Kevin Humphreys (Dublin South East, Labour) | Oireachtas source

First, I apologise on behalf of the Tánaiste. She had hoped to be here today herself to take Second Stage but, fortunately for me, she had to travel to Stormont, and I got the opportunity to come in to the Seanad.

This is a short social welfare Bill by normal standards but nonetheless it marks a positive shift in our economic and social recovery. This recovery can now clearly be seen. According to the European Commission, Ireland will be the fastest-growing economy in the EU this year, with our growth rate expected to be 4.6% compared to an EU average of just 1.3%. The latest CSO quarterly national household data shows that there was an annual increase in employment of 1.4% or 26,800 in the year to the third quarter of 2014, bringing total employment on a seasonally-adjusted basis to nearly 2 million people. Overall, almost 125,000 people have left the live register so far this year to take up employment. Importantly, the vast majority of people returning to work are returning to full-time employment. In budget 2015, the Government delivered a package that will reduce taxes for middle and low-income workers and provide welfare increases in a number of key areas, such as child benefit and the living alone allowance. By any standards, that is a remarkable turnaround given the economic crisis this Government inherited upon taking office.

The main social protection measures contained in this Bill and in budget 2015 are an increase of €5 a month per child in child benefit from January 2015; the introduction of a new back to work family dividend scheme to help people back to work; an increase in the living alone allowance to €9 a week from January 2015; the payment of a Christmas bonus of 25% to all long-term welfare recipients in early December; the retention of the weekly earnings disregard for recipients of one-parent family payment at its current level of €90; and a doubling of JobsPlus places from 3,000 to 6,000 and increased funding for JobPath.

I am conscious that, in the six years since the banking collapse, some very difficult social welfare changes have had to be made. The Government has been able to prioritise the protection of basic social welfare rates and maintain a social welfare safety net that is among the most effective in the EU at reducing poverty. We are now realising the benefits of the sacrifices that have been made by the Irish people, as we emerge from the unprecedented economic crisis that has impacted so significantly on our country. Budget 2015 now reinforces the improvements in the economy by sharing the gains of our recovery in an equitable and sustainable manner. Together with more measured announcements in the budget, the measures being provided in this Bill will begin the process of restoring living standards for families, for older people and for low and middle-income workers. I am very pleased that it has been possible, for the first time since forming this Government, to have been able to provide for modest increases in social welfare payments, and they are modest increases.

The Government's statement of priorities published earlier in the year promised a new deal on living standards for low and middle-income families. In line with this commitment and in recognition of the sacrifices that have been made and the difficulties still facing many families, the Bill provides for a €5 increase in the rate of child benefit as announced in budget 2015. This will bring the monthly rate of child benefit from €130 to €135 per child, with effect from 1 January 2015. This increase represents an annual increase of €60 for each child, bringing the overall annual investment through the child benefit system to €1,620 for each child. This measure will benefit more than 1.1 million children in 612,800 families. The Government has also committed to increase the monthly rate of child benefit by a further €5 in 2016, provided that the circumstances allow and the economy continues to perform. Child benefit has been critical in supporting families through difficult times and this increase will help families to build a better financial future and boost the recovery. Child benefit helps to prevent poverty, along with other child income supports paid to welfare recipients and low-paid working families. Altogether, the Government will provide a combined weekly payment of €63 for vulnerable children. These and other social transfers greatly reduce the at-risk-of-poverty rate for children from 45% to 19%. Child benefit is one of the few universal payments in the welfare system in that regard and its universality has an important role to play in maintaining the welfare system. That every child receives child benefit, regardless of their employment status, also ensures that this payment does not act as a disincentive to work.

Last week the live register figures, which show a year-on-year reduction of 10%, are a clear demonstration of the jobs-led recovery overseen by the Government. There were 10% fewer people on the live register last month as compared with November 2013, and that 10% reduction over a year is a substantial improvement. Unemployment now stands at 10.7%, down from a crisis figure of 15%. The number of long-term unemployed has also seen a fall of 7.4% in the last year. This is still far too high. However, the pace of the reduction in unemployment is now accelerating and I am confident that we will get unemployment below 10% within the next year. Employment creation remains a central focus of Government policy. In particular, we want to ensure that people who lost their jobs during the crisis can now benefit from the strong economic recovery under way.

A vital part of Government's strategy is the need for additional activation measures in the interim while the economy recovers. This is the rationale behind the Government's activation strategy, Pathways to Work. In order to support the implementation of Pathways to Work, €1.6 billion is being made available in 2015 to provide approximately 300,000 work and training places. An additional €12 million has been allocated for the JobPath initiative which will match the long-term unemployed with appropriate training and employment opportunities. That is one of the most significant aspects, because the people who became unemployed at the very start of this recession are the ones who now need to be trained so they can access employment. In other recessions, we have seen people being left behind because they were unfortunate enough to get detached from the workforce and were not close to the market. The training positions that are being made available and the extra resources that are being put in are quite significant.

