Friday, 14 July 2017
Social Welfare, Pensions and Civil Registration Bill 2017: Second Stage
I move: "That the Bill be now read a Second Time."
I am very pleased to have the opportunity today to introduce the Bill to the House. As the rather unwieldy Title indicates, the Bill contains measures which will amend the Social Welfare Consolidation Act 2005, the Pensions Act 1990 and the Civil Registration Act 2004.
The Long Title of the Bill also reflects the breadth of issues which I and my Department are dealing with. Since taking up office a few weeks ago, I have been struck by the scale of the operations being undertaken by my Department. It is fair to say, that in one way or another, the work of my Department touches on the lives of every person in the State.
The Bill before us today reflects this very point. It incudes, for instance, a measure which confirms the special position within the welfare code of guardians who take on the responsibility for caring for children who have been orphaned or whose parents are unable to take care of them. The Bill includes a measure supporting people with a disability who take up employment. The Bill will seek to offer greater protection to people who are members of defined benefit pension schemes. The Bill also provides for amendments relating to the Civil Registration Service, which covers key life events.
The Bill before us today is, in a sense, a work in progress. Many Members present will be keenly aware of the issues affecting the defined benefit pensions sector in Ireland in recent times. I will be introducing amendments to the Bill on Committee Stage in this area. Given the complexities involved, it simply was not possible to have these included in the published Bill. While we will have an opportunity to consider the amendments in greater detail, the fundamental point I want to make now is that the key purpose of the amendments is to better protect the benefits of scheme members.
Until now, there has never been a statutory obligation on employers under Irish law to engage with trustees and members to address proactively deficits in their defined benefit schemes, nor have conditions been put on employers, who wish to terminate their liability, to contribute to their defined benefit schemes. That will no longer be the case.
As Members know, defined benefit schemes have been facing substantial challenges over the past two decades. To put it simply, the cost of providing benefits has increased at a rate that has not been covered by the investment returns earned by pension schemes. I acknowledge that many employers and scheme trustees have made great efforts to ensure the ongoing viability of their schemes. The best outcomes are achieved when trustees, employers and members negotiate to reach agreement on what is needed to secure the scheme's viability. The amendments I will be tabling on Committee Stage seek to underpin this approach.
The amendments will not permit an employer to walk away at short notice. They will provide for a 12-month notification period to enable negotiation and discussion between all sides. Where a scheme is in deficit, it will require the employer to enter into dialogue with the trustees to develop a plan to sustain the scheme. It is only where these steps have failed and no funding proposal is in place that the Pensions Authority will determine a funding obligation in the form of a schedule of contribution amounts and dates by which those amounts have to be paid. These measures will encourage employers to engage with trustees and members to ensure schemes are well funded and managed. I should mention also that the provisions will allow for entitlement, in certain circumstances, to a spouse’s pension for civil partners and same-sex spouses who are members of occupational pension schemes.
As Members know, the general scheme of the Bill was the subject of pre-legislative scrutiny on 1 June, and I thank the Chairman, who has just arrived in the Chamber, and members of the committee for the manner in which they engaged positively in that process. The committee, in its report, highlighted concerns about heads 4 and 5 of the general scheme which dealt with measures designed to reinforce the Department’s ongoing efforts to deter fraudulent claiming of welfare payments. Having had the opportunity to reflect on head 5 of the Bill and also having listened to the concerns of the committee, I decided to drop this measure entirely from the Bill. Regarding head 4 of the Bill, Members will know that I have secured the agreement of the Government to accept a proposed amendment from Deputy O’Dea of Fianna Fáil which will provide that only the names of individuals convicted of fraud in excess of €5,000 would or could be published. Obviously it is up to the House to determine whether to accept that and we will talk about it in the course of this debate.
The Bill contains 19 sections and I will give a brief overview of its provisions. Sections, 1, 2, 10 and 13 are standard provisions relating to the Title of the Bill, any necessary commencements, and definitions of certain terms used throughout the Bill. Section 3 is an administrative amendment which simply provides certainty on the payments to guardians. In line with policy and practice in my Department, it provides that payments to a guardian in respect of an orphan do not affect the rights of the guardian to claim welfare payments in his or her own right.
Section 4 provides, from the beginning of 2018, for the quarterly compilation and publication of the list of persons who have been convicted of an offence under the Social Welfare Consolidation Act 2005 or welfare fraud related offences under the Criminal Justice (Theft and Fraud Offences) Act 2001. The aim here is simply to increase public awareness of the consequences of such activity. After three months the list would be removed from the Department’s website which will be refreshed.
Section 5 introduces a number of changes to the arrangements governing the use of the public services card, PSC. It will allow for a cardholder’s date of birth, solely at their own request, to be inscribed on the PSC, in order that it can then be used by the cardholder as an age related identity card if they so wish. This section also allows the cardholder, on a voluntary basis, to use the card to confirm their identity in certain circumstances. Currently, a body that is not explicitly specified in the Act is prohibited from accepting the PSC as proof of identity. even in circumstances where the cardholder voluntarily tenders it for this purpose. This amendment will permit a customer to use the PSC at his or her own discretion without causing the person or entity accepting the PSC to be guilty of an offence. The section also clarifies that the ownership of a PSC is at all times vested in the Minister for Social Protection, in line with the practice for the use of other documents such as passports and driving licences.
Section 6 provides for the repeal of section 282 of the Social Welfare Consolidation Act 2005 which provides for reduced cost life event certificates, such as birth, marriage and death certificates. This provision will be formally introduced in parallel with the commencement of sections 27(a) and 30(a) of the Civil Registration (Amendment) Act 2014. Consequently, the powers to set the level of reduced cost fees will lie with the Minister for Social Protection.
Section 7 provides that decisions to award a social welfare benefit or payment which are to the benefit of a claimant can be made by an automated information system. Importantly, it also provides that decisions which deny entitlement to a benefit or payment must in all cases be made by a deciding officer. In other words, IT decisions will be in the affirmative only. All others will have human interaction.
Section 8 is concerned with the arrangements governing the recovery of benefits from compensators, typically insurance companies, in cases where a compensator is paying compensation in respect of the same injury, accident or disease that gave rise to a claim for a social welfare payment. This section provides for the inclusion of supplementary welfare allowance, SWA, in so far as it relates to payments paid as a result of a personal injury, on the list of benefits which may be recovered from the compensator by the Minister. The inclusion of SWA in the list of specified recoverable benefits will enable full recovery from the compensator of the basic supplementary welfare allowance payment, together with any exceptional needs payments and urgent needs payments that arise as a consequence of the injury, accident or disease that gave rise to a claim for compensation. This section of the Bill also provides for the adjustment of the period within which the Minister must respond to a request to provide a statement of recoverable benefits to the compensator from four weeks to 25 working days.
Section 9 addresses the fact that, under the existing legislative provisions, recipients of disability allowance, blind pension and certain supplements under the supplementary welfare allowance scheme only benefit from the disregard of earnings from employment where the employment, or self-employment in the case of disability allowance, has been certified by the recipient’s general practitioner as being of a rehabilitative nature. In line with the recently published report of an interdepartmental group established under the comprehensive employment strategy for people with disabilities, the Make Work Pay report, this section dispenses with the practice of distinguishing between employment of a rehabilitative nature and work more generally. We view all work to be of a rehabilitative nature. In addition to benefiting recipients of the schemes mentioned, this change will also reduce the administrative workload for GPs and the Department of Social Protection.
Section 11 provides for some of the necessary amendments to section 43 of the Pensions Act to underpin the annual preparation of actuarial funding certificates and funding standard reserve certificates and to require the submission of such certificates to the Pensions Authority within six months of the effective date. Further changes will be introduced on Committee Stage to complete the changes required.
Section 12 provides for amendments to section 49 of the Act to specify that funding proposals must be submitted to the Pensions Authority within six months of the effective date of the actuarial funding certificate or funding standard reserve certificates to which it refers.
Sections 14 and 15 provide for the deletion of the provisions in the Civil Registration Act 2004 concerning the terms of office of an tArd-Chláraitheoir, Registrar General, and an tArd-Chláraitheoir Cúnta, the Deputy Registrar General, as those are unduly restrictive and unnecessary in practice.
Section 16 addresses a gap in the current legislation by providing a role for a "qualified informant", usually the next of kin or relative, in the registration of a death where a coroner is involved.
Sections 17 and 18 extend the existing legislative provisions which provide that records of births, deaths and marriages may be shared by the General Register Office with the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs, to provide that those records may also be shared with a body under the aegis of that Minister.
Section 19 provides that the country of birth and the country of citizenship of a deceased person are to be added to the particulars of a death to be entered in the register of deaths. This provision, as well as providing a richer source of data in the records of deaths held by the General Register Office, also responds to the State's obligations under EU regulations in this area.
I had hoped to be able to bring this Bill into law before the summer recess but that will not now be possible. In the intervening period, my officials, together with their counterparts in the Office of the Attorney General, will be working to refine the text of the amendments, in particular around defined-benefit schemes, which will be introduced on Committee Stage in the autumn.
The reason we are here to talk about this particular Bill today arises from four different Private Members' Bills introduced by Members of this House and Seanad Éireann. One was from Deputy Willie O'Dea of Fianna Fáil, another was from Deputy Willie Penrose of the Labour Party and there was one from his colleague, Senator Ivana Bacik, and the fourth Bill was from Deputies John Brady, David Cullinane, and Denise Mitchell of Sinn Féin. The Bill is an amalgamation of issues that have been recognised by all parties in this House. I acknowledge everybody's contribution and I look forward to hearing the views of Deputies from all sides of the House on the content of the Bill in the course of the Second Stage debate and in particular when we get to Committee and Report Stages, please God in the autumn.
I congratulate the Minister on her elevation to high office and wish her the very best in persuading her colleagues, in particular her colleague at the Department of Finance, to make adequate provision to ensure that the progressivity we managed to get reintroduced in budgets last year is continued. She can be assured of our unstinting support in that regard.
Fianna Fáil does not intend to oppose Second Stage of the Bill but, nevertheless, a number of issues arise in regard to the Bill. The first relates not to what is in the Bill before the House today but to what is not in it. The Minister has told us that the provisions relating to defined-benefit pensions, which are extremely important, will be debated on Committee Stage and amendments in that regard will be presented in the autumn. Members will recall that the pre-legislative stage of the Bill was debated approximately eight weeks ago and at that stage we had proposals on pensions but they have been taken out. In spite of the committee's recommendations, in the interim period the Civil Service was not able to reflect the views of the committee in writing and we must now wait until the autumn. When those Committee Stage amendments are finally drafted could the Minister let us have them as soon possible because the issue is extremely important?
The heads of the Bill that we debated in the Joint Committee on Social Protection would have given rise to unintended consequences and in some cases unwelcome unintended consequences not just for the various categories of pensioner but also for current employees of a company. In so far as I can ascertain, what the Department is trying to achieve is that if an employer is a position to maintain a defined-benefit pension scheme he or she should not be allowed to walk away from it. Second, if an employer is in a position to partially maintain a defined-benefit pension scheme he or she would not be able to afford the full amount but a lesser amount could be afforded and that should be strongly encouraged and in the last instance, compelled. It is difficult to get the appropriate wording and to get the balance right and I wish the Department every success in that regard but I would like to see the amendment as soon as possible.
