who can afford it to help those who are least well off, as it should.
I thank the Tánaiste and Minister for Social Protection for introducing the Bill. I thank the Minister for Finance and the Minister for Public Expenditure and Reform for their work on the budget. It is a very good sign and a very good start. Let this be the first of many budgets that continues this trajectory of providing resources for those who need them and giving breaks to those who get up every morning, bring the children to school and go to work.
Deputy Martin Ferris, who spoke just before Deputy Nolan, is a merchant of misery. Sinn Féin Members think they have the monopoly on caring. If they really cared about the families they talk about, they need to face up to the people and decide to go into government to make life better for the people they feel they have a monopoly interest in. Who does Deputy Ferris think he is? I live in a family in a community in a village in a county where unemployment was at the highest rate of any region in the country when we came into government in 2011. I am very proud that from May of last year to May this year, the number of people on the live register dropped by 10%. Sinn Féin Members need not start to shout at me about JobBridge, which accounts for about 170 people, most of whom are not exploited. There are difficulties with the scheme but I have met many young people who have gone on to full-time employment because of those job-activation measures.
As a Government Member I am interested in ensuring that people get access to good quality employment. For the first time in a long time this budget rewards working families, which is very important. It also looks after people who have difficulties through no fault of their own because of illness or disability or because of life circumstances. We have been able to increase child benefit, which is a universal payment that looks after our children and our families. We have also been able to take away some of the barriers preventing people from working., including the difficulty that PRSI kicked in very quickly as soon as they took on more hours.
The Labour Party is the party of work and I am very proud of that. This budget rewards working families, which is what the recovery has to be about. Deputy Martin Ferris suggested that the recovery is not taking hold outside of Dublin, which is not true. It is not happening in the same accelerated way as it is happening in the capital, but it is starting to take hold.
The meanest cut of all those imposed by the Fianna Fáil-led Government was to take €1 off the minimum wage. This affected the people who were getting up in the morning and going out to do work that is often not held in high regard - perhaps in the catering industry or in retail - and that Government wanted to take €1 an hour off them. It claimed it was of national importance and was imperative that it happen. However, as bad as the economic situation was, this Government in our first budget restored that minimum wage cut. I commend the Minister of State, Deputy Nash, on increasing the national minimum wage because I have first-hand experience of working as well as having family members working in a sector of the economy that is badly paid.
That will bring about an improvement in people's lives. Family income supplement is another social transfer that helps and supports people who want to get out and work. It is hugely significant that in the budget family income supplement has been increased to support families in that regard.
The social impact assessment carried out by the Department very clearly indicates that the average household will be better off by in or around €14 a week. However, the cumulative effect over a year is that there will be an extra week’s wages. That is very significant for families who are trying to meet mortgage repayments and get their children back to school or perhaps it will mean that children will be able to engage in additional activities that might have been beyond their reach in recent years.
Nobody in this House is more acutely aware of the situation than I am. I will not take any lecture from Deputy Martin Ferris or any member of Sinn Féin about how difficult recent years have been. No Deputy on the Government side came into the House in recent years and voted with glee for what had been introduced in the budget. We are acutely aware of what happened, not in terms of votes in the House but the impact measures had on people’s lives. Now that the recovery is starting to take hold, it is the focus of the Labour Party – the party leader, the Tánaiste and Minister for Social Protection, Deputy Joan Burton, has spoken about it on a number of occasions – to ensure that as the economy grows, we will have a social recovery because that is what we believe in. We believe in the redistribution of social transfers generated by economic activity to invest in public services and social payments and to make work pay. It is imperative that we do this for families, in particular where there are small children.
A landmark feature of the budget is that for the first time on a statutory basis there will be two weeks paid paternity leave. That is a significant step forward not only for husbands, partners and wives but also for children. The overall policy direction of the Government is to try to ensure that when young children are born into a new family, whatever its make-up, they will be able to stay at home with the main carer for the first year of life. We have a bit to travel on that road, but it is a significant and very welcome measure. It is something on which the Minister of State, Deputy Kevin Humphreys; the Minister, Deputy Joan Burton, and the Minister of State, Deputy Aodhán Ó Ríordáin, worked and campaigned for. That is the difference between sitting on the Government side of the House as opposed to the Opposition side. That is the reason I will not take any lecture from Deputy Martin Ferris or Sinn Féin, as they do not have the courage of their convictions to sit on this side of the House and improve the lot of those who want to get up every morning to go to work, make sure their children go to a school that will now enjoy a reduced pupil-teacher ratio and access to a second free preschool year and, if they are in a low-paid job or only work part time, family income supplement will give them a leg up to ensure they can move on to better things. What any family want is to ensure their children get every opportunity. The other changes introduced in budget 2016, in addition to the Social Welfare Bill, will ensure that will happen. I accept it is not happening at the accelerated rate we would like to see, but that is the reality of being in government. It is easy to sit on the sidelines and be against everything, stand for nothing and not take one’s seat on this side of the House.
I wish to speak briefly about the Bill. I was trying to find any philosophy behind the Government's distribution of money in social welfare payments, but it did not take me very long to work it out. It was, quite simply, that the Government had decided it had a certain amount of money to distribute - it found an awful lot of money in a hurry recently - and it decided it would distribute it very thinly among a large number of the electorate in order to buy as many votes as possible. That is, unfortunately, what Governments have always done and it is what the Government is doing also. I do not think it is necessarily going to work because in my experience those who are the beneficiaries of social welfare expenditure are saying in every case that what they are getting is a pittance. Some of them find the increases insulting; others find that they are too little, while a lot of them feel the money was taken away from them in the first place for reasons beyond their control and that they are now getting back only a small portion of what they consider is due to them. That is the reality. There has not been the surge in the polls to the Labour Party that it might have expected, given that the Government had some largesse to distribute. That is because people believe they have suffered enough and that they should get back what they had in the first place and perhaps a little more besides.
By my calculations, the increase in the old age pension of €3 per week will buy people an extra six cigarettes. It will not even buy them an extra cigarette a day. That is the kind of money they have been given back. Those in receipt of child benefit will receive an extra €5 per child per month. The amounts involved are, therefore, very small. The Government’s approach is based on the philosophy that if it spreads the benefits very thinly, it will buy each vote one by one and that it will win the election. I do not think people are deceived by this or will buy it. I do not think the Labour Party has benefited, although it is claiming the credit for it. A different approach should have been taken.
