Joan Burton (Dublin West, Labour)

On the savings from the five specific measures, first, I am reducing from 60% to 15% the rebate for companies which make staff redundant. Second, the fuel allowance in future will be payable for 26 weeks, a reduction of six weeks. The level of the allowance and its duration has greatly increased in the past ten years. The scheme is unsustainable, given the increase in the numbers of people. People sometimes believe fuel allowance goes only to pensioners and people on invalidity or disability benefit. It also goes to people who are long-term unemployed and to all lone parents. It goes to a significant number of people, therefore, and it is expensive. It is important but it is expensive. We will be paying the fuel allowance for the coldest six months of the year, namely, mid-October to mid-April. It always has been the case, and will continue to be the case, that a person in difficulty with fuel or energy costs can go to their community welfare service. That service has now been integrated into my Department, and the community welfare service is ready to assist people in difficulty.

Third, I am reducing child benefit to €148 for the third child, while the rate for the fourth child is reduced to €160. In addition to generating savings, this will facilitate a planned reform of the overall system of child income supports which will include a standard universal payment for each child, supplemented by a further payment for low-income families, regardless of whether they are in employment.

Fourth, I am increasing the minimum contribution to rent or mortgage interest supplement by €6 a week for a single person and €11 a week for a couple. I am determined to try to get value for the €0.5 billion the Department is spending on rent supplement each year. I also intend to reduce rent limits, where appropriate, to ensure state support for rent supplement tenants does not give rise to inflated rental prices.

Fifth, the amount of earnings disregarded for the purposes of the one parent family means test will be reduced from €146.50 per week to €130 per week next year. I recognise that this will be difficult for the people parenting on their own who are affected by this measure. However, given the choices before me, it is appropriate to target savings from those lone parents who have employment income of more than €130 per week in addition to their social welfare payment. Those with employment income of less than €130 per week, and their social welfare payment, and those with no employment who are relying solely on their social welfare payment are not affected.

It is not just about saving money. The changes must be also consistent with moves to reform the social welfare system to make it more responsive to modern conditions and to make it financially sustainable. We inherited a social welfare system on independence from the British poor law system and, largely, we have continued with that rather than having fundamental changes which examine people's opportunities and options throughout their life and use the State resources to maximise what people can do with income support.

A core principle of sustainable social protection systems in advanced economies is that citizens receive benefits in proportion to their contributions. Some of the changes I am introducing today in the area of pensions put this principle into practice. Another principle is that we should gradually move towards a system where everyone would have an entitlement to one weekly income support payment only, with no special arrangements or top-ups for particular groups. It is no longer possible to have a social welfare system where some people get more than one primary weekly payment if we want to avoid reducing the level of weekly payments generally. We have delivered on our promise to retain core rates, but we are discontinuing entitlements to certain concurrent or additional payments.

Since coming into office my priority has been to ensure that job readiness for the unemployed and keeping people in employment is at the top of the agenda. The introduction of the national internship scheme, JobBridge, was a key step in providing new pathways to employment or re-employment and more than 3,000 people are now on the scheme. The Department will be spending €977 million on employment supports, including community employment schemes, in 2012. That is up from €882 million in 2011.

For the information of Deputies, the FÁS labour services and the community employment schemes will come under the remit of the Department from 1 January next. We will receive the budget for next year but we do not have operational control over the community employment schemes until 1 January.

As Senators are aware, I will be introducing changes to community employment schemes to make them more effective and efficient. I recognise, and I know from my own work, as I am sure do many Senators, that community employment schemes provide an important and valued contribution to social employment and training for unemployed people, and to delivering services to communities throughout the country. The Government is fully committed to the protection and development of community and social employment initiatives. We will seek value for money reviews of schemes emphasising good outcomes and experience for participants. The national training fund will provide €4.2 million for training on CE schemes in 2012. In addition, SOLAS will continue to provide access to its training programmes for CE scheme participants. SOLAS is the education side of FÁS and will start operations from 1 January. I am happy to say that an extra €20 million has been allocated for activation, which will play a very important role for both CE schemes and in the education sector.

I want to focus attention on the particular measures that are contained in the Bill. The Bill will give legislative effect to some of the social welfare measures announced in the Budget Statement of 5 December 2011, which are due to come into effect from 1 January 2012. The budget announcement included a number of other measures which are not provided for in this Bill. Some of these measures relate to non-statutory schemes and do not require legislative amendments. Other measures will be implemented through regulations and through legislation to be brought forward early in 2012.

I would now like to outline the main provisions in the Bill. Section 3provides for the abolition of entitlement to payment of disablement benefit in the case of assessments of loss of faculty amounting to less than 15%, with effect from the beginning of January 2012. This is for new cases. Existing recipients of disablement benefit, who have qualified for payment before 1 January 2012 on the basis of assessments of less than 15%, will be protected.

Section 4 provides for discontinuing the current entitlement to the payment of a half-rate qualified child increase, where the spouse, civil partner or cohabitant of the beneficiary has weekly income in excess of a prescribed amount of €400 per week in the case of new claimants of carer's benefit, State pension (contributory), State pension (transition) and invalidity pension, with effect from the beginning of July 2012. This section also extends the reference to the spouse of the beneficiary, in the case of similar provisions applying to the incapacity supplement scheme, to include a reference also to the civil partner or cohabitant of the beneficiary. Existing claimants in receipt of the half-rate QCI will not be affected..

