John Perry (Sligo-North Leitrim, Fine Gael)

This is straight talking.

I would like to clarify some elements of the voluntary contribution provisions. The total number of participants is 3,000, while the number of new applicants during 2011 was 1,720. Some 62% of voluntary contributors are male, while 38% are female. The voluntary contribution schemes applies both to former self-employed and former employed persons - 25% are former employed contributors, while 75% are former self-employed contributors. It is estimated that 100 cases annually will be affected by the change to be introduced in 2013, with a further 100 cases affected annually from 2014 onwards. The changes in the requirements to become a voluntary contributor do not affect existing voluntary contributors who are availing of the scheme. The people who avail of this option to become voluntary contributors include retired employees not in receipt of social welfare credits, persons working abroad no longer subject to Irish social insurance and self-employed contributors who have ceased self-employment or do not have a PRSI liability because they fail to meet the income threshold of €5,000 to pay class S PRSI contributions. There is a flat rate contribution for such voluntary contributors of €253 per annum. The principal purpose of the change to the scheme is to align with the change in the contributory State pension scheme which, from April, requires a minimum of 520 paid PRSI contributions for qualification purposes. These changes will not affect those currently in receipt of contributory State pension.

Senators referred to the need to control social welfare fraud which undermines public confidence in the entire system, as well as being unfair to other recipients of social welfare payments, businesses run on a legitimate basis and taxpayers. The Government is very conscious of the need to protect public money and determined to ensure abuse of the system is prevented and dealt with effectively when detected. A number of important fraud control measures are being provided for in the Bill. While social welfare inspectors have a range of existing powers of inquiry, it does not include a specific power of inquiry at ports and airports. New measures will allow them to make inquiries at ports and airports where they believe or are aware an offence has been or is being committed by individuals, that is, where they have a reasonable suspicion or evidence that an individual is entering the jurisdiction solely for the purpose of continuing to claim social welfare payments to which he or she is not entitled.

With regard to the rent supplement scheme, there will be new measures to strengthen the powers of social welfare inspectors to make inquiries of landlords for rent supplement purposes. While there are existing powers that allow for the general investigation of rent supplement claimants, they do not include a specific power of inquiry of a landlord of a premises where a rent supplement is being paid to ensure the supplement is being correctly paid. This provision introduces new powers for social welfare inspectors and community welfare officers to make inquiries of landlords where a rent supplement is being paid. There are almost 95,000 rent supplement recipients, with a provisional expenditure outturn of €503 million in 2011. The estimate for 2012 is €437 million. In the case of new claims for social welfare payments, the existing legislation is being amended to make it a condition that a claimant's identity be appropriately authenticated. This provision allows for a photograph and electronic signature to taken, retained and reproduced. In the case of an application for and the allocation of a personal public service number and public services card, provision is being made to ensure a person's identity will be appropriately authenticated. This provision also allows for a photograph and electronic signature to be taken, retained and reproduced. As well as combating identity fraud, the public services card will, in time, replace the cards currently in use such as the social services card and the free travel card with a highly secure card.

As regards jobseeker's benefit, the proposed measure will not impact on a person whose sole income comes from social welfare; the headline rate of €188 a week for a single person is unaffected if the person does not have additional income from employment for days worked. It will only apply to those who have earned additional income from working some days during the week. The effect of the measure will be to reduce the contribution from jobseeker's benefit in the weekly amount of total income, welfare and wages combined, and work towards a reduction in reliance on the welfare system among those who avail of the mix of welfare and earned income. It is proposed to base jobseeker's benefit on a five-day as opposed to a six-day week, as is currently the case. This effectively means that all casual and part-time workers will have the same method of calculation of the payment as currently applies to short-time workers. If the employer of a person who has normally worked full-time reduces the number of days worked on a permanent basis, the person concerned may receive jobseeker's benefit for the days he or she does not work. For each day a person is unemployed, one sixth of the normal rate of jobseeker's benefit is currently payable. For example, if a person works part time for two days, he or she can claim four sixths of the normal jobseeker's benefit payment. As a result of the change provided for in the Bill, from July, for each day a person is unemployed, one fifth of the normal rate of jobseeker's benefit will be payable. For example, where a person works part time for two days, he or she will be able to claim three fifths of the normal jobseeker's benefit payment. An estimated 18,000 in receipt of jobseeker's benefit will be affected in a full year. It is important to note that recipients of the benefit may opt for jobseeker's allowance which is subject to a means test.

The purpose of mortgage interest supplement is to provide short-term income support for eligible persons who are unable to meet their mortgage interest repayments on a house which is their sole place of residence. The supplement assists with the interest portion of the mortgage repayment only; the capital element of the repayment is not taken into account in calculating the amount of supplement payable. Approximately 18,200 are in receipt of mortgage interest supplement, an increase of 360% since 2007. Expenditure of €50.8 million has been provided for in the year ending 31 December 2012. Budget 2012 provides for the curtailment of access to mortgage interest supplement for the first 12 months where a person is involved in the mortgage arrears resolution process, as set out in the code of conduct in dealing with mortgage arrears applied to mortgage lenders.