Máire Hoctor (Tipperary North, Fianna Fail)

Go raibh maith agat, a Leas-Chathaoirligh.

I am pleased to introduce this Bill, the first of two Bills which will implement the social welfare package of €900 million announced on 5 December in budget 2008. This generous package, representing nearly half of all additional current Government spending announced in the budget, brings total expenditure on social welfare in 2008 to just under €17 billion.

At a time of more moderate growth, our first priority must be to ensure that the less well off in society are protected. Budget 2008 provides significant resources to allow us address the needs of the most disadvantaged in our society. The schemes and other supports the Department of Social and Family Affairs administer will benefit more than 1.5 million people. Families also receive child benefit for almost 1.2 million children.

The 2008 social welfare budget package significantly improves the position of the spouses and partners of contributory pensioners who receive the qualified adult allowance. It continues to make significant progress towards achieving the Government's target rate for social welfare contributory pensions. It strengthens the framework of supports for family carers and it ensures that the real value of all social welfare payments is maintained and safeguarded.

The social welfare budget package ensures that decisive steps are being taken in implementing commitments in the programme for Government, Towards 2016 and the national action plan for social inclusion.

The Government is committed to achieving a pension of at least €300 per week by 2012. As a first step towards achieving this target, the Minister for Social and Family Affairs has increased the contributory State pension by €14 to €223.30 per week. The non-contributory State pension is being increased by €12 to €212 per week.

Senators will be aware that much of the current debate on pensions is focused on the challenges to be met in the decades ahead as our population ages. These are major issues for our society which must be faced. However, we must not forget those currently living on pensions and the need to ensure that today's pensioners have a decent income in retirement. The increases in State pensions over many years have been one of the major achievements of the Government. Since 2002, the level of the contributory State pension has increased by more than 50% from €147.30 to €223.30 following this budget. This level of improvement has had a marked impact on the living standards of older people enabling them to face the future with security and dignity.

This improvement is shown clearly in the numbers of older people deemed to be at risk of poverty, measured on a relative income basis. The most up to date figures from the EU Survey on Income and Living Conditions, SILC, which were published recently, have confirmed the steady improvements of recent years. The risk of poverty for older people has fallen from just under 30% in 2003 to 13.6% in 2006. The fall last year was 6.5 percentage points from the previous year, and that is before the substantial improvements in social welfare pensions in 2007 and 2008 are taken into account.

The Government is also committed to increasing the pensioner qualified adult allowance to the level of the State non-contributory pension and to increase the numbers of people eligible for this payment. A major step forward in this regard was taken in this year's budget and the Bill provides for an increase of €27 per week in the qualified adult rate, which brings it to €200 per week or 94% of the target. This measure will benefit all qualified adults aged 66 or over, including those on reduced rates of payment who will benefit on a proportionate basis. This increase will be of particular benefit to women who do not have an entitlement to a contributory pension in their own right because of home responsibilities in the past.

As a result of these changes in the personal pension rate and the qualified adult rate, more than 42,000 pensioner couples will see their household incomes increase by up to €41 a week or nearly 11 % next year. The total social welfare support provided for a contributory pensioner couple receiving the fuel allowance will exceed €23,000, an increase of almost €2,200 over their pre-budget position.

The Minister for Social and Family Affairs has also lengthened the fuel season, in respect of which the fuel allowance of €18 a week is paid, by one week to 30 weeks with effect from April next year. This measure will be of particular benefit to older people.

Despite the major improvements for pensioners in the past number of years, the Government has concerns for the long-term future of our pension system. Given our experience in the past ten years, it is entirely appropriate that we should now review our overall approach in order that we have in place a pension system which is sustainable in the long-term and which will deliver an adequate retirement income to all retired people.

On 17 October last, the Minister for Social and Family Affairs published a Green Paper on Pensions. It addresses all of the challenges we face in the pensions areas and puts forward a number of options for tackling them. The purpose of the Green Paper is not to recommend any particular course of action but rather to set out clearly the current situation and the economic and social implications of the various courses of action that have been suggested.

We are aware that progress has been slow in ensuring that those in employment have an occupational or private pension. The National Pensions Review target is to ensure that 70% of those aged over 30 in employment have such a pension but we remain at 62%. Also, there are concerns that the contributions being made by individuals to their pension schemes may be too low.

Women continue to have a lower coverage rate than men, although the gap is narrowing, and certain sectors of the economy such as hotels and restaurants, agriculture and retail continue to be extremely difficult to reach. Despite the progress we are making, there are still upwards of 1 million people who will rely exclusively on social welfare provision for their retirement income unless action is taken.

