Joan Burton (Dublin West, Labour) | Oireachtas source

As Minister for Social Protection, I strongly believe social welfare must be there for those who need it and that we must do everything we can to help people back to work. In essence, the social welfare system must provide a safety net and a springboard to help people back to work. To achieve that, my focus has been on transforming the Department from a passive provider of benefits to an organisation that is actively assisting people back to work, training or education. In this legislation, I continue the necessary and important structural reforms of the social welfare system. I also make important amendments to the social welfare code on PRSI, jobseeker's payments, fraud prevention and to the pensions code relating to occupational pension provision.

In his Budget Statement last December, the Minister for Finance announced a number of measures to broaden the income base for PRSI in order to ensure the stability of the Social Insurance Fund. One of the PRSI base-broadening measures provided for in the Bill extends liability for PRSI contributions in 2013 to certain civil and public sector workers who pay modified rates of PRSI contributions and who also have income from a trade or profession. They will now be liable for a PRSI contribution of 4% on any income arising from a trade or profession. I will give an example with which many Members will be familiar. There are a lot of highly-paid medical consultants who work in the public system but who also have lucrative private practice income. Up to now, those consultants did not pay PRSI on the private income. We know from VHI statistics that more than 300 consultants earn in excess of €200,000 from their private practice income and of the 300, one or two earn double the amount. The Bill will change the situation and result in a fairer system. The measure will extend the PRSI base to ensure it covers all income of public sector workers from their trades, professions or other employment. It is anticipated that the change will yield up to €12 million a year in additional PRSI revenue.

In recent years, reforms have been made to the one-parent family scheme. We have discussed the scheme at length in the Chamber. I now propose reforms that will ease the transition of former recipients of one-parent family payment with young children to the jobseeker's allowance scheme. These parents will be exempted for a transitional period from the full conditionality of the jobseeker's allowance scheme, specifically the criteria that jobseekers must be available for and genuinely seeking full-time work. However, they will be required to engage fully with the Department's activation process.

The changes will allow the lone parents in question to seek part-time work rather than full-time work if that better suits their family circumstances. They will also be able to access existing child care supports and the additional supports I funded for the Department of Children and Youth Affairs for 6,000 after-school child care places. The transitional period will last, provided the individual continues to satisfy entitlement conditions for one-parent family payment other than the relevant age of their youngest child, until the child reaches 14 years of age. That was an issue we discussed on previous occasions in the Chamber.

I am introducing changes to jobseeker's benefit and jobseeker's allowance to allow for persons working as retained firefighters to be exempted from certain conditions to enable them to access these schemes. Sometimes the pace of reform in this country is slow but this has been an issue since 1972 – more than 40 years. I am delighted we are now bringing in legislation to deal with the matter because retained firefighters are extremely important in their local community. There are approximately 2,000 of them in total, of whom approximately 800 rely on support from social welfare payments to supplement their income. This is part of the cost of providing a nationwide part-time fire service. However, no legislative basis was ever provided to support the position, which led to uncertainty and difficulty for individual firefighters. I am now bringing clarity to this situation in recognition of the social good of the work of retained firefighters, their service to the community and the bravery and sacrifice shown by fire brigade personnel through the decades.

It is essential that each person in receipt of a jobseeker's payment fulfils his or her personal responsibility to engage fully with the employment and training supports provided by the State. Currently, the rules provide for reductions of up to €44 a week in the personal rates of payment for those who refuse to engage in activation. I propose that the sanctions which currently apply to the refusal to participate in training and education options will be extended to prescribed employment programmes and education courses. The changes will also provide for a strengthening of the sanctions, in the form of a disqualification for up to nine weeks, where a customer continues to fail to engage with activation measures after the weekly rate of payment has been reduced for more than three weeks. If people take part then they will go back to the appropriate level of payment.

Fraud undermines confidence in the entire system and is unfair to genuine claimants and the taxpayers who fund it by paying tax and PRSI. Identity authentication is an important part of ensuring that only those who are entitled to payment receive it. I will propose a change to provide for the introduction of a condition for existing recipients of social welfare payment that the person must satisfy the Department as to his or her identity, including allowing for electronic capture of a photograph and signature. That is already in place for new recipients. To date, more than 250,000 public services cards have been rolled out, which contain a biometric photograph. That is of great assistance in terms of limiting fraud and multiple claims.

Effective debt recovery is a key aspect of my Department's control policy. I am introducing a provision in the Bill to further improve the Department's ability to recover overpayments. It is intended to target persons who have a capacity to repay, but repeatedly refuse to do so.

This will be undertaken by way of an attachment notice to earnings, moneys due by other Government agencies, or where that individual has funds in financial institutions. To date we could only address this by going into civil legal proceedings, which are very expensive and lengthy.

I am also introducing changes to occupational pension provision. These changes gives effect to the recommendation of the critical review undertaken by the Pensions Board and the Pensions Ombudsman as part of the public services reform plan. I am also introducing a number of other amendments to the Pensions Act to: give powers to the Pensions Board to wind-up a pension scheme in certain circumstances; provide for the disclosure of information on a proposal by the Pensions Board to restructure scheme benefits and to provide for an appeal to the High Court on a point of law against a direction by the Pensions Board to restructure a defined benefit pension scheme; provide the Pensions Board with a right of appeal to the High Court to seek compliance with a directive to either restructure scheme benefits or a direction to wind-up a scheme; change the fines regime that applies to personal retirement savings accounts; and amend the terms of office of the Pensions Ombudsman.