Section 5 provides that the implementation of certain provisions of Schedule 6 to the Social Welfare Consolidation Act 2005, relating to changes in the entitlement conditions for State pension (contributory) and State pension (transition) with effect from 6 April 2012, will not apply to existing recipients of those pensions. Paragraph 3 of Schedule 6 provides for the increase in the minimum number of paid employment or self-employment contributions required to qualify for the State pension (contributory) and the State pension (transition) from 260 to 520, with effect from 6 April 2012.

Section 6 provides for increasing the number of qualifying contributions required to qualify for the widow's, widower's and surviving civil partner's (contributory) pension. Existing pensioners will not be affected by these changes. I will be proposing an amendment on Committee Stage to change the section to increase the number of paid PRSI contributions required to qualify for these pensions from 156 to 260 from December 2013.

Section 7 provides for the discontinuance, with effect from January 2012, of the transitional measures which enable the one-parent family payment to continue to be paid for a period of up to six months where a claimant's weekly earnings exceed €425. Existing one-parent family payment recipients who are benefitting from these transitional measures at the beginning of January 2012 will continue to receive the transitional payment for the unexpired balance of the six-month period.

Section 8 provides for the discontinuance of the payment of the grant for multiple births under the child benefit scheme, with effect from 1 January 2012. This section also provides for the phased alignment of the different rates of monthly child benefit payable according to the family size into a single rate. The rates payable to the third and subsequent qualified children will be reduced with effect from 1 January 2012 and further reduced from 1 January 2013, when there will be a single rate of €140 for each qualified child. That compares with the UK, where the rate for the first child is €100 and the rate for the second and all subsequent children is €67 per month.

Section 9reduces the period for backdating claims to long-term contributory pensions such as the State pensions, the widow's, widower's and surviving civil partner's pension schemes and the guardian's payment, from up to 12 months before the claim was made to six months. The new backdating arrangements will apply to claims for such payments made from the beginning of April 2012.

Section 10 amends the rules relating to the assessment of means for certain social assistance payments, including the abolition of the income disregard for income from employment by the HSE as a home help in the case of all social assistance payment schemes, and increasing the proportion of income from farming and fishing assessed as means from 70% to 85%, for the purposes of the farm assist and jobseeker's allowance schemes. These amendments apply to both new and existing claimants of the relevant schemes, with effect from 1 January 2012.

Section 11provides that for the purposes of calculating means for the one-parent family payment, the weekly earnings disregard is being decreased from €146.50 to €60 over a five-year period, commencing from 1 January 2012. The annual reductions in the weekly disregard will apply to both new and existing one-parent family payment claimants.

Section 12 discontinues, for new claimants, entitlement to receive a weekly social welfare payment where a person is also participating on a community employment scheme. With effect from January, new entrants who participate in the CE scheme will no longer be entitled to receive simultaneously both a CE allowance and a proportion or all of their social welfare assistance payment.

The introduction of this measure is part of the move towards the introduction of a single working age assistance payment, as it removes discrepancies in the existing system which enables individuals in receipt of certain social welfare payments to retain all or a proportion of these payments, while simultaneously receiving the CE allowance.

Section 13provides for changes to PRSI by extension of liability to share-based remuneration. In the last budget, share-based remuneration was brought within the charge of PRSI. The effect of the changes is that share-based remuneration is subject to employee PRSI only.

Section 14 provides for the abolition of employer PRSI relief on employee occupational pension contributions, with effect from 1 January 2012. Employer relief in respect of employee pension contributions had been reduced to 50% in the last budget and we are now bringing that to 100%.

It is vital that the Government secures economic recovery in the country. It is not possible to stabilise and reduce public spending without reductions in social welfare spending. If we do not make these changes now, we risk making the economic situation far worse for everyone, including social welfare recipients in the long term. Each measure that reduces the support we can give to those in need is difficult to make. When we need to consider the future of our children and the long-term economic prosperity of our country, these hard choices unfortunately have to be made. We have done our best to protect the most vulnerable members of our society by maintaining the primary weekly social welfare rates. This is a momentous achievement in the current climate.

Even after these savings, this Government will spend €20.5 billion on social protection in 2012. In the future that €20.5 billion will be spent on developing a culture of enablement. In that way, those who find themselves having to rely on social welfare, particularly during their working lives — roughly from leaving secondary school to retirement — will find a suite of options in education, training and work experience which will ultimately help them to become fully financially independent. That will fulfil the social contract underlying the welfare state — that people of working age contribute in order that we can provide an income to support children, retired older people and those of working age who fall ill or lose their jobs. We must utilise the €20.5 billion to do positive things, thus enhancing the social welfare state and emerging from this difficult recession during which hundreds of thousands have lost their jobs. We will emerge enhanced and more robust, with better economic opportunities to ensure people's economic independence. In addition, we will provide strong support for those who need to rely on the Department of Social Protection.

I commend the Bill to House and look forward to listening to the debate.