Mary Hanafin (Dún Laoghaire, Fianna Fail)

When I met groups representing carers in the run-up to the budget, their main priority was the retention of the half rate carer's allowance and this payment was maintained in the budget. They also stressed the need for improved supports from the Department of Health and Children and I am glad that, even in a context of much tighter resources, increased funding will be provided next year for home care packages. The Government absolutely appreciates the difficulties that people with disabilities and their carers face and we have done our utmost to preserve supports for them as much as possible in this budget.

In order to incentivise young jobseekers to avail of education and training opportunities and try to avoid them becoming welfare dependent from a young age, changes are being made to the jobseeker's allowance. For new entrants, the rate of jobseeker's allowance is being reduced to €100 per week for 20 to 21 year olds and €150 per week for those aged 22 to 24, inclusive, who are not in training or education. The basic rate of supplementary welfare allowance payable to new claimants aged 24 and under is also being reduced to ensure that jobseeker's allowance claimants affected by the above measure do not have recourse to a basic supplementary welfare allowance top-up, the net effect of which would be to negate the jobseeker's allowance measure. The qualified adult rate for a spouse payable where the main claimant is aged 20 to 21 is also being reduced to €100 per week.

It is important to note that the following people will not be affected by this measure: existing claimants; young people with dependent children; those who have paid sufficient PRSI contributions to qualify for jobseekers benefit; and people transferring to jobseeker's allowance immediately after exhausting their entitlement to jobseeker's benefit or those transferring from the disability allowance directly to jobseeker's allowance.

Where existing jobseeker's allowance claimants aged 24 or under being paid the full adult rate get a job and leave jobseeker's allowance but lose that job and end up back on jobseeker's allowance within 12 months, they will be entitled to the full rate of up to €196 again, rather than €100 or €150 a week. If this was not done, there would be little incentive for those currently on jobseeker's allowance to take up offers of work.

The full adult rate of jobseeker's allowance will also be paid to the following: those who participate in a full-time Youthreach course for young early school leavers or a full-time course in a senior Traveller training centre; qualify for the back to education allowance for pursuing a full-time second level course or post leaving certificate or VTOS course; participate in a full-time FÁS training course; or take part in the Government's work placement programme. A person in this category will be selected for the employment action plan after 53 days on the live register, and directed to FAS for appropriate training, education and jobseeking interventions.

In the education sphere alone, opportunities are available at all levels. Young people who did not finish school can avail of the Youthreach programme to get a leaving certificate qualification. Those who already have second level qualifications can avail of the thousands of extra places made available in recent years in PLC colleges and third level institutions. Those who have already completed third level can do a masters or participate in the new work placement programme. On top of the opportunities in the education sector, the Department of Enterprise, Trade and Employment will provide an additional 16,000 training places for 2010, bringing the total number available to more than 145,000.

The differentiation in the rates between those aged 20 and 21 and those aged 22, 23 and 24 recognises the fact that the older group would include graduates. The rationale for this change is straightforward. Receiving the full adult rate of a jobseeker's payment at a young age, without a strong financial incentive to engage in education or training, can lead to welfare dependency. It is considered particularly necessary to provide 20 and 21 year old jobseekers with a strong financial incentive to engage in education or training. It could also be argued that people aged 24 or under without child dependents do not need an income of €196 per week and that the current income differential between young jobseekers and third level students, or young job seekers and those who have been working all their lives, is not justifiable.

The new reduced jobseeker's allowance rate for 20 and 21 year olds amounts to €5,200 per annum, more than twice the amount of third level grant payable to young people from the poorest families whose family home is near their college. The reduced rate for 22 to 24 year olds amounts to €7,800 per annum, more than is payable to such young people if they attend college away from home. It is worth noting that the UK pays a reduced rate of just £50.95 per week to jobseekers aged 24 and under. Similar provisions relating to 18 and 19 year olds, introduced here earlier this year, have been effective.

The Government has also decided to limit the treatment benefit scheme from next January to the medical appliances scheme and the free examination elements of dental and optical benefits. The position will be reviewed annually after that. As Senators will be aware, treatment benefits are paid to insured persons from the social insurance fund. Although the social insurance fund has operated a surplus since 1996, this position began to change last year when expenditure had to be partially funded from the accumulated surplus. Expenditure continued to exceed PRSI and investment income to the fund this year and it is expected that the accumulated surplus will be completely exhausted in the first half of 2010. It is estimated that the Exchequer will be required to subvent the fund by approximately €1.2 billion next year. The changes to the treatment benefit scheme will be approximately €54 million next year. The effect of the limitation of the scheme provided for in the Bill is that the treatments previously available under the scheme will be limited to dental and optical examinations. The hearing aid scheme will be retained as is. However, almost 2 million insured persons will continue to be covered for the annual free examination and hearing aids, and more than 400,000 people are still likely to claim a dental examination and 200,000 an optical examination in 2010.