The Green Paper on Pensions addresses all of these challenges and puts forward a number of options for tackling them. We have choices, as set out in the Green Paper, on the way we can address the many issues arising. At EU level, a number of common approaches are emerging to address the pension challenge, including supporting longer working lives and active ageing; balancing contributions and benefits in an appropriate and socially fair manner; and promoting the affordability and security of funded and private schemes.

In an Irish context, some or all of these same principles can be applied. However, it would not be appropriate for the Minister for Social and Family Affairs, or the Government, to champion any particular approach at this stage as that would focus the debate in one direction and diminish the consultation process being undertaken. We must be clear, however, that good pension provision is costly, whether it is done through personal contributions to private pension schemes or through the State by way of PRSI contributions or taxes.

Pensions policy is of major importance and should be of interest to everyone in the country. Given the growing significance of pensions in coming decades, it is important that we have an informed public discussion and debate on the subject. The Green Paper is a key part of that process of informed debate.

It is also not just about our pensions system. It is about all of us — our priorities both as individuals and as a society, how long we live, our expectations for retirement and the prospects for our children. It is of relevance to anyone with an interest in the shape of Irish society in the decades ahead.

Our ambition must be to create a pensions system that can be financially, economically and socially sustainable in the face of demographic change. We face a significant challenge and some difficult choices if we are to realise this ambition.

The establishment of the National Pensions Reserve Fund was a judicious and far-sighted initiative. The fund, which currently has a market value of some €21 billion, will go some way towards easing future funding concerns.

The challenges outlined in the Green Paper are not unique to Ireland. They are at the heart of the debate on pension reform in many countries, particularly where the pace of demographic change is more advanced. The good news is that because our demographic situation will remain relatively favourable for some time, we have a reasonable but by no means indefinite period to learn from the experiences of other countries and decide how best to address them.

The consultation process will allow all interested parties the opportunity to contribute towards shaping a framework for addressing the pension's agenda over the longer term. It will be important that all stakeholders participate constructively in this process as we work towards the achievement of a pensions system that can meet the needs of those currently in retirement and those of future generations. The Minister for Social and Family Affairs looks forward to moving the debate forward in this area during the coming year.

We all agree that carers play a critical role in ensuring that our older people, people with disabilities and those who are seriously ill can remain in their own homes for as long as possible. Supporting and recognising carers in society is a priority of the Government and has been since 1997. Over that period, weekly payment rates to carers have been greatly increased, qualifying conditions for the 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. Recent reforms of the scheme allow people in receipt of certain social welfare payments, who are also providing full-time care and attention to a person, to retain their main social welfare payment and receive a half rate carer's allowance. The amount paid varies depending on the person's means.

As a result of these improvements there are now more than 34,000 carers in receipt of either carer's allowance or carer's benefit. A total of 42,000 people also received a respite care grant in 2007. The numbers availing of these schemes continue to increase. The improvements to the carers' schemes have been made in the context of continued developments in areas such as needs assessment and home care packages, which are also designed to facilitate the care of people in their own homes for as long as possible.

One key Government commitment in the national partnership agreement Towards 2016 is the development of a national carers' strategy and this commitment is reiterated in the programme for Government. One recommendation of the report of the Oireachtas Joint Committee on Social and Family Affairs on the position of full-time carers was that such a strategy should be developed. I am pleased the Department is in a position to act on that recommendation.

This strategy will focus on supporting informal and family carers in the community. While social welfare supports for carers will be a key issue in the strategy, other issues such as access to respite, health and other services, education, training and employment will also feature strongly.

Co-operation between relevant Departments and agencies is essential if the provision of services, supports and entitlements for carers is to be addressed fully. For that reason, all relevant Departments and agencies will be involved in the strategy and there will be appropriate consultation with the social partners. An interdepartmental working group, chaired by the Department of the Taoiseach, is being established to draw up the strategy and to manage the consultation process. It is expected the strategy will be completed by the summer of 2008. The development of a national carers' strategy provides an opportunity to build further on the improvements made to the scheme to date and to consider other areas where further progress can be made.

The Bill provides for further improvements to the income supports available to carers which build on the significant improvements made in recent years. As in previous years, the Minister for Social and Family Affairs has increased the rates of payments for carers. The rate of carer's allowance will increase by €14 from January, bringing the rate for carers over 66 years to €232 a week and the payment for carers under 66 years to €214 per week. The rate of carer's benefit will also increase by €14 to €214.70 per week.

