Joan Burton (Dublin West, Labour) | Oireachtas source

Over the last three years, many changes have been made to the social protection system to improve its long-term sustainability and to ensure we have a modem, responsible welfare state that provides both a safety net for those who need it and a springboard back to work for those who want it.

There can be no doubt about the hardship and difficulties which the economic crisis has caused for our people. However, despite the need to get the public finances in check and the need to reduce overall welfare expenditure, the safety net has been protected and maintained.

This year, we will spend an estimated €19.6 billion on social welfare. Research has consistently shown that Ireland's system of social transfers is among the best in the EU in terms of preventing poverty. The best long-term protection against poverty is, of course, fairly paid and secure work. That is why I have focused on transforming the Department from a passive benefits provider to an active and engaged public employment service.

That work is paying off. The live register is down from a previous peak of 15.1% to 11.8% now. Every 10,000 reduction in the numbers of people on the live register saves approximately €95 million in the social welfare bill. Getting people back to work is the best way of reducing welfare expenditure and we are doing it, although there remains a long way to go. This Bill continues that crucial process of reform.

As well as benefiting the recipients directly, social transfers have a significant effect in local communities where money is spent, as well as on the economy as a whole. For many recipients, their money is paid through the network of post offices that are spread around the country in rural and urban areas. As we all know, post offices provide an invaluable service to our communities.

I was pleased to sign a contract with An Post for over-the-counter cash payment services for welfare clients at the end of last year. This was, for the first time, signed on foot of a detailed specification of services and was openly and publicly advertised in a procurement competition. It was essential that the procurement competition was fully compliant with European procurement law, given the previous challenge adjudicated on by the European Court of Justice concerning cash payment services delivered through An Post.

The contract has been awarded for two years and commenced on 2 January this year. The contract may be reviewed annually for a further four years thereafter - that is, an accumulated period of up to six years in total up to December 2019. I am confident that the contract for the delivery of payments to welfare clients is now robust.

In this Bill, I am making changes to ensure that the legislative provisions underpinning these arrangements are equally robust. They will ensure that what we are doing can stand up to scrutiny at national and European level, and that the arrangements are not open to challenge in any way, which is what happened before.

The provisions being considered here today do not interfere with the contract. Neither do they diminish the contract, nor jeopardise it. What they do is provide a solid basis for the provision of payment services through payment service providers such as An Post. They do this by providing in legislation that payment functions and services can be delivered under formal contractual arrangements, which was not previously the case.

The measures contained in the Bill update the legal framework behind the new contract with An Post so as to ensure that its activity on behalf of the Department on a week-to-week basis has the backing required to ensure that our fraud and control regime remains robust and resilient. This contract is a very valuable one for An Post. The role the company plays in preventing fraud and helping us in terms of control is really significant.

I am keenly aware of the excellent work carried out by the various staff of An Post, including postmasters. My officials and I will continue to work with An Post, as well as with the Minister for Communications, Energy and Natural Resources, and his officials, to ensure a strong and vibrant post office network.

I now wish to turn to the issue of the Youth Guarantee. Through the Pathways to Work strategy overseen by my Department, we are succeeding in getting people back to work. A key element of this is the Youth Guarantee, which is about ensuring that young jobseekers in particular get the work, training and education opportunities they need and deserve.

Research shows that early and prolonged periods of unemployment during a person's lifetime can have a permanent scarring effect in terms of earning capacity and well-being. This is a particular problem during an economic downturn, as young people tend to be hit by the impact of job losses more than other age groups. This is because young people tend to be the most junior employees in an organisation and also tend to work in sectors such as retail and services, which feel the brunt of any reduction in demand.

Therefore, it is crucial that an effective strategy is in place to tackle youth unemployment. The key to this approach is the implementation of the Youth Guarantee, the objective of which is to ensure that young people receive a quality offer of training, education, work experience or employment within four months of becoming unemployed.

The implementation of the initiatives planned under the Youth Guarantee requires primary legislation to allow a certain measure of positive discrimination on age grounds for young people in the provision of employment services and supports.

A pilot currently under way in Ballymun has delivered positive results and has received support from the community, the business sector and various agencies. Senators may like to hear more about that.