The argument is put consistently that there are two types of employer in that context. First, one has the employer who deliberately sets up a defined-benefit pension scheme, which will benefit the contributors when they retire, and second, one has the employer who does not bother doing that, and who does not take on that responsibility. The argument is that if employers take on that responsibility why should we put extra burdens on them because they have taken it on voluntarily, as it were, and they are at a competitive disadvantage to those who have not taken on that burden. Unfortunately, that does not tell the whole story. The defined-benefit pension scheme was the usual type of pension scheme in operation when a lot of companies were set up, or at least when they established their pension scheme. In so far as defined-benefit pension schemes are concerned, employees have been paying into them, sometimes for a lifetime, with certain legitimate expectations at the end. It is wrong for an employer who is obviously wealthy enough to maintain those payments without any danger to the company or the future of the company to be just allowed to walk away from them. Where an employer can afford to partially maintain a scheme, he or she should be forced to do that. I agree with those objectives but I look forward to seeing precisely how the Government wishes to achieve them.
In my Bill, to which the Minister referred, there was a provision whereby the Minister would ask the Pensions Authority to look at how minimum funding standard is determined, because that is at the root of a lot of the problems. In many cases that has created an artificial deficit in pension schemes. My proposal was that the Pensions Authority would be asked to look at that and come back to us with its views, observations and recommendations within six months. The previous Minister, Deputy Varadkar, undertook to ask the Pensions Authority to do that but he said there was no need for legislation. To the best of my recollection that was more than six months ago. What is the status of the authority's examination? Perhaps the Minister would advert to it when she responds. We would like to see the results as soon as possible.
The clarification on guardian's payment is welcome. A guardian's payment is a payment for the child although it goes to the guardian. The issue of maintenance payments was raised during our pre-legislative discussions on the heads of the Bill. The answer given by the Department's officials at that stage was that the maintenance payments were for the individual maintained and therefore it would be wrong to disregard those. However, my understanding is that in a lot of court cases and in out-of-court settlements one will find that a specific portion of the maintenance payment is given specifically for the child so I think the question of disregarding that should be looked at.
There was an extraordinary provision in the heads of the Bill that was originally published, namely, that if one had defrauded the Department of Social Protection one would go before the courts and be punished in the same way as anybody else who committed a criminal offence but there was an extra provision whereby the Department could punish the person as well. It was a parallel system of punishment, which was very strongly opposed at the committee. The opposition to it was very well articulated by Senator Kevin Humphreys of the Labour Party who is a former Minister of State in the Department. I applaud the Minister for taking out the measure. It was not necessary and quite possibly was unconstitutional. I welcome its absence from the Bill before us today.
The Bill also contains a provision on earnings disregard for people on disability allowance, blind pension and supplementary welfare allowance. The rule up to now was that in order to get the earnings disregard one would have to have a medical certificate to state that the work would rehabilitate the person in some way.
That was standard. In my long years of experience, I never came across a case in which the doctor refused to issue such a certificate. The fact is that work is by definition rehabilitative anyway. I welcome that.
I point out to the Minister that my colleague, Deputy Eamon Ó Cuív, has suggested foster care payments received from the United Kingdom should also be disregarded. I think the Department was not entirely ill-disposed towards that suggestion. The officials were prepared to consider it. Perhaps the Minister would let us know the position on that when she is replying.
According to the Department, the changes introduced for the public services card are designed to make people's lives easier. If one's date of birth is inscribed on the public services card, it can be used for all sorts of transactions and interactions with public bodies, such as motor taxation, passports etc. Broadly speaking, this is welcome. However, the view has been reiterated many times that the Irish are not in favour of the idea of a compulsory identity card. This was raised at the committee and the officials gave us an absolute assurance that we would never arrive at a situation in which the public services card would be used in respect of commercial transactions or to prove one's identity to private operators. I would like the Minister to reassure us again on that matter.
The original head in respect of automated transactions was somewhat unwieldy. I welcome the change in the legislation before us. I ask the Minister to address the question of how secure the data will be in view of the dangers of hacking. As I understand the section, the change in respect of births, deaths and marriages simply clarifies which Minister is responsible for setting the charges.
I must confess that I still have some concerns about section 8. The general law currently is that if someone who is pursuing a civil case for damages, as a result of an accident for example, has to rely on social welfare in the meantime, once the damages are awarded the amount paid by the Department of Social Welfare is recovered and the damages reduced by that amount. As I understand it, the Bill seeks to include supplementary welfare allowance in the amount recovered by the Department, which was not previously included. I am worried about the possibility of a double deduction. When somebody is in receipt of supplementary welfare allowance and waiting for a social welfare benefit to come through, provided they qualify for a payment, the benefit will be granted and backdated to the time of application. The supplementary welfare allowance paid is then deducted from the arrears of the benefit. In the case of an award of damages, I do not want a situation in which the full benefit and also the supplementary welfare payment is deducted from the award. I want to make sure that is clear in the section as I am not sure that it is currently.
One of the most controversial provisions in the Bill lies in the couple of sections in respect of publishing the names of people who have been found guilty of defrauding the Department of Social Protection. I said at the committee and reiterate today that I am totally opposed to social welfare fraud. It is a particularly despicable form of crime. I have seen instances in the media of people who deliberately set out in a planned and calculated manner to defraud the Department of Social Protection. Given that we spent about €20 billion or so on social protection last year, which comprises a very large chunk of our public expenditure, this is a reprehensible crime. Nevertheless, I am not quite sure what is going to be achieved by naming and shaming.
In the usual situation, if somebody is taken to court and convicted of defrauding the Department of Social Protection, it is going to be in all the newspapers and is certainly going to be publicised locally. I have seen several of those cases published nationally as well. The person convicted will also be subject to whatever penalties the court decides to apply and will have to pay back the money, which is only right and proper. The previous Minister for Social Protection, Deputy Leo Varadkar, said the reason for naming and shaming was to deter fraud. If the possibility of being dragged into court, having one's name plastered all over the newspapers to the knowledge of all one's neighbours etc., and accepting whatever other attendant penalties the court wanted to impose, is not a sufficient deterrent, I really do not think the extra possibility that, three months afterwards, one's name would be published on some sort of list as a social welfare fraudster is going to make a difference.
There was also some misunderstanding, some of which I am afraid was deliberately created, of the figures. A figure of €500 million was mentioned. To be honest, that figure is laughable. The way the Department operates, as I understand it, is that the provisions from savings come to something in excess of €500 million. These come about, for example, if somebody who is in receipt of the pension dies and the pension stops. That is a saving. If somebody in receipt of jobseeker's allowance happens to win the lottery, he or she is no longer entitled to jobseeker's allowance. That is a saving. When we add it all up it comes to about €500 million.
Sometimes the person who wins the lottery might continue to draw jobseeker's allowance for a few extra weeks or months or whatever, in which case there is an overpayment. The figure for overpayments, which are also included in the €500 million, is about €110 million. Of that €110 million, however, fraud only accounts for €41 million. That is not €500 million. The figure is small in the context of a departmental budget of over €20 billion. Of course, €41 million is a considerable sum and is not to be sneezed at. There are a lot of good things the Minister could do with it. However, I do not think the figure for fraud is going to go up or down because of these name and shame provisions. Three years ago, I understand, the figure was about €61.5 million. It has dropped quite considerably. The systems in place in the Department are working.
I agree with the Minister's suggestion of an amendment to take out people whose cases involve less than €5,000. I do not want to be seen to be doing any favours for people who are calculatedly defrauding the Department of huge sums of money. Nevertheless, I am not moved from my viewpoint that the provision is going to make no difference in practice. Furthermore, the provision has a negative side. It reinforces a stereotype and a negative impression that has been put out, particularly by certain sections of the media, that the vast majority of people on social welfare, or a huge chunk of them, are defrauding the system. Nothing could be further from the truth. My colleague, Deputy John Curran, who is chairman of the social protection committee, recently submitted a parliamentary question as to how many cases were dealt with in 2016, the last year for which figures are available. The answer he got was that there were 130 cases for which a punishment was applied by the court. Of those, 41 were in respect of under €5,000. There were 36 more cases in which the Probation Act was applied, of which 15 were under €5,000. If we include child benefit - of course we can have fraud in that area as well - payments from the Department of Social Protection are made to almost 2.5 million people and out of that group 166 were convicted of fraud. That gives the lie to the notion that there is widespread fraud.
There is no suggestion that lists of those involved in other types of fraud, including white-collar crime and financial fraud, or in more serious crimes such as murder and armed robbery should be compiled and published on a regular basis. It would not do any good because the people in those Departments know it would not provide any deterrent, just as it will not in this case. It has been mentioned that lists of tax cheats who owe the Revenue Commissioners money and are forced to pay interest and penalties are regularly published, but that is different because, by and large, such cases do not go through the courts. The public would never know the identities of such people if such lists were not published. That is not the case here because details of social welfare fraud prosecutions are published all over the newspapers. Lists of tax cheats are published so that the public can know who is involved in such activity.
I understand that it is the Department's intention to publish a list within three months of the end of the quarter in which the conviction occurred. Serious and searching questions have been raised about how other organisations will be prevented from republishing or sharing that list on a regular basis. For example, I have been asked to ascertain from the Minister whether the information will be removed from the Department's search engine. The Department gave the joint committee an absolute assurance that there would be no question of this list being available for any further use. When the Minister replies at the end of this debate, I would like her to indicate the precise measures the Department is taking in this regard. It has been suggested to me that the stated reason for these provisions - that they will heighten public awareness of the consequences of social welfare fraud - will not be sufficient to pass muster with the Data Protection Commissioner. Has the commissioner been consulted about these provisions? What observations, if any, have been made by the commissioner in this regard?
I would like to bring a number of issues that are not covered in this Bill to the attention of the Minister because they will need to be dealt with in the social welfare Bill that will follow the budget. An ESRI report this morning recommended that the retirement age for pensioners should be increased to 70. The increase in the retirement age from 65 to 66 has created enormous problems. I know people in my constituency who have worked for over 40 years. Having been forced to retire at the age of 65, they find it extremely difficult to have to sign on for the labour every week. It is outside their normal experience. God knows what the position would be if they had to sign on until the age of 70. Many people cannot work beyond a certain age because of the type of work they do. It would be preposterous to expect people who do heavy manual work to work until they are 70 years of age. Fianna Fáil and Sinn Féin both drafted and introduced Bills to end the right of employers to compel people to retire at a certain age. We deferred to Sinn Féin because its Bill was introduced first and because we were anxious to bring into law the abolition of mandatory retirement at the discretion of employers. In general, there is no law that says one has to retire at a certain age.
I would like the Minister to respond in her concluding remarks to the MABS report she has received from the Joint Committee on Social Protection. On 15 June last, the committee was addressed by a group that wants to be brought within the terms of the Dr. David Parris case. I understand that the circumstances are exactly the same. It should be included in the interests of justice and fairness. I am making a special plea to the Minister to provide for it to be included.