In addition, the Minister has provided for an increase of €200 in the rate of the respite care grant to €1,700 from June 2008. This will allow more than 48,000 carers next year to have a well-deserved break from their caring duties and is a positive step towards the achievement of the Government's commitment to increase the grant to €3,000 per year over the lifetime of the Government.

The level of the income disregard for carer's allowance has been increased to €332.50 per week for a single person and to €665 per week for a couple. A couple can earn up to €60,150 per annum and still receive a reduced rate of carer's allowance, as well as the associated free travel and household benefits. This measure surpasses the commitment in Towards 2016 to ensure those on average industrial earnings can continue to qualify for a full carer's allowance. Similarly, the income threshold for carer's benefit has been increased to €332.50 per week. These improvements in the income supports available from the Department of Social and Family Affairs, together with the improvements in home care and related services in recent years, represent a further realisation of the Government's vision of a co-ordinated approach to services and supports for carers in the community.

The Government is committed to maintaining the value of the lowest social welfare rates in keeping with the commitments in the programme for Government and the national action plan for social inclusion. The rates of payments to people with disabilities, the unemployed, widows and those parenting alone, to mention some of the groups to benefit, have increased by €12 or approximately 6.5%. The value of the qualified adult allowance for these payments is also being increased by €8 a week. As a result of the budget, a couple dependent on jobseeker's allowance, with no other earnings, will be more than €1,000 better off next year, while a single unemployed person will gain by more than €650.

These increases are ahead of projected increases in both prices and earnings. For the fifth year in a row, social welfare rates will have grown more quickly than prices and earnings. The lowest social welfare rates have increased by 58% since 2004 compared with cumulative price increases of 15% in the same period. The lowest social welfare rate of payment in 2004 equated to 24% of gross average industrial earnings. It now stands at 30%. These are significant achievements which the Government is determined to consolidate and continue to make further progress.

The Bill provides for an increase in the widowed parent grant by €2,000 to €6,000. This is an important measure for the families concerned giving them a timely financial boost at a time of bereavement and great personal loss which, frequently, is also compounded by economic uncertainty and concerns about the future.

The social welfare package sets aside nearly €148 million, or €194 million when the early child care supplement is included, to improve the range of supports provided for children. The budget has provided increases of 6% or above in overall child income support through a combination of child benefit, qualified child increases, back to school clothing and footwear allowance and the early child care supplement.

The impact of these measures is best illustrated by way of an example of a social welfare dependent family with three children, one of them under six years of age, one over six and less than 12 years and another over 12 years of age. As a result of this year's budget, the combined value of child support payments to that family will increase by €718 in a full year, bringing their total child income support to more than €12,000 next year. This equates to an income support payment of €77 per child per week and represents an increase of more than 6% in the value of their current payments. In the case of a social welfare dependent family with four children, one under six years, two over six years and less than 12 years and one over 12 years, the total value of child support payments will increase by €940 in a full year, bringing their total child income support to almost €16,000 next year.

The Bill provides for payment of an additional €2 per week in the qualified child increase, formerly called the child dependant allowance, which is paid to all social welfare recipients with children. It also provides for increases in the threshold for family income supplement, FIS, by €10 per week for each child which will result in payments increasing by €6 a week per child.

Research has shown that poverty is likely to be more concentrated in larger families. The new FIS thresholds, while substantially increasing all payments, concentrate additional resources on larger families. This improvement continues the re-focusing of thresholds towards larger families, thereby further targeting resources at low-income households. The change in FIS thresholds, together with the qualified child increase, represent a more selective approach to child income support through targeting children in poorer households while at the same time limiting the extent to which employment incentives are worsened. These improvements will benefit some 26,500 existing families and entitle a further 2,700 families to the payment.

Adequate income support, while important, is only part of the solution for people and families living in poverty. They need a lasting solution to their difficulties and the necessary supports to help them make their way to a more promising future. That is why activation and participation in employment, education, training and personal development opportunities have become an increasingly important part of the Department's activities.

To improve the effectiveness of these measures, it has been decided to amalgamate two initiatives run by the Department and to increase significantly the funding provided to them. The revamped activation and family support programme will have a budget of €6.5 million next year. It will provide funding for projects run by third parties to assist welfare recipients and members of their families to enhance their employability through education, training and personal development. It will also provide or co-fund training and development programmes for particularly disadvantaged social welfare customers and their families, including young lone mothers, other parents rearing children without the support of a partner, carers, Travellers and people with disabilities.