Turning now to the rent supplement scheme, the Government is determined to ensure that reductions in rents generally in the year to date result in savings for the taxpayer. To this end, the maximum level of rent supplement payable by the State will be reviewed early in 2010 on the basis of the latest data available on general trends in rental prices. The maximum rent limits payable will then be adjusted and new limits will apply in respect of new tenancies or renewals of tenancies from April 2010. Based on current information available about decreases in rent levels since April, the Department expects the rent review to lead to savings of €20 million in 2010. With rent prices falling in general, it is vital that taxpayers money is not used to pay inflated prices to landlords.

The budget also provides for an increase in the target for control and fraud savings next year to €533 million across all of the Department's 50 schemes. This is €33.3 million more than the level of control savings planned for 2010 in the pre-budget outlook. The additional savings are being targeted on the non-contributory State pension, illness benefit and one-parent family payments. The increased target also takes account of new anti-fraud powers included in this Bill which I will detail later.

Welfare fraud is theft. It is a serious crime and the Department of Social and Family Affairs is doing everything that it can to crack down on people who abuse the system. I want to put on the record again that there is no evidence whatsoever that 10% of all social welfare customers are engaged in fraud, or that fraud costs the State €2 billion a year. The Comptroller and Auditor General and a multi-party Oireachtas committee have conducted detailed examinations of welfare fraud and neither claimed that fraud rates were this high, as was indicated on a television programme.

The level of fraud on most schemes is very low. As reported by the Comptroller and Auditor General, the percentage of expenditure resulting from fraud identified in the Department's fraud and error surveys ranged from 0% for pensioners, to 0.1% for illness benefit, 0.8% for the family income supplement, 1.8% for child benefit, 2.3% for the disability allowance and 6.4% for the one-parent family payment.

Nonetheless, the Department is conscious that in a small number of schemes, some groups of claimants present a higher risk than others and we have made changes to address this. For example, a number of individual surveys have highlighted a high level of risk that non-Irish nationals could claim welfare payments to which they are no longer entitled after they have left the State. Having identified this risk, the Department has sought to minimise it by removing the option to receive payments by electronic fund transfer for new claimants of jobseeker payments. They must attend in person at the post office each week thus confirming their continued residency in the country. Their claim is automatically suspended where two consecutive payments are not collected. Targeted control measures have also been put in place for child benefit claims from non-Irish nationals and for other customer segments in schemes where any form of high risk has been identified. Since the Department started the cross-Border operations, the percentage year-on-year increase in people signing on for jobseeker's payments in virtually all of the Border offices had reduced.

Fraud detection systems have also been improved through data matches with organisations such as the Revenue Commissioners on commencement of employment data, the General Register Office on marriages and deaths information, and many other organisations including Departments and other State bodies. In addition, a data matching programme is now in place to ensure that relevant information available in one area of the Department is applied to all schemes.

Anonymous reports from members of the public are of increasing value to the Department in tackling fraud. For example, of 144 reports investigated this year in the north-west region, 48 cases, or 33%, generated savings of just under €600,000. In the north-east region, 65 reports, or 31%, of the 216 cases investigated resulted in savings of €880,000 and in south Dublin, 38 cases generated savings of more than €500,000. Despite the various pressures on the Department due to the increased volume of claims received this year, over 600,000 cases were reviewed between January and October, resulting in savings of almost €407 million. This will obviously rise by the end of the year to €500 million.

Last week's budget also included funding of €7 million to allow the roll out of the new public service card. The front of the card will contain a photograph and signature, and other identifying information may be electronically encoded on the card. This will help public service officers, such as those working in social welfare local offices, authenticate people's identity and reduce the potential for fraud. The Department continues to use every available means to crack down on welfare fraud.

I wish to outline briefly the main provisions of the Bill. Sections 3 and 4 and Schedules 1 and 2 to the Bill provide for reductions ranging from €7.50 to €8.50 in the weekly personal rates of payments, excluding payments to recipients aged 66 or over and recipients of the invalidity pension who are aged 65. They also deal with the reductions for qualified adults and with the increases for children. Section 5 provides for an increase of €6 per week in all family income supplement weekly earnings thresholds, effective from 1 January 2010.

Section 6 provides for a reduced personal rate of jobseeker's allowance of €100 per week for persons aged 20 and 21 years and €150 per week for persons aged 22 to 24. It also deals with the consequent effects for qualified adults. Section 7 provides for a reduction of €16 per month in the lower and higher rates of child benefit from 1 January 2010, bringing the rates to €150 and €187, respectively, per month. Section 8 provides for the introduction of a four year time limit for claiming refunds of PRSI contributions. Section 9 provides that where a self-employment contribution record is being used to establish entitlement to a State pension and unpaid PRSI contributions are paid subsequent to the date of claim, the pension will only be payable from the date on which the contributions are paid. Section 10 provides for similar arrangements in respect of claims for a widow's or widower's contributory pension.

Section 11 limits the treatment benefit scheme. Section 12 provides that in determining entitlement to mortgage interest supplement under the supplementary welfare allowance scheme, the amount of mortgage interest relief received by a person and any mortgage allowance or mortgage interest subsidy payable by a local authority under a shared purchase scheme will be deducted from the gross interest payable. This section also provides for a definition of "institution" for supplementary welfare allowance required for the purposes of section 14.

Section 13 provides for a reduced personal rate of supplementary welfare allowance of €100 per week for persons aged 20 and 21 years and €150 per week for persons aged 22 to 24. It also provides for the qualified adult reduction. Section 14 incorporates into primary legislation an existing requirement in the regulations that to be entitled to rent supplement, the applicant must be in a position to demonstrate that he or she could reasonably have afforded the rent at the beginning of the tenancy. In order to qualify for rent supplement, a person must have been a tenant or living in homeless accommodation for a period of at least six months. Section 14 extends this provision to include periods of residence in an institution, as defined in section 12 of the Bill. Section 15 provides that a person who does not have a right to reside in the State cannot be habitually resident here and also provides that asylum seekers cannot be habitually resident in the State.

Under existing provisions, a social welfare inspector may, if accompanied by a member of the Garda Síochána in uniform, stop a vehicle and question anyone in the vehicle where the inspector reasonably suspects that it is being used for employment or self-employment. Section 16 extends these provisions to provide for similar checkpoints operated by social welfare inspectors and customs officers without the need for a Garda presence. It also provides that an inspector may question any occupants for the purposes of the control of any social welfare payment.

Section 17 contains another fraud measure. It provides that an officer of the Minister, authorised by the Minister for this purpose, may serve notice on a financial institution requiring it to make records available for inspection which may contain information about possible welfare fraud. Section 18 provides for the transfer of bulk information relating to recipients of social welfare payments to the competent authority of another member state or international organisation, or other country with which a reciprocal agreement has been made.

Section 19 provides that payments made under the scheme known as the special Civil Service incentive career break scheme will not be regarded as earnings for the purposes of the various earnings disregards applied in determining entitlement to social assistance payments, and will therefore be fully assessable as means. Section 20 provides for the inclusion of the Health and Social Care Professionals Council and the Road Safety Authority in the list of specified bodies authorised by legislation to use the PPS number as a public service identifier.

Part 3 is an amendment to the Pensions Act 1990. Under the provisions of that Act, an application to the Circuit Court for an order to enforce a determination of the Pensions Ombudsman must be made by the Minister. Section 21 provides that such applications will be taken by the Pensions Ombudsman.

Even with the changes provided for in this Bill, €21.1 billion will be spent on social welfare in 2010, which is €676 million or 3.3% more than the expected final expenditure figure of €20.4 billion for 2009. The Government appreciates that the cuts we are making in the welfare area will not be easy for people, but we also genuinely believe that if we do not take steps now to reduce overall public expenditure and restore stability to the public finances, we risk making the economic situation far worse for everyone in the long term, including welfare recipients. We were faced with the scenario of having to make savings in each of the three major areas of expenditure of the Government, namely, public pay, social welfare and services. Not to take from any one of those three elements would have placed a burden on the other two, which would have been equally unfair.

We have avoided making any cuts in the State pension. We have also fully protected more than 420,000 children in welfare-dependent and low-income families from cuts in child benefit. We have ensured that cuts in weekly rates for those aged under 66 are lower than the decreases in prices over the past year. I appreciate that the changes in this Bill are difficult, but they are also necessary and I look forward to a constructive debate about them over the next two days in this House.