Batt O'Keeffe (Cork South Central, Fianna Fail)

On behalf of the Minister for Social and Family Affairs, Deputy Séamus Brennan, I am pleased to introduce this measure, the second of two Bills intended to implement the largest social welfare package in the history of the State at €1.41 billion, announced in last December's budget. This substantial investment brings total expenditure on social welfare this year to €15.3 billion, or almost €1 for every €3 of current Government expenditure. Ireland is now making solid and steady progress in tackling the core issues that can blight people's lives, blunt opportunities and leave some vulnerable and marginalised in society.

As well as income support improvements of over €970 million which took effect from January, another €430 million — or nearly one third of the total package — is being directed to support a range of significant reform measures. These include confronting and tackling remaining child poverty, increasing income supports for all pensioners, recognising and supporting carers and those with disabilities, as well as increasing the status and incomes of women. These are major structural reforms which, when taken with a number of other reforms implemented in areas such as pensions and lone parent allowances, will contribute greatly to the overall policy reform agenda that the Minister for Social and Family Affairs has been pursuing for the last two years.

These reforms on child poverty, carer's allowance, women's incomes and pensions are about more than just increasing incomes. They are important and necessary reforms that create change, open up fresh opportunities and deliver enlightened social policies.

In recent years, this Government has lifted more than 250,000 people, including 100,000 children, out of poverty, but there is still a distance to travel. It behoves all of us to redouble our efforts and complete the task. Prior to budget 2007, resources were directed towards alleviating child poverty through substantial increases in universal child benefit payments, rather than through increases in qualified child allowances, which are paid to recipients of social welfare payments. From January of this year, the Minister increased the qualified child allowance, for the first time since 1994, to a new single high rate of €22 per week. This has benefited over 340,000 children by targeting those in poorer households.

The shift towards child benefit has been significant in tackling disincentives to employment. In 1994, child benefit represented just 27% of the combined child benefit-qualified child payment for a four-child family. Today, child benefit accounts for over 65% of that combined payment. In other words, when an unemployed welfare recipient moves into full-time employment — or a lone parent moves into a permanent relationship — the family now loses less than 35% of its child income support through loss of qualified child payments. In this Bill, the Minister is increasing child benefit rates by €10 per month. Over 560,000 families will benefit from the increase, in respect of approximately 1,134,000 children, which comes into effect next week. It is expected that expenditure on the child benefit scheme will be €2.15 billion in 2007.

It is well established that child poverty is especially prevalent among the families of those on the one-parent family payment. Last March, the Minister launched a Government discussion paper, Proposals for Supporting Lone Parents, which proposed an expansion of the availability and range of education and training opportunities for lone parents, an extension of the national employment action plan to focus on lone parents, and the introduction of a new social assistance payment for low-income families with young children. One of the discussion paper's proposals was that the upper income limit for the proposed new social assistance payment should be set at €400 per week. In budget 2006, the upper income limit for the one-parent family payment was increased from €293 to €375 per week. In the Bill, this element of the proposal is being delivered in full by increasing the upper income limit to €400 per week, which is no mean achievement.

The long-term aim of the proposed new social assistance payment, which is currently being developed by officials in the Department of Social and Family Affairs, is to assist people to achieve financial independence by enabling them to enter the labour force. This route offers the best way out of poverty and social exclusion. It is acknowledged that the proposed new payment cannot be introduced without co-ordinated supports and services being put in place by other Departments and agencies. For that reason, the Government has instructed the senior officials' group on social inclusion to draw up an implementation plan to progress the non-income recommendations to facilitate the introduction of the new payment scheme.

Senators will recall that in the Social Welfare Act 2006, significant progress was made towards achieving the commitment to increase the qualified adult allowance for the spouses and partners of contributory pensioners to the level of the State non-contributory pension. Since January, the budget increase of €23.70 per week in the qualified adult payment has benefited approximately 35,000 couples. That increase brings the rate of qualified adult allowance payments for those aged 66 years and over to 86.5% of the target rate referred to in the Government commitment. There is now a €60 million commitment to reach the target rate within the next three years. This Bill includes the provisions necessary to implement in new cases from September the direct payment of increases for qualified adults to the qualified adult for the duration of the entitlement of the State pensioner. It will remain open to any qualified adult to continue to have his or her portion of the pension paid jointly with the personal portion of the pension, if that is his or her preferred option.

