Séamus Brennan (Dublin South, Fianna Fail)
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I am very pleased to introduce this, the first of two Bills intended to implement the largest social welfare package in the history of the State of €1.41 billion announced in last week's budget. This substantial investment brings total expenditure on social welfare in 2007 to €15.3 billion, or €1 for every €3 of Government day-to-day spending. Some 1.5 million people will benefit from the significant increases and improvements in the budget that will protect and improve the living standards of social welfare recipients.

The budget is about delivering on the commitments to bring the non-contributory State pension to €200 per week and realising the 2007 target for the lowest social welfare rates. With increases in the qualified adult allowances, a pensioner on contributory State pension will be better off by almost €40 per week. In addition, the lowest rate of social welfare payments has increased by 12.1%, far in excess of the expected increase of 4.5% in private sector earnings and almost three times the forecast rate of inflation for 2007.

As well as substantial income support improvements of more than €970 million, another €430 million, nearly one third of the total package, is being directed to support a range of significant reform measures including confronting and tackling remaining child poverty; increasing income supports for all pensioners; recognising and supporting carers and those with disabilities; and increasing the status and incomes of women. These are major structural reforms which, when taken with a number of other reforms and changes that are being implemented or progressed, particularly in the areas of lone parents and occupational pensions, will contribute greatly to the overall policy reform agenda that I have been pursuing for the past two years. These reforms are about more than just increasing incomes. They are important and necessary structural reforms that create change, open up fresh opportunities and deliver enlightened social policies.

On many occasions in this House and elsewhere I have described child poverty as totally unacceptable in the prosperous and progressive Ireland of the 21st century. Childhood deprivation can leave lasting marks on children by impeding their development and curbing their life chances. It is a complex area that requires an integrated, joined-up Government response, such as the programme of priority measures envisaged in Towards 2016. However, in the meantime, I am determined that further progress must be made. That is why at the core of this welfare budget is the commitment to an even stronger and more focused campaign. We have already travelled some distance towards eliminating hardship and deprivation. In the past decade alone we have lifted more than 250,000 people, including 100,000 children, out of poverty. However, we still have a distance to travel.

I have long held the view that implementing a second tier of payment for children in low income and welfare families is the most effective method of significantly reducing remaining child poverty. Child benefit remains the main universal support for families with children. I now intend introducing in this Bill, a new single high-rate qualified child allowance — formerly child dependant allowance — targeted specifically at families on welfare where, naturally, children are most at risk of poverty. The current three qualified child allowance rates will be combined into a single rate of €22 per week to be paid for more than 340,000 children of welfare families. For those on the current lower rates of €16.80 and €19.30 per child per week, this represents a substantial improvement, particularly when child benefit and other increases are taken into account.

The allowance has remained unchanged since 1994 because it was viewed as a disincentive in moving people from welfare to work. However, Ireland's labour market has changed dramatically in the 12 years since then. Initiatives such as the introduction of the national minimum wage, the national employment action plan and the re-focussing of the family income supplement scheme have all served to reduce further the impact of the loss of qualified child allowance in the decision to take up full-time employment. I view this improved and targeted allowance as representing a substantial move in the direction of a second tier payment and that is why I have deliberately taken the decision to focus increased child supports in this area.

The budget included a number of other targeted measures. The back to school clothing and footwear allowance, a vital additional income support for poorer families at a particularly difficult time of the year, is being increased by €60 and €95, an increase of 50%. Over just two budgets this allowance has nearly doubled in value. The family income supplement, which provides cash support for employees with families on low earnings while at the same time maintaining incentives to employment, was refocused by me last year to concentrate on larger families, as all the evidence suggests that is where poverty is rooted.

These improvements, coupled with the response to the nationwide awareness campaign, has resulted in an increase of more than 20% and 21,400 families now receive the family income supplement. I am continuing this approach by re-focusing the family income supplement weekly earnings thresholds in favour of larger families. Consequently, average payments per child will increase to nearly €50 and changes in the thresholds will entitle approximately 5,600 additional families to the payment.

Everyone is entitled to a decent pension, and security and dignity in their later years. We have a responsibility to assist those who for reasons of age, health or other circumstances need the financial lifeline that is welfare support. At the core of the Government's commitment to delivering a number of specific and ambitious improvements in social welfare rates by 2007, was the pledge to bring the basic State pension to €200 per week. I am pleased to have been able to deliver on that promise by increasing the non-contributory State pension by €18 per week to €200 with effect from next January and the contributory State pension to more than €209 per week. The needs of older people have been, and will remain, a priority. For instance, since 1996 pensions have increased by almost 119%, approximately 57% in real terms, faster than both price and wage growth over the period.

All the more recent indicators, including the latest EU survey on income and living conditions for 2005, show the progress which is being made in significantly improving the well being of older people, with the consistent poverty rates for older people quite low at 3.7%, even before the many benefits flowing from the budget are taken into account. Last year's budget increased, for the first time in many years, the basic income disregard for the means test for non-contributory State pension to €20 per week. At the same time, I introduced incentives for pensioners on means-tested payments to earn up to €100 per week and retain their pension entitlements. In this year's budget, I am building on these improvements by increasing the disregard to €30 per week and doubling the allowed earnings to €200 per week. These measures will benefit approximately 26,000 pensioners who are now in receipt of a reduced rate of pension. They will also benefit from the general €18 per week increase in the personal rate of payment and, where relevant, the €11.90 increase in the qualified adult rate. In other words, many non-contributory pensioner couples will gain by more than €46 per week from these combined measures, with effect from next January.

