Seanad debates

Friday, 23 March 2007

Tax and Social Welfare Codes

 

2:00 pm

Photo of Joe O'TooleJoe O'Toole (Independent)

I encountered this issue recently and I presume that, of all Ministers, a Progressive Democrats Minister of State will sympathise. I do not want to go into detail, but I will read my Adjournment debate into the record. It reads:

The need for the Minister for Social and Family Affairs to correct the anomaly which penalises a person who chooses to work in a low paid job rather than claim Social Welfare payments. This penalisation arises when the person is deemed ineligible for a Back to Education Allowance should they wish to participate in Third Level Education.

I am talking about a simple and human situation. I will use two people in my example. A man asked me whether he was naive to work while preparing to return to education and whether he would have been better off going on social welfare. I said he would not have been, but I was appalled by the facts and figures he outlined. The current structuring of the student support system leads to one student receiving €71,600 in direct Government support during the course of a degree and another student, who may be sitting next to the first, receiving under €12,000.

The Minister of State's reply will not matter because he and I know it will not deal with the issue. The two people in question are returning to education, which we want them to do, sitting side by side and studying for the same degree at university level. What is wrong? The gap in direct Government support between the students, who are required to produce the same work to earn their degrees, is almost €60,000. The only difference between the students is that one was in receipt of a minimum of €16,000 per year in social welfare payments while the other was in a low income job earning less than €16,000 per year.

The Minister of State shares my opinion. This situation makes me angry because we are trying to stop it occurring. In my years in the trade union movement, we were trying to make it sensible for people to move from social welfare payments or work to college. The man, who was earning €16,000 per year, decided to continue working until going to college so that he could make his contribution, but he was penalised to the extent of €60,000 as a result.

I do not claim to understand the details, but they are factual. In the course of a year, the student who was in receipt of social welfare payments gets the back to education allowance of almost €10,000, rent support of almost €7,000 and a special rate of maintenance grant of almost €3,000. The student also gets a European social fund grant and a student support grant. We should examine the six or seven elements of support for the student in question. However, I am not knocking them, as one must qualify for each. The other student doing the same course and paying the same rent does not get the back to education allowance, rent support allowance or special rate of maintenance grant. In the course of a year, that student receives €3,900 and loses out on almost €20,000, which is wrong and unfair.

I get involved in social welfare issues rarely, but this issue energises and angers me because the Minister of State and I have often debated it and agreed or disagreed on the importance of returning people to and raising the level of education. Last week, the Minister for Enterprise, Trade and Employment, Deputy Martin, spoke about people studying at master and doctorate levels and bringing people who understand and worked in the private sector into the education system to determine what they can contribute, but it is not taking place.

The Minister of State's answer will give me little comfort and annoy me further, but I want him to consider the two students doing the same degree course and paying the same money, one is in receipt of €20,000 per year less than the other because he or she was working in a low-paid job of less than €16,000 per year and was not on social welfare. If he or she had chosen to jack in the job two years earlier and gone on social welfare, he or she would be receiving an additional €20,000 per year. Where is the incentive, motivation, sense or logic and what is it we are trying to do?

I have a long script on our approach, but the Government should examine the back to education allowance and include workers earning less than €16,000 per year before going to college full-time. I am also referring to the rent support grant and special rate of maintenance grant.

I could talk for another hour and go through the bits and pieces of the social welfare system, which are listed for me here, but I would like to give hope to a young man who has taken it upon himself to return to college. He represents hundreds of others in the same situation. The Minister of State's reply will make a great deal of sense, but can we make some changes? It is a busy time for him and the man in question is not his constituent, although he could be given that he is a Maynooth student, but will the Minister of State write someone a letter to get an answer as to why this is happening? I look forward to his answer, but I would like to hear from someone who will take the matter in hand and try to correct this unacceptable anomaly.

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