Our social welfare system should evolve to reflect the social changes of recent years. The system needs to keep pace with changes in working and living conditions, particularly those of women. Accordingly, provision is made in this Bill to significantly reform the way spouses are assessed as qualified adults in a range of social assistance schemes. Women are generally involved in these instances.

The proposed reform involves removing the differential disregards from employment income which apply to couples on assistance schemes and assessing both members of a couple in a similar manner, with common disregards and assessments applying to both. Additionally, the poverty traps in the current method of assessment, which arise from the way the current disregard operates, will be removed. At certain income levels, if a woman increases her income from part-time employment to more than the current disregard of €100 per week, her spouse can lose €1.20 from his jobseeker's allowance for every €1 she earns in excess of €100. Such a situation, which represents a withdrawal rate of 120% in respect of income, has no place in a modern labour market.

Increases in labour market participation will be rewarded under the proposed reform. This will allow women to move beyond the occupational cul-de-sac of long-term part-time employment with earnings below €100 per week. The current position whereby it is more advantageous for the half of a couple who undertakes part-time work to be a qualified adult will be removed. Both partners will be able to claim jobseeker's allowance in their own right, as long as they satisfy the usual conditions. They will receive the same rate of payment as a couple where one is a claimant and the other is a qualified applicant. This will facilitate women, in particular, to claim jobseeker's allowance in their own right and access the accompanying range of employment supports and training opportunities. As part of this reform, the daily disregard of €12.70 from earned income from employment will be increased to €20 per day and extended to all customers with such income.

This proposal removes the anomaly whereby parents of qualified children cannot avail of the disregard. It further strengthens the incentive for labour market participation by increasing family income when children are involved. The complexities I have mentioned mean there is potential for some couples to be less well-off under the proposed reform. They will not be less well-off, however, because the Department of Social and Family Affairs will operate a transitional saver system to protect the level of income they have at present from a combination of jobseeker's allowance and employment income. I am confident that the proposals will reduce significantly the complexity in the system and recognise, encourage and reward increased labour market participation.

As carers play a valuable and much appreciated role in our society, it is important that we support and care for them. Since the Government took office in 1997, it has been committed to supporting care in the community to the maximum extent possible. Over that period, weekly payment rates to carers have been greatly increased, qualifying conditions for carer's allowance have been significantly eased, coverage of the scheme has been extended and new schemes such as carer's benefit and the respite care grant have been introduced and extended. As a result of these improvements, almost 28,500 carers now receive either carer's allowance or carer's benefit. Such carers receive a respite care grant, as do approximately 10,000 other carers. Our commitment to carers was further reinforced in the national partnership agreement, Towards 2016, which contains significant commitments in the area of caring. Work is progressing in Government Departments on the development of a national carer's strategy by the end of the year, which will focus on supporting informal and family carers in the community.

The primary objective of the social welfare system is to provide income support. As a general rule, just one weekly social welfare payment is payable to an individual. In practice, people who qualify for two social welfare payments always receive the higher payment to which they are entitled. The Minister is aware that this causes particular concern for people in receipt of one social welfare payment when they become carers.

The Joint Committee on Social and Family Affairs has made some specific and sensible recommendations in this regard. The Minister has responded by introducing in this Bill a fundamental reform relating to payments to carers. From September, people in receipt of certain other social welfare payments, who also provide full-time care and attention to a person, will be able to retain their main welfare payment and receive another payment, subject to their means, up to half the rate of carer's allowance.

The Minister is also including in the Bill provision for an increase of €300 in the rate of the respite care grant to €1,500 from June 2007. This will allow up to 40,000 carers to have a well-deserved break from their caring duties. The full package of measures for carers included in budget 2007 will cost in excess of €107 million in a full year.

The Bill gives effect to a number of improvements to the supplementary welfare allowance, SWA, rent supplement scheme as part of the overall supplement package announced in budget 2007. These include an extension of the qualifying conditions and an easing of the rent supplement means test. The key objectives of the changes are to simplify the means test, so that a rent supplement recipient can judge the impact of an offer of work, and address disincentives and eliminate poverty traps faced by rent supplement recipients seeking to increase their hours of work or wishing to take up full-time employment.