Meeting household heating costs, particularly through the winter months, can be a cause of concern and anxiety for older people. Increases in energy and fuel prices only add to these anxieties, which is why we have taken actions to protect older people from the impact of price increases. Last year, I increased the fuel allowance to 274,000 recipients by €5 per week, to €14. This year, I am increasing it by a further €4 to €18 per week, a doubling of the allowance in just two years. To further address fuel poverty and to alleviate the worries of elderly people, the number of free units of electricity and gas paid under the household benefits scheme will increase significantly, from next January, by some 700 units a year to more than 2,500 units, at a cost of €50 million.

The budget includes several further improvements to the household benefits package. From next April, it will be possible for pensioners and others who qualify to have the free telephone allowance paid in respect of mobile telephones as well as fixed land lines. I am extending the automatic entitlement to a free travel companion pass to pensioners aged under 75 years who are medically unfit to travel unaccompanied. In addition, early 2007 will see the beginning of the introduction of an all-Ireland free travel scheme, which will apply to all pensioners, North and South.

Carers make a valued and valuable contribution to society by devoting their time and energy to improving the quality of life of others. I am determined that their dedication and sacrifice will be recognised and acknowledged through increased benefits and improved support measures. Since 1997, weekly payment rates to carers were greatly increased, qualifying conditions for the carer's allowance were significantly eased, coverage of the scheme was extended, and new schemes such as the respite care grant and carer's benefit were introduced and extended. As a result of these improvements, almost 28,500 carers are in receipt of either carer's allowance or carer's benefit.

We are committed to the development and publication, in 2007, of a national carer's strategy which will focus on supporting informal and family carers in the community. This is in addition to further agreed reforms, increases and improvements. As I have said on many occasions, the primary objective of the social welfare system is to provide income support. It is for this reason the rules specify that only one weekly welfare payment can be paid to any individual. I am aware this has been a cause of particular concern to people in receipt of a welfare payment when they become carers. I have taken into account the specific recommendations of the Oireachtas Joint Committee on Social and Family Affairs in this regard.

Accordingly, I am introducing fundamental structural reforms in this area. In future, people in receipt of certain social welfare payments, who are also providing full-time care, will be able to retain the main welfare payment and receive another payment, in the order of up to the half-rate carer's allowance. I expect some 18,000 carers will qualify for a half-rate carer's allowance of up to €109 per week under the new dual payment system. The details of the new arrangement are being examined by my Department and will be set out in the next social welfare Bill.

The abolition of the rule on two welfare payments means that for the first time, carers will have adequate recognition of their caring duties. It also signifies a change in our perception of the carer's allowance in that it will be seen less as a welfare income payment and more as a direct support for caring duties and responsibilities. This reform is an important step forward and I am determined to press ahead with other necessary reforms and improvements. Overall, the budget delivered an investment of more than €107 million in a comprehensive carers package.

This Bill achieves one of the principal commitments in my Department's disability sectoral plan. People in residential care prior to August 1999, or those who entered residential care after that date without an entitlement to disability allowance, are disqualified from receipt of the allowance solely because of their residency. This was partially addressed in budget 2005 when I introduced a new disability allowance personal expenses rate, currently payable at €35 per week to 2,700 people in residential care. I am now providing for eligibility to full disability allowance, as a matter of right, from next January for all persons resident in institutions.

In further advances in the area of disability, the Citizens Information Bill 2006, which is due to complete its progression through the Dáil later today and which will be before this House early next session, lays the statutory foundation for the provision of a personal advocacy service to people with disabilities. A further €1.9 million is allocated to continue the development of this and related services next year.

In delivering on the commitment to greater gender equality in the welfare system, and in making the welfare code fairer to women, the Bill includes important reforms that will lead to more enlightened social policies in the pensions area. Increasing the rate of qualified adult allowance for the spouses and partners of contributory pensioners by €23.70 per week will benefit some 35,500 couples. It will bring the rate of qualified adult allowance payments for those aged 66 years and over to 86.5% of the target rate as set out by the Government, which is to bring it up to the rate of the non-contributory State pension. There is a €60 million commitment to reaching that target in the coming three years, and €20 million of that will be utilised next year.

I also intend to introduce legislation, in the next social welfare Bill to be presented to this House in March next year, to provide for the qualified adult's entitlement to the qualified adult allowance for the duration of the entitlement of a State pensioner. As most qualified adults are women, this decision will be of enormous benefit to them as it will, in most cases, transform the payment into what is, in effect, a woman's pension in her own right. I also intend to provide for this payment to be made directly to the qualified adult.

I propose to reform significantly the manner in which spouses and partners are assessed as qualified adults across a range of social assistance schemes. The proposed reform involves assessing both members of a couple in a similar manner, with common disregards and assessments applying to both. In addition, I will remove the poverty traps that are present in the current method of assessment. Under these reforms, increases in labour market participation will instead be rewarded, and this will facilitate women in moving beyond the occupational cul-de-sac of indefinite part-time employment with earnings kept below €100 per week. These measures will significantly reduce the complexity in the present system, while recognising and rewarding increased labour market participation by all, and particularly by women.