I apologise on behalf of Deputy Mitchell who was supposed to speak on this Bill on behalf of Sinn Féin. I was asked to come in at the last minute. I have a background in this area, having served as my party's social welfare spokesperson at one point. As a hardworking Deputy, I deal with many social welfare cases every day. I am pleased that we have been given an opportunity speak on the Social Welfare, Pensions and Civil Registration Bill 2017. I welcome a number of aspects of it.
Section 3 is a sensible proposal that seeks to ensure the individual welfare rights of a person who is the guardian of an orphan are not adversely affected by payments that are made to him or her in that capacity. I think that clarification is very welcome. I know from my past experience of dealing with this area that one of the difficulties encountered by parents and others in caring roles, including guardians who are looking after children, is that there is a difference between the foster payment and the guardian's payment. The child being cared for by the person receiving one of these payments is required to have been abandoned. This issue arises quite frequently in the Dublin area, with which I am most familiar. It probably arises in other areas as well. If one of the parents of someone who is on drugs is dead and the other parent is living a chaotic life, that person's child might be taken in by his or her grandparents. I think it is unfair for the abandonment stipulation to apply in such cases. Regardless of the frame of mind a parent is in and the awful things that are happening in his or her life, the idea of signing something to say that he or she is abandoning a child to its grandparents is problematic. Perhaps the Minister for Social Protection can look at this at some stage in her new role. I take this opportunity to congratulate the Minister on her appointment.
I would like to speak about the section of the Bill that deals with the rights of people with disabilities to work. As we know, in Ireland people with disabilities are half as likely to be in employment as others of working age. Collectively, we agree that this needs to change. People with disabilities should not be in fear of losing medical cards and disability supports because they want to enter the workforce. I think we are going in the right direction in this regard, but we are doing so slowly. When we talk to people who have impairments, they tell us that this frustrates them the most. They cannot move out of the poverty associated with this area of social welfare because of the supports they need. Changes in this area are very welcome and will be of great benefit to citizens with disabilities.
I want to take issue with other aspects of this legislation, such as the controversial section of the Bill that provides for the publication of the names and addresses of people who have been convicted of welfare fraud. I do not think we should do down this road. I will outline some of the reasons I am uncomfortable with it. When these cases go to court, they are generally reported on in local newspapers. The details are published by the courts. This is being proposed as a further deterrent. I am aware that the names of tax defaulters are published by the Revenue Commissioners when the total amount of tax, interest and penalties owed exceeds €35,000. We are talking about allowing the names and addresses of those involved in fraud to the tune of €5,000 to be published. From where did the €5,000 figure come? I would be interested to know why this is happening.
Certain problems in society are viewed from two different viewpoints. I am not justifying the behaviour of those who are involved in criminality such as white-collar crime or social welfare fraud. Two different approaches are taken in cases in which people owe money to the Department. If someone discovers after many years that he or she has been underpaid and the fault lies with the Department, there is a sunset clause that ensures the Department does not have to pay after a certain period has elapsed. If an individual owes money to the Department because he or she made an error when filling in a form or something of that nature, the Department will follow that person to his or her grave to ensure that some sort of agreement is reached or ceiling is set about the debt that is owed.
This needs to be looked at as it is unfair. There seems to be one approach for the Department and the mistakes that it made, and another approach for the welfare recipient or the person that is redundant.
This whole idea of the welfare fraud campaign was based on figures that were nowhere near the actual figures involved. The figures for savings in 2016 went from a headline figure of €506 million to an actual figure of €41 million. There is a view that calculations were made that were based on flawed, utterly bizarre assumptions and make-believe numbers were created. There is a view held by many on this side of the Chamber that it was to give someone a lift in the leadership bid for that person's political party. The social welfare fraud campaign labelled a whole cohort of people and suggested that somehow, everyone who is in receipt of social welfare payments had something suspect about them or a question mark over them. It feeds into the negativity that those people do not want to work, like to spend all day in bed at home, are wasters or are just not interested in contributing to society. As we know through our own lives, our own work and from those who are in receipt of social welfare payments, the vast majority of people who are reliant on this payment have no choice. They would prefer to be out of this position and back in gainful employment but for various reasons, including the lack of employment opportunities, lack of education and all sorts of other reasons, they cannot do that. I am uncomfortable with that campaign. We need to change the narrative that people in receipt of social welfare payments are somehow taking all the time. In many cases, I know of such people who still contribute to their communities. They work in community centres and help out within the community itself within the parameters of what they are allowed to do under social welfare regulations.
How was the figure of €5,000 arrived at? Has the Government consulted with the Data Protection Commissioner on this provision? When this Bill was considered by the committee during pre-legislative scrutiny, a number of provisions were in place for people on defined benefit schemes. These were not perfect but provided some support for members and some sort of long-awaited Government response to the crisis in the defined benefit scheme as witnessed in the case of Independent News and Media and that is now unfolding in Irish Life. These protections have been wiped out in the Bill. The question to ask is why it happened. One need only consider the situation in Irish Life with the defined benefit scheme to know that stronger provisions are necessary. Our view is the Government is hanging workers out to dry, is facilitating companies walking away from their own pension commitments and is letting them away with ripping off their employees. The Irish Life pension scheme has a huge surplus. It has assets of €1.2 billion and has never been in deficit, yet the scheme is being wound down. What is the Government saying to such companies that simply decide to take the liability off their balance sheets and renege on their pension obligations?
Every year, this Bill gives an opportunity to do something positive for the most vulnerable in society and the Bill contains a number of tidy-up measures and some anomalies will be fixed in this Bill, which is welcome. For lone parents, however, the Government could have ended the child maintenance scheme being calculated as an income for rent supplement and that money could be classed as something for the child. For young jobseekers, the Government could have ended the ongoing discrimination introduced by Fianna Fáil and continued by Fine Gael where their age determines that they receive €102 or €147 a week and they are expected to live off that. For older people, I touched on the matter of the farce of the 65 year olds being asked to go on to jobseeker's payment. I find in my constituency that individuals come in who were unaware of this until the point at which they thought they were going to get the payment and who were then put in this situation where they must sign on. I do not know how many people I have had in tears in my office. The idea of very proud people who have never received a social welfare payment in their lives but who were looking forward to retiring being obliged to sign on is wrong. This issue needs to be reconsidered.
A Bill has been put forward by my colleague, Deputy Cullinane, which proceeded to Committee Stage. The difficulty is that as it needs a money message from the Department, it is really going nowhere. Everyone who comes in asks if it is going to be resolved. I say that I believe it will be, that it is the will of the House and that everyone here, including the Government, the Opposition and everyone else, wants it to happen. I acknowledge there is a cost factor related to it but we need to collectively agree that it needs to be moved on. The idea of people being obliged to sign on at that age, who have never been in that circumstance, is wrong. The other way it used to be was to put people on community employment, CE, schemes or such for the year. It is an anomaly. We all collectively agree that it should be a choice. If people want to work on, they should be given that opportunity and in many cases they are not because of the regulations that have been put in previously.
There is a huge amount of anomalies within the Social Welfare Act. They are not being addressed. Perhaps some can be addressed on Committee Stage, but the fact that we pushed it and had this conversation here today is healthy, since we can raise the issues and give some sort of idea to the Minister of some of our concerns. There is concern about section 5(2), which deals with the public service card. I agree on the need for checks and balances but it seems that the card is being rolled out for everything. The previous Minister was keen to tell us that this card was not compulsory. However, to engage in any way with social protection systems, it is becoming increasingly mandatory. One even needs a card now if one wants to do a driving test or to apply for one's first passport. It is a piece of identification that is looked for now.
There is a move towards including a cardholder's date of birth on the card. Why is that necessary? The concern from civil libertarians would be that it is a move towards a national ID card. What is the idea? I know that an identifier is needed but it is all information for fraudsters or anyone else who sought to rob a person's identity and so on. If they have that, they would know a person's date of birth. It raises serious questions about individual privacy and data protection. Digital Rights Ireland has expressed serious concern that this is an attempt to introduce a national ID card by stealth and if it is, it has enormous implications for civil liberties and privacy. That probably deserves a debate of its own. In the Bill as published in May, there were aims to ensure that same-sex couples would enjoy the same rights and entitlements when it comes to occupational pension schemes as would any other couples. Will the Minister explain why this provision has been removed? It is a technical issue but what is the Government's intent in this area?
There are other areas on which we hopefully will see action in the forthcoming budget. I already mentioned that women are still facing discrimination in the State pension. The changes being made affect 36,000 people, mainly women, who are on the reduced State pension. It is to do with a person not having enough stamps or enough contributions and it is a huge issue. People are shocked to find it out. They plan in their minds. Not everyone goes down the route of checking that they have everything. They just believe that they have worked for all their lives and while there might have been a short gap, people are under the impression that they will get their pensions. I urge the Minister to make pension equality for women a key priority going forward and all the parties in the House would work with the Minister on that.
Another issue is tackling discrimination against younger people on jobseeker's allowance. Consideration should be given to moving towards reversing this unfair discrimination.
I presume that will be a budgetary matter. It was an unfair and cruel cut and it is being felt right across communities. When I knock on doors and there are young people in the houses, I see the fact that the son or daughter is caught up in this situation is one of the issues for many families in financial difficulties and creates a huge burden and huge hardship for those families.
As I stated at the outset, there are elements of the Bill that I welcome. I have raised some of the issues that require greater scrutiny.
I am glad to have the opportunity to contribute to the debate on the Social Welfare, Pensions and Civil Registration Bill 2017. I congratulate the Minister, Deputy Regina Doherty, on her elevation. I have no doubt but that she will be ambitious in the role. I think she will do a good job. She is out of the traps quickly and at least ahead of her predecessor: there seems to be a far more sensible and realistic adoption of issues raised by the Opposition and I am glad to see she has already incorporated some of them into the Bill. That is the way to make progress. There is no use being antagonistic and setting up false rows at the beginning. I will point out a couple of these issues to the Minister. Many of the provisions in the Bill are effectively designed to tidy up other provisions, to streamline matters and to deal with some anomalies that have arisen in the social welfare code. For the most part, we all welcome these provisions. Where there are issues outstanding, we will address and debate them in a civilised way.
Section 3 is a change that carries with it much import. Payments to guardians in respect of orphans clearly should not have affected guardianship rights, specifically the right of a guardian to claim social welfare payments in respect of the child in his or her own right. This should never have been included or even contemplated for inclusion in the legislation. Of course, this mirrors what happens in the taxation code regarding child benefit, which is where this anomaly was first addressed. The social welfare code is therefore belatedly catching up with the taxation code in respect of child benefit, which is specifically for the child and should not be considered as the income of any of the parents involved.