The changes I am bringing forward today will strengthen governance and regulation of occupational pensions and give consumers greater input into pensions policy. The Pensions Board will be renamed the pensions authority to ensure public awareness and clarity of its role and functions and distinguish it from the policy advisory activities. I am very aware of the persistent funding challenge facing defined benefit pension schemes. Greater accuracy of the overall funding position of schemes will be provided after the end of June when schemes submit their funding proposals. The deadline for funding proposals is 30 June and it is essential that schemes comply with the deadline.

Trustees must meet their legal obligations. Ultimately the Pensions Board will use its regulatory powers where benefit underfunding is not properly addressed.

There was an expectation that I would be bringing forward in this Bill changes to the manner in which assets are distributed on the wind-up of a pension scheme. This is a very complex and sensitive issue and one which has received considerable scrutiny in the Department. In light of the recent decision by the European Court of Justice in the Waterford Crystal case, the Government recognises the need for a comprehensive policy and legislative response that addresses the range of issues involved. In light of the outcome from the responses to the funding standard and the considerations on the Waterford Crystal case, which are coming back to the Irish courts, I will bring forward proposals to Government on the appropriate policy response.

I will now outline the main provisions of the Bill. Section 1 provides for the Short Title, collective citations, construction and any necessary commencements. Section 2 defines a number of common terms used in this part of the Bill. Section 3 replaces references to training provided or approved by FÁS contained in the Social Welfare Consolidation Act in light of the new structural arrangements for the provision of State training. Section 4 amends the definition of a "special contributor" which is used for the purposes of the special collection system operated by the Department of Social Protection for the collection of certain PRSI contributions. Section 5 is a technical amendment which corrects an error in the wording of section 23(5) of the Social Welfare Consolidation Act 2005.

Section 6 extends liability for PRSI contributions to modified rate PRSI contributors. Section 7 provides for a number of amendments to the Social Welfare Consolidation Act 2005 to take account of the provisions of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010. Section 8 amends the conditions of entitlement applying to the partial capacity benefit scheme. Section 9 provides for changes to the jobseeker's benefit and jobseeker's allowance schemes to exempt persons who are working as retained fire­fighters from certain conditionality due to the nature of that employment.

Section 10 provides for amendments to the jobseeker's allowance scheme to cater for the transition of persons to that scheme who no longer qualify for one-parent family payment due to their youngest child reaching specified age thresholds. Section 11 extends the identity authentication requirements that currently apply to new applicants for a social welfare payment, a personal public service number or a public services card to existing recipients of social welfare payments under which they must agree to have a biometric standard photograph and electronic signature taken.

Sections 12, 13 and 14 provide for extension of the sanctions which currently apply to refusals to participate in training and education options to prescribed employment programmes and education courses. These sections also provide for a strengthening of the sanctions, in the form of a disqualification for up to nine weeks, where a customer continues to fail to engage with activation measures after the weekly rate of payment has been reduced for more than three weeks.

Section 15 provides for notices of attachment for the recovery of social welfare overpayments from earnings or money in financial institutions. This measure will be used in circumstances where a person who has been actively engaged with by the Department, refuses to co-operate with the repayment of his debt and where there is evidence of an ability to repay.

Section 16 provides that a working director with a shareholding of 50% or more in a company will not be regarded as being insurable as an employed contributor in that company. Company directors holding 50% or more of the shareholding of a company are not normally regarded as falling within a normal employer/employee relationship and are therefore deemed not to be employed under a contract of service and liable for PRSI class A contributions as an employee.

Section 17 clarifies the operation of the income disregard which is used for the purposes of the rent and mortgage interest supplement schemes. Section 18 extends the list of bodies that are authorised to use the personal public service number for the purposes of carrying out transactions with members of the public and for sharing personal information. The new bodies being included are the Insolvency Service of Ireland, Quality and Qualifications Ireland, and payment service providers who have been authorised by the Revenue Commissioners to collect the local property tax.

Section 19 is a technical amendment. Section 20 provides for amendments to the Civil Registration Act 2004, to allow for the provision of index information from the registers of births, deaths, marriages and civil partnerships to the Department of Arts, Heritage and the Gaeltacht in order to facilitate access to this index information. Index information on adoptions and stillbirths is excluded on privacy grounds.

Section 21 defines the term the "Principal Act". Section 22 inserts a definition of the pensions council which is being provided for in the new section 26B of the Pensions Act 1990 and amends the definition of employer to allow for a separate definition of employer used in the new section 5OB.

Sections 26, 27, 28, 29 and 34 provide for structural changes to the Pensions Board. Section 30 amends section 50 of the Pensions Act 1990 to provide for the disclosure of information. Section 31 inserts a new section 5OB in the Pensions Act 1990. Section 32 inserts a new section 50C in the Pensions Act 1990. Section 33 extends the age on which the Pensions Ombudsman must vacate that office in the context of that office being merged with the Financial Services Ombudsman being merged.

This Bill is another positive step on the road to reforming our social welfare system into an active, positive system that provides income support to a vast number of people but which all helps those who have become unemployed or who are of working age and out of the labour force to re-enter work, education and training and, where they are unemployed, to cooperate with the Department in availing of the assistance offered by it.