I am also making provision whereby rent supplement may be withheld in respect of accommodation which fails to meet local authority housing standards and to allow rent supplement to be refused in respect of private rental accommodation located in specified areas of regeneration identified by the Minister for the Environment, Heritage and Local Government. This latter measure supports the State's significant investment on regeneration in areas such as Ballymun. The objective is to achieve a better balance between private, social and affordable housing in these localities. In taking this approach, provision is made to protect existing tenants.

I am also taking the opportunity in the Bill to bring forward enabling legislation which will help to give effect to the Government decision to transfer certain income support and maintenance scheme functions from the Health Service Executive to my Department. At present, the social welfare allowance scheme is delivered by some 700 community welfare officers, CWOs, 59 superintendent community welfare officers and supporting clerical staff in the community welfare service of the HSE. The Social Welfare Consolidation Act 2005 currently stipulates that HSE staff determine entitlement to social welfare allowance.

The legislation I am introducing is a technical change which is necessary to ensure that CWOs may continue to administer the scheme when they transfer out of the HSE to the Department of Social and Family Affairs and will come into operation by means of a commencement order. The legislation required for the transfer of functions will be prepared later this year following full consultation with staff and other stakeholders. The HSE's community welfare service is responsive and flexible in meeting needs and the Minister will ensure these attributes are preserved and built upon as part of the transfer process.

The transfer of functions presents fundamental reform and developmental opportunities for a fully integrated and enhanced income support system, including the restructuring and integration of income support services within one entity. This presents both a challenge and an opportunity for those within the community welfare service and the Department in supporting those most disadvantaged in society.

The Government is concerned about retirement income in general, now and in the future. I do not need to remind the House of the demographic pressures our pensions system will face. Thankfully, unlike other countries, our position will remain favourable for a number of years yet. As part of the social partnership agreement, Towards 2016, the Government is committed to publishing a Green Paper on pensions outlining the major policy choices and challenges in this area and the views of the social partners. Following a consultation process, the Government will respond to the matters raised by developing a framework for comprehensively addressing the pensions agenda over the longer term. While we face a difficult challenge in securing agreement on a way forward, work on drafting the Green Paper is progressing well and is scheduled for completion within a few weeks.

I will now outline to the House the main provisions of the Bill which includes new measures and amends the Social Welfare Consolidation Act 2005, the Pensions Act 1990 and a small number of other Acts.

Sections 1 and 2 contain the usual provisions for the Short Title, citation and commencement of the Bill, and the definition of certain terms used throughout the Bill. Section 3 contains a technical amendment to clarify the definition of a volunteer development worker for the purposes of the social welfare code. Section 4 provides for an increase of €10 in the monthly rate of child benefit, bringing the lower and higher rates, respectively, to €160 and €195 per month. Families who receive the monthly payment via their bank accounts will receive the budget increase from April 2007, while those who receive payment via personalised payable order books encashable at post offices will be paid in the first week in May 2007, backdated to April 2007. In addition, section 27 provides for a measure of flexibility in the payment arrangements for child benefit by removing the presumption that a child resides with only one person.

Section 5 provides, in addition to a technical amendment, that where a person who was in receipt of illness benefit for at least two years has engaged in employment for less than 26 weeks and subsequently re-applies for that benefit, payment will not be made at a lower rate than that which he or she previously received. This section and section 8 provide that former recipients of carer's benefit or carer's allowance who transfer to illness benefit or jobseeker's benefit may revert to a rate not lower than that previously in payment. Section 5 also removes an obsolete reference to "rules of behaviour".

Section 6 contains a number of measures to enhance the maternity benefit scheme. These include provision for the payment of maternity benefit to the father of a newborn child on the death of the child's mother without having to satisfy the contribution conditions of the scheme in his own right. This section also provides for the payment of not less than six weeks maternity benefit on the death of the mother, bringing this scheme into line with the after-death payment arrangements of other social welfare schemes. In addition, the section clarifies the position in respect of disqualification for receipt of maternity benefit by providing that benefit will not be payable where a woman engages in any form of insurable employment or self-employment or fails, without good cause, to attend for medical examination.

