Joan Burton (Dublin West, Labour)

Ar an gcéad dul síos, ba mhaith liom mo bhuíochas a ghabháil le gach Seanadóir a ghlac páirt sa díospóireacht seo. Go háirithe, ba mhaith liom mo bhuíochas a ghabháil leis na Seanadóirí a thug a dtacaíocht dos na réitithe éagsúla sa Bhille, go mórmhór leo siúd a labhair faoin scéim inteirneachta. I thank all of the Senators who contributed to the debate on the Bill, and I welcome the support of so many Senators for the measures contained in the Bill. There were a number of recurring themes which I wish to address.

With regard to social welfare reform, I wish to inform and advise Senators that I will be announcing this weekend, as indicated in the programme for Government, the formation of a commission for the reform of social welfare and its interaction with taxation and work, to ensure, as many Senators on all sides of the House said, that work pays. That is the bottom line. That came from Members' contributions.

Initially, we will be considering family income supports in the social welfare system and how they interact with the taxation system. I have already said, with regard to the Duffy-Walsh report and the proposed reforms of joint labour committees, that one must be very careful in moving to economise on wages, that one does not push people into greater dependence on social welfare. The figures that have emerged today for GNP and GDP growth in Ireland show what many Senators reflected in their contributions, namely, that we have two economies. We have an export, services and goods economy which is doing very well, as shown by the figures published today. However, we also have a domestic economy that is very flat and in which we are trying to both retain jobs and create new ones. Some Senators suggested monitoring the impact of the reduction in employers' PRSI. This applies to low-paid employees up to the end of 2013, and if there is no evidence that the measure is helping to retain jobs and increase employment, we will have to reconsider it. I gave that undertaking to the Dáil as well. We will be monitoring it.

When implementing changes to the social welfare system, it is important that we try to achieve continuous monitoring and updating of changes. In recent years, when there was a lot of money to spend, there was much expansion of schemes, which was gratefully accepted by the people availing of them, but it was done without much insight into the effect on the overall social welfare system.

People spoke about incentives to work. I do not think it is a secret that this is something that is lacking in the current social welfare system. The example was given earlier by Senator Healy Eames of a young man with a family who was reluctant to accept a job with a salary of €40,000. Let me try to do the maths. For an unemployed couple with three children, one benefit is the entitlement to a medical card if one or more of the children have an ongoing medical condition. If one is in low-paid employment and does not have a medical card or even a GP card, we all know how expensive it can be. For example, for a child who has a couple of bouts of asthma over one winter, the cost of visiting a GP can be €50 to €60, certainly on the northside of Dublin, and then there is the cost of prescriptions and inhalers. This problem is easily addressed by allowing people to retain their medical cards if they move into work, as in the back-to-work schemes that Senator Moloney spoke about. I was involved in setting these up many years ago when unemployment was high. We had an 18% rate of unemployment at the end of the 1980s and the beginning of the 1990s.

The other big differential between those who are working and those on social welfare is, of course, rent supplement. Let us be honest about this. For a family of five renting a three-bedroom house, particularly in Dublin, this can be worth as much as €1,000 per month, without any taxation considerations. A person who is the breadwinner for a family of five and earning €40,000 per year must pay PRSI, the universal social charge and a small amount of income tax, whereas a family on rent supplement could be receiving a housing benefit of €1,000 per month - which would not be untypical for such a family in the Dublin region - or, for a family outside Dublin, a couple of hundred euro less. We are talking about a differential of €10,000 to €12,000 per year, and that is what constitutes the difference to which people have referred in their examples.

Shortly after taking office, I asked my Department to carry out research on this, because employers do say they offered a job to somebody at €35,000 or €38,000 and he or she was not interested. I do not think those examples are in any way mythical, but they do relate to people with a number of children who are entitled to a medical card. The medical card issue is addressable by instituting a transition period, but the rent supplement issue can only be addressed by a concerted effort by the Departments of the Environment, Community and Local Government and Social Protection, working together to make arrangements such as the rental accommodation scheme, or the RAS, as people call it in Dublin. We must remember that in a family receiving rent supplement, only the person who receives the rent supplement is assessed for the contribution, whereas most differential rent schemes assess the social welfare income of all adults in the house.

I have had detailed discussions with my colleagues the Minister for the Environment, Community and Local Government, Deputy Hogan, and the Minister of State with responsibility for housing, Deputy Penrose, to examine whether we can move the rent supplement scheme from my Department to local authorities and the Department of the Environment, Community and Local Government, where there is expertise in dealing with housing, by the beginning of next year. The differential rent system would apply. We would also be in a position to obtain better value in rents and to ensure landlords are fully registered for tax and income purposes.

Many Senators mentioned the issue of social welfare fraud. The message must go out that fraud is not acceptable and that it is taking food out of the mouths of old age pensioners who are relying on the State for their income. When we take Committee and Report Stage of the Bill next week, we might explore some of those issues.

I thank Senators for their support on the internship scheme. Last year and the year before, Fianna Fáil announced 5,000 intern-type places, but none of them was ever taken up. There is also the Tús scheme, which is a valuable scheme designed by the previous Minister, but I was disappointed when I came into the Department to find there was not a single person on it. We are now making a considerable effort to fill those places because Tús is a copy of the rural social scheme, which was run quite well over a number of years.

The increase in the age of eligibility for the State pension has been signalled over a long period. The discussions have been ongoing since 2007. I accept what Senators have stated about the difficulties the transition year may pose and I am aware of these. We will examine the matter but we are in an enormous economic hole. The difficulty for Ireland is that the current fiscal deficit, the gap between income and expenditure, is enormous and we must bridge it. The reason the sovereign has been completely destabilised is because of Fianna Fáil's ill-fated and disastrous bank guarantee, whereby the then Fianna Fáil Government took the debts of the banks collectively onto the sovereign. That has weakened the sovereign more than anything else.