I do not understand why when the Government makes so much fuss about its ability to broaden the tax base and its philosophy in that regard, it has narrowed the tax base in the budget. That is what it has done by excluding people from USC, quite rightly. The Government stated it had broadened the tax base by imposing a property tax and water rates, but it did not really; it has actually hit the same people with slightly different tax rates. The Government is playing with words. If it really wanted to broaden the tax base, it would have read The Irish Timesthis morning and asked what was really happening in taxation. Suddenly, in the past few days it has discovered €800 million. It keeps discovering money. A sum of €800 million will come in in corporation tax from multinationals totally and utterly unexpectedly and the Government maintains that it is not a once-off. It seems that it might be. I refer the Minister of State to an article in The Irish Timestoday. It states there is speculation in financial circles in Dublin that the increase in corporation tax payments - a windfall that has just arrived which could be spent on social welfare payments certainly - follows moves by a large US multinational to book certain profits in its Irish division that had previously been booked offshore. The multinationals simply pick their profit figures nowadays. They decide what their profits will be. The Minister will know this, as will others on the Government side of the House. For some reason, the Government refuses to acknowledge the fact that multinationals which we welcome, cherish and nurture are playing ducks and drakes with the economy and the budget. If it wants to broaden the tax base, the thing it ought to do is have a reasonable relationship and come to a reasonable arrangement with multinationals.
I do not wish to go into critical mode. Much has been said about the cuts to child benefit, grants for school clothing and rent payments and taxing maternity benefit. It is accepted across the world, even by the World Health Organization, that the issues of social welfare and poverty are interlinked. The vast majority of those who are impoverished are on very low pay or in receipt of social welfare payments. I accept that there are people in receipt of minimum payments and even moderate payments who suffer poverty.
The fact remains that in Ireland, statistics show that without a social welfare payment, 50% of the population would be in some form of poverty, which is an incredible figure. In 2013, 698,000 people were living below the poverty line, of whom 218,000 were children. As all Members are aware, the health effects for people in receipt of social welfare benefits can be catastrophic because they do not have private health insurance. Housing can be catastrophic because they cannot afford to buy their own house, are in local authority housing and can be in arrears with rent. Education can be catastrophic for such people and so on. Last Christmas, when dealing with people in receipt of social welfare, the Society of St. Vincent de Paul used the term "catastrophic" to describe the situation in Dublin. Studies show that social welfare rates are not adequate to provide a standard of living that is perceived to be acceptable to all those who do not wish to see people living with a poor quality of life. Interestingly, while one can balance that up between a minimum wage, an adequate wage, a livable wage and so on, the United Nations has stated the minimum standard of living is one which meets a person's physical, psychological and social needs. This applies to everybody who lives in a country and consequently, each Member must ask himself or herself whether he or she is comfortable and confident that people who are in receipt of social welfare payments, many of them through no fault of their own because of recession after recession and the downturn in the economy find themselves with poor qualities of life.
While in my office, I listened to the debate and was taken aback by some speakers on the Government benches. One speaker suggested everything was going well, people now are being looked after well and it is better than it was because there is a fair tax system and so on. It also was suggested that were it possible to get in more tax, one could pay out more in social welfare and so on. At present, statistics show that Ireland is home to more than 3,000 people who are recognised as non-domiciliary for the purposes of avoiding tax worldwide in respect of the capital gains tax regime. Moreover, all Members are aware, as was stated in an article published in The Irish Timesa few weeks ago, that companies are legally avoiding paying billions in corporate tax. Apple has been called the Holy Grail of tax avoidance. A question was put to the Minister for Finance approximately 18 months ago regarding the top 5%, 10% and 20% of earners. Incidentally, I am not against anyone earning big money; many of my friends earn more money than do I and that is fine. Astonishingly, however, the aforementioned 5%, 10% and 20% were paying less tax than the average PAYE earner in Ireland. As these are the Minister's own statistics, the money is there to avoid having this number of people living below an adequate income, as referred to by the United Nations, Social Justice Ireland and the Society of St. Vincent de Paul.
The Minister of State and I both are aware one cannot live on €188 or €220 per week or €350 per week if one has a family or whatever. It simply is not possible. Should one not have a television? The consequence of having a television is one must pay for it and for a provider. Should one not have a car? Should one not be able to buy a computer? Any reasonably-minded person will know many people in receipt of social welfare do not have that comfort in life and do not have the quality of life they deserve. I wish I had more time but unfortunately I do not. It comes back to the balance of poverty and social welfare, which are inextricably linked. It is unfortunate the State has not dealt with this in a substantial way. A few bob may be given here or there, this or that rate will be increased but at the end of the day, one finds statistics still show the poverty levels may have dropped or increased by 2% but the same substantive number of people are affected by poverty. To conclude, all the statistics show the vast majority of them are in receipt of social welfare payments.
I wish to take this opportunity to dismantle some of the myths presented within this Bill as endorsed by the Labour Party and Fine Gael. Key aims were presented by the Tánaiste, Deputy Burton, on budget day, which included the strengthening of supports for families with children, increasing the momentum to date in helping jobseekers back to work and providing targeted assistance for vulnerable groups. While the Government hailed these aims as being progressive and inclusive, it is clear they are myths that must be dispelled and the truth revealed that these aims are in fact backward and cynical.
I will begin with the first myth as advocated in this Bill, which is it will increase the momentum to date in helping jobseekers back to work. The Bill outlines slight increases in supports for family income supplement, jobseeker's transitional payment, a new tapered PRSI credit for class A employees, as well as top-up payments of €2.50 per week for community employment, the rural social scheme, Tús, Gateway and similar schemes. This top-up is to be contributed towards costs, namely, a meal and travel costs. On paper and in elaborate budget speeches, these additions may sound nice. However, on closer observation they in fact are surface-level, shallow and random. Two issues stand out for me. First, in trying to get people into work, people are faced with low quality insecure jobs. Second, a characteristic of 21st century capitalism is flexible, periodic and insecure employment, as well as transiency, lack of control over time, over qualification and uncertainty. To reiterate this point, there are 272,000 fewer full-time jobs in Ireland at present compared with the position in 2007 and this constitutes a fall of 15%. The number of people in part-time jobs is more than 55,000 higher than was the case in 2007, which is an increase of 14% and more than one quarter of part-time workers are underemployed. In addition, between 2010 and 2014 the number of people who were long-term unemployed fell by 48,700 but during the same period, the net loss of Irish people to emigration was more than 123,000. A worrying statistic published by the Central Statistics Office shows that just over 73,000 workers were being paid the national minimum wage rate for an experienced adult of €8.65 per hour, or less, in the second quarter of 2014. Contrary to the Government's job push proposals, over time, people will be obliged to depend increasingly on social welfare as job security decreases across society. Social welfare traps will re-emerge because the Government's jobs and social welfare policies lack a coherent targeted approach for jobseekers or those on low incomes. Instead, it has covered its tracks with a shallow layer of small top-ups and token initiatives. The increase in the income disregard for those in receipt of the jobseeker's transitional allowance is a modest approach to increasing a parent's ability to stay in low-paid employment. Keeping families on the margins of work through low pay will mean welfare traps will become an increasing reality. Currently, 59,000 families are in receipt of the family income supplement and combined with the changes in the universal social charge, this means the State is creating a low-paid economy and actually is subsidising low pay within the economy through Government transfers.