As the provisions governing adoptive benefit mirror those applicable to maternity benefit, section 7 extends the section 6 enhancements to adoptive benefit. It also clarifies that a person will be disqualified from receiving adoptive benefit if he or she engages in any form of employment or self-employment. As outlined, section 9 contains amendments to the provisions governing the means test and the assessment of spouses' earnings for the purposes of jobseeker's allowance, pre-retirement allowance, farm assist and disability allowance.

Sections 10, 11, 16 and 26 provide for technical amendments to the occupational injuries schemes, including the deletion of an obsolete provision regarding the prescribed time for claiming the cost of medical care. They also provide for the deletion of obsolete references in the Social Welfare Consolidation Act 2005 to "rules of behaviour".

Section 12 provides for the inclusion of education and training, subject to prescribed conditions, in the activities in which a recipient of carer's benefit may engage and still satisfy the conditions for receipt of that benefit. Section 13 provides for a technical amendment to clarify date of entry into social insurance for the purposes of a State pension, contributory.

Section 14 provides for the direct payment of increases for qualified adults payable with the State pensions directly to the qualified adult, for the duration of the period of entitlement of the State pensioner. This provision is applicable to the State pension, contributory, State pension, transition, and the State pension, non-contributory, and will come into effect for new claims made from 24 September 2007.

Section 15 provides that where a recipient of invalidity pension subsequently qualifies for State pension, contributory, or a pension payable under reciprocal arrangements by another state, he or she shall be entitled to receive whichever payment is the most beneficial. Section 17 provides that guardian's payment, contributory, and guardian's payment, non-contributory, shall not be payable simultaneously with a payment under Part VI of the Child Care Act 1991.

Section 18 provides that, for the purposes of the bereavement grant, "qualified child" shall include a person aged between 16 and 22 who is in receipt of disability allowance. Section 19 contains a technical amendment to clarify that the widowed parent grant is applicable to recipients of widow's and widower's contributory pensions which are payable under the Social Welfare Consolidation Act 2005.

Section 20 provides that where a person who was in receipt of a widow's or widower's payment ceases to be a widow or widower and subsequently applies for jobseeker's allowance, payment of the allowance will commence without the application of the "waiting days" condition normally applicable for that allowance.

Section 21 provides that where a current recipient of carer's allowance has been in receipt of pre-retirement allowance immediately before becoming a carer, such a person will be able to revert to pre-retirement allowance and retain half his or her current personal rate of carer's allowance if it is beneficial for him or her to do so. This is of course subject to continuing to meet the qualifying conditions for pre-retirement allowance in terms of age, retirement and so on. Section 22 provides for an increase in the upper earnings limit for customers in receipt of the one-parent family payment from €375 to €400 per week. This provision is effective from May 2007. Section 23 confers power to make regulations to provide for a transitional payment where a deserted wives benefit beneficiary's entitlement ceases because her earnings have exceeded the prescribed upper limit of €20,000. Section 24 provides for a means-tested payment equivalent to up to half the carer's allowance rate to certain persons who may also be in receipt of another social welfare payment.

Section 25 provides that where a person is unemployed for 12 months and in receipt of rent supplement, he or she may engage in full-time employment, or where a person participates in a community employment or back to work scheme, he or she will continue to receive rent supplement if he or she has been accepted as being in need of accommodation under the rental accommodation scheme. This section also provides at Schedule 1 for the transfer of certain functions from the Health Service Executive to the Department of Social and Family Affairs, as recommended by the core functions of the health service report and as agreed by Government, and provides for a number of consequential amendments to existing provisions in the area of appeals, overpayments and recovery of overpayments arising from this. The section also provides for measures to preclude the payment of rent supplement where accommodation standards, as defined by the Department of the Environment, Heritage and Local Government, are not met. In addition, the section contains the legislative provisions to preclude the payment of rent supplement in areas of regeneration, as identified by the same Department.

Section 28 provides for an increase in the amount of the annual respite care grant from €1,200 to €1,500 from June 2007. The section also provides for an enhancement of the scheme by providing that, subject to the conditions that may be prescribed, a person may engage in education and training and still qualify for the grant.

