Kathleen O'Meara (Labour)

I move amendment No. 1:

In page 6, before section 2, to insert the following new section:

"2.—The Minister shall within 6 months from after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the earnings disregards applicable to schemes operated under the Social Welfare Acts and the impact of transition to work on the recipients of secondary benefits attaching to such schemes.".

I welcome the Minister to the House to debate this important Bill. A good deal of discussion was given to the Bill in the Dáil, although my colleague, Senator Terry, has tabled specific amendments which have not been discussed in the Dáil. My own amendments arise from the Dáil discussions and I hope the Minister will broaden his view on them. I look forward to the debate on those amendments.

This amendment concerns income disregards. I read the Minister's comments on the Committee Stage debate in the Dáil and I know he agrees that this is an extremely important area. The Minister may not be aware that it has been referred to already on the Order of Business. As public representatives we regularly find ourselves at the coalface of people's experience of the social welfare system and their struggle to overcome the poverty trap, particularly their dependency on social welfare payments. There is an onus on us as public representatives, and particularly on the Minister, to ensure we have a system which on the one hand supports people sufficiently while, on the other hand, does not create such a level of dependency that they are unable or unwilling to break out of that dependency. A concern that would be shared across the House is that we must be careful to ensure we do everything we possibly can to put in place the supports people need to break out of social welfare dependency, and the whole issue of means testing and income disregards is crucial area. That is the reason I included it in the first amendment.

I want to examine the impact of earnings disregards. We are trying to create a system which supports people, in particular those wishing to return to work. People are concerned that returning to work will have a major impact on their social welfare benefits in particular. I am aware much work has been done on the back to work allowance, which I welcome. That has been very successful and it does support people but we still have a road to travel on this whole area.

Further consideration must be given to the impact of the earnings disregards rules in particular on low paid employment. If we are talking about people who are struggling to get back to work but if there is little or no difference between being on a social welfare payment or being at work, where is the incentive for them to do that? We must examine the impact of low pay in that regard too and employers' responsibilities in this area, particularly in the context of a booming economy and so on. If our aim is to allow people to break out of the poverty trap, we must examine how the transition from social welfare into employment can be supported as fully as possible. There is no doubt that the differences between getting a social welfare payment and taking a job, and the impact of that on other benefits, is where we see the full impact of the income disregards.

We must do everything we can to attract people into the working environment and something people have to consider when trying to return to work, particularly women, is the cost of child care. If people are considering taking up a relatively low paid job and take into account the cost of child care, they will discover that it will not be worth their while to do so. I wonder if, like me, the Minister has been informed of this when knocking on doors in Kildare. Women on full-time incomes who are often very well paid decide, when they give birth to their second or third children, to give up work because in light of the child care costs involved, it is not worth their while to remain in employment.

People who are in receipt of social welfare payments and who are considering taking up low paid jobs must weigh up what they would earn, on one hand, and the costs relating to child care, transport to work, etc., on the other. The costs to which I refer are actually a disincentive for these people in terms of their taking up employment.

We must consider the impact of the income disregard in this area and the way in which legislation, rules, regulations, etc., can act as supports for people and make it attractive for them to enter or return to the workforce. I look forward to the Minister's reply.