We are also doubling the number of positions on JobsPlus to 6,000, with a focus on young unemployed people, at a cost of €13.5 million in a full year. Under the JobsPlus scheme, monthly cash grants are paid to employers to help with wage costs when recruiting long-term unemployed jobseekers. One of the interesting statistic relating to JobsPlus is that over 60% of those recruited last year had been unemployed for longer than two years. The initiative is focused and is clearly getting people who had been quite removed from the workforce back into employment. This is why I am so pleased to see the doubling of the number of positions to 6,000. Hopefully, demand will grow and we will see many of our long-term unemployed back in the workforce. This must be one of our main priorities.
In addition, a new incentive, the back to work family dividend, is being introduced, which will help jobseekers with families return to work. This dividend will provide an incentive of up to €1,550 per child in the first year of employment or self-employment and half that amount in the second year. The scheme will apply to families returning to work from the beginning of 2015 and will cost €22 million in 2015 and €46 million in a full year. It also offers people a great opportunity to start their own business. I believe many of those who have been long-term unemployed will avail of this incentive dividend to get back into employment. The necessary administrative and technical details of the dividend are currently being developed, but will not be finalised in time for inclusion in this Bill. Instead, the required legislative amendments will be provided for in a further Social Welfare Bill which will be introduced early in the new year, with a view to enactment by the end of March 2015. While the dividend will come into operation in early April 2015, payment of the dividend will be backdated to the beginning of January in the case of families taking up employment from that date. There is no bar, therefore, to returning to work in the new year. People should realise the dividend will be backdated to January and paid in a lump sum.
The 2015 Social Welfare Bill will also provide for a number of other changes to the social welfare code arising from policy, administrative, operational and control matters. The back to work family dividend, when taken together with the employer incentives under JobsPlus and the activation measures under the JobPath scheme, will ensure that people who have remained on the live register for a prolonged period can also benefit from the recovery in the labour market. Senators are aware of people in their communities who became unemployed back in 2008 and 2009. We now have quite a package in place to help these, between the back to work family dividend, JobsPlus and universal children's allowance payments. Disincentives to returning to work are being removed. The HAP scheme being rolled out across the country will replace the rent allowance and help remove unemployed people from the poverty trap. A range of initiatives and assistance is now in place to help the long-term unemployed back into the workforce and I believe this will be successful in coming years.
It is essential that the ongoing task of economic repair is accompanied by an equal focus on social recovery. Following a number of budgets which required a major consolidation of the public finances, including social protection expenditure, budget 2015 provides that all social welfare payments and supports will be maintained during 2015. This means that there will be no reductions in payment levels and no changes in qualifying criteria. However, the improved economic circumstances have allowed us to go beyond this by providing for the first increases in weekly social welfare payments since 2008.
The living alone allowance, which is payable to some 180,000 pensioners and people with disabilities, is being increased from €7.70 to €9 a week from the beginning of January 2015. While this is only a small change, it is significant because the payment has not changed since 1996. This payment recognises that people living alone have additional expenditure. It costs as much to heat a room for one as it does for two. This is acknowledged through this increase. We need to monitor the effect of this payment. People living alone face additional expenditure and a higher cost of living. This extra payment acknowledges this for the first time since 1996.
We have also been in a position to partially restore the Christmas bonus this year. A bonus of 25% was paid last week to all long-term welfare recipients, including pensioners, lone parents, jobseekers, carers and people with disabilities. Both of these measures are being provided for by way of regulations which have been made by the Tánaiste and Minister for Social Protection. While these increases are modest in regard to those provided for in the recent past, they are also prudent. We will not return to the recklessness of the past. Instead we are using the economic dividend from the recovery to invest in sustainable growth in families and communities and in vital public services. All Members will acknowledge that the Christmas bonus will go back into the economy and help sustain it. The moneys paid out this week will be spent over Christmas and is, therefore, an important boost to the economy.
I am delighted to say that budget 2012 provided for a phased reduction between 2012 and 2016 in the weekly amount of earnings that can be disregarded for the purposes of the one-parent family payment scheme, with the disregard due to fall from €90 to €75 next year and to €60 in 2016. I am pleased that it has been possible to provide for the retention of the weekly earnings disregard for recipients of one-parent family payment at its present level of €90 a week. This measure will benefit some 28,000 working recipients of one-parent family payments during 2015, at a cost of €8 million. In addition, the back to work family dividend will be a significant financial assistance to lone parents looking to return to work.
Given the scale of the economic downturn and the unparalleled levels of unemployment, supporting the protection and creation of jobs has been a major priority for the Government. A key element of this is supporting people to move from welfare into employment. One of my main priorities as Minister of State with responsibility for activation measures is to continue with the transformation of the Department of Social Protection from being a passive benefits provider to one that is actively engaged in assisting jobseekers to return to work, including engagement with employers to them and employees get what they need. The number of people at work has increased by 84,000 since 2012.
We talk about reform and change. The reform that has taken place in our employment offices is only paying a return now. Our new Intreo centres, which have been developed by our public and civil servants have changed how these offices interact. They offer a service now. The first step taken into an Intreo centre is a first step back towards employment. I pay tribute to the public and civil servants who have retrained, changed and are working actively to help jobseekers to return to employment. They are also working with employers to match them with the talents of jobseekers. The Government's primary strategy to reduce long-term unemployment has been, through policies, to create the environment for a strong economic recovery. Economic growth will underpin jobs growth and this strategy is working.
This Bill also enables the Minister for Finance to drawn down moneys from the Central Fund to discharge liabilities which may accrue to the State in the event of the wind up of a defined benefit pension scheme in particular circumstances. These circumstances arise where: both the employer and the scheme are insolvent, which is often referred to as a double insolvency; the date of the wind up of the scheme was on or after 25 January 2007 and before 25 December 2013; and the resources in the scheme are not sufficient to fund a minimum level of benefits.
The issue of a potential liability on the State arises following two rulings of the European Court of Justice. The first ruling, which was delivered on 25 January 2007, relates to a UK case - Carol Marilyn Robins and Othersv.the UK Secretary of State for Work and Pensions. The second ruling, which was delivered on 25 April 2013, relates to an Irish case - Hogan and others v. the Minister for Social and Family Affairs, Ireland and the Attorney General.