I have already indicated my dislike and displeasure - even in person to the Minister - of the measure contained in section 4. As someone who practises in the courts and who often defends people in this area, I know it is a big ordeal to be prosecuted and brought to court, particularly for those who often may not have a third-level or even a second-level education. It is difficult and a fairly traumatic experience. Very often one makes the plea ad misericordiamon behalf of these people. Quite frequently, a case appears in local news media, including newspapers, and the whole neighbourhood knows. Very often, these people may have young children under the age of nine or ten and this affects them at school or wherever else. If a taxpayer defaults, he or she is an adult and can take it on the chin: he or she does the crime and so must obey the rules and pay up the interest and penalties. Then if his or her name appears in public as a tax defaulter, the person is an adult. However, this measure would affect young children who may be at school. Willie Penrose may meet a child and tell him or her that he saw his or her daddy's or mammy's name in the newspaper, and this affects people. There is nothing more to be gained in this regard; the punishment has already been levied and the case has been advertised.
The good thing about this is that, after a week or so, the case disappears or it goes on and something else takes over. I do not use Facebook or any of that social media stuff. I do not believe in it and have no time for it all because the way people are going, they are trying to eliminate the postal service. People send emails and all that. No one knows how to write a letter nowadays. Everything I send goes out in written form and in the post. I do not just come in here and speak balderdash about supporting people in the postal service or post offices; I actually act. Everything I send goes out by letter. That is how we save the post offices. I know about this so I am very eager that the post offices be saved. Anyway, the Minister knows my view on section 4. If one is a tax defaulter, the sum the Revenue Commissioners accept must be over €33,000 under the Taxes Consolidation Act before one's name is published. Why should a person in receipt of social welfare be treated any differently? To hell's blazes, the Minister will do another good deed if she takes section 4 out. People are already being punished, and rightly so. Anyone who commits fraud deserves the punishment he or she gets, but the courts are already dealing with them. The courts are a public forum and there are no in camerasittings for these types of cases. The public knows, and that is the end of the matter. I understand that old faddish ideas come into people's heads and that individuals like to come forward with innovative ideas. People would see that those ideas are as mad as be damned if they would only examine them closely.
I agree with my colleagues that there are data protection issues and I am of the view that these must be addressed. I do not deal with much of that stuff but I do not think those issues have been addressed or adverted to. The Data Protection Commissioner may well have something to say about them. However, I stay away from that type of thing because I have no interest in it. I am the last of the Luddites, I suppose.
Head 5, which the Minister's predecessors tried to introduce, sought to provide the Minister with the power to punish someone convicted of social welfare fraud in our courts - an additional punishment. Mother of the Divine Institutions, it has not been possible to do that since the Conroy case and that was heard nearly before most of us were born. No Minister has the power to do that. Deputy O'Dea, who is a former Minister, will remember the East Donegal Co-operative case. He had to study it as part of his law degree course. It curtails the power of the Executive. The Minister cannot do anything in this regard; only the courts are empowered to judge citizens. The powers the Minister was seeking were arbitrary and not properly defined. There is already a procedure in place to recover payments as a result of fraud over a period. Then the Minister was going to assess the gravity of offences in individual cases along with other relevant factors - Mother Divine - and impose a punishment afterwards. At least the Minister is an intelligent person and got rid of this.
Any penalty imposed by a court of law is part of a judicial function. The administration of justice in criminal matters is constitutionally confined to the courts and the selection of a penalty following conviction is an integral part of the judicial function. I was disappointed this got through because if one goes back to Cox v. Ireland in 1992, it was a case of game over, out to hell with it and it should not have been brought in.
I welcome some of the other measures in the Bill. I do not want to get caught up in some of them. Section 9 is a sensible provision. For anyone who gets out of bed and goes to work, that is rehabilitative in itself. This is why I want community employment, CE, schemes to be reviewed in order to allow people to avail of this. It is very important to people who have nothing else to go to. The very fact that they go to CE schemes and do their 19 hours is very important in rural parts of the country, and there are many people who do that.
What I am really concerned about is the pension situation. My colleagues, Deputies Brady and O'Dea, and I have introduced Bills on this. None of us claims to have the monopoly of wisdom or virtue, but we had to cry stop to an untrammelled gallop to the headlands to get out of defined benefit schemes. These schemes were healthy from a financial perspective and an employer's perspective. Of course, at the end of the day, many of them cleverly rushed to the headlands so they could distribute dividends to their shareholders. That is what much of this was about. The unfortunate people left behind were the contributors. We had to cry stop. A bit like the late John Healy, we were out crying stop well in advance. It took a bit of convincing, and I know the officials in the Department of Social Protection might have been quite reluctant. The people in the Office of the Ombudsman and the Financial Regulator would be doubly reluctant-----
Yes. It goes without saying that a significant and worrying crisis has developed over the past few years pertaining to defined benefits pensions, and the Minister mentioned this. As I said, if things keep going as they appear to be going, it is a trajectory that will ultimately lead to a meltdown. They will all be wiped. Hardly any of them are left in any event. They are being wiped out by the day. Deputy O'Dea spoke about the minimum funding standard. The standard, as designed, clearly overstates the scheme's liabilities and facilitates some employers taking advantage to welch on defined benefits. They had this beautiful way of doing it. I recall attending an ICTU conference and Fergus Whelan and those guys had this down to a tee.
There was a comprehensive analysis of the problem. How can we prevent the demise of the defined benefit provision? It was a compelling analysis of where the blame lies for a situation which will mean that hundreds of thousands of people at work today in our country are likely to be significantly worse off in retirement than they anticipate, having done the right thing all their lives by putting aside significant amounts of their hard-earned income into pension funds. Our defined benefit pension deficits are calculated on a buy out basis, which means that a scheme is deemed to be in deficit unless it has enough assets at any one point in time to purchase annuities for each of the beneficiaries. I do not know where this was made up, but it is leprechaun economics. The current minimum funding standard overstates liabilities. If we look at the UK, they do not apply anything like the minimum funding standard that we apply. They think that we are crazy over here. The regulator there regards the projections as misleading as they are based on deficits calculated on a buy out basis, reflecting exceptionally low bond yields, a cost to capital buffers and a profit margin for insurance companies built in.
Many schemes are unwell. Many employers are very responsible and make contributions under the section 50 schemes. Workers and unions work together. As long as the regulator insists on valuing liabilities on the basis of German bond rates and annuity buy outs matters will only get worse for what is left. Nobody in the UK is forced to buy annuities. The only people who are actually forced to buy into Ireland's dysfunctional annuities market are the defined benefit schemes in wind up. The people with defined contributions do not have to purchase them. We have to end this. We should call in all the pension regulators and tell them that it is time to stop. The good work of trustees, the unions and employers mean that we can salvage something. They have salvaged the section 50 agreements already. There are many good employers out there and we cannot tar them all with the same brush. However, that will all be rendered useless unless we stop this. That is why this legislation is important.
I regret that we are not passing this legislation in full before the summer, because I am worried that in the eight, nine or ten weeks that we are off unscrupulous employers will run to the headland and say goodbye and leave the unfortunate workers, or their partners or wives, in the lurch waiting for pensions. It is desperately important that we get our act together here. There is no excuse. They need not be crying wolf. Some 90% of these defined benefit schemes are now closed to new members. We are trying to protect those people who have already paid in. Everyone believed that the defined benefit schemes were the best place to invest their funds, and if there was any risk the scheme, or the responsible employer, was to carry them. What has transpired is that, just like the defined contribution schemes, it is the worker that carries the burden of risk. We also have the issue of the defined benefit schemes being tied up with the State pension schemes.
Let us be clear. The Government made the rules as to how those defined benefit schemes were to operate. The Government introduced the legislative measures, for example revaluing the deferred pensions, the cost of which is added to the burden of active members. The workers make their contributions and pay for the regulatory system, but their pensions were not protected. Who is at fault? The workers pay for everything, including the regulatory system, and the regulator's function appears to be just to adhere to the minimum funding standard, even though it might not be in the best interests of the members of the defined benefit scheme. The FRS17 came in in 2002, and there is now the IAS19 of 2011. The assumed liabilities scheme appears on a company's balance sheet. My Bill was going to deal with that nicely. Neither myself, Deputy Brady or Deputy O'Dea are experts in the area, but we are circling the wagons so that there will be no more escapes. I proposed crystallising events to meet this. When we introduced that Bill on behalf of the Labour Party last spring opportunistic companies were availing of the situation. To repair their balance sheet resulted in dividends being payable to the shareholders, and the only losers would be the workers. The company suffered no pain. Events which have transpired on the defined benefit pension scheme over the last six month have lead me to question why the regulator insists on valuing liabilities on German bond rates and annuity buy outs. Currently even the defined contribution members would have nothing to do with an annuity. The UK Government changed its rules last year concerning personal annuities. In any event, the question of whether there is a functioning annuities market in Ireland today arises. ICTU stated that annuity prices in Ireland are a mathematical exercise in a non-existent, dysfunctional market. Annuities are not affordable or good value for money, so why should defined benefit scheme members still be compelled to buy overpriced annuities? That has to be reviewed. It has to stop, and if legislation is required to enable this to happen then legislation amendments should be brought forward.
I have to mention the equality provision in this Bill. My colleague, Senator Ivana Bacik, brought forward a Pensions (Equal Pension Treatment in Occupational Benefits Scheme) (Amendment) Bill 2016. That was intended to deal with what is now in place under head 14 of this Social Welfare Bill. Senator Bacik brought that Bill forward last March as a result of the David Parris situation. When this scheme was introduced she was very grateful to the then Minister - now Taoiseach Varadkar - for adopting the words of our Bill and placing them into the social welfare heads. It is important to ensure equality for the small group of LGBT couples who have been denied equal treatment and pension rights. Recently in the English courts this particular provision was applied. Whatever little worries people may have had, we are under the same common law and so we can utilise the precedent. It is a legacy issue left over after the marriage equality referendum was passed. There are a small number of cases, as Deputy O'Dea referred to - I would support other cases if they are out there - where retired employees who were not legally permitted to marry persons of the same sex before a certain date were denied certain pension benefits. The Parris v. TCD case, which went to Europe, included an argument that the TCD pension scheme was discriminatory because a TCD employee's partner would only be entitled to a survivor's pension if the employee had married or entered into a civil partnership before reaching the age of 60. This is a very important but significant step towards rectifying continued discrimination against a small number of individuals who faced the same difficulty as David Parris under the pension schemes despite the passage of the equality referendum. I believe that Senator Bacik was in contact with the Minister and received confirmation from him. She was very grateful that the Committee Stage was included.
I read the heads of the Bill and had a discussion with the Minister, and was fortified in my view. The heads of the Bill had some very interesting, forward thinking material, but it is disappointing that they did not reach the Bill. There are sections in the Bill relating to actuarial calculations which are welcome, but they are very confined and it is important that we widen those. Section 13, which gives pension authorities the power to determine a scheduled contribution for defined benefit schemes where they are in deficit and the employer is not engaged with trustees, is particularly engaging and exercises me most, because in my view it was the most important amendment.
