Phil Prendergast (Labour)

I welcome the Minister of State. I wish to take up some points already mentioned by my colleagues in the House. The increase in child allowance to €24 per week will not help. There are 96,000 children under 14 living in consistent poverty, that is in a low income household that is unable to afford heat, clothing, substantial meals or other key basic necessities. Child poverty is increasing. Government policy in this area is based on outdated research, and perhaps the whole area is over-researched. What policy benefit has it had? Has it stopped parents taking up employment and if so, where is the proof? The reality is one in nine children live in consistent poverty, which is unacceptable.

While I am not suggesting that income support is the only solution to the problem, it is one of the principal ones. Welfare improvements for pensioners in recent budgets have shown what can happen when income maintenance measures are directed at specific groups. We should now show the same focus on children. The rate of increase in child benefit in respect of the first two children is less than the current rate of inflation. The improvements on the back to school clothing and footwear allowance were paltry. It shows a complete disregard for the costs faced by low-income families. Even within available resources, it would have been possible to match the qualifying criteria to those of family income supplement.

The issue of paternity benefit was not mentioned in the Minister's Budget Statement. I understand a working group to examine the issue has not yet been established. Like so many promises it seems that nothing will come of this proposal.

The standard rating of some tax credits could have been managed under the old system. The Government has basically changed the method of calculating income tax rather than changing the calculation itself. Without applying tax credits on a refundable basis, the move to tax credits has been largely meaningless. Without a refundable tax credit system, people outside the tax net, typically those on low wages, in part-time work, in seasonal work or term-time work, lose out on every euro in tax relief available to those inside the tax net.

PRSI tax credits are not the only tax elements of the budget that deserve our attention. A detailed report on the Social Insurance Fund clearly showed that the surplus was running out, and the promises of €645 million worth of cuts in PRSI rates and up to €2 billion worth of spending on contributory pensions could not be kept.

Budget 2008 represented a missed opportunity on supplementary pensions. The issue was not mentioned once in the Budget Statement, indicating an alarming lack of urgency. The Government should have indicated clearly in the budget that from next year, the existing pension tax relief system would end and be replaced with whatever is recommended in the Green Paper. If this really is a budget that is concerned with securing our future, it is astonishing that paying for it, in terms of pension provision, does not deserve a mention.

Social welfare rates have generally been increased by €12, which perhaps unsurprisingly is almost half of the amount by which they increased in election year. I cannot agree with the Government or the social partners that benchmarking the lowest social welfare rates to 30% of gross average industrial earnings is sufficient. To do that is to suggest that €197.80 is enough to live on for a person who is single, suffers from a disability or is otherwise out of the workforce. In an Ireland with grocery inflation at 4.4%, fuel costs rising at a rate of 17%, and the average electricity bill approximately €150, €197.80 is not enough. I would not be able to live on that amount.

I welcome the increase in State pensions. It is a most important issue and I acknowledge this good increase. However, the increase in pensions is considerably less than expected. If it was to address the pleas from those representing older people, the Government should have front-loaded the promised rate increase. Even if the increase was to be spread evenly across the five years, it should have been €18.14 despite what Senator Boyle said. Again there is a shortfall in this regard.

For the 14th consecutive year the living alone allowance has not been increased. Traditionally pitched at approximately 7% of the maximum State pension, it is now at less than half of that. If it had have kept pace, the weekly payment would now be about €15.50, or approximately double the current payment of €7.70. Claimants are effectively losing out on an additional €7.70 per week as a result. Almost 160,000 people receive the living alone allowance. Their costs are substantially higher than for couples because the same heating, maintenance and electricity bills need to be met out of one income instead of two.

In the programme for government, Fianna Fáil and the Green Party promised to award the over 80s allowance to pensioner spouses. The cost of this provision would have been less than €3 million. However, this has not happened. The lack of progress on supports for lone parents is equally disappointing. The recent EU SILC statistics showed that one in three households in consistent poverty were lone parent households and that the rate of poverty among this group is rising. The evidence I witness in my clinics would support that. I am getting constant calls from people especially at this time of year when there are competing demands and parents are being bombarded by advertising, etc., and are finding it very difficult to meet their needs and to meet the continuing costs of child care. Last year I was mayor of Clonmel, which had a mayor's fund. Local businesses contributed and fundraising events were held to help people at Christmas time. The fund was oversubscribed and we were unable to help 425 people. We tried to work with the Society of St. Vincent de Paul. There is genuine poverty.

Members of lone parent families have the highest deprivation levels at 64.7%. Almost 41% of lone parent households have experienced problems with debt. I would like to see some activation measures for lone parents but I would also like to see key support services put in place so that it is actually feasible for lone parents to leave welfare. It would be good to see an end to the rule on cohabitation as it makes no sense for the State to be actively encouraging parents to liveapart. This is a serious issue.

The situation of carers is only very marginally improved by this budget and they are still waiting for the great leap forward. A total of approximately 29 million hours per week are worked by carers. The Government has already reneged on a commitment to publish a national carer's strategy by the end of this year. I ask the Minister of State to inform the House on this commitment.

The recent figures produced by the CSO highlighted a number of issues in relation to carers and these issues are not being addressed by income maintenance policies or by services. The census recorded 161,000 carers of whom fewer than 42,000 currently receive a payment from the Department. Likewise, while 50,000 carers work over 29 hours and 67,500 work over 15 hours per week, only 21% of all carers are receiving a weekly payment. More than half of all carers indicated their principal economic status was as being at work, suggesting that none of these would be entitled to a weekly payment under current rules. I empathise with Senator McFadden's story about her friend as I can identify similar situations.

Under the current rules, carers who care for two people continue to be discriminated against. The means test for back to school allowance counts a carer's allowance as part of the qualifying material, whereas family income supplement does not count in the same calculation. People who move to carer's allowance are not awarded credits on that allowance if they had not been paying credits for the two years previous to their claim. This deprives carers of credits which mainly affect them in the calculation of their pension.

I await the response of the Minister of State to the issues raised today. I welcome the opportunity to discuss the Bill and I thank the Minister of State for her attention.