I will move on to the second myth, which is that this Bill will strengthen support for families with children. It does not do so at all; it only just about sustains them. One would expect a Government that has witnessed a doubling in child poverty rates since taking office to have drafted a policy to reflect this urgent issue. Many of the supports, such as child benefit, are blanket increases to all recipients and are not targeted to anyone on the basis of the level of need. Barnardos has stated that although the child benefit increase might appear to be a step in the right direction, without meaningful investment in public services, the Government target of lifting 70,000 children out of poverty will never be achieved. Barnardos stated further that while some measures in budget 2016 were encouraging, for example, the introduction of paternity benefit, there is little to suggest it will be followed up with investment measures that in turn will have a lasting impact on families who have spent years struggling against poverty and inequality. One Family, which deals with lone parents and their families, has explicitly expressed its disappointment in the budget's approach to lone parents, whose poverty rates are far higher than in the rest of society. That organisation has stated that low-income families need the family income supplement to be adjusted in order that it makes work pay by reducing the qualifying hours to 15 hours per week and tapering the payment.
The final myth is that this Bill provides targeted assistance for vulnerable groups in society. The Bill does not do so and in fact, Social Justice Ireland has declared this budget to be the fifth regressive budget, as it favours the better off in society and there is no denying this point. Vulnerable groups were sidelined in this Bill and all Members know why.
I was horrified to hear a Minister deny in a budget speech that inequality had risen and equally, to hear Government speeches stating it had protected young people, old people and the vulnerable because the statistics from the Central Statistics Office tell a different story. Moreover, all the non-governmental organisations working with those in vulnerable situations have acknowledged that inequality is rising and is doing so because of decisions in recent budgets.
The European Anti-Poverty Network put it succinctly when it said that the resource measures are welcome but not nearly enough to undo the damage of eight years of policies. The ESRI has shown that the poorest 10% have paid more than any group. In its post-budget analysis, Social Justice Ireland indicated that a €6.50 increase across all social welfare payments was needed to combat inflation and that the value of the minimum payment of €188 per week, which has been at that level since January 2011, has been eroded because of a 4.5% increase in inflation. This is simply taking into account the cost of living as the economy recovers but only for some. According to one family, the budget did not respond to the lived realities of one-parent families and resources are not targeted at the poorest of children.
I acknowledge that social welfare payments have increased and are going in the right direction but there is an element of giving with one hand while taking back with the other, including the increase of €3 in pensions while the cost of fuel, coal and briquettes continues to rise and the €5 increase in child benefit, which is paid to parents of children in emergency accommodation and to parents on six figure salaries. The statistic in relation to the number of children living in consistent poverty, which is one in eight, is alarming. We know that single unemployed people will gain approximately €95 per annum while single employed people will gain in the region of €900 and that an unemployed couple will gain €157 per annum while an employed couple will gain €1,500 per annum. While all gains are welcome, it is important they are proportionate to need.
The increase in the minimum wage is also welcome. This means a full-time worker on the minimum wage will get a gross increase of €1,000. However, we know that low pay affects many workers. Currently, there are 80,000 people in employment who are living in poverty. The new minimum rate remains more than 25% below the proposed living wage of €11.50 per hour.
I always look to see how disability groups react to the budget. Unfortunately, that group has not welcomed this budget. The people concerned are bitterly disappointed and deeply concerned. While acknowledging that there was some long-awaited relief, they believe the budget is not likely to lead to employment for anyone with a disability over the coming years, resulting in an increase in inequality for them.
The community platform issued a statement containing four tests for budget 2016, which are interesting. Will it redistribute income towards the poorest 20% of the population and compensate those who have lost most over the last seven years? Will it strengthen access to quality employment? Will it provide the funding needed to restore and strengthen services of vital importance to people on low income? Will it put in place mechanisms to ensure that all areas of policy addressed in the budget will reduce poverty and inequality? Sadly, there is no positive answer to those four questions from this budget.
There is need for a return to full financial transparency from multinational companies. We have made a step in this direction through the agreement on country to country annual reporting but not in the public domain. We need a stronger commitment to closing the tax loopholes in this area and to addressing tax avoidance and tax evasion. We saw the increase recently from the multinationals. While in theory 12.5% is the tax rate, in practice, it is much less than that. It is reckoned that a minimum effective tax rate of 6% for corporations would bring in an additional €1 billion in tax revenue. We need that revenue. If we had it, the answer to those tests by the community platform would be different. One can only imagine what the Minister could do if she had that €1 billion at her disposal for social welfare. We know that some of the multinationals take the perks and the breaks and then move on. I referred previously to the situation at Medtronic and the 150 to 200 employees who will lose their jobs this week. During Private Members' time some months, I put forward proposals around new ways to draw up budgets, including human rights analysis and equality proofing of budgets prior to their introduction. In that way, the four tests from the community platform could be answered.
I welcome the opportunity to contribute to the debate on this legislation. The word "poverty" is often trotted out and used as a cliché to describe all sorts of situations. Poverty is a serious issue. When talking about what is poverty and what is not poverty, we must be sober-minded and straight and ensure we address it in a fair manner, so as not to depress people.
Reference has been made many times to poverty, money, budgets, social welfare payments and so on. Poverty will not be eradicated through the provision of additional money alone. That is for sure. We all know that taking two families in similar circumstances in receipt of the same social welfare income, one family will manage and the other will not. How to take people out of poverty is a complex issue. As I said, money is not the only answer in this regard. There are many people coping, although that is not to suggest that is an attractive life. If we are to tackle poverty in a meaningful way, we need to look not only at social welfare payments but at services, supports and so on.
We all know - I am sure this has been alluded to here previously on many occasions - that for many low income households taking up employment is a deterrent because if they do so, they will lose incidental benefits such as a medical card and so on. I am sure everybody welcomes all of the inroads that have been made in terms of the reduction in the rate at which people pay the universal social charge, USC, and a reduction in the rate at which people start to pay tax. I particularly welcome the new emphasis on child care and the reality in this regard for young couples in terms of fees while at the same time repaying large mortgages. Many of these couples are financially strapped despite the fact they are working. As a modern society, in which there is no nuclear family to rely on, we need to develop our child care system more. I do not think anybody disagrees with that. I welcome the interdepartmental report that issued in this regard and would like to see it implemented. I also welcome the child care provisions announced in the budget.