The Bill introduces two beneficial measures that will assist widows and widowers at a particularly difficult time in their lives, in the immediate aftermath of the death of their spouse. To help in easing the financial strains at this sensitive time, the widowed parent grant will increase by €1,300 to €4,000, while the bereavement grant will rise by €215 to €850.

I will now outline the main provisions of the Bill. Sections 2 and 3, together with Schedules 1 and 2, provide for an increase of €16 in the contributory State pension and the contributory widow or widower's pension. In addition, recipients of the deserted wife's benefit who are aged 66 years and over will also receive an extra €16, as will those aged 65 years and over and in receipt of the transitional State pension or invalidity pensions. An increase of €18 per week is provided in the non-contributory State pension and the carer's allowance. Recipients of invalidity pensions, non-contributory widow or widower's pensions, deserted wife's benefit and carer's benefit will receive an increase of €20 per week. Payments including jobseeker's benefit and allowance, illness benefit, one parent family payment, disability allowance, supplementary welfare allowance, carer's allowance, farm assist and guardian's payment are all increased by €20 per week.

Weekly increases in respect of qualified adults, ranging from €23.70 in the case of contributory and transitional State pensions where the qualified adult is over 66 years of age, to €10.70 if under 66 years, will ensure the existing proportional relationship between all personal rates of payment and that of their associated qualified adult allowances is either significantly increased to almost 83% in the former case or maintained at over 66% in the latter. These sections of the Bill also provide for increases in the qualified child allowance rates to bring the existing three rates up to a single standard rate of €22 per week. Where reduced rates of payment apply, proportionate increases will be implemented.

All personal, qualified adult and qualified child increases take effect from the first week in January 2007. Increases for recipients of jobseeker's benefit and allowance, illness and maternity benefit, one parent family payment, family income supplement, farm assist and supplementary welfare allowance will be made from the first payday in January 2007. Due to the lead-in times involved in the production of personal payable orders for certain long-term payments such as pensions, it will not be possible for budgetary increases to be paid immediately in such cases. Some 142,000 recipients, including those in receipt of widow or widower's, carer's and invalidity payments, for example, will receive their new order books in mid-February. These beneficiaries will receive six weeks arrears in the first order of the new book and the weekly increase will be incorporated in their normal weekly payment thereafter.

Certain other long-term recipients, such as State pensioners and those in receipt of disability allowance, will receive new pension order books at the end of March. This applies to some 276,000 customers. This group will receive a special once-off payment in mid-February representing 12 weeks of their budgetary increase. This will cover retrospection of the increase to January plus an advance payment of the increase to the end of March. From the book renewal date at end of March, the increase will be incorporated in the normal weekly payment.

Section 4 provides for increases in the weekly income thresholds applied in determining entitlement to family income supplement with effect from 4 January 2007. The new thresholds will range from €480 for a family with one child to €1,090 for a family of eight or more children. For example, a family with three children on €500, or about two thirds of gross average industrial weekly earnings, will receive €75 in 2007 compared to €39 currently, an increase of €36 per week.

Sections 5 and 6 provide for changes in PRSI. In budget 2006, the position was achieved whereby the threshold for liability to the employee element of PRSI was set at €300 per week, equivalent to the entry point to taxation. Section 7 provides for an increase of four weeks, from 22 weeks to 26 weeks, in the duration of maternity benefit. Section 8 provides for an increase of four weeks, from 20 weeks to 24 weeks, in the duration of adoptive benefit. These improvements take effect from 1 March 2007.

Section 9 and Schedule 1 provide for bereavement and death benefit grants. Section 10 provides for an increase of €10, from €20 to €30, in the weekly means disregard for non-contributory pension means-testing purposes from January 5, the same day the budget increase of €18 per week will come into effect.

Section 11 makes provision for the payment of full-rate disability allowance to those resident in institutions prior to 1 August 1999. A partial rate of €35 has been payable to some 2,700 such persons since 1 June 2005. Entitlement to the full-rate allowance will commence in January.

Legislation in 1988 provided for the introduction of self-employed, or class S contributions, but excluded from liability self-employed workers whose total income was below a threshold of £2,500, equivalent to €3,174 per annum. At the time, those who engaged in self-employment but were entitled to unemployment assistance were excluded from liability for PRSI in view of their low income levels. Over the years, the threshold for class S liability has remained unchanged while there has been significant improvements in disregards for means-tested schemes, notably with farm assist. There is also no provision for the award of credited contributions to self-employed workers. Therefore, a self-employed worker who is in receipt of farm assist or jobseeker's allowance may only maintain his or her contribution record through opting into the voluntary contribution scheme. In this context, it is desirable to improve access to social insurance coverage and enable continuing social insurance protection, specifically the accrual of contributions towards a contributory pension, by removing the exemption from PRSI liability for those in receipt of farm assist and jobseeker's allowance. This will be provided for in section 12.

To ensure the position of those on lower incomes is protected, the health contribution levy threshold is being increased by €40, from €440 per week to €480 per week, with the corresponding annual threshold being increased from €22,880 to €24,960. An additional 0.5% is being introduced in respect of income to the extent that it exceeds €100,100 per year or equivalent to €1,925 per week. This increase, which is expected to affect only the top 10% of earners, is effective from 1 January 2007.