It enabled the Pensions Authority to determine a schedule of contributions that would restore the defined benefit pension schemes which do not satisfy the minimum funding standard or funding standard reserve to an adequate funding position in circumstances where the employer has not engaged with the trustees to develop and agree a funding proposal. This scheduled contribution was enforceable as a debt by the trustees before the civil courts. It would have meant that an employer could not walk away from a defined benefit scheme that did not meet the statutory minimum funding standards. Without this amendment, the current statutory minimum funding standard means little when a scheme goes belly up. The consequences of this for members of a defined benefit pension scheme have been and will continue to be catastrophic. I am heartened to see that will be one of the most important amendments the Minister will bring forward, together with heads 11 and 12, requiring employers to give minimum notice of 12 months to members of defined benefits schemes, trustees and the Pensions Authority for ceasing contributions to defined benefit schemes whether that scheme was in deficit or not. I know there can be a shorter time period, if it is agreed, but that would have prevented employers from making arbitrary and unilateral decisions to close defined benefit schemes without any notification to the members of the scheme. That is extremely important.
The proposed amendment also provides that where a scheme is already under a funding proposal the employer must continue to contribute during the contribution period at the rate agreed under the funding proposal. That provides members of the scheme with some security heading into the wind up. That is extremely important. I look forward to those amendments. I congratulate the Minister and have no doubt that she will work hard. Like Deputy O'Dea, I would like to receive the amendments during the summer because it would be helpful to review them then.
Like other Deputies, I read the earlier version of the Bill. There are substantial changes between the draft and this version. The hate campaign and class bias demonstrated by the former Minister in his attempt to win the leadership of Fine Gael, the campaign for Leo, however, remains as an attack on those who are allegedly committing welfare fraud. The other striking change is in the means to be used to protect defined benefit pensions. The balance of changes made and not made says much about the priorities of Fine Gael and this Government.
It would be wonderful to see the Government devote the same outrage and energy to go after corporate fraud and tax evasion as it demonstrated in its campaign to go after social welfare fraud. Instead, it is spending millions of euro to protect the Apple tax owed to us. I am stating the obvious. There is less interest in collecting tax revenue from some sources than there is in hounding a certain set of welfare recipients that seem to preoccupy the Government, and particularly the former Minister for Social Protection, for some time. The campaign does not paint the reality. For example, I have come across a few people being examined for social welfare fraud. One family in Ballyfermot was examined in a confrontational and threatening way. The result of the examination showed that they received an overpayment of €60 per week. It was not said but this should come out in the statistics, the same family is saving the State a fortune by caring for an elderly parent on a full-time permanent basis. That woman should, or could otherwise, be occupying a bed and the services of the State but there is a family taking care of her and they are being overpaid a paltry €60 a week and were given a hard time.
Approximately a year ago I asked the previous Minister how much he estimated was unclaimed by people who were otherwise entitled to some sort of social welfare payment but he never answered. We do not seem to know or estimate what goes unclaimed in this State. When the UK began to estimate the unclaimed entitlements it found they far outweighed the levels of fraud in the social protection service. I think this would be the same in Ireland.
There are several steps that could have imposed some limitations and barrier on the widespread attack on defined benefit pensions. They would have put some manners or delays at least on employers withdrawing from the schemes and stopping others contributing to them. All of us here would have supported that and would like to see that happen because so many companies have moved away from defined benefit schemes. In many, as we have seen recently, the pension schemes are in surplus. They are very healthy. Two have been mentioned, Irish Life and Irish News and Media, INM. Workers at INM recently saw their pensions cut from an expectation of €24,000 a year, to €18,000, then €12,000 and some now expect approximately €6,000, having paid all their lives into a defined benefit scheme. The scheme, however, is in surplus. The same is true of thousands of workers in Irish Life. They are under attack and this is the subject of dialogue and negotiation with the union which should not be the case. Irish Life is the leading seller of pensions in this country. If it gets away with withdrawing from the defined benefit scheme all the other pension companies will follow suit. A pension of this nature is deferred pay. It is money owed to workers because it was taken out of their income, put away and allegedly invested. What is really going on is that pension companies are getting less and less return on their investments because they are investing in equities and bonds that are not paying what they used to because the system is yielding less. Instead of bearing the brunt of that because their profits are big enough they pass the cut on to the workers who are owed it. This is a savage attack. Legislation is needed, similar to that in Britain, which would stop any attempt by a solvent company to stop or reduce contributions to a defined benefit scheme. We hope to amend the Bill in the autumn.
I note the Citizens' Assembly has recommended that there should not be a compulsory retirement age of 65 and that the Economic and Social Research Institute, ESRI, has been quick off the blocks to say people should not receive their old age pension until they are 70. I hope the Minister will resist that sort of inverse attack on the old age pension because while there are workers who do not want to retire at 65 there are a hell of a lot more who cannot wait to get out of their dull, dreary and often physically taxing jobs and they deserve to be treated with more respect by the State.
She probably will not like what I will say to her. Her predecessor ran a campaign entitled "Welfare Cheats Cheat Us All". It was wholeheartedly condemned by the majority of Deputies on the Oireachtas Joint Committee on Social Protection as vindictive, malicious and mean spirited. It goes against everything we are trying to do for social justice. It was an affront to anybody on social welfare. I do not condone fraud but it is a pretty horrible measure that the name of anyone convicted of fraud is included in a register for three months. I know people have said that register can be online for only three months but who is to stop anybody using that name on social media and sharing it? Deputy O'Dea says there should be an excess of €5,000 but I think it should be got rid of. Last year, at a meeting of the committee I asked an official from the Department of Social Protection how many were convicted of fraud.
I asked an official what was the least amount owed by any of the 126 people. The least amount was €726. Had this person been convicted, he or she would have been on a register. I believe wholeheartedly that this is very unfair.
Another reason people are up in arms about this proposal is that we can see the other comparisons in society. Look at what is happening in the corporate sector where people evade taxes and are, literally, robbing the State. They do not seem to get any justice. It sticks in people's craw. We have a system that is a class bias system, with one law for the rich and one law for people who are trying to get on. I hope this measure can be taken out of the Bill completely. Some parts of the Bill are progressive but I hope the Dáil can exclude this measure. It would give rise to unintended consequences for data protection and for the liberty of the person. It is a horrible measure and I have no doubt that it was the idea of the Taoiseach, Deputy Varadkar. It was his vanity project to get elected. That is his legacy and I hope the Minister, Deputy Doherty, looks upon this and makes it her good guidance to take it out.
Much of the Bill is uncontroversial. It is technical amendments to legislation etc. As other Deputies have said, there are elements of this Bill which display a contempt and despisement for the poor and working-class people or those who may be reliant on social welfare. I will come back to the name and shame policy shortly as I want to refer to a couple of other sections first.
Section 5 allows for the public services card to have dates of birth on them in order that the card can then be used as ID. A proposal such as this requires further debate.
Section 7 allows for certain welfare payments to be awarded on the basis of an automated information system rather than through the scrutiny of an actual human being who is familiar. This could also lead to a lot of problems. Clearly, this is about reducing staffing levels and the trade unions should be very aware of this. The automated system is also much more likely to be extended to more complex decisions than those it is already being used for. Currently it is being used for requests such as increasing child benefit for the second or subsequent child. It will lead to a poorer service and it is very likely to lead to people not being given the benefit they seek. This is an issue about which people contact our office a lot. It would leave applicants then having to appeal the decision, which is a very daunting prospect for many people who do not have the means, literacy or wherewithal to do that. This will lead to people being potentially underpaid, overpaid or accused of the type of fraud the Minister appears to be so obsessed with. The Bill in the context of the Pensions Act is also something we will take up further in future contributions on the Bill.
Section 4 contains the name and shame policy for people who are found guilty of welfare fraud by the Department in each quarter. This carries out the campaign policy of the Taoiseach, Deputy Varadkar, when he was bidding to become the leader of Fine Gael and appealing to his base. It is now to be carried out quickly before the summer, even though there are many other pressing subjects waiting to be legislated for.
Let us look at the reality of this welfare fraud. In a recent survey by thejournal.ie, it has been calculated as €51.9 million. This is 16% of the inflated estimate that came from the Department. A former welfare inspector, fair play to the woman, Bernadette Gorman, estimates the fraud level to be lower again at €41 million. A former welfare inspector has come out publicly and spoken of the kinds of people who are found guilty of getting these overpayments. She has condemned the Minister's policy as being unnecessary and politically motivated. The numbers of overpayments due to fraud have been declining in recent years. The loss in State funds due to overpayments is minimal and is largely due to genuine errors. Total overpayments for last year amounted to €110 million. The Taoiseach, Deputy Varadkar, has said his Department recovered €82 million. If most of this money is repaid, what is the need to publicise people's names?
We can contrast the massive resources going into the this detection versus the resources the Minister, Deputy Doherty, and her Government put in to detecting underpayment of tax by business. I will give a few statistics. Of 385 audits on companies in 2013, additional liability was found in 77% of cases. In the south west, it was discovered that of those audited, 89.9% had underpaid their tax. Revenue received €61 million in underpaid taxes from 276 hospital consultants who were audited this year. Despite consistently bringing in large amounts of undeclared tax, Revenue’s risk-based audits have decreased by 30% since 2012. The Revenue Commissioners are doing less with regard to tax fraud by companies. Clearly, the Government is not interested in resourcing the audits in this area, even though it would bring in much more revenue.
Given that the Minister only seems to be concerned with so-called fraud by the poor, I want to ask her a few questions. Does the Minister believe that businesses that, for example, do not pay their creditors should be named and shamed? Does she believe that individuals who owe money to Revenue should be named and shamed? Should companies which do not keep proper books of accounts be named and shamed, as deemed by auditors who investigate those companies? Should owners of companies who take loans from those companies, in contravention of company law, be named and shamed and made to pay everything back?
The Minister can answer. I will continue. Should companies that are struck off by the Companies Registration Office for not filing accounts be allowed back on the register very quickly? The reason I ask these questions, as the Minister is aware, is that the hypocrisy is rank. It is not just the Minister, Deputy Doherty. There are many Deputies in this Dáil who have been involved in this kind of thing. The Minister was involved in just one company, but it is a little bit rich that she is now going after people who owe minuscule amounts compared with €286,000. When people are caught for social welfare fraud or overpayments, they repay the money. Companies do not. What happens? They get write-downs of their debts, they go into liquidation, the bank writes down some of it and the creditors must forgo whatever they are owed. Companies never pay the full amount but the people who do end up getting it docked for the rest of their lives until it is paid off, as the Minister is proposing, are to be named and shamed. Here is the real Fine Gael. It is not the cute socks and running in the park with world leaders. This is the Fine Gael that despises the poor and has one law for the rich. It is the bear-toothed, Tory Fine Gael coming out very clearly for anyone to see. Fine Gael under-resourced the Office of the Director of Corporate Enforcement, which led to the likes of Seánie FitzPatrick getting off the hook. There were many other reasons but certainly under-resourcing was an aspect. The Government was asked six times for extra funds and staff for that but it was not interested. Instead, we have this high-profile policy to attack the poor being proposed, and the hypocrisy is rank, while in here we have Deputies who owe money left, right and centre and they are let off the hook, including the Minister, Deputy Doherty.
Fine Gael was asked several times to take a more serious approach to white-collar crime, but it has demonstrated that it is going to put all the light in one direction. No one condones anyone ripping off the Department of Social Protection.