Many people have sneezed at the increase in the pension and the fuel allowance and at the partial restoration of the Christmas bonus. I do not think those people realise what an increase in payment as opposed to a decrease in payment means to people. It means a lot. It behoves us to do the best we can for older people. I hope that at some stage we will be able to assist them further by way of reintroduction of the telephone allowance, which meant a lot to many people. Things are moving in the right direction. There are many people who want to talk others into depression, from which they appear to get some political gain. The increases provided for in the budget mean real money that will benefit people and it is very welcome.
I also welcome the increase in the national minimum wage, the family income supplement and the back to work family dividend. Under the Action Plan for Jobs employment has also increased. Some 126,000 new jobs have been created. That is positive news for people and there is more of that to come. If we stick to the steady path we are on, employment will continue to increase. Everybody knows there is no magic wand that will fix our problems. We have endured a lot. Being a member of the Opposition has been the easiest job in the world during the past few years, although I am not sure it did a great job of it. Much of what the Opposition had to say during that time was pure populism. However, that is perhaps the nature of politics.
I welcome this legislation and compliment the Minister, Deputy Burton, and the Minister of State, Deputy Kevin Humphreys, on their achievements in what is a tough portfolio. It has also not been an easy time for the people working in the area of social welfare. I welcome the emphasis on trying to support people into employment. As more jobs are created, I would like to see people with disabilities being supported more in getting back into employment. We are increasingly becoming a more inclusive society.
There are two particular issues in the area of social welfare that I believe need to be addressed, including the discontinuation of child benefit in respect of children who reach the age of 18 years while still attending secondary school.
Cuts have been made throughout the system in recent years and we all know the reason for that. Let us consider the rationale for this cut. If one has a child in secondary school, that child still needs to be supported and maintained, particularly if the family is on social welfare and suddenly finds it has to cope with this significant cut in its income. If the child is not in school, he or she would be entitled to jobseeker's allowance of €100 per week, or he or she could be going to college. Quite a number of people are affected by this cut. In the interests of fairness, if a child continues in secondary education, the parents should be entitled to some form of child benefit until the child reaches the age 19 or 20, in recognition of the need to support the child and having regard to the additional funds that are provided through child benefit, which support families. I would like the Minister and the Minister of State, Deputy Kevin Humphreys, to examine this measure. There is no logic to this cut given that if the child left school and could not get work, he or she would get jobseekers's allowance or if he or she was to go to college, he or she could get a higher education grant. If children stay in secondary school, they still have to be maintained and looked after by their families.
The second issue I wish to raise relates to JobBridge. A woman raised this issue with me in my constituency clinic this week. Aside from participants in the scheme gaining meaningful experience, a traineeship and progressing towards work - I am aware that much has been done to tackle any abuses in the system - there has been progression from the scheme, which I welcome. Some people clearly have benefited from participating in JobBridge; they got a break and the crucial experience they needed. My concern is that the approach to the way JobBridge is being rolled out is that one size fits all. The woman who called to my clinic is a lone parent with two children. She has a degree and is anxious to get experience in a certain type of work. She has been offered an internship but if she takes it up, she will not get the back to work family dividend nor will she get any family income supplement or a stamp. She is trying to improve her circumstances even though she could have decided to rely entirely on the State. There is no public transport in my constituency and this woman will have to travel to get work experience and will have to put €50 worth of diesel in her car every week. That is a cost of €50 a week on top of everything. She will have to find a childminder. She an awful lot on her plate as a single parent. I could not tell her I thought this was a fair situation, that is, that she is not being supported in her efforts. The Minister, Deputy Bruton, in particular, has been vocal on the issue of supporting women - who, in the main, tend to be lone parents - back into the workplace but taking up an internship could put them into poverty. They are not in the same position as a young person who is living at home and may still have the support of his or her parents and be gaining that benefit. There must be a reality check about lone parents, particularly lone mothers in that type of situation where they are trying to improving their circumstances.
I have no doubt the Minister of State and the Minister, Deputy Burton, will seriously examine these issues which are impacting on people's lives in a real way. These people are trying to improve themselves and the circumstances of their families and to create a better future for their children. I would like to think we are always moving towards a point where we are trying to address shortcomings in the system, although I know there always will be shortcomings and more will be revealed.
I welcome this opportunity to contribute to this important debate. There is no doubt that the last few budgets have been very difficult for everyone. As a result of the disastrous policies of Fianna Fáil, this country was left bankrupt and unable to fund its day to day requirements, which resulted in the introduction of the dreaded troika programme. However, those difficult budgets paved the way for our exit form the bailout programme, reduced our public debts and paved the way for real economic recovery, which can be seen by the fact that we are the fastest growing economy in Europe. It is vital that we keep this recovery on track and, in doing so, provide much deserved relief to Irish taxpayers, who have sacrificed so much in recent years to get this country back to financial independence.
We must not only provide tax cuts but we must also improve our public services, including providing more nurses and doctors in the health service, more affordable child care, reducing classroom sizes and have a more efficient public service. We must never go back to the Fianna Fáil boom and bust policies or move to the high tax and high spend policies of Sinn Féin. We must be sensible and take only affordable steps that will keep our recovery going and bring even more benefits to Irish households. We must protect the recovery that is taking place. Even though we are the fastest growing economy in Europe, unemployment is still too high at 9.4%. We need to get more people back to work in jobs that are sustainable.
I am delighted that my own county of Louth is performing very well in terms of job creation and the fact that it gets one in ten of all new jobs as a result of foreign direct investment proves this. In my hometown of Dundalk, we are fortunate to have many high calibre employers, including eBay, PayPal, Sales Sense and National Pen, which this week announced the creation of more than 80 new permanent positions in its Dundalk call centre. I know from my dealings with constituents the effect getting meaningful employment can have on the individual concerned and also on his or her family. There is no doubt that employment is the most effective way of improving the quality of life for those involved.
A sensible approach has been taken to this budget. The measures outlined are affordable and will not overheat the economy. Unlike our colleagues on the opposite side of the House, Fine Gael has a proven track record in managing the economy. This budget will secure our recovery and create even more jobs. We have already exceeded our forecasts on job creation. The tax cuts announced will no doubt encourage emigrants to return home and this, in turn, will attract even more foreign direct investment which, as we all know, will attract even more jobs to this country. It should be noted that over five budgets, this Government has restored our public finances without taxing jobs, a key election promise, and created more than 125,000 jobs since the start of the Action Plan for Jobs in February 2012.