I firmly believe that the strength of the social welfare safety net was one of the reasons that social cohesion was maintained in Ireland despite the scale of the crisis. The people of this country have continued to support a strong social protection system because they know it will be there for them and their loved ones when they need it, whether through child benefit, a jobseeker's payment or the State pension. However, to maintain that public support it is absolutely essential that we ensure every euro of the welfare budget is properly spent and that where fraud or error arises, we recover the overpayments as appropriate.

With this Bill, I am building on the reforms made to date in relation to recovery of overpayments. I recognise that most social welfare customers receive only the payment to which they are entitled but where overpayments arise through fraud or error, it is essential that the moneys are recovered if we are to ensure the money is there for those who need it and are entitled to receive it. The Bill further extends the powers of the Department to recover social welfare overpayments. Notice of attachment provisions are being extended to allow recovery from payments being made or to be made by public bodies such as Departments. In this way, we can ensure that one arm of Government is not paying out lump sums to individuals who owe significant amounts of money in respect of welfare overpayments.

I am also taking the opportunity in this Bill to transpose the provisions relevant to the social welfare code of EU Directive 2010(41) on the principle of equal treatment between men and women engaged in an activity in a self-employed capacity. This means ending the exclusion from social insurance of spouses or civil partners of a self-employed worker who participate in the activities of their self-employed spouse or civil partner performing the same or ancillary tasks.In other words, this Bill will extend social insurance cover to spouses or civil partners of a self-employed contributor in cases where that spouse or civil partner is participating in that person's business and earning more than €5,000 a year. Heretofore only one of the couple could be insured as a self-employed worker for social insurance benefits. This means that the spouse or civil partner will, under the social insurance system, be able to establish entitlement over time to maternity benefit, widow's, widower's or surviving civil partner's contributory pension and State contributory pension contributory in their own right. This is a very important and welcome reform which will provide excellent value for those involved. While we do not have the exact figures, I understand that approximately 5,000 people will benefit from this reform.

The Bill will ensure that, in general, once a family qualifies for family income supplement, FIS, payment of the supplement will continue for 52 weeks regardless of a change in circumstances, such as an increase in weekly earnings. FIS is a weekly tax free top-up payment for employees on low pay with children. More than 44,000 working families with more than 98,000 children benefit from the scheme. The Department's expenditure on FIS will increase to more than €280 million this year, an increase of 25% since 2012. It is a direct subsidy to people who are on limited hours or low wages to top up their income to provide an incentive to return to work. I have placed a high priority on FIS because the evidence shows that families are better off in work and FIS helps them to continue in work and build towards financial independence. FIS is crucial to working families, and the measure in this Bill is about ensuring that families in receipt of the supplement have security and peace of mind about the duration of their payment. If, for example, workers in a family lost their employment for a certain period, as soon as they go back into employment they will be able to access FIS for the remaining part of the 52 weeks.

In the area of pensions, the Bill is providing for an amendment to the Pensions Act to clarify the notification procedures in relation a direction from the Pensions Authority to the trustees of a pension scheme to restructure their scheme.

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 provides for changes to enable functions relating to payment of benefit or assistance and related payment services to be provided under arrangements with selected payment service providers. Section 4 provides that only gains from share option transactions which result in the employee actually receiving shares will come within the definition of "share-based remuneration" in order to benefit from the exemption from employer PRSI liability. Section 5 inserts a new definition of a member state of the European Economic Area in the Social Welfare Consolidation Act 2005 for the purposes of the amendments in section 6 and section 11 of the Bill. Section 6 clarifies the powers contained in the 2005 Act enabling the Minister for Social Protection to provide for refunds of employer PRSI contributions in the case of certain seafarers employed on board vessels registered in a member state of the EU or European Economic Area and are providing scheduled passenger services between ports within those States.

Section 7 provides that where an employer has a debt owing to the Minister in respect of redundancy lump sum payments and that employer qualifies for a refund of PRSI contributions, the debt owing to the Minister can be recovered from the PRSI refund. The Redundancy Payments Act 1967 provides for lump sum payments by employers to their employees upon their dismissal by reason of redundancy. Where an employer does not pay such a lump sum payment to his or her employees who have been made redundant, the Redundancy Payments Act provides that such payments can be made by the Minister for Social Protection to the employee. The Minister can then recover such amounts from the employer.

