Joan Burton (Dublin West, Labour) | Oireachtas source

-----because the number of people out of work remains far too high, but it confirms that the Government has taken the right measures since coming into office and inheriting an unprecedented crisis. The labour market is improving because of the policies we have pursued, and that is why the economy is healing - slowly but surely. We are exiting the bailout programme and we can look forward to regaining control of our destiny.

The live register figures are a clear sign that things are moving in the right direction. The latest CSO data showed there were 396,512 people on the register in October, 23,000 fewer than the same month last year and almost 34,000 fewer than in October 2011. This is a very welcome turnaround considering that the register was firmly on an upward trajectory towards 500,000 when this Government took office, to an unemployment rate of 15% or over. The unemployment rate for October has come down to 13.2%. The live register has fallen below 400,000 for the first time since May 2009.

The turnaround is the chief reason I was able to lower the spending reductions required of my Department for 2014. When negotiations on the budget began, the Department was initially expected to make new spending reductions of €440 million. This was ultimately reduced to €226 million plus an additional €30 million in savings will be made through more fraud and control measures in 2014, while €34 million will be saved through better management of expenditure and lower than expected demand on some schemes, bringing the Department's cumulative adjustment to €290 million. Even with this lower adjustment, the Department continues to play its role in the necessary deficit reduction programme as Ireland prepares to exit the bailout.

Overall, social welfare expenditure will fall below €20 billion in 2014, despite demographic pressures due to the growing number of older people, and welfare expenditure will continue on a downward trajectory as we help more people back to work through our Pathways to Work strategy.

That is the context in which I bring this Bill forward to the Seanad.

I mentioned earlier the population pressures on the Department's budget. These pressures mean that, for example, the Department had to provide an extra €190 million this year for expenditure on State pensions and on widow and widower contributory pensions. Nonetheless, I have protected pensions in the budget. I have also protected carer's allowance, disability allowance and the other core weekly payments upon which people depend. I am also protecting crucial supplementary supports for pensioners, carers and people with disabilities, such as the fuel allowance, the electricity and gas allowance, free travel, which is particularly important for retired people, the half-rate carer's allowance and the respite care grant. Child benefit has also been protected in this budget and will remain a vital universal support for all families and all children.

In addition to supporting people when they are out of work, we support them to stay in work. Critics of the welfare system often miss this crucial point. Last year, the Department spent €224 million on the family income supplement, which is a weekly tax-free top-up payment for workers on low pay with children. Next year, we will spend more than €280 million on that payment. More than 40,000 working families, with a total of more than 90,000 children, benefit from the scheme at present. The family income supplement makes a crucial difference for them by making work more attractive than welfare and in the process helping to build a better future for their families.

The reality is that helping people back to work and to stay in work is the most effective way of reducing overall social welfare expenditure. Every time we help 10,000 people to come off the live register, we save approximately €95 million in annual welfare expenditure. That is why, since coming into office, I have focused on transforming the Department from the passive benefits provider of old to an active, engaged and focused organisation that provides employment services for jobseekers and employers alike. Our core aim is to engage with every unemployed person to make sure their first day out of a job and relying on a social welfare income is also their first step on the pathway back to work. That work is paying off. The live register figures are proof of this. Data show that the number of people in work increased by 33,800 in the last year and that the private sector is creating 3,000 new jobs every month. It is in that context that I am bringing forward changes to jobseeker's allowance for younger people. Most EU member states require a young person to have made social insurance contributions before he or she can qualify for unemployment benefits or allowances.

Ireland is one of a small number of member states that pay young people a non-insurance-based payment - in our case, jobseeker's allowance - in addition to an insurance-based payment. I am ensuring this continues because of the difficult economic climate and the recognition that not everybody can walk into a job at 18 years of age. However, it is true that paying a significant amount of welfare support upon turning 18 is not the best way of helping young jobseekers into work. To be honest, I do not think any Member of this House would want his or her child to go to the jobseeker's office at the age of 18 to claim a social welfare payment, rather than getting into work or training or being involved in education or work experience. Work, training and education supports are much more beneficial to young jobseekers in the long term. I am making changes to jobseeker's allowance for young people to ensure a greater emphasis on work, training and education supports.