The Social Welfare Bill 2006, the first of two instalments, builds further on the considerable progress made in recent years through a range of Government measures. It safeguards the living standards of those who rely on social welfare income and other supports and prioritises the allocation of resources at those most in need. The Bill is about solid and fundamental structural reforms of welfare policies in areas of child poverty, women's pensions and carers. These reforms will modernise and make the welfare system fairer to all, delivering more enlightened social policies.

I commend the Bill to the House and look forward to a constructive debate.

Sheila Terry (Fine Gael)
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I compliment the Minister for Social and Family Affairs on the many increases provided for in the Bill. Increases have been provided in the past several years which have made a difference to many people on social welfare benefits. I recognise the work the Minister has done in this area since he took up his portfolio.

The moneys are available to the Minister to achieve these increases. In a time of plenty, it is only right that it is done, particularly for those most in need. Many on social welfare still struggle on the money available because various increases in benefits are wiped out by rises in, for example, the cost of fuel, electricity or general prices. Many people still live in poverty despite the improvements made in social welfare payments.

In some cases it is down to how people manage their money. Unfortunately, many of those dependent on social welfare benefits have a myriad of problems such as unemployment, drug or drink problems or simply being unable to cope with a household budget. More community work needs to be done to assist this group so that children do not go hungry and money is not spent on drink or drugs.

Some residents have been staying in the homeless unit on Clanbrassil Street in Dublin for three years or more. I know of one family with three children in the unit living in one bedroom and sharing communal facilities. To expect a family to survive in that type of atmosphere is unacceptable. Such families need to get out of homeless units as quickly as possible. I can understand using the units as a short-term solution to homelessness but not for the long term. A welfare officer or social worker visits the Clanbrassil Street unit occasionally. Across the State many children live in such units which warrants a full-time child care worker being assigned to them. Will the Minister ensure a child care worker is assigned full-time to homeless units?

The Bill recognises the role of carers. Those who already had a social welfare benefit but were precluded from availing of the carer's allowance can now receive half of the carer's allowance. This will be of great assistance to elderly people looking after a spouse or son or daughter. That is really good. The increase in the family income supplement is welcome, as well as the increase in the child dependant allowance. The Minister is trying to assist the poorest of the poor and is working towards a two tier system. That is where we should be going because some children and families are poorer than others and they need additional help. More should be done for them in the coming years.

There has been an increase in qualified adult allowance. I thank the Minister for recognising that, at last, women should be acknowledged in their own right and receive a pension in their own name. We have been calling for that for many years. Why is the Minister waiting until September to introduce it? I accept the Minister plans to introduce legislation but this involves only a simple legislative change. Perhaps he is including it with the lone parents proposal. However, could he not introduce the change more quickly? I am happy it is being done but it should be done before September.

On Second Stage in the Dáil the Minister said, with regard to the qualified adult allowance, that women will get their allowances directly and in their own names but they may choose not to do that. The Minister did not say that in the Seanad this morning and I prefer the way he phrased it today. No loophole should be left whereby a woman might feel under pressure not to take her pension in her own name. The Minister's phrasing this morning is far more definite. A woman will get the pension in her own name. Let there be no question that there might be a choice that she will not take it. We know some women, generally older, who will be under pressure to leave it as a joint payment. The wording presented this morning should be the definitive version.

I welcome the increases in the death benefit payments. People are still under pressure in providing child care. The Government is tackling the child care issue through various benefits for children. However, families are still struggling to meet child care costs. It is a deterrent for many women returning to the workforce when they cannot meet those costs.

The fuel allowance has doubled in the past two years but the increases are small. They are wiped out by the increase in the price of coal, briquettes, gas and electricity, despite the Minister's decision to allocate additional units. It is still quite difficult for some people to access the fuel allowance. It is not available for everybody. Access to the scheme should be easier in order that more people will be covered by it. I heard recently about an elderly woman who lives alone and who goes to bed early every night to save on her electricity costs. Older people are still worried about keeping warm and the cost of doing so.

When the Minister was first appointed I had great hopes he would tackle the issue of private pensions. Several reports on the matter have been produced. The Minister said he would think the unthinkable and take on the industry but I have seen no sign of that yet. I am a little disappointed. Perhaps he will take on the industry in the Green Paper. I have written to the Minister, the Department and the Pensions Board about this but many of my questions have been unanswered. I get a standard reply acknowledging receipt of my letter and stating that the Minister will be in contact with me. However, I do not get any detailed answers, which is disappointing.

When one considers the tax relief for the pensions industry which the Government foregoes, we are not getting value for money. This issue must be tackled. Some of my questions related to value for money. In addition, I have not yet been able to get an answer from the Minister as to whether he believes it is constitutional to compel people to join occupational pension schemes where there is no guarantee of benefits.

He also does not know how many people are receiving frozen pension benefits. After 20 years in retirement, a private sector pensioner with frozen benefits receives less than one third of the income of his public sector counterpart. The Minister also cannot say how many people are not claiming an occupational pension benefit despite paying into the scheme for years. The pensions ombudsman told the committee on social and family affairs that there are people, and they number in the thousands, who have paid into schemes but when they reached retirement, they did not receive their benefits. There should be a campaign to highlight this issue. It might be 30, 40 or 50 years since they worked and paid into schemes but they should be reminded to claim those benefits. The industry does not let them know they are entitled to them.