Section 29 clarifies the obligation of a claimant to provide the information and evidence required in support of a social welfare claim, and to inform the Department of any relevant change of circumstances in the course of payment. Section 30 outlines in legislation the five factors, based on European Court of Justice case law, that are taken into account when determining whether a claimant for certain social welfare schemes satisfies the habitual residence condition.

Section 31 provides for the exchange of relevant employment data between the Department of Social and Family Affairs, the Revenue Commissioners and the Minister for Enterprise, Trade and Employment to facilitate the operation of the agency established under Towards 2016 with responsibility for ensuring employment rights compliance. Section 32 contains measures to further strengthen control in issuing personal public service numbers. They include increased penalties, enhanced identity measures and provisions to combat the use of fraudulent documentation.

Section 33 provides for the household budgeting scheme to encompass any telecommunications service provider which is registered with the Commission for Communications Regulation. Section 34 contains provisions for the inclusion of the managers and staff of social welfare branch offices in the categories of persons designated to decide claims for certain social welfare payments under the social welfare code. This measure is intended to facilitate improvement in claim processing times in branch offices by removing the current requirement to forward certain claims to social welfare local offices for decision.

Section 35 provides for an improvement in the means test applicable to disability allowance by increasing by €30,000, from €20,000 to €50,000, the amount of capital which is disregarded for the purposes of the means test. It also provides for some technical amendments to Schedule 3 of the Social Welfare Consolidation Act 2005.

Section 36 provides a number of enhancements to the means test for entitlement to supplementary welfare allowance, including the disregard from means assessment of any moneys received by way of guardian's payments and respite care grant. This section also provides for the disregard, for rent supplement purposes, of €75 per week plus 25% of any additional income over €75 derived from employment or training, subject to a minimum disregard of €75 per week. This, together with the improvement in section 24, whereby a rent supplement recipient accepted for the rental accommodation scheme may engage in full-time employment, is aimed at supporting people returning to work and to assist tenants in achieving long-term solutions for their housing needs.

The main measures I am introducing in this Bill with regard to the Pensions Act will further enhance the regulatory regime governing supplementary pensions. Section 36 and Part 1 of Schedule 2 make provision for the inclusion of trust retirement annuity contracts — trust RACs — within the remit of the Pensions Act 1990. This is a requirement under Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision — the lORPs directive. This amendment to the Pensions Act applies only to trust RACs which currently have approximately 10,000 members. These are arrangements for groups of individuals established under trust, for example, the Law Society of Ireland or the Institute of Chartered Accountants of Ireland. This amending provision treats trust RACs in a similar manner to that already provided for in the Pensions Act 1990 in respect of defined contribution occupational pension schemes.

Part 2 of Schedule 2 contains amendments to the Pensions Act to enhance the Pension Board's powers in the area of prosecution. Section 3A of the Pensions Act was inserted by section 39 of the Social Welfare Law Reform and Pensions Act 2006 to provide an alternative to the prosecution of an offence by the Pensions Board. It allows the board introduce an on-the-spot fine regime as an alternative to taking a prosecution. Section 3A is now amended to specify the sections of the Act, a contravention of which will warrant the application of an on-the-spot fine. Contraventions of the Act which are not specified under section 3A because they do not, in the board's view, meet the criteria for an on-the-spot fine will be considered for immediate prosecution by the board.

The Pensions Act is also amended to increase the level of fines for both summary and indictable offences under the Act from €1904.61 to €5,000 for a summary offence and from €12,697.38 to €25,000 for an indictable offence. It provides that fines imposed under the Act shall not be paid out of the resources of the scheme, trust RAC, or out of the assets of any PRSA, as the case may be.

Part 3 of Schedule 2 provides for a number of miscellaneous amendments which are mainly technical in nature, including the insertion of two new sections into the Pensions Act with regard to the accountability of the chief executive of the Pensions Board and the Pensions Ombudsman before the Committee of Public Accounts. This amendment is in compliance with the requirements of the Report of the Working Group on the Accountability of Secretaries General and Accounting Officers — the Mullarkey report.