The measure being provided for in the Bill will allow for payment from the Central Fund to be made by the Minister for Finance in circumstances where the State may need to address liabilities that could arise between the date of the Robins judgment which was delivered on 25 January 2007 and the date of enactment of the Social Welfare and Pensions (No. 2) Act 2013, namely, 25 December 2013.

As I know Senators will be aware, Government approval has been given for a mediator set of recommendations to settle the long-running Waterford Crystal pensions case. Under this settlement, the former workers of Waterford Crystal will receive significant pensions and a tax free lump sum by way of compensation for the delay and stress involved in bringing Irish and European court cases to resolve the matter. In addition to the measures contained in the Bill, a number of administrative measures are being put in place and will be finalised early in the new year, with a view to having lump sums paid as early as possible in 2015 and pension payments starting by the middle of the year. The settlement will include all 1,774 deferred members of the Waterford Crystal staff and factory pension schemes and encompass the families of some members who have, unfortunately, died since the company went into receivership. These arrangements are subject to the workers balloting on and accepting the proposals. I hope the measures will bring security and peace of mind for pensioners in the certain knowledge that their pension entitlements are now secure.

I will now address the specific measures contained in the Bill. Section 1 provides for the definition of common terms which are used for the purposes of the Bill. The "Principal Act" means the Social Welfare Consolidation Act 2005 and the "Act of 2012" means the Social Welfare Act 2012.

Section 2 provides for a €5 increase in the monthly rate of child benefit, bringing the current rate up from €130 to €135 with effect from 1 January 2015. The section also provides that in the case of twins, the monthly rate of child benefit will increase from €195 to €202.50 per child, while in the case of multiple births of three or more children, the monthly rate of child benefit will increase from €260 to €270 per child, with effect from 1 January 2015.

Section 3 provides for the retention of the weekly earnings disregard for recipients of one parent family payment at its current level of €90.

Section 4 provides for the drawdown of moneys from the Central Fund by the Minister for Finance for making payments to approved persons to discharge the liabilities of an eligible pension scheme. An eligible pension scheme is one where the scheme was wound up between 25 January 2007 and 25 December 2013; the employer is insolvent; and the resources of the scheme are insufficient to discharge certain defined liabilities.

Section 5 provides for the Short Title and construction of the Bill and collective citations.

Despite the need to stabilise the public finances in recent years, the social welfare system continues to have a key role to play in society. We have made substantial progress in repairing the enormous damage done to the economy. We must now ensure we provide assistance for people who have become unemployed through no fault of their own. This is the first budget to put money back into people's pockets. I recognise nevertheless that many difficulties remain. I commend the Bill to the House.