Finally, I have raised questions about the tax free lump sum. I believe we are getting bad value for money with that. It is different for the public sector worker, who gets the tax free lump sum as well as his or her pension. When the private sector worker takes out the tax free lump sum it comes out of his or her pension, thus reducing the income stream. The computation used by the industry to provide that lump sum gives bad value for money. Many issues must be dealt with in the Green Paper and I hope some of the matters I have raised will be addressed in it.

Margaret Cox (Fianna Fail)
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I welcome the opportunity to discuss the social welfare package announced recently. I am approaching my tenth year as a Senator and in one of the first debates in which I participated I spoke before the then Minister about the single payment issue. As increases were made and additional benefits were provided for carers, it became increasingly difficult to provide a justification for people being unable to get two payments from the Department of Social and Family Affairs.

Today the Minister acknowledged that the rule had resulted in inequality and discrimination against carers generally and particularly women, given that it tends to be women who take on the caring role. I am amazed and delighted the Minister has taken on board the points we made and our pleas that this be examined. I welcome the change he has introduced, whereby people providing full-time care will be able to retain their main welfare payment and receive another payment equivalent to up to half the rate of the carer's allowance. That reform is long awaited and is most important. The Minister can be justifiably proud of it. It is one of the most significant changes in social welfare for many years.

We all agree it is marvellous to see the old age pension increased to the current levels. More than anybody, the Minister accepts that the cost of living is increasing daily such that these annual increases are being eroded. An increase in an allowance or pension that we might expect to mean an extra €10, €15 or €20 in our pockets, is actually a reduction. Although we must recognise and acknowledge that it is still more money, it is not enough. Until we do something that caps the cost of electricity, gas, heating or telephone bills and the 21% additional VAT charge on top of the increase, we are fooling ourselves if we believe we are making a significant difference to the lives of our pensioners and people on social welfare. Perhaps we need to examine reform in this area. Where there are instances of charges under the control of the State or State regulators we can do something about the impact they have on the older and most vulnerable people in our society. I commend the Minister who, in his past number of years in this portfolio, has made a significant difference, and the Government which has delivered on its commitments. However, is it making a significant difference to the lives of old age pensioners and those on the margins of society?

I commend the Minister's focus on poorer children. The €10 increase per month per child in child benefit is welcome. The increase in the weekly payment focuses on the families of poorer children, which I commend. It deals with the issue and the worry we had about taxation and child benefit. However, there are many people in that middle group, low-income earners, who are just out of the family income supplement net. This is middle Ireland, the Pope's children as they are called on television. These are the people living in Knocknacarra, Renmore, Doughiska and Merlin Park. They are all buying their own houses; paying large mortgages as first and second-time buyers; paying stamp duty to the Government on family homes, with which I disagree; paying child care costs because both parents are in work; and paying car loans and other expenses. We are not addressing that large group of ordinary, everyday people.

These are the people sitting in their cars for 40 to 45 minutes to get home in the evening, who have to take the dinner out of the fridge, put it in the oven, heat it, do homework, prepare clothes for school the next day, pack lunches and prepare bottles for babies. We forget about these people. We must do something about them to address not child poverty in the material sense of not having enough food to eat, but child poverty in the sense of family time, quality of life and the opportunity to live their lives as I did, in a warm, loving family with clear expectations. We must not forget about them.

While I welcome the child benefit increase as the method we have chosen to address child care costs, and the annual child care supplement of €1,000 for children under the age of six, which is something to be proud of, we must remember there is a bigger group of people for whom, as Senator Terry said, the cost of child care is a major issue. If we forget this we do so at our peril. As we look to the future and our manifestos, I suggest the child care supplement be paid for children under the age of seven. Children aged four, five or six come out of school at 12.30 p.m. If one is working the children must go somewhere from 12.30 p.m. to 5.30 p.m. Most children do not go into first class until they are at least seven, unless they started school early. We need to consider such people because providing child care for those children is as costly as for those under the age of six. Perhaps we could examine moving that forward a little in the budget for the future.

On the subject of social welfare disadvantage, I spoke about the back to school allowances at the Fianna Fáil parliamentary party meeting in Cavan in September. The following is an estimate of the costs for a 12 or 13 year old child going to secondary school for the first time, based on buying in Dunnes Stores rather than the most expensive shops: pair of shoes, €50; pair of runners, €50; school jumper with a crest, €45; two school shirts, €20 each; and an ordinary Dunnes or Penneys jacket for walking or cycling to school, not a €180 Nike or Tommy Hilfiger jacket, €50. All that adds up to more than €285 for the 12-22 year olds. That €285 clothing allowance is given to those in receipt of social welfare.

I return to the people in places like Knocknacarra and Renmore who send children back to school. My mother used to save the child benefit in June, July and August to buy our school uniforms for September. We save our child benefit to buy school uniforms. We must examine this. Many people who are not on social welfare have little disposable income but want to give their children the best. I appeal to the Minister to examine this issue to see if there is anything we can do for this group, whether by way of additional means testing, income disregards or otherwise.