The income tax cuts announced in the budget are fair and spread the benefits of recovery. For a working family of two middle income earners, on around €50,000 each, these changes mean an extra €2,300 in their pockets each year. Other measures announced in the budget include the following measures. The capital gains tax entrepreneur relief will mean a decrease in capital gains tax for entrepreneurs from 33% to 20%. In terms of the knowledge development box, there is a lower 6.2% rate of corporation tax on profits from patents and copyrighted software, which will encourage research and development to take place in Ireland. We are making work pay to increase jobs through cuts in the lower universal social charge rates and bands and a 50 cent increase in the minimum wage. We are making child care more affordable and removing barriers to work, including free preschool for children from the age of three until primary school, the provision of 8,000 extra community child care scheme places, the introduction of two weeks' paid paternity leave and a €5 increase in child benefit. We have a new €27 billion multi-year capital plan to address emerging infrastructural bottlenecks in the economy which will create an additional 45,000 jobs in the construction sector.
This is a fair budget with everyone benefiting from tax cuts. Extra funding is being provided for key services. Extra funding is being provided for housing, with an extra €69 million for social housing and an extra €17 million to tackle homelessness. NAMA will build 20,000 houses over the next five years. Extra funding is being provided for health, with free general practitioner care for the under 12s and a €900 million increase in health funding. There will be 2,260 extra teachers and a reduction in the pupil-teacher ratio from 28:1 to 27:1. There will also be 600 extra Garda recruits. There is fairness for low earners in that they gain the most through the universal social charge cut and the 50 cent minimum wage increase. Lower earners will gain more under the Government's tax cuts than under the previous Fianna Fáil-led Government. A €20,000 earner only gained €255 under Fianna Fáil but that earner will gain €493 under this Government through the universal social charge and pay related social insurance cuts. Fine Gael's universal social charge cuts are worth more to an ordinary family - for example, €717 for a family on €45,000 - than Sinn Féin's populist property tax of €405 for houses valued under €250,000 and water charges cuts of €160. There is fairness for the self-employed in terms of a new tax credit worth €550, which moves them towards equal tax treatment with PAYE workers. The budget provides fairness for families with the decrease in inheritance tax by increasing the threshold and freezing the local property tax until 2019.
I would like to put on the record that this Fine Gael-led Government has been responsible for turning the fortunes of this country from the brink of bankruptcy to where we are today, with the fastest growing economy in Europe.
I welcome the opportunity to speak on this important Bill. It is also welcome to speak on a Social Welfare Bill which does not contain any cuts but, instead, welcome restorations or partial restorations of important and vital payments. This Bill is a sign of our improving economy and recovery. It does not solve every problem in social protection nor does it contain every restoration or reform. However, it is the first real step back in the right direction. It is prudent and responsible, keeping with the overall budget presented to us several weeks ago. The fact the Opposition does not know whether to criticise it as a giveaway budget, or as a budget which does not do enough, demonstrates in itself the responsible and even approach the Government is taking with our recovery. This is evident in this Social Welfare Bill which provides for the restoration of important payments, such as child benefit and the respite care grant.
During the troika’s time in this country, the Government had to make difficult decisions and tough choices which directly affected ordinary citizens. I remember vividly the budget in which child benefit was reduced. It was a difficult time. Commentators and many Opposition politicians felt the country was moving towards a second bailout with no end in sight. When we, in the Labour Party parliamentary party, made our feelings clear about these reductions at the time, we were told that when the economy improved, we would be able to restore payments. With income and tax receipts ahead of expectation, this budget was the first opportunity to begin to restore payments. I commend the Tánaiste and Minister for Social Protection for being true to her word and beginning the restoration needed for payments in social protection.
The Christmas bonus being restored to 75% is a real boost to social welfare recipients, as well as to local economies. Many studies have shown over the years that this money is, by and large, reinvested in local towns and villages. When I welcomed the Tánaiste and Minister for Social Protection to Swords last week, we visited the Swords senior citizen centre where there was welcome for the increase in the State pension, the fuel allowance and, in particular, the Christmas bonus. These restorations and increases will make a real difference to pensioners.
In its pre-budget submissions, Fianna Fáil proposed nothing in respect of the Christmas bonus. It also proposed nothing in respect of the fuel allowance but the Labour Party has secured a €2.50 increase per week to this payment, in addition to the living alone increase announced last year. We have not only protected the bus pass, we have increased its funding by €3 million to meet increased demand with no eligibility change to the scheme. Fianna Fáil offered nothing in this area except stoking fears among older people that the bus pass could be cut or revoked. This bitter tactic over the years has done nothing but heap needless extra worry on older people. It certainly was not the action of a responsible Opposition as promised by Fianna Fáil and quickly forgotten as it reverted to pure populism. We are making responsible progress with this recovery. We are seeing a continued decrease in the unemployment rate, now down to 9.3%, or, in real terms, 203,000 people.
This is still not good enough but the trend is clear and confidence is returning. The evidence is there and the recovery is happening. That is beyond argument. We are delivering in government. There is a recognition that this Government has done a good job. The Labour Party continues to play an important role in this Government, fighting and delivering for ordinary people. When things were at their toughest and tough budgets had to be delivered, we kept in. We kept fighting on the promise that once the economy turned and we could afford to do so, payments would be restored. Some did not believe this would happen. Some criticised us for being a party that held a secret desire to implement cuts, that there was some magical alternative to expenditure cuts that we were deciding not to choose. Nothing could have been further from the truth.
The Opposition has demonstrated continued lack of direction and competence on budgetary matters. It doubted a recovery was possible and now denies it exists. Our fragile and still delicate recovery cannot be entrusted to the populist charms of Fianna Fáil or Sinn Féin. If we are to fully realise a recovery and to ensure further restorations for those most vulnerable, including older people, young families and young workers, and if we are to continue to strengthen workers’ rights, tackle low pay, make key social reforms, broaden free primary care and invest in key transport projects such as metro north, then it is vital that a sensible and progressive left party such as the Labour Party is there to deliver it.
We are restoring this country back to where its people deserve to be. I am proud of the Labour Party’s role in doing so. Listening to Opposition speakers today, and in previous budget contributions, I am both amazed and amused at their capacity to magnify and exaggerate the impact of any cut of any size on those affected but dismiss it as being minuscule and totally insignificant when it is restored.
Ireland has the highest level of jobless households in the whole of the EU. Any debate on social welfare must take place in that context and we need to focus on that. In fairness, I acknowledge the Government has provided some supports, particularly for the self-employed, in this budget. The self-employed are the risk-takers, the ones who set up a business, try to make a living and then employ someone else. The majority of employed people are employed by those individual risk-takers. They are the ones who have, at the end of the week, to come up with an additional wage packages, whether it is two, three, five, ten, 15 or 20 wage packets. They then have to pay the State the money it is due before they can put anything on their own table. If we are going to get back to full employment, they are the people we need to support and to encourage.