That is a critical move in terms of the traditional approach to social welfare for younger people in Ireland. This will ensure that younger people are always better off in education, employment or training than claiming. Even then, it is worth noting that the amounts paid to young jobseekers in Ireland will still exceed those in several member states, including the UK. In the UK, jobseekers aged 24 years or younger get £56.80, or €67, per week. To facilitate the shift towards employment supports, the Department will enhance the range of opportunities currently on offer in the form of internships, participation on employment schemes, subsidised private sector recruitment and supports for self-employment. The full range of youth employment initiatives will be set out in our plan for the implementation of the EU youth guarantee, which will be finalised and submitted to the EU by the end of the year. I want to tell Members here, many of whom are actively involved in employment or familiar with many employers, that on 1 January, young jobseekers aged under 26 will qualify for JobsPlus if they are without employment for more than six months. That means their employer will get a monthly cash back subsidy of €300 for every month they work up to two years. The monthly cash back subsidy for employing jobseekers aged under 26 who are out of work for more than two years is €400 per month and will be paid to the employer for each month the jobseeker works. It will be paid a month in arrears through electronic funds transfer. I have not been able to make it any easier than that. It is a very simple wage subsidy scheme for employers who take on jobseekers, particularly young jobseekers. Even before any EU funding is agreed, the Department is already committed to spending €1.08 billion next year on work, training and education places and related supports for jobseekers generally. This is an increase of almost €85 million on the projected spend this year. To recap, we will spend an extra €50 million next year on family income supplement for families in work with children on low incomes and an extra €85 million on supports for jobseekers in terms of training and education. In a time of tight budgets, that is a very significant commitment by the Department to helping people back to work.

I will now go through the main provisions of the Bill. Section 1 is the Title. Section 2 provides for the definitions. Section 3 provides for the second element of the Budget 2013 decision to broaden the base on which PRSI contributions are charged so as to provide that the exemption from PRSI that applies to employed contributors and occupational pensioners under 66 whose only additional income is unearned income will be abolished with effect from 1 January 2014. The additional unearned income will now become liable to PRSI at 4% provided the person is a chargeable person for Revenue purposes. This relates to a person whose unearned income is in excess of €3,174. This will not apply to PAYE taxpayers with no other income or additional income less than €3,174. In addition, people who have reached State pension age of 66 are not liable to pay PRSI and, therefore, will not be affected. Sections 4 and 7 increase the number of waiting days for entitlement to illness benefit and injury benefit, respectively, from three to six days with the change taking effect from 6 January 2014. Section 5 provides for the alignment of the minimum and maximum rates of maternity benefit to a standard rate of €230 per week. The change only applies to new claimants and comes into effect from 6 January 2014.

The 26-week duration of the payment is preserved under this budget because we know how important this time is for families and their children.

This level is substantially in excess of the 14 weeks required under EU legislation. For example, in the Netherlands and France only 16 weeks of maternity benefit is paid. Section 6 provides for the alignment of the minimum and maximum rates of adoptive benefit to a standard rate of €230 per week on the same basis as section 5.

Section 8 provides for the discontinuation of the payment of a bereavement grant in the case of deaths occurring on or after 1 January 2014. However, it is important to note that the additional supports which remain available for people following a bereavement are worth considerably more than the bereavement grant. These include widow's, widower's or surviving civil partner's pension, which is a weekly payment based on contributions or a means test; the widowed or surviving civil partner grant, which is a once off payment of €6,000 where there is a dependent child aged 18 years or under, or up to 22 years where the child is in education; a number of social welfare payments, including State pensions, which continue in payment for six weeks following a death and deliver an income of €1,380 to the surviving spouse, partner or estate; and, if a person dies because of an accident at work or occupational disease, a special funeral grant of €850. We also pay significant amounts of money through special needs payments to those who require assistance with funerals.