I commend the Government, the Taoiseach, the Minister for Finance, Deputy Cowen, and the Minister for Social and Family Affairs on the increase to 26 weeks in paid maternity benefit. It is incredible to think that we will have that in this country, as well as the additional unpaid leave. Now that we have crossed that hurdle and made that commitment to families under our Constitution, the challenge for the Minister as he leaves his Department is to make a universal parental leave payment. He should begin with four weeks, increase it to six weeks and give it to one or other parent but not both. If we love our children and believe in looking after society we must begin somewhere.

Where do people think these gangland shootings come from? They come from the fact that we are not in a position to look after our children properly. We allow children, particularly in disadvantaged areas but throughout the country, to miss the opportunity of the care and nurturing of a parent at home, be it the mother or the father. I spoke to a woman who is returning to work next February after seven months off with her second baby. When I asked her what it was like she said it was incredible to look after the baby at home and to know that when she returns to work the baby will be seven months old. One could say it is half reared, although that is not the case, but it is better than putting it into a crèche at the age of three or four months. My vision of Ireland is that if somebody chooses to have a baby, the mother or father will stay at home with that child supported by the State until the child is one year old. I plead with the Minister, as I plead with my political party, that this must be a priority for us.

As a result of the changes we have seen in social welfare payments, I get the feeling the Minister listens to us. Therefore, I will speak about rent allowance. I hate to see the amount of rent allowance paid every week to private individuals who own houses. It profits the property developers and investors, who may not even pay tax on those phenomenal amounts of money over the €100,000 where the 0.5% tax we are putting on for the health levy makes no impact. We must reform rent allowance. There must be a way of working with the local authority and the social welfare system so that the State does not subsidise the provision of rental accommodation to the profit of private investors. That money is disappearing into a black hole and we must do something about this. Last year I suggested a pilot scheme.

I congratulate the Minister on the budget. I do not normally offer unqualified congratulations to any Minister but the changes made to child benefit, maternity leave, €1,000 payment and allowing those on carer's benefit to receive the half-rate carer's allowance and the main welfare payment are measures of which the Minister can be proud. I commend the Bill to the House.

Michael Kitt (Fianna Fail)
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I congratulate the Minister on the Bill. Senator Terry referred to the qualified adult allowance for those over 66 years of age and under 66 years of age. This payment is a right and there is no pressure on people to be dependants. The increase in pensions, with the contributory State pension rising to €209.30, is welcome. Increasing the qualified child allowance to a standard rate of €22 per week is welcome. I am pleased the Minister took an initiative on the carer's allowance. There should be no means test for carers but the Minister has made improvements. One can now receive a half-rate carer's allowance and a full social welfare payment. Such payments recognise carers' duties and it is now accepted that one can receive two welfare payments. The Minister has recognised the case we made for this measure. The number of payments made available through the Department amazes me. Almost all have been increased.

The fuel allowance has doubled in two years to €18 per week. The accommodation of older people is not within the remit of the Department but it should be. I attended a meeting with Senator Cox and officials from the HSE about the delay in repairing houses, installing windows and doors and insulating them so that people's accommodation is warm. Many of us may wish to improve our houses but young people are not in a rush to do so. For those over 70 years of age it is important to make improvements quickly. In Galway applications in respect of 2005 are now being processed and applications in respect of 2006 will not be processed until next year. Increasing the fuel allowance and improving heating cannot be done without repairing houses. I hope the Government examines this matter and improves the service.

I have often raised the matter of pensions for missionaries and those who work abroad and do not receive a pension at the end of their careers. The Joint Committee on Foreign Affairs is meeting with officials from the Department of Social and Family Affairs next week. I hope we make progress. Retiring missionaries are entitled to know what will happen at the end of their careers. A contributory pension is the best way to address this. If this is not possible perhaps the Irish Aid programme, which has been greatly increased, could be considered as a means of resolving this issue.

The Minister should examine the case of those who do not have sufficient contributions to receive the State pension. Previous Governments introduced a scheme whereby the self-employed, including farmers, could pay into a scheme over ten years. Those who did not qualify could receive a pro rata pension but some people do not have the required five years' contributions. Many lobby groups seek a pro rata pension and I urge the Minister to examine this issue.

The widow's, widower's and orphan's schemes are compulsory now but some people did not opt for them years ago. Progress is needed on this matter. Marvellous schemes exist to allow one to transfer one's pension entitlements from one country to another. Various protocols and treaties have been signed to make this available between Ireland, the United States and Australia. It is hard to believe that those on invalidity and disability schemes must travel to Newcastle-upon-Tyne in the United Kingdom for medical examinations. These examinations should be undertaken in Ireland and, if not in the Republic, in Belfast or somewhere on the island of Ireland. This would be more practical.

I welcome the increase from €20 to €30 in respect of the means test disregard. The €100 disregard for part-time employment should be extended to all employment. We should not distinguish between those in receipt of a social welfare payment and those in part-time employment. The Bill contains many initiatives and the budget is excellent. The reaction has been most favourable.

The Minister encourages people to return to work. The disability allowance gives the Department the option of granting an allocation for light work for therapeutic reasons. This is often granted for six months and has been successful. This could be extended for a second six-month period if, according to a general practitioner, it is beneficial. The community employment scheme is one obvious means by which such work may be available to those in receipt of disability allowance.