In fairness the Government has restructured supports for businesses. The Department of Jobs, Enterprise and Innovation has a one-stop shop which is very effective in indicating the supports available to small businesses. What we need in this country is an ethos of supporting risk, of encouraging people to gamble and set up a new business. It is disappointing to see that many start-ups are now relocating to the United Kingdom because of the tax structure here but also because the safety net is not in place to support those who take the risk.
For every business that is set up, nine of them will fall flat on their faces. We need to ensure we can pick up those pieces, support those individuals, dust them off and get them back up again. That is why I have consistently raised the issue of allowing the self-employed to make additional voluntary contributions, so they can access supports when they fall down through illness or injury. I know the Government has talked about it but we yet have to see movement on this. This should also be extended to self-employed people if their business goes to the wall and they become unemployed themselves. I am disappointed the Tánaiste and Minister for Social Protection has dismissed that. Her defence was that nine out of ten self-employed people who applied for jobseeker’s allowance between 2009 and 2011 received the payment. However, it was drummed into the self-employed that there were no supports available to them and there was no point in them applying for social welfare. It was only those who were really on their uppers who applied for social welfare. I have come across numerous families where there was genuine poverty and where they believed they were not entitled to a social welfare payment. However, they were fully entitled to it and got it eventually. Many more suffered through that and did not apply because of that misconception. It is important that proper supports are put in place for the self-employed. These are the people who will create the jobs and sustain our economy in the long term. We need to support them when they fall on hard times. It is disappointing there is no provision for this in the legislation.
The second issue I wish to raise concerns the lack of pension entitlements for FÁS supervisors. The Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Nash, has responsibility for small businesses and collective bargaining. During the passage of the Industrial Relations (Amendment) Bill in the House, he stated the Labour Court will be able to initiate a review of pay and pension conditions and make recommendations to the Minister. Accordingly, if the Minister is happy with the process that has been employed, he can sign an order bringing them into force. In 2008, the Labour Court made a determination, recommending that a scheme be put in place for the provision of pensions for supervisors and assistant supervisors in FÁS community employment schemes.
Both the State's side and the employees' side of that case were heard fully and the court made that recommendation.
The Minister of State, Deputy Gerald Nash, has said in this House that Dunnes Stores should go before the Labour Court to deal with its industrial relations issues and use the industrial relations mechanisms available. The State's industrial relations mechanisms have made a recommendation that the State provide pension entitlements for community employment scheme supervisors, yet the Government ignores it saying it will create a precedent for other private organisations in receipt of State funding. I would like to see the evidence behind that assertion because I have not seen it to date.
In 2007 the benchmarking implementation group did not give public servants any additional payment on the basis that they had access to pension entitlements. The community employment scheme supervisors did not get an increase at that stage on that basis. They did not, at that time, have an entitlement to a pension. They feel there was a legitimate expectation at the time that they would be given access to pension entitlements. Will the Minister of State examine this issue? The community employment schemes were established by Government in the 1990s. It was subsequently forced into establishing private companies and the Government is using that fact as a mechanism by which to turn its back on the supervisors.
Today Bank of Ireland announced that it no longer wants customers. It stated that unless people are withdrawing €700 in cash from a bank branch they are not to come near it. We have addressed this matter previously but the Minister of State's officials in his Department wrote to pensioners advising them that the most efficient way for them to access their money and for the Department to send the money to them is if they open a bank account into which the money could be paid. Not only does the Bank of Ireland no longer wish to deal with cash customers in its branches, in my part of the country, County Roscommon, and many other rural counties, Bank of Ireland does not want customers on certain days of the week either. Given his Department officials were so anxious to write to pensioners asking them to provide their bank account details and encouraging them to use the banks instead of their local post offices, will the Minister of State now write to those customers to whom the Department is electronically transferring money pointing out to them the huge risk associated with continuing to use their Bank of Ireland accounts and encouraging them to go to their local post office?
I have seen it before but what is going to happen is that older people will take out their cash and keep it in their homes. We have enough gurriers going around the country raping and plundering rural Ireland and pillaging communities at the moment without adding an extra incentive. We should not be encouraging older people to take out cash and allowing those individuals that are coming from urban centres, mainly in Dublin, to rob older, vulnerable people in their homes. I urge the Minister of State to issue that directive to his officials. He should encourage them to tell their customers - the people in receipt of welfare payments - not to do business with Bank of Ireland and to return to their local post offices.
I welcome the partial restorations of pension payments under sections 3 and 4 and Schedule 1, the partial restoration of child benefit payments under section 7, the restoration of the respite care grant under section 6, the partial back-tracking of the family income supplement earnings threshold under section 8, the changes to the carer's allowance under section 9 and the amendments to certain PRSI credits and earning thresholds under section 10 of the Bill.
It would be churlish of me not to acknowledge these partial restorations, yet it is also disrespectful of the Minister of State and the Tánaiste to refer to them as increases. The social impact assessment, based on ESRI's SWITCH model analysis, about which the Tánaiste told us this morning, may show tiny gains under budget 2016, but these partial restorations of levels of benefit and income for some of the most vulnerable citizens come after seven years of brutal austerity and horrendous cuts. They cannot undo the damage already done to households and individuals. The basic minimum rate of social welfare has stayed exactly the same throughout this Government's term despite the Tánaiste's input.
Sections 3 and 4 and Schedule 1 provide for the partial restoration of a number of payments, including the State pension. In many interactions with my constituents in Dublin Bay North, I found great disappointment at the €3 a week change to State pensions. Many told me they were hoping for a €10 a week increase, or at least a €5 increase. As one senior citizen said to me a few days ago, the increase would barely cover the cost of a daily newspaper.
Once again, in the 2015 Social Welfare Bill, the Tánaiste refuses to address the serious cuts to pensions of deferred members of the Irish aviation superannuation scheme, the IASS. She also has not addressed the serious complaints of the ESB retired staff association and countless other public service pensioners who were left with drastically reduced payments due to austerity levies and other cuts introduced by this outgoing Government.
What of women workers who spent many years working in the home and rearing families? For nearly five years, the Tánaiste has singly failed to remedy the unfair predicament of women workers who had perhaps made 15 to 25 years of social insurance contributions. These women are now being disadvantaged as pensioners at 66 years of age, particularly following the Tánaiste's changes to contributory pension qualification bands. I am sure the Minister of State, Deputy Humphreys, has come across that experience as well. One hard working constituent who has just turned 66 years of age and spent a lot of time rearing a great family is bitterly disappointed that she will receive just €196 per week instead of the higher amount of €233 because the Tánaiste has failed to address this serious issue of gender inequality.
I welcome the provision in section 6, amending section 225 of the principal Act, restoring fully the respite care grant from €1,375 to €1,700. However, the provision in section 5, renaming the grant as the carer's support grant, is disingenuous. The Minister of State knows that I was a social welfare spokesperson in this House for a good number of years and we always intended to have a carer's support grant in addition to the respite care grant.