Section 9 provides for the amendment of the rates of jobseeker's allowance payable to certain claimants aged under 26 years. A reduced weekly rate of €100 currently applies to recipients aged between 18 and 21 years and a reduced rate of €144 applies to those aged between 22 and 24 years, in both cases where the claimant does not have children. This section provides that the reduced weekly rate of €100 will continue to apply to existing claimants aged between 18 and 21 years until they reach 25 years and will also apply to new claimants aged between 22 and 24 years. Section 9 also provides that the reduced weekly rate of €144 will continue to apply to existing claimants aged between 22 and 24 years when they reach 25 years and will apply to new claimants who are aged 25 years. In addition, these lower rates of jobseeker's allowance will apply to claimants aged 25 and under who have exhausted their entitlement to jobseeker's benefit. Claimants who have children will be unaffected by these measures. These changes will apply from 15 January 2014. Section 10 provides for amendment of the rates of supplementary welfare allowance payable to people who are younger than 26 years old on the same basis.

Section 11 provides for the discontinuation of the mortgage interest supplement scheme for new applicants with effect from 1 January 2014 and allows for a winding down of the scheme for existing claimants over a four year period. In the last couple of years we have paid more than €300 million to banks in respect of mortgage interest supplement with no net gain for the people whose mortgage interest supplement we have been paying. Now that the Insolvency Service and MARP structures are in place, they will be provided for through the MARP process, as was recommended in the reports by various working groups.

Section 12 provides for the discontinuation of the higher personal weekly rate of invalidity pensions of €230.30 and €206.30 where the qualified adult attains 66 years of age on or after 2 January 2014.

Section 13 provides that where a specified illness or disability payment is paid by the Department to a person who is unable to work as a result of an accident, injury or disease and such social welfare recipient has been compensated by way of court settlement or otherwise, the amount of such illness related social welfare payments that have also been paid as a consequence of the personal injury is to be repaid to the Minister by the person liable to pay compensation.

In most cases the compensator is an insurance company.

Currently compensators are allowed to reduce the amount of a settlement arising from a motor accident by an amount equivalent to any illness benefit or invalidity pension paid by the Department. In effect, the benefits involved represent a subsidy to the compensators or insurance companies in such cases.

Similarly, in the case of occupational injuries, compensators are allowed to offset injury benefit and disablement pension payments against compensation for loss of earnings.

Part 3 and section 14 provide for amendment to section 38 of the Personal Injuries Assessment Board Act 2003 consequential to section 13.

Section 15 provides for the definition of the "Principal Act" to mean the "Pensions Act 1990". Sections 16 and 17 provide for the inclusion of a reference to the surviving civil partner (contributory) pension in section 59B and 59C of the Pensions Act.

Section 18 inserts a new section 59H into the Pensions Act and provides the trustees of a pension scheme with the power to amend the scheme rules to ensure that the correct occupational pension is paid at age 65. This amendment arises from the change in the qualifying age for State pension from 65 to 66 from January 2014. It is to address situations which may arise in a pension scheme where the rules of the scheme provide for age 65 rather than normal pensionable age, and the scheme rules cannot be amended to address this. This change is being made to ensure that trustees can act as appropriate to administer their schemes and are not prevented by any conflict between the Pensions Act and the scheme rules from making any necessary arrangements to amend the scheme.

It provides for the cessation of a bridging pension which may be payable in the period before the State pension becomes payable and for determining the correct rate of occupational pension payable in the case of an integrated pension. That completes the main provisions of the Bill.

Protecting people in need in a very difficult economic climate - while reforming the welfare system to ensure it delivers better long-term outcomes for people - is central to the Government's mission.

In 2014, my Department will continue to help more people back to work, reduce the overall welfare spend as part of the sustained effort to repair the public finances, and ensure the safety net of social protection remains firmly in place for those who need it most.

I commend the Bill to the House.