Michael McCarthy (Labour)
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We have been able to debate these matters with the benefit of there being a good deal of money in the country. One need only look at an issue referred to in this House last week, a clip on "Morning Ireland" of Ray MacSharry delivering a budget speech in the late 1980s, which had to deal with issues such as very significant emigration, high unemployment and severe interest rates. Listening to that clip, one realises we live in a completely different Ireland today, and it is difficult to imagine that the clip is not from very many budgets ago when Governments, unfortunately, did not have the current largesse at their disposal.

That improves the conditions and circumstances under which we can deliver budgets and spend money on various areas. One should be mindful that it is not long since this country did not have such money at its disposal and decisions were therefore much more difficult. The criticism that could be levelled at various Ministers for Finance and other Departments was more strident because there was no money to introduce measures people would like to have seen.

Aspects of this budget must be welcomed, and it is particularly significant that we can welcome old-age pensions surpassing the €200 a week level. Other measures can also be welcomed but we must also consider the budget in a balanced and objective fashion. It improves in some way the lot of the poor and disadvantaged, as did the budgets from 2004 and 2005.

We must disagree with the Minister stating in his budget speech that throughout its terms in office, the Government has ensured the less well-off have shared in Ireland's growing prosperity. If the Minister for Finance has forgotten the "savage 16" or the "dirty dozen", all legacies of the former Minister for Finance, Charlie McCreevy, none of the disadvantaged, the less well-off or those who had supports cut will have done so.

From 1997 until 2004, the gap between rich and poor widened as each of seven successive budgets gave to the rich and took from the poor, making Ireland one of the most unequal countries in Europe. In 2004, CORI put it well in stating that the rich get richer while those living in poverty still have a long way to go before they ever reach the poverty line of income. Just two past budgets giving more to the poor than the rich can only go a small way to tackling the neglect of the previous seven budgets. We await the outcome of the most recent budget to see how its measures will take effect.

I question the real meaning of the Minister's boast in the budget that he is providing the biggest package of support for those on low incomes in the history of the State. There were two very clear reasons for this large package, both arising from mismanagement of the State's finances. The Government increased income inequality and worsened the situation for the poor over the first seven years of its time in office and it will take more than two or three years of higher spending on social welfare to put right the damage done over recent years.

In addition, economic commentators recently put our current inflation rate at 4%. We have not done nearly as well as our EU neighbours in keeping inflation under control, although we are facing the same international problems, with rising energy prices and the fall in the value of the dollar, etc. If doctors differ, economists can differ every bit as much and as dramatically. The Minister for Finance would have used different indicators for a naturally lower figure.

With significant inflation, the Government will spend more in absolute terms just to buy the same amount of goods and services this year as last. Any Minister for Finance presiding over an economy with significant inflation can always make the very hollow boast that he is spending more than he ever did before, which is not the same as devoting more resources to the needy.

I should make a comparison with what is being spent now and what was being spent by the rainbow Government. In 1995 and 1996, that Government's spend on social welfare was always in double figures in terms of gross domestic product, between 10.4% and 11.1%. The current Government has led social welfare expenditure to the level of 7.5% of GDP and it has remained in single figures throughout the term of the Government.

Those struggling on inadequate social welfare incomes are very sensitive to price increases, whether caused by general price inflation or Government increases in gas, electricity, transport and health care costs. What is important in disadvantage terms is the real improvement in circumstances rather than the monetary measure of changes from the previous years.

I was in the Dáil Chamber to hear the budget speech and there was a great cheer when the Minister announced that social welfare payments were at last crossing the €200 per week barrier. There was the key indication that this was helping the poor and improving the prospects of the Government in the next general election, and also that any social welfare payment of €200 solves all problems for low-income groups. Neither of these assumptions is justified.

We will see what the election produces as we have no crystal ball for this side of May. The increase in the social welfare payment was important as a pre-election commitment being fulfilled, which is good, but I dread to think what it must be like to live on €200 per week. Anybody in such circumstances would not join in the chorus of approval received by the Minister when he announced it.

There is evidence that such levels of money can still consign somebody to the breadline, so there is not much to cheer about. The minimum weekly disposable income required to avoid poverty in 2006 is €203 for one adult, €270 for an adult and child and €337 for two adults. Even with the first instalment of these improved payments, the unemployed, widows, widowers, those under 65, lone parents, carers for the disabled and many other groups are still below the poverty line.

I will comment on poverty in general before going into cases in finer detail. We must recognise that poverty levels in this country are too high and it is not good enough to hide behind fancy speeches and the manipulation of figures. There is statistical evidence to prove the levels are too high and all the references I have made to poverty have come from Central Statistics Office figures published last month. These refer to some of the indicators agreed by Ireland and other EU countries in 2001 as an appropriate means of measuring social inclusion and comparing the effectiveness with which different EU countries are handling their own problems of social inclusion and poverty.

Statistics show that Ireland has the highest poverty levels of any country in the EU except for Portugal and the Slovak Republic. We are less effective than other EU countries in reducing poverty levels through social transfers and our total transfer system only reduces poverty by 18%, compared with the EU average of 25%. The unemployed, one-parent families, the ill, the disabled and the elderly have unacceptably high poverty levels. A worrying feature is that in Ireland, up to a third of all children in the country are living in poverty.