The Social Insurance Fund is set to increase to almost €8.9 billion next year, recovering from the devastating deficit of almost €2 billion at the worst time of the crash. The projected surplus of €216 million is welcome but it also reminds us that a huge percentage of the social protection budget comes from workers' weekly contributions. Neo-liberal journalists and economists like to talk about a €20 billion social protection budget while ignoring the role of the Social Insurance Fund. In reality, the Tánaiste and her Government have followed the prescription of those reactionary and well-heeled ideologues and relentlessly kept the social assistance budget under €12 billion during the 31st Dáil, with terrible consequences for the most vulnerable sections of our society.
In her speech this morning, the Tánaiste referred to the cost of administering the rent supplement scheme for approximately 63,800 people and noted that it will be more than €298 million this year. The Minister of State, in particular, knows that this represents a savage cut in rent supports over the lifetime of this Government. In 2010, the cost of the scheme, as the Leas-Cheann Comhairle will remember, was approximately €520 million to house 96,500 people and families. The Tánaiste's mantra since 2011 has been that raising rent supplement levels would push up rent levels nationally, yet she has known all that time that the Government could legally introduce rent certainty and regulation. We know this from the work of Senator Aideen Hayden and various barristers who briefed us and helped push towards the uplifts in rent thresholds.
When I called for rent regulation in this House four years ago, we immediately saw bitter hostility to the proposal from Fianna Fáil and Fine Gael, which are the political parties of landlords. The Tánaiste and her party knew throughout the lifetime of this Dáil that Fine Gael would never agree to rent regulation or certainty. They also knew Ireland was facing the worst housing crisis since the 1920s, yet the Minister of State and his party persisted in joining and staying in a Fine Gael-dominated Government which has given us five years of paralysis and terrible suffering for homeless families. I was the only Deputy to stand up in UCD and say not to enter government, that we could be the leader of the Opposition, oppose a Fianna Fáil-Fine Gael Government, run them out of office and have a government of the left that would look after people and not yield to crazy austerity economics.
The Minister said this morning that people who vote against this budget will be putting politics before people but it is the Government that has put politics before people. I apologise to Deputy Creighton for going over time.
I have no problem with that. While Deputy Broughan and I may not agree on many things, I absolutely admire and respect his integrity and passion.
The programme for Government made a clear commitment to open up the budget process to the full glare of public scrutiny in a way that would restore confidence and stability by exposing and cutting failing programmes and pork barrel politics. That was the clear commitment of both Government parties and it is one I believed and thought would be pursued. Sadly, however, as we saw in the recent budget, and this Bill gives effect to part of it, nothing could be further from the truth. This is a return to both populism and pork barrel politics and, indeed, to the type of Bertie-nomics that brought this country to its knees. It must be resisted without hesitation on this occasion.
The budget is hugely disappointing and unambitious. We have seen nothing new from the Government in terms of a new economic vision or agenda for Ireland, a vision that will lead us to secure and stable economic and social conditions long into the future. Much of what Deputy Broughan alluded to is absolutely correct with regard to the housing crisis, which both parties in the Government have abjectly failed to address. I might not agree with the proposal on rent controls or rent caps but there is a clear solution to the problem which, unfortunately, the Government does not have the imagination to implement. It is very simple - build more houses. The capital allocations for housing in the budget were paltry. There is no new thinking in terms of new streams of funding to build housing. There still appears to be a huge reluctance to deliver community and social housing through local authorities, which is extraordinary.
My party, RENUA Ireland, was established because we wish to create a clear, stable, secure future in this State for the 425,000 people, or 19% of the labour force, who, as recently as last August, were either in receipt of jobseekers allowance, social welfare support through back to work schemes, in receipt of back to college grants or were participating in a three day working week. We do not have anything close to full employment in the State and we will not have it for a long time if we do not strive to do better, to be more ambitious and to deliver better and more sustainable outcomes for our citizens.
We have proposed a new tax environment, an entirely new way to stimulate growth and investment in the economy. We have proposed a 23% flat tax rate. It is interesting that the Government's commission on enterprise in 2013 recommended a flat tax rate, which the Minister, Deputy Bruton, dismissed as too radical. Clearly, for a Government that has no economic vision anything so radical will be rejected without any scrutiny or consideration.
We believe a number of measures ought to have been introduced in this Bill and in the budget generally. We favour the reinvigoration, expansion and extension of community employment schemes. They really work. They are hugely successful in communities throughout the country, both in urban and rural areas, but they are under-utilised. They are too restrictive. The bureaucracy is excessive and means many people who were in community employment schemes have been forced out of them. That is unfortunate.
There should be increased access to JobBridge. In our pre-budget submission, we proposed to develop greater access to JobBridge and to ensure that certain types of companies can offer better training and development opportunities for people through that scheme. Again, there is no ambition. There is nothing new or visionary in this Bill to achieve that.
Everybody will welcome a €5 increase in child benefit. However, it really sums up the Bertie-nomics approach of this Government, giving a little bit here and a little bit there. It is not a solution to the huge trauma being experienced by families throughout the country, especially in urban areas but also in rural areas, with regard to child care. The average cost of child care in Dublin is €1,000 per month. It is a second mortgage and a huge noose around the necks of families. It discourages people from having larger families and more children. That is morally wrong. It is wrong that people are being punished for trying to balance work with the provision of child care. A €5 increase in child benefit will do nothing for the families that are struggling to maintain a balance between family life and working.
There is a great deal more to be said but, unfortunately, I have been limited to five minutes.
I am grateful for the opportunity to speak on this Bill. This Government inherited a collapsed banking system and a collapsed construction industry. The Labour Party was the only party that voted against the blanket guarantee. It is hard to think now that back in 2008, it was possible to vote for a zombie bank such as Anglo Irish Bank which put us in debt to the tune of €32 billion, money that will never be recovered. That is part of what we inherited in 2011. We also inherited savage taxes that had been introduced at that time, levies, welfare cuts and the most unkind cut of all, a reduction of €1 in the minimum wage. In addition, as one can read in the book written recently by Deputy Gilmore, there was only money for five months in the Exchequer. That was to last for the rest of the year after the Government was elected in 2011. It was as chaotic and desperate a situation as one could imagine.
We sought to carefully manage the economy and to protect all the core social welfare benefits that existed at the time. We built on the strengths that we had. The result of all of that is we now have the fastest growing economy in the European Union. We are creating 1,100 jobs weekly, with 130,000 jobs having been created in the past three years. Unemployment is now at its lowest ebb.