However, all the arguments have been made and the Government seems to be only concerned with poor people, many of whom are women who are overly dependent on social welfare, who might owe money back and, as has been said, putting their names out to be shared on social media, something the Minister is hugely conscious of herself. The Minister needs to stand up and answer for her hypocrisy and that of Fine Gael. For her promotion, she is faithfully carrying out the policy the Taoiseach, Deputy Leo Varadkar, promised in the election.
I am sharing time with Deputy Clare Daly, who will be here in a few moments. We will take ten minutes each.
I will make a number of observations on the Bill but first I will make the general point that most of its provisions are non-controversial as they contain technical amendments to the Social Welfare Acts. However, I am concerned about a number of the Bill's provisions. The public services card is an issue. Many people do not want to see the national use of a public services card. There is a data protection question around this as well. I believe we are moving ever closer to a mandatory identity card and by changing this a little at a time, it will become part of the system. Most people in this State are opposed to that. Has this been checked with the Office of the Data Protection Commissioner? What is its opinion on it? Can we have a written reply from that office? It would be good to have it on Committee Stage.
We had an important debate in the committee on equal treatment and the occupational pension. Pension Equality, which represents retired LGBTI public servants who cannot access a survivor pension for their same-sex spouse because they could not marry before they retired appeared before the joint committee. That provision was in the original Bill. Where is it now? Will it come in at a later Stage or will it be contained in separate legislation? That group was given an indication by the Department that it was not a problem to deal with the issue, that the Department would deal with it and that it would be part of the Bill, and the representatives were quite pleased.
Like other Deputies, I am also concerned about section 4 of the Bill. I welcome the removal of the provision about the 25% because it was clearly controversial from the point of view of even the courts system. The State was playing an arbitrary role in this regard whereby a trial having taken place and a judge having given a penalty, the Department of Social Protection would then be adding on another penalty. I think this would have been illegal and we would have sought clarification on whether it was legally permissible.
I take the Minister to task about the Taoiseach's campaign against so-called welfare cheats. Many people referred to how he was the main problem. He used that campaign to win his position in the Fine Gael Party as he was seen as the man who was going after all the cheats out there and those working-class people who were of that part of society. It was a disgraceful and shameful act on the part of a Minister.
As has been already stated, Bernadette Gorman, a former social protection officer, has come out in opposition against what the Taoiseach said, as well as against the comments of the Minister, Deputy Regina Doherty. Ms Gorman's comments came after the new Minister for Social Protection, Deputy Regina Doherty, indicated that tackling fraud will continue to be a priority for the Department. Speaking about the controversial campaign headed by her predecessor, the Taoiseach, Deputy Leo Varadkar, the Minister stated "anybody who's claiming money that they shouldn't be claiming that would deny other people who should be claiming the money is obviously going to be a priority".
I have no problem with anyone being brought to court for maliciously defrauding the State. That is not a problem for anyone in this Dáil. Everyone has made that quite clear. However, here we see a heightened and hyper campaign that the then Minister led. The current Minister for Social Protection went on to state it is "interesting that every single TD yesterday from the left stood up and challenged the Taoiseach over that [welfare fraud] campaign when it's defrauding money from the State". Ms Gorman spoke to "Newstalk Breakfast" on the following Friday morning to defend the Department's anti-fraud practices. She quite rightly said, and it has always been the case, that staff had been extremely effective at stamping out fraud. She said that on listening to the Taoiseach and the Minister, Deputy Regina Doherty, one would imagine he had magicked the notion into the social welfare code of anti-fraud activities. She said the reality is there had always been highly efficient anti-fraud activities within the Department's structure and statutes. She queried whether the Minister was telling her that the methods whereby the fraud was policed for all those years was inefficient. Ms Gorman, a former social protection officer, stated this was not the case. She went on to state there had not been €500 million worth of fraud in 2016. She noted that was a projected figure and there has always been a projected figure every year. She stated the true figure is €40 million but that when one factors out unintentional fraud and administrative errors, it is around €25 million. She said that is a very small amount and it has to be dealt with. It is obvious that it must be dealt with but to inflate it to the point to which it has been inflated is absolutely outrageous. It is targeting a certain section of society that is very vulnerable.
The Irish National Organisation of the Unemployed, INOU, has also condemned this campaign and welcomes the removal of the proposed 25% deduction. The organisation has stated it should be taken out of the Bill. I agree and intend to put down an amendment to delete that section of the Bill. I am sure everyone else will be doing the same. The INOU also believes that the publication of names and addresses is an issue requiring consideration under the Data Protection Act and has gone through a number of points that we will raise on Committee Stage. Therefore, the Minister should be aware that several organisations also have huge concerns.
Deputy Clare Daly has a lot of experience in dealing with and information on defined benefit schemes and she intends to table amendments in this regard. I will not say too much, except to say such schemes should be protected. No company should be able to dissolve such a scheme, particularly when it is in surplus. There is also the question of what happens when they do run into problems. That the Pensions Authority is using money from the defined benefit schemes to pay for itself to continue to look at the schemes must be examined. Delaying this will give companies some additional time to ascertain how such schemes can be wound down quicker. It would have been better if it had been more defined in the Bill at this stage of the game.
My last point relates to pensions. As has been discussed at the committee, we have produced three reports to date. One is on lone parents, one is on the Money Advice & Budgeting Services, MABS, and the third, on the pensions contribution, is being finalised at the moment. Members of the committee, including me, would like a reply regarding the Minister's position on the reports on lone parents and MABS report but have not got received such a reply yet. We will produce a report on the contributory pension issue and the points coming out of it are very important.
Mick Clifford wrote an article entitled "It seems this is no country for old women". He makes the point about the changes that Deputy Burton, the so-called leader of the Labour Party and the working people, introduced in 2012. He refers to a worker who retired on 31 August 2012 with an average of 21 annual PRSI payments throughout his working life receiving a contributory pension of €225, while a worker who retired two days later and who had made an average of 29 contributions per year, got only €196. This affects women in particular. We know that given the way in which the bands were changed. This must change as soon as possible.
It was pointed out that the tax relief given to private pensions could be reduced to 33%, which would give the State approximately €180 million to offset against paying back the moneys owed to women from 1973 or even from 1994. That should be reviewed. The Minister should examine that and refer back to it on Committee Stage.
When this Bill was made available to us last week and we were asked to facilitate it passing all Stages prior to the recess in order to protect workers' defined benefit pension schemes, I thought I was on another planet and that this was something on which we could wholeheartedly and enthusiastically support the Government. Then, of course, I woke up and all of the good and welcome provisions in the Bill were gone. What is happening gives incredible clout to the belief that the big employers and others nobbled the Minister and, perhaps, the committee. Despite what people have said to assure me otherwise, it has not left a good taste. More importantly, it has left vulnerable workers in defined benefit pension schemes continuing to face a nightmare.
There is no doubt that when one talks about pensions, people's eyes tend to glaze over and they sort of lose the will to live. The pensions industry thrives on that because no matter how boring pensions are, the fees paid to the pensions industry continue unabated. We hear sporadically about the pensions time bomb that is going to explode due to the fact that 70% of retirees will depend on social welfare. In other words, they will get just over €200 per week in non-contributory pension payments. Undoubtedly, there is a need for an urgent discussion on pensions and on the need to supplement the poverty-level amounts with which people will end up in their retirement years. This Bill does not refer to that. It concentrates on just one aspect of pension provision, namely, occupational defined benefit pension schemes in the private and semi-State sectors. That is simply not good enough.
Let us consider the history of pensions. There was a time when an unco-ordinated occupational defined benefit scheme was regarded as the Rolls-Royce. The worker contributed a modest percentage of his or her wages and the employer made up the difference to ensure that the employee, whom it was assumed would give 40 years of loyal service, got up to two thirds of his or her final salary when he or she retired. The worker could rely on the State pension as well. That Rolls-Royce has been replaced by a banger that would not even pass the national car test, NCT. It has been stood on its head completely. The clawback or undermining began with the introduction of co-ordination or integration of defined benefit alterations. In short, one's benefits were reduced by the full value of the State contributory pension. That significantly and disproportionately affected lower paid workers as against those on higher salaries. It accelerated the decline and the Bill does not address that. An increasing number of defined benefit schemes are being wound up, are having their benefits drastically reduced or are closed to new entrants. The acceleration of this process has been phenomenal. It is incredible how much the landscape has changed. At the end of 2008 there were 1,271 defined benefit schemes, but this year there are 628. Over 150,000 people have gone from those schemes in ten years. It is absolutely incredible, and it is more probable than possible that many more will join them.
We must consider why this is happening. The official line from the pensions industry is that it is due to historically low German bond yields, low interest rates, the high cost of annuities and so forth. Annuities are defined as the amount of pension the retiree receives regularly throughout their retirement. I will give an example of how costly annuities have become. Less than 20 years ago, it would have cost approximately €130,000 to buy a pension of €200 per week. Today, it costs €270,000, which is a massive increase of 108%. However, the people selling the annuities get 2% commission. Even in the case of a small pension of €200 per week the pension provider picks up a fee of €5,400 for a few hours work. It is absolutely scandalous and unregulated. Low bond yields, low interest rates, the higher expense of purchase of pensions and the fact that people are living longer are undoubtedly contributing factors.
The elephant in the room which we never officially discuss and which is causing the death - not just the terminal illness - of defined benefit pension schemes is the funding standard. The funding standard for defined benefit schemes is quite simply mad. The Pensions Authority works on the ridiculous principle that all of the schemes must have the money to pay out all pensions to active, deferred and existing pensioners today. That is the standard. Has anybody ever heard anything so ridiculous? Let us apply it to the housing market and to a couple in my constituency who wish to buy a nice house in Swords. It will cost them €280,000. If they go to the EBS for a mortgage, it will inform them that it will consider their application but that it must apply the Pensions Authority rules. Before the EBS will provide the mortgage, the couple will have to prove, beyond all doubt, that they can meet their monthly mortgage repayments for ever and, more importantly, they must also have the €280,000 stashed away already before the application can be approved. How in God's name could that be reasonable? This is what is causing the death of many of these pensions schemes.
To add salt to the wound, there are 100 defined benefit schemes that do not play by that rule and that do not have the funding standard hanging over them to collapse them. What schemes are these? Interestingly, one of them is the Pensions Board staff superannuation scheme 1993. Another is the Labour Court (members) superannuation scheme 1971 to 1998. There is also the National Standards Authority of Ireland superannuation scheme 1996. There are 100 schemes of similar bodies on the list. It is a case of do as I say, not as I do. It is criminal. This is the reason used for closing down many schemes and there is nothing in the Bill to address it. Some 164 of the remaining defined benefit schemes are insolvent based on the stupid, ridiculous rules in place. The rules are being used to wind up schemes and erode the retirement conditions of workers.
I do not have time to go into detail about the appalling robbery that was unleashed on the Central Remedial Clinic, CRC, pension scheme, which was arbitrarily abandoned overnight by the employer, the CRC. I have spoken many times in the House about the carnage in Aer Lingus and the Dublin Airport Authority after the wind-up of the Irish airlines superannuation scheme, IASS, and the attacks on existing pensioners, deferred pensioners and members at that time. Despite the assertions of the actuary that the scheme is on track, I have proof that it continues to be insolvent and will remain so. In fact, the pension scheme people are paying into now will be effectively worthless.