Séamus Brennan (Dublin South, Fianna Fail)
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That is just not the case.

Michael McCarthy (Labour)
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The statistics exist; they are not mine. It is the case and I have provided statistical evidence to prove it.

Séamus Brennan (Dublin South, Fianna Fail)
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It is really not.

Michael McCarthy (Labour)
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This goes to show the manner in which some people can attempt to block it out. The statistics are irrefutable.

If the Government does not accept the EU's official comparisons as outlined, will it at least accept the evidence provided by the Society of St. Vincent de Paul and other charitable organisations? In the past year, the Society of St. Vincent de Paul spent more than €41 million giving direct help to more than 300,000 families let down by social support systems in this country, €7.5 million which was emergency support for families with no money, food or resources. Some €4.6 million was for food and €3.1 million was for fuel.

The society spent €1 million getting families reconnected to gas or electricity supplies and with fuel prices inevitably increasing, the society's pre-budget submission pleaded with the Government for a weekly fuel allowance of €24 for an extended period running from September to April. The amount went to €18 and an increase should always be welcomed, but we are dealing with an organisation at the coalface of poverty. It has provided evidence to suggest its experience in the many towns, villages and communities of what people are going through. It is justified in its pre-budget submission as the society knows the people who cannot afford basic fuel costs.

There are three groups I wish to refer to in particular, the first being lone parents. In this House at the start of the year, I stated the Minister for Social and Family Affairs, Deputy Brennan, was to be applauded for hitting at the myth about lone parents perpetrated by people who know better. Senior academics and journalists used this category of people to unearth extremely conservative views which are not based on fact. Approximately two years ago, two such people in particular went after lone parents in a disgusting fashion. The entire issue spilled onto the pages of the broadsheets and onto radio programmes. Myths exist but we fail to connect facts and evidence.

I was appalled by a particular article in The Irish Times and conducted research on the matter. It referred to a figure which it wanted people to believe was a majority. In fact it was a minority. Earlier this year, the Minister told the House that 1.7% were in this category and he justifiably hit the myth on the head.

In 2002, Ireland had 154,000 lone-parent families, approximately one in six of all families. One in three births takes place outside of marriage, a high proportion of which are to one parent families. Approximately half of lone parents, a total of 80,000 people, receive the one-parent family payment. This payment was increased in the budget to €207 for one adult and one child. However, the weekly disposable income for one adult and one child to avoid poverty is €270. This means one-parent families will start the new year well below the poverty line.

One-parent families are now a significant feature of our social system. They deserve better than being left on the breadline with this year's increases. Their problems in caring for children and, as most of them would wish, finding suitable employment are made worse by Ireland's extremely high child care costs and the lack of free State child care as exists in most other countries.

The office of the Minister for Social and Family Affairs, Deputy Brennan, communicated with me on the discussion paper launched at the beginning of this year regarding the residency rule for one-parent families. This rule means the State discriminates against family units who want to reside together. The Department stated the Minister would consider allowing somebody who had formed a relationship to keep the one-parent family allowance if his or her partner moved in. This is an important measure.

I was in communication with the Department on this matter because somebody applied for a mortgage on the basis the rule was no longer in place and was asked to produce a statement of earnings. This individual was refused a mortgage because the measure to remove the rule is still at discussion phase and has not been introduced. The Leader of the House is also familiar with the case. The person is on the list for an affordable house. It may take a year or two but it is hoped this will solve the problem. It is important to state it is a good measure and I look forward to its implementation. We must promote the family living together as a unit and those in stable relationships seeking employment and getting on the property ladder.

We have approximately 150,000 carers in the country, one third of whom give more than 43 hours of unpaid time each week caring for elderly, frail or disabled relatives or friends. Approximately half of all carers have no paid employment and most of them find themselves being carers not out of choice but out of pure necessity. They do not choose the role, it is forced upon them by circumstances beyond their control. Strong evidence exists to suggest carers suffer from stress and poor health because of the circumstances under which they operate.

Approximately four years ago, the Joint Committee on Social and Family Affairs undertook a detailed study of carers and their problems. It reached the unanimous conclusion that all carers need help. The carer's allowance should no longer be means tested and should be made available to all carers. This country has far more means tested benefits than any other EU country. I believe the Minister will examine this and I sincerely hope we will see an end to it.

The Bill contains welcome measures and it is always good to see an increase in money. However, statistical evidence suggests poverty levels are unacceptably high and we must confront this face-on.

Martin Mansergh (Fianna Fail)
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I warmly welcome the Minister and the Bill. As was made clear to me on the Order of Business, and I do not want to be too hard on him, Senator McCarthy needs tutorials in recent economic and social history.

Michael McCarthy (Labour)
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That is absolute nonsense. The Senator was at this all morning and it is pure rubbish. The Senator should read his script.

Martin Mansergh (Fianna Fail)
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I do not have a script.

Michael McCarthy (Labour)
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The Senator should form his own political views and not read them from a book. I cited hard statistical evidence.

Paddy Burke (Fine Gael)
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Senator Mansergh without interruption.

Martin Mansergh (Fianna Fail)
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I have Deputy Quinn's last budget which increased child benefit from £29 to £30. I accept it is more in terms of euro. This year, we increased child benefit from €150 to €160.

Michael McCarthy (Labour)