That was only possible because the people came with us. It was the sacrifices of the people of this country that made it possible. It is only right and fitting, therefore, that the people who made those sacrifices benefit now from the recovery that is taking place. That is the reason this budget has focused in particular on social welfare. This Bill focuses on social welfare benefits such as pensions paid to older people, increases in the rate of child benefit, the respite care grant, the family income supplement, the fuel allowance, the jobseekers transition payment, the community employment top-ups and the 75% restoration of the Christmas bonus, which is very welcome after a 25% increase last year. All of that is being done along with a reduction in taxation. The worst rates of the universal social charge have been reduced and the income at which a person pays universal social charge has been increased again.
The intention and focus of all of this is to ensure there will be a fair recovery. That is the thrust of our policy. That has been shown by the social impact assessment of the welfare and income measures in the budget which was published today. It shows that there are higher than average gains for the bottom two quintiles, while the smallest percentage gain is in the top quintile. The social impact assessment shows that households with children will benefit the most from the budget, particularly working lone parents. Indeed, the ESRI has shown that in contrast with most other crisis countries, inequality has been reduced in Ireland over this period of time. This was achieved due to the policy choices of this Government. The OECD figures also show that this country has a progressive taxation system.
That did not happen by chance. There were enormous challenges that other countries have been unable to meet. We have been able to meet and overcome them.
We have done that in consultation with the people. It is important we ensure the recovery is fair.
I am delighted to welcome the measures in the Bill. There is a lot more work to be done to ensure inequality and poverty are reduced and we will continue to take further steps to ensure that. The minimum wage has been increased for the second time and will come into effect in January. The Low Pay Commission has been looking at these issues and there is now a big push for a living wage on a voluntary basis. I believe this is an exciting opportunity which we will be able to push ahead very rapidly in the future.
I very much welcome the introduction of two weeks' paid paternity leave for the first time in the history of the country. This is something I would foresee developing into the future. We will have an equal balance of child care between men and women and the State will have to recognise the importance of the family in this respect, so men can participate fully in the rearing of their children. This is the beginning of that development.
This is a decent Social Welfare Bill which is moving very strongly in the right direction. I welcome the steps it contains and look forward to further improvements in the years to come. I commend the Bill to the House.
I came into the House a few minutes ago to hear a lot of disingenuous comment from members of the Opposition who fail to recognise, or do not wish to recognise, that the positive decisions that were taken by this Government, tough and all as they were, turned around a country that was on the verge of bankruptcy and of falling off the cliff. It is the hard decisions we took to rescue this country that have resulted, almost miraculously, in the fact that in last year's budget, we were able to at least return 25% of the Christmas bonus.
The social welfare budget is incredibly interesting given the conditions in which the country found itself. The Opposition spokespersons who deride the €3 increase say they would have made it a €10 increase or instead of a €5 increase, they would have made it €15. All of this balderdash comes from people who voted consistently against the measures we were taking in order to rescue this country. Now, they want us to spend the benefits we have achieved according to their formula of Opposition politics.
I am very proud that almost five years after the horrors of the circumstances we inherited in 2011, we are now giving something back, and rightly so. This is happening notwithstanding the fact some economists say we should not be doing it, that this is an expansionary budget and that we should put all of our additional accumulated wealth into paying off debts that were accumulated by previous Governments. The people who made the sacrifices in this country deserve every penny and more, if we have it, to improve their lot, particularly around Christmas time and the winter period, when people get sick and need additional resources to heat their homes. That old age pensioners are getting an increase of €3 might not sound a lot but it goes to show we have reversed the trend that was evident when we inherited a bankrupt country.
I want to applaud Aldi, which has clearly listened to the political debate that has been initiated in this Parliament by the Labour Party, when it raised the issue of a living wage. Not only did Aldi guarantee its workers a living wage but, hopefully, this will act as an incentive to other employers to recognise the Labour Party policy of looking after workers in low income streams fairly. It is also important to record that the Minister of State, Deputy Gerald Nash, having had to confront the unconstitutionality of the JLCs in the past, by the stroke of a pen, was able to give stability to 55,000 additional low paid workers, such as cleaners and security guards.
The return of 75% of the Christmas bonus is a remarkable step in the right direction. There are also other net beneficiaries, which I will not outline because they have already been stated. However, I would like to highlight the fact that, for example, widows on a contributory pension aged 66 and over will see their rate of payment increase from €230.30 to €233.30 per week. It is a good increase, and it might be better next time. I would suggest that what we need is more stability in this country to allow the Government to implement the plans it has set in motion on behalf of the working class and welfare recipients.
Given we have found an extra €2 billion in additional resources, we might look again at an area of concern, which is that we did nothing to reverse the rates for jobseekers aged up to 26 years. In addition, we should try to reverse the penalties that have been applied to people who are very sick, in particular the prescription charges for elderly people and sick people using a multiple of drugs, who find it very difficult to survive. If not in this budget, we should start looking to reverse those charges in the next budget.
I am very pleased to support the Bill, which gives effect to a number of social protection measures announced in budget 2016. After the years of austerity, budget 2015 saw funding for social protection measures begin to increase in order to again start increasing living standards and investments in communities. Budget 2016 brings further increases for these social protection measures and brings increases through other measures after the austerity of previous years. With the welcome departure of the troika and the improving global economic situation, the recovery this Government has been driving is beginning to show results, although the amount of money available to spend is still limited. Within that context, the priority of the Government is to make sure that every household benefits.
As I said, this process started with the 2015 budget. The 2016 budget, of which this legislation is a key part, is designed to particularly help low and middle income families, retired people and vulnerable groups. The social welfare package in the budget has four main aims: first, to deliver welfare improvements for pensioners aged 66 years and over; second, to strengthen supports for all families with children; third, to enhance incentives for employment and to make work pay; and, fourth, to provide targeted assistance for vulnerable groups, such as carers and people with disabilities.
There will be a €3 weekly increase for pensioners and carers aged 66 years and over. This is the first weekly rise for pensioners since 2009, almost seven years ago. In recent years, many pensioners have supported their adult children and families through very difficult times. They deserve to see their income in retirement increase, now that we can do so. Just over 1.2 million people will receive the Christmas bonus this year, at a cost of €197 million, which I warmly welcome. The Christmas bonus will be spent within the local economy. It will provide a boost not only to the individuals and families who receive it but also to local businesses and the community and it will help the recovery.
Given it was cut during a previous budget, I am very pleased the respite care grant is to be increased by €325 to €1,700. The title of the respite care grant scheme is to be changed to the carer's support grant. From January 2016, the carer's allowance will be paid for 12 weeks after the death of the person being cared for. I welcome this measure.
A new analysis of the budget changes shows that households with children are the biggest beneficiaries from budget 2016, in particular working lone parents. There will be an increase in the monthly rate of child benefit to €140 from January 2016, which sees further increases on top of the increases already awarded last year.