Section 8 provides that increases in jobseeker's allowance, pre-retirement allowance, supplementary welfare allowance, disability allowance or farm assist in respect of the qualified adult of the recipient will not be payable for any period during which that qualified adult is resident, whether temporarily or permanently, outside the State, or in prison or otherwise detained in legal custody. Sections 9 and 10 clarify the rules on entitlement to family income supplement to set out the circumstances in which a claimant who is living apart from his or her spouse or civil partner and children can still claim the supplement, and ensure that, in general, once a family qualifies for FIS payment of the supplement will continue for 52 weeks regardless of a change in circumstances, such as an increase in weekly earnings. Section 10 also provides that where FIS ceases to be paid to a family during the 52 week entitlement period and that family requalifies for FIS before the end of that 52 week period, then payment of FIS will recommence for the unexpired portion of the 52 week period at the rate payable at the start of the 52 week period.

Sections 11 and 12 provide for changes in respect of the application of the habitual residence condition for entitlement to certain social welfare payments. The presumption that persons are not habitually resident in the State if they have not been present for a continuous period of two years in the common travel area at the date of making the application is being removed. In addition, a person must satisfy the habitual residence condition for the duration of his or her claim in order for the entitlement to continue. This also allows for the review of habitual residence in respect of persons who were not required to satisfy such conditions under EU law at the date of application for the schemes concerned. Habitual residence is just one condition of these payments. A person must also satisfy other conditions to receive a payment.

Section 13 is a minor technical amendment. Sections 14 and 16 extend the powers for the recovery of social welfare overpayments to include recovery from certain lump sum payments made by the Minister for Social Protection to that person, that is, refunds of PRSI contributions and lump sum payments made under the Redundancy Payments Act 1967 and the Protection of Employees (Employers' Insolvency) Act 1984.

Section 15 enables the secondment of members of An Garda Síochána to the Department of Social Protection to assist it with fraud investigation work. This section also provides for the termination of appointments as a social welfare inspector or as a deciding officer where such a person is no longer working in the Department of Social Protection - for example, if he or she retires, resigns, moves to another Department, the period of his or her fixed-term contract expires, or where the Minister terminates the appointment.

Section 17 extends the provisions relating to the recovery of social welfare overpayments by way of notice of attachment to include situations where the person who has been overpaid has sources of income from payments made from State funds, for example, grants, refunds and repayment of taxes. Section 18 allows for positive age-based discrimination in the provision of employment schemes and supports on objectively justifiable grounds. It also clarifies that the types of employment schemes and supports where positive age-based discrimination can occur will include schemes and programmes which support young unemployed people in setting up self-employment businesses. We have to bring in some positive discrimination in regard to younger people, both in employment and in self-employment, where the Department seeks to support them. These measures will facilitate the implementation of the Youth Guarantee.

Section 19 provides for the transposition of Directive 2010/41/EU on equal treatment between men and women engaged in self-employment so that the spouse or civil partner of a self-employed person will now qualify to pay social insurance and, therefore, qualify for the self-employed benefits of maternity, widow's and widower's and retirement pensions. Section 20 provides for the inclusion of Irish Water as specified body for purposes of using PPSNs. As part of its functions, Irish Water will be transacting with members of the public and will need to share or confirm personal data and information in certain cases. For example, additional water allowances are being provided where a household contains children under 18 years and in order to assess such cases, Irish Water will need to collect and verify the PPSNs of those in respect of whom these additional allowances are to be provided. The best database for that is obviously the child benefit database.

Section 21 provides for the removal of three uncommenced sections of the Social Welfare Consolidation Act 2005, which are no longer necessary. Section 22 provides for a number of minor amendments to correct textual errors. Section 23 defines the term "Act of 1990", which is used for the purposes of Part 3 of the Bill, as meaning the Pensions Act 1990.

Section 24 clarifies the detail to be provided by trustees to scheme members in the notification, including the right to appeal to the High Court, in situations where the Pensions Authority issues or proposes to issue a unilateral direction to the trustees of a scheme to restructure a scheme. Section 25 provides for similar clarification in regard to the notification of scheme members in advance of the Pensions Authority making a direction to wind up a defined benefit scheme. Section 26 amends section 50C of the Pensions Act to cross-reference the new section inserted.

I commend the Bill, which will provide for a further significant strengthening and reform of our social protection system.