Provision has been made in the Department's administrative budget for the deployment of an additional 30 facilitators with clerical support staff next year as the first stage in a radical development of activation supports provided by the Department. This programme, funded under the national development plan, will provide for the individual case management of all social welfare customers of working age who are not progressing into employment or accessing training or employment opportunities. The approach will be directed specifically towards those who, because of their personal or family circumstances, face particular difficulties in engaging with the labour market.

The budget provides for other measures which are designed to assist people in the progression from welfare to work. These include an increase in the upper income threshold for entitlement to one-parent family payment and a reform of the method of assessing earnings for that scheme by disregarding social insurance and other employment related contributions.

Sections 2 and 3, together with Schedules 1 and 2, provide for increases in the rates of social welfare payments. These include an increase of €14 per week for persons in receipt of a State contributory pension and for recipients of widow's or widower's contributory pension and deserted wife's benefit who are over 66 years, and for recipients of State pension transition or invalidity pension aged 65 years and over, bringing the weekly payment to €223.30. Recipients of carer's benefit will also receive an increase of €14 per week bringing their new weekly payment to €214.70. The Bill provides for an increase of €14 per week for persons in receipt of carer's allowance who are over age 66. An increase of €14 is provided for recipients of carer's allowance who are under age 66. These increases will bring the weekly rate of carer's allowance to €232 for recipients over age 66 and to €214 for those under 66 years of age.

Provision is made for an increase of €12 in the weekly personal rate of the non-contributory State pension, giving a new rate of €212. The rate for widow's and widower's non-contributory pensions is being increased to €197.80.

An increase of €12 is also provided in the personal rates of illness benefit, jobseeker's benefit, injury benefit and health and safety benefit bringing the weekly rate to €197.80. An increase of €12 per week is provided for in all other social insurance and social assistance payments where the recipient is under age 66 and for recipients of invalidity pension under age 65. The personal rates of jobseeker's allowance, pre-retirement allowance, farm assist and disability allowance are being increased to €197.80.

An increase of €27 per week is being provided in respect of qualified adults of recipients of invalidity pension, where the qualified adult is aged 66 years or over. An increase of €27 per week is also being provided for qualified adults aged 66 years and over where their spouse or partner is receiving a contributory State pension, or is receiving a State transition pension, with pro-rata increases for those on certain reduced rates.

Recipients of the contributory State pension, and the State transition pension, receive an increase of €9.30 where the qualified adult is under age 66. The increase in the invalidity pension is €8.60 where the qualified adult is under age 66 and in the case of the non-contributory State pension, the increase is €7.90 where the qualified adult is under age 66.

An increase of €8 per week is provided for all other qualified adult payments. The rate payable in respect of a qualified child is being increased by €2 per week to €24 per week. These increases will take effect from the first week in January 2008.

Section 4 provides for increases in the weekly income thresholds used to determine entitlement to family income supplement. The new thresholds range from €490 in the case of a family with one child, to €1,170 in the case of a family with eight or more children. This measure will take effect from 3 January 2008.

Section 5 provides for an increase from €48,800 to €50,700 in the annual earnings ceiling up to which social insurance contributions are payable by employees. The section further provides for an increase in the amount of weekly earnings below which PRSl is not payable, from €339 to €352. These provisions come into effect on 1 January 2008.

Section 6 provides for an increase in the earnings ceiling up to which social insurance contributions are payable by optional contributors, from €48,800 to €50,700 with effect from I January 2008. Section 7 provides for a €2,000 increase in the widowed parent grant, bringing it to €6,000. This increase is effective from budget day, 5 December 2007.

Section 8 provides for an increase in the health levy exemption thresholds from €480 per week to €500 per week and from €24,960 per annum to €26,000 per annum. This measure will take effect from 1 January 2008.

Pensioners who are paid by electronic methods will receive their increase in full from January 2008. Increases for recipients of jobseeker's benefit or allowance, illness or maternity benefit, one-parent family payment, family income supplement, farm assist and supplementary welfare allowance will be paid in full from January 2008. Recipients of certain long-term payments such as pensions, carer's allowance and invalidity pension will receive their increase in mid-February backdated to January along with their new payable order books because of the lead-in time involved in the production of personal payable orders. Increases for certain other long-term payments, such as State pensions and disability allowance, will be paid by a special once-off payment in mid-February to cover 12 weeks' payment to the end of March when new payable order books will be issued.

This Social Welfare Bill, the first of two instalments, safeguards the living standards of those who rely on social welfare income and other supports, and focuses the allocation of resources on those most in need. I commend the Bill to the House and look forward to a constructive debate.