If that is not bad enough, we now hear through the grapevine that CIE wants to get in on the act. It has jumped on this funding-standard-and-pensions-in-trouble bandwagon and now wishes to restructure its defined benefit scheme. Among other things that will include, of course, closing off the scheme to new entrants. To make matters worse, management in CIE is threatening to cut workers' trade unions out of the negotiating process. Not only was there the affront to retired members from Aer Lingus and the Dublin Airport Authority in the past few years when they were excluded from a process that decided their livelihoods in their retirement, now existing workers in CIE are being told that their unions cannot represent them. What has happened in Irish Life was the proof beyond all doubt, if that was required. That staff scheme was shut down despite the fact that it was perfectly healthy, even with mad regulation.
What we should be discussing here is properly regulating defined benefit pension schemes. The industry and many employers are trying to eliminate them and replace them with defined contribution schemes, which put all of the risk on the hard pressed workers. It is unacceptable. I am sorry that the Tánaiste is not present because last November, on Leaders' Questions, I called for an investigation of this pensions debacle. Since then, 38 other regulated defined benefit schemes have closed down, causing huge uncertainty to workers in their retirement year.
In the time remaining, I wish to call on the Minister to do the following in no particular order, namely: reinstate heads 11, 12 and 13, as originally set out; introduce a statutory order precluding any further winding up or restructuring of regulated defined benefit schemes until the full legislation has been enacted; and establish a commission on adequate pension provision to investigate and make recommendations on securing fair, affordable and reasonable retirement benefits for workers, including more than 1 million employees who do not have a pension scheme and rely on the welfare system.
I have to wonder why we are discussing this Bill, which is only a skeleton of what we were promised. The general scheme of what was then the Social Welfare and Pensions Bill 2017 was launched in May to great fanfare, including a press statement from the previous Minister and current Taoiseach, Deputy Varadkar. The general scheme promised significant reform of the pensions area. For example, we learned that a sovereign employer would not be allowed to walk away from its pension liabilities for a defined benefits pension scheme where the scheme did not meet the minimum funding standard and funding standard reserve. We were told that any outstanding liability would become an enforceable debt on the employer payable to the trustees. This signalled that significant progress was being made and the Government was finally listening to what had been said for some years in respect of the large gap in pensions legislation. It was a very welcome development. It was somewhat surprising, therefore, to see the Bill before us being quietly slipped out by the Department last Friday afternoon. It was not, as far as I am aware, accompanied by a press statement and has been very much kept under the radar. The attempt to have all Stages of the gutted Bill brought through the Dáil this week leads one to wonder what is afoot. The promises made in the general scheme in May have been reneged on.
We know there is a serious problem in respect of pensions because it has been signalled for many years. Successive Governments have dodged their responsibility to provide for a fair, equitable and sound pensions regime. On the one hand, exceptionally generous tax reliefs are available under the private pension regime for those who can afford to stash away large amounts of money for their retirement. The cost of this arrangement has fluctuated over the years but amounts to between €2.5 billion and €3 billion per annum. Under this arrangement, substantial tax benefits are provided to a small number of people, with estimates suggesting approximately 20% of the population enjoy approximately 80% of its benefits. On the other hand, a similar amount of money is allocated for the remainder of the population through the State pension. For a long time, it has been argued that we need a fair pension regime based on an enhanced State pension. However, we continue to wait for such a regime to be introduced.
In the middle of the private and State pension systems, we have private occupational pension arrangements, both defined benefit and defined contribution schemes. In recent years, we have become acutely aware that many of the thousands of workers and retirees in defined benefit schemes have been left high and dry by the State as a succession of employers took the disgraceful decision to walk away from their responsibilities to their retirees and employees. The State has stood idly by and allowed this to happen. One by one, employers have wound up their schemes and walked away, leaving people with little or no pension cover and Governments appear to believe this is somehow okay. Despite many calls to address this area, very little has been done.
Aer Lingus, the Dublin Airport Authority, Marks & Spencer and several other companies decided to wind up their defined benefit pension schemes and walk from their responsibilities. The most recent high profile company to walk away from a defined benefit scheme was Independent News and Media, INM. Its decision attracted considerable publicity at the time. Having paid into the pension scheme over many years, employees in the company were left to swing in terms of their pension entitlements. It was particularly galling to them and everyone else that the Government saw fit to bail out INM to the tune of approximately €130 million, yet no safety net or protection was provided for employees and retirees. Unfortunately, the then Minister and current Taoiseach refused to address the problem when he had an opportunity to do so in the social welfare legislation at the end of last year. Despite efforts from a number of sources to address the issue, including through the tabling of a number of amendments, he refused to take the necessary action.
The scheme of the Bill before us was welcomed when it was announced because it appeared that it would address these problems. I cannot understand the reason the Minister has presented this legislation, however, as it is clearly not ready and the key provisions set out in the scheme are absent. The Bill is much more notable for its omissions than its provisions. I listened to the Minister make further promises in this area. Why is action not being taken now? Why is the legislation not ready? Why did the Minister's officials not address this problem given that it was signalled long ago and has been a glaring omission from pension legislation?
The Minister signalled that she may do something in future. That, in itself, is extremely dangerous because it gives notice to employers who are considering walking away from their responsibilities. Giving these companies notice that she may do something about this issue in four or five months is no way to behave in terms of the Minister's responsibility to the many hundreds of thousands of workers who will be directly affected by her inaction in this area. I am concerned that she is giving notice to employers and failing to make the necessary legislative changes at this point. If the legislation had provided for the necessary changes, the Minister would have received full co-operation from all Deputies on this side. We would have been happy to stay here until midnight or to sit next week and spend whatever time was necessary to pass all Stages of the Bill, close off the loophole that exists in legislation and provide the essential protection workers require. The Minister has reneged on her responsibility to do this and is leaving a major gap which will place many thousands of workers in an even more precarious position in the coming months. That is unforgivable. I do not know who is advising her but the Minister has been very misguided in her approach to this legislation.
There are serious gaps in Irish pensions legislation when compared with the legislation in place in the United Kingdom. I cannot understand the reason for the reticence shown by the Minister and her two predecessors regarding the introduction here of the same type of legislative regime for pensions that exists in the UK.
Protection is provided in most other developed European countries such that employers cannot act irresponsibly in this regard. Basic pension entitlements should be allowed for workers who pay substantial amounts of their income into a pension scheme over tens of years during their working lives. There is simply no justification for allowing this unacceptable situation to continue. I believe we will pay a severe price for the Minister's failure to act on this. I hope that I am proved wrong, but I have serious fears about what will happen in the coming months.
There are two other key omissions in the legislation. These omissions need to be addressed but are not being touched at all. The first relates to bogus self-employed people. This applies to workers, especially in the construction industry, who are forced to become sole traders in order to be hired by their employers. They actually operate as employees but they do not have the protection that employees generally have through employment legislation. This means they are deprived of all those protections, for example, unemployment benefit, sick pay, holiday pay and so on. The key point of having this bogus regime is that employers do not have to pay PRSI. It is a fraudulent situation. It is a scam really and it needs to be deal with as a matter of urgency.
Last year, the Irish Congress of Trade Unions estimated that this scam costs the State approximately €80 million per year. That corresponds to State revenue but, of course, it costs the people who are forced into this situation dearly indeed. It is estimated that there are approximately 27,600 such fraudulent sole traders in the construction industry alone. This is a glaring problem in the way our employment legislation operates. This area needs to be addressed as a matter of urgency.
The other omission concerns a point raised by a number of other speakers. It relates to the failure to deal with the many women who feel very much short-changed as a result of changes in respect of pension entitlements over recent years. A substantial number of those women are now in their 60s - perhaps they are 63 or 64 years of age - and approaching retirement. They are checking out their entitlements. Many are only now finding out that they do not have an entitlement to a full State pension in spite of the fact that they have substantial work records. Many have pointed out to us that they are being penalised for working in their early years.
Many women went out to work in insurable employment at the age of 16 years. They would have worked for many years to put themselves through school, college and so on. Of course we should encourage people to take on properly insured employment. However, these women are being penalised now because of the way of calculating contributions. They point out that people who did not work for decades and then took up legitimate insured employment in more recent years have entitlements to full pensions while they are denied them. It is a major pressing issue that needs to be addressed as a matter of urgency. There are basic equity and family issues involved. Most of these women gave up work and were encouraged to do so to tend to family responsibilities. They are being penalised for that and they feel hard done by and sore about it. This needs to be addressed urgently and I encourage the Minister to take action in this regard as a matter of urgency.
It seems that section 4 is being provided as cover for the Taoiseach to somehow justify the nasty and disingenuous campaign that he ran while seeking the leadership of Fine Gael. The idea of highlighting fraud and making a big thing about suspected fraud in the social welfare system is something successive Ministers have turned to when they have needed publicity. We saw Deputy Joan Burton and Mary Hannifin doing it when their profiles were low. They needed publicity and needed to be seen to be talking tough. They talked about large numbers of people defrauding the system. Of course none of that was ever found to be justifiable and there was little or no basis to it. However, it encouraged people to snitch on their neighbours, often in situations where there was a misunderstanding about someone working and getting some type of payment and so on.
Most of those complaints came to nothing but they imposed a significant additional burden of work on the Department of Social Protection at a time when the Department was leaving people waiting six or nine months for their claims to come through.
It is something of a nonsense. It was disappointing that the then Minister, Deputy Varadkar, decided to engage in this. The sensible thing to do at this point is simply to drop section 4 altogether. We have already seen a campaign that is estimated to have cost €200,000. The provisions relate to anyone found to have defrauded the system by as little as €5,000. No fraud is acceptable or justifiable, but we need to ask what the point of doing this is. The numbers are particularly low. Deputy Curran cited the figures recently - they amount to fewer than 100 people. Those cases go to court anyway. If a person is found guilty, the case is covered and there is publicity in the newspapers, in the main.
The idea of setting up a separate website to be maintained by the Minister is nonsense, but that is what the legislation provides for. It states that a new website will be set up and will be maintained by the Minister. We need to ask what this will actually cost. Who is going to maintain it in the Department? Are the necessary resources available? What is the point in doing all that?
An interesting point was made earlier about the impact of this. Whatever about the person in question - if a person deliberately defrauded the Department, then that is absolutely wrong - this will have ramifications for any children as well. Significant data protection issues arise. What is stopping any agency or company from using the data, for example, the banks. They could record what is on the Department website. What is stopping them from keeping a database of anyone who was ever found guilty of a €5,000 fraud? What about employers getting access to that data? I imagine there are significant data protection issues that would need to be addressed. What is it all about at the end of the day? Does it actually achieve anything? The most sensible thing by far is to simply drop the section altogether.
Two aspects of concern arise relating to the public services card. The first is that many people believe the card is not secure and some agencies do not accept it as identification. There is a general view that they can be reproduced, like the free travel card, and that there is a certain market in them.
The second concern relates to the requirement to produce it. When was that decided? I encountered a case recently in which someone who wanted to do a driver theory test was required to produce the public services card. Apparently, it was the only identification acceptable. I was unaware this requirement had come in. Certainly, there has been no debate about it. This particular young person wanted to do a driver theory test. The person was in employment, did not have a public services card and ended up having to take a day off work to get the public services card to do the driver theory test. In my view that makes no sense at all. If this regime is to continue, the least the Minister should do is make provision for people to get their public services cards outside normal working hours. The Minister should not require working people to take time off work to get their cards.
It could be dealt with through extended opening hours.
I will refer to a number of positive provisions. The question of payments to guardians not being taken into consideration is important. On the question of disability, there is a sensible reform in this where work does not have to be rehabilitative. That makes sense. The recovery of benefits from compensators is positive. I spent a long time highlighting that. The State was forgoing €50 million a year as a result of its failure to do that in respect of standard payments. I do not see why SWA was not brought in when other payments were brought in quite recently. In spite of that it is a welcome development. Overall, this is very disappointing. I do not know why we are here today doing this when it is a Bill that has been filleted in terms of what was expected. I have concerns about its implications over the summer months.
I wish the Minister well in her new role. I have a degree of sympathy for her because the Bill was initiated by the previous Minister. The concept at the time was to have the Bill enacted before the summer. What we are presented with here is incomplete. Other speakers have alluded to that.
Before I refer to the Bill, I will correct a comment made by Deputy Coppinger when she spoke about Deputies who were in business. She talked about businesses generally and that they could go into liquidation and have to wind up. I have been in business for a long number of years and many people I know have run small businesses. They get a bad press. The Deputy failed to indicate that most people running small businesses give personal guarantees. That is how the businesses functions. I am a director of a local enterprise centre and I see people constantly risking everything they have to run their businesses. This is a side of the argument that was not put here today. The argument put here today is a misportrayal of the situation. We should be encouraging our entrepreneurs. Small businesses give huge employment to hundred of thousands of people in this country and we should not be as dismissive as were the comments made earlier.
I will refer to the issue of pensions and in particular the State pension. A number of people have referred to it this afternoon. The committee has looked at it and this afternoon laid a report before the Minister. The Taoiseach, who was the Minister, appeared before the committee and informed us that the Department is looking at a new model. The committee found the current system inequitable. Two people can have paid the same contributions and get different rates of pension payment. The averaging system has an in-built unfairness. The earlier a person works, the probability is that his or her pension will be somewhat less than someone entering the workforce later and having a full record. Whether it is a total contribution system or a universal system, I urge the Minister to act on it with some urgency. One of the specific things that compounded the situation, in particular for married women who have left the workplace, was the 2012 change where the number of bands was increased. The committee is specifically recommending those bands be reverted until the new system, whether it is a total contribution or universal pension scheme, is introduced. Those changes have adversely affected married women who left the workplace because they dropped down a band as a result. There was some margin of error in the bigger banding system. By introducing new bands, many people have fallen to a level they would not have anticipated. It is unfair on them and as a temporary arrangement it should be reversed. It is not my view, but that of the committee, that it should be reversed until such time as a new scheme of pensions is introduced which should be fairer from the outset. This one was not in that regard.
I will not refer to every section of the Bill. I will refer to a number of them that received particular attention at committee. The first relates to the guardian payment which is section 3. The committee welcomed it. Deputy O'Dea quite adequately explained the guardian payment was directed at the child and consequently would not have an impact on means testing. When the committee was considering this, the members welcomed the change for guardians but concerns were raised that the same principle was not being applied to maintenance payments. People may argue that the maintenance payment is a general payment. I am asking the Minister, now that she has time over the summer and before we come back to committee, to reconsider the issue of maintenance payments where a payment is directed towards a child so that a maintenance payment would receive the same rights as the guardian payment. I am making the point where the maintenance payment is directed at a child.
Section 4 has received a great deal of discussion and debate. This relates to the publication of the names and addresses. Certainly from the committee's point of view there is very significant opposition to it. The Minister heard all of the arguments here earlier today, in particular on data protection and secondary or other unforeseen consequences of publishing those names. I will read the numbers into the record because people have used them time and time again. I tabled a question to the Department and the officials gave the numbers. The scale is important. While people have expressed concerns about producing a list and naming people, the people who spoke are very clear they are totally opposed to fraud and that fraud deprives someone else. We are very clear on that. It was in that regard I asked the question so we could have the scale and the context. The Department very kindly provided the information on the value of overpayments in cases finalised in the courts during 2016 where prosecutions were taken under the Social Welfare Act. It found there was no overpayment in two cases; under €1,000 in no case; between €1,000 and €5,000 in 39 cases; between €5,000 and €10,000 in 25 cases; between €10,000 and €20,000 in 33 cases; between €20,000 and €50,000 in 19 cases; between €50,000 and €100,000 in nine cases; and above €100,000 in three cases. Of those in which the Probation Act was used, the figures were under €1,000 in no case; between €1,000 and €5,000 in 15 cases; between €5,000 and €10,000 in nine cases; between €10,000 and €20,000 in eight cases; between €20,000 and €50,000 in three cases; and between €50,000 and €100,000 in one case. The reason I read those figures out is that we sometimes think they involve a couple of thousand euro here and there. To get up to a level of overpayment of €50,000 or €100,000, some of these cases had to be going on for very extended periods. This needs to be dealt with sensitively and proportionately but it should not become the centre of the Bill because it has the potential to dominate the whole discussion. I wanted to read those figures into the record so that if somebody wants to look at them or comment on them, they will be commenting on facts. It is mind-boggling when one thinks of somebody receiving overpayments of €20,000 or €50,000 or €100,000. They are astronomical figures. The Minister can read into it as she will.
Head 5 has been removed; it is not a section in the Bill. It was to do with the reduced payment following conviction of fraud. When I saw it deleted from the Bill I was pleased because if somebody goes to court and receives a sentence or a fine that is the punishment. This seemed to be an arbitrary additional punishment. The standard rate for reclaiming an overpayment is 15% and this proposed up to 25% which seemed excessively punitive. Will the Minister confirm that, while it is not in the Bill as published, she has no intention of reintroducing that provision? I will leave it at that.
The one concern that came up about the public services card was that it would become mandatory the more it is used and the more common it becomes. That is the concern members have. Perhaps as the Bill develops it is important that issue is dealt with. The real glaring omissions are the ones around the pension. I will not go over the debate that took place in committee. The original heads of the Bill were published in May. As a committee we were conscious that once the heads of the Bill were published the cat was out of the bag and everybody knew what would be done.
The committee was very concerned to facilitate the passage of that Bill as quickly as possible because we did not want an employer or a pension fund taking advantage or jumping ahead of what was being proposed. Like others here, I express the concern that commencing a Bill today which will not be completed for several months is not ideal. I hope my concerns are not realised and that people do not take advantage of the situation. However, it is a cause of concern. Once the heads were published in May, the clock started ticking. People are looking at it and know the Minister's intention. They do not know the detail of how she will get to where she is going, but they know her intention. That is a weakness and I share the concern of others.
I wish to refer in a little detail to what was contained in heads 12 and 13. While they are not in the Bill as presented, we know the Minister intends to introduce amendments similar to these. Head 12 sought to address the problem where employers may cease making contributions to defined benefit schemes without prior notice to members. Such notice periods are normally set out in trusts of deeds, and rules and vary from scheme to scheme, with some trust deeds making no provision for a notice period. The head would require employers who sponsor defined benefit schemes, whether those schemes are in deficit or not, to give 12 months’ notice of their intention to cease contributions. A shorter period may be agreed between the trustees and the employer, following consultation with the members and in circumstances where it is not contrary to members’ interests. The purpose of the 12 months’ notice is to ensure employees and trustees are properly notified that it is to occur and that they have time to plan accordingly. Where a scheme is in deficit, employers will be obliged to enter into discussions with the trustees of the scheme to agree a funding proposal if one is not already in place. Employers will be obliged to continue contributions in line with the current contribution rate during the notice period. If there is a funding proposal in place, the employer will be obliged to continue to pay contributions in accordance with the terms of that proposal for the duration of the 12-month period.
Head 13, following on from the Pensions Act, provides for the submission of a funding proposal by the trustees to the Pensions Authority where a scheme is in deficit. In some circumstances, however, employers are not engaging with this process and a funding proposal cannot be agreed, thus triggering the wind-up of the scheme. Head 13 was to provide powers to the Pensions Authority to determine a schedule of employer contributions to restore defined benefit pension schemes which do not satisfy the funding standard to an adequate funding position in a specified set of circumstances, most notably where the trustees have not submitted a funding proposal or where the employer has not engaged with the trustees to develop and agree a funding proposal. The schedule of contributions specified by the Pensions Authority will be an enforceable debt on the employer. I will not read any more, but those provisions form the crux of it.
While the committee did not deal with this at pre-legislative scrutiny, I suggest that the subsequent meeting with representatives of the Pensions Authority and IBEC would be worth referring to. The representatives of the Pensions Authority stated they did not seek these new powers. The employers' concern is with the enforceable debt. From this point of view I can see why the drafting has not been concluded. The legislation, as proposed, makes no reference to whether the employer can afford that payment in terms of the viability of the business to meet the funding. That needs to be dealt with specifically. There is a voluntary scheme into which employers have entered. There is a funding standard which may or may not be appropriate, but that is the standard to which the Pensions Authority is working. When that funding standard is not being met, the company has to make up the shortfall as dictated to by the Pensions Authority without due reference to the ability of that company to do so. That has to be included. It is not possible to have one or the other. It has to be a combination or else the whole viability of the company is threatened. If two companies are in competition and one is funding a pension scheme and the other is not, the costs to the company that is funding can be significantly higher. I am not advocating that companies do not meet their liabilities. However, from a legislative point of view it is important that a balance is achieved in terms of what the company has to do to meet the funding standard, but on the other hand, it should not jeopardise the existence of the company.
I also want to talk about head 14, which is not included as a section at this stage, but I understand it is to be included. The committee met representatives of Pensions Equality, who have also been in direct contact with the Department. I welcome that they have been advised that appropriate amendments will be introduced. Head 14 was to provide for a measure seeking to ensure same-sex spouses and civil partners of members of occupational pension schemes with marriage age clauses will be able to obtain, in certain circumstances, a spouse’s pension. I understand this applies to a relatively small group of people - perhaps 20. The representatives of Pensions Equality made their case very well at the committee and have made it directly to departmental officials. I hope the Minister will be able to introduce an appropriate amendment on Committee Stage.
I started by mentioning the pensions report we brought here. I finish on pensions generally. As others have mentioned, the majority of people are reaching retirement at 65 and the pension age is 66. That is why one of the biggest age cohorts of people in receipt of job seeker's payments are 65 year old people. We need to address that properly. One of the proposals - it is not the only proposal - is the Sinn Féin Bill to address that mandatory retirement age. The Government needs to consider how that could be addressed in a speedy way. Someone suggested that it might require a money message. I find that hard to see. I really do not know what the blockage is. I would like to see that Bill done in parallel with the Minister's Bill.