Joan Burton (Dublin West, Labour)

That is something on which we will all have to work, and organisations are correctly concerned about the poverty that loan parents and their children are experiencing in some cases. This would be an appropriate area to discuss and investigate to see if we can make the outcomes better. Today's ESRI report, which this House might have an opportunity to examine separately, is a good contribution to the debate.

On the redundancy payments, we spent €1.1 billion on redundancy payments to employers in the past three years. I acknowledge the concern regarding small employments but Dell spent €12 million on redundancy payments to people in respect of jobs in Limerick that went overseas. That was in what was otherwise a fairly profitable position at plant level. In SR Technics in my constituency, 1,000 qualified aircraft engineers — the best in the world — were made redundant at short notice and all of the jobs went back to Switzerland. The State paid nearly €14 million to the company to transfer good, profitable jobs to Switzerland. We must consider that.

In Germany, employers who are in difficulty are incentivised to retain jobs. We should try to turn this around here but we must consider how we can incentivise the retention of jobs where, in the type of circumstances referred to by a number of Senators, employment is marginal and in great difficulty. We are the only country in Europe which retains incentives to redundancy but in a time of economic difficulty and depression, it may be necessary to switch the incentives to retaining employment rather than incentivising redundancy. That is an issue to which we will return.

I recognise and accept what many Senators on both sides of the House said, including Senator O'Keeffe, about taxing or means testing child benefit. Means testing might require an army of means testers. People who have assisted people with student grants, for instance, know how difficult and time consuming that is with appeals and so on. If we can address this issue through the taxation system or through refundable tax credits, which is the mechanism suggested for many years by people like Fr. Seán Healy, that would be a more attractive option than straightforward taxation.

I expect to have a report from the advisory group working on this issue by the end of March, and I will bring that report to the House for discussion. We should examine all of the options in such a debate. One option suggested before the budget by the Institute of Taxation has much merit, namely, that people with an income over a certain threshold, say €100,000, should make a tax return. If they were making a tax return that might facilitate the suggestions made by a number of Senators to the effect that people earning over €100,000 might pay tax on their child benefit. There are many complications constitutionally about child benefit but if a tax return was required, that would be a mechanism whereby child benefit could be declared in terms of the income of the child or the caring parent.

I apologise to any family who felt upset by the proposals on disability. I accept what was said regarding children with a profound disability. I worked for many years, almost since they were established, with the centres for independent living where people with a high level of disability carry out important and satisfying jobs but with a high level of support and personal assistance. I have been influenced over many years by their approach which is that we should enable an ability-focused and not simply a disability-focused approach.

There are two issues in the proposals, and to clarify for Senators, they have been dropped from the Bill, that merit consideration in the future. First, should a child of 16 or 17 years of age be in receipt of a social welfare payment directly or should its parents receive the money in terms of the authority of the parent? My view is that the payment should go to the parent. Second, I believe that we should have an encouragement in the system so that the child receiving €188 per week can be encouraged to stay in school or in training. Young adults receive lower jobseeker's payments, and this system was introduced by the former Minister, Mary Hanafin. I supported her at the time, if people care to check the record. People get the full payment if they are engaged in education, training or any activity that helps them achieve their full potential, whatever that is. There have been previous discussions about introducing a partial capacity payment. I hope that by the end of January, we will be in a position to advance some of the proposals that have been made.

Several Senators asked about job activation measures. The job activation measures were not announced in this budget. The Government will be making announcements on them in January.

Widows currently qualify for a widow's pension on a contributory basis after three years of contributions. From December 2013, there will be a requirement for five years of contributions. This is because the contribution requirements for the old age pension have gone up and we will be looking for five years of contributions at the end of another two years. Someone who has three years at the moment will have another two years to build up five years, based on either that person's own contribution or the spouse's contribution. A person with three years of contributions to the social welfare system currently receives a full widow's pension. Most widows are widowed later in life, which is why the contribution threshold is set at a very low level. That is the change proposed.

A number of questions were asked about CE schemes. I am slightly constrained on this as the Minister for Social Protection, for the simple reason that CE schemes do not come under the remit of the Department of Social Protection until 1 January, so I ask for some understanding on that. I have asked the 700 people from FÁS who are joining the Department on 1 January that a review be carried out, on a rolling basis, of all the CE schemes, with a view to examining the good outcomes of the service delivered to a particular group or community, the outcomes for the participants of the CE schemes and suggestions to improve them, and whether we can get better value for money. Some CE schemes are spending a lot of money on insurance and small schemes, while other schemes spend a lot of money on audit fees. We want to find out if we can get value for money by bringing some of the cost structures together.

There will be no immediate changes to CE schemes until the review process has been completed. That process will be undertaken on an ongoing basis after 1 January, when the CE schemes are before the Department. I want to ensure that more people get an opportunity to take part in CE schemes, and that we get better value for the €900 million that we will spend on employment supports next year. We also have some additional funds in the budget that will be made available to people on CE schemes. We have a training fund of €4.2 million and an extra activation fund of €20 million for training.

Senator O'Brien said that he had much experience of looking at FÁS and at uneven qualities in the training provided. In the new structure under SOLAS, we hope to work much closer with the VECs and with other established education providers, whether in the public or the private sector, to provide better quality training and education.

We are spending over €500 million on rent supplement. In some cases, we need to review the rent levels. I am aware that the extra contribution is difficult, but we should remember that those adults on social welfare or other income and who are on a traditional local authority tenancy or on the RAS, are contributing to the local authority rent. However, in respect of the rent supplement, only the person and his or her spouse who receive the supplement have been contributing. If we are to transfer to the local authorities — which is what I would like to see happen with rent supplement — then the two rent treatments need to come together. All of the studies show that rent supplement is the most serious disincentive to taking up work. If people are on rent supplement and they take up a lot of work, they lose that supplement, which could be up to €1,200 per month, depending on the family size. If we transfer the rent supplement to the local authorities, people who are getting it would then be on a differential rent and if they are taking up work, they would have some guarantee that their rent might be somewhere between 11% and 16% of their income and they could therefore calculate how much is at stake and how much extra they could gain from working.

Senator O'Keeffe referred to social welfare being a bit like an onion and that we have to keep peeling in order to figure out the complexities of the system. It is worth working towards that reform. It is also worth bearing in mind that of the 95,000 people on rent supplement, most are single people. The number of large families on rent supplement is relatively small. We make up about 50% of the private rental market and we certainly need to get better value.

We are hoping to get a discount from the energy suppliers in the region of €15 million. I think I have dealt with most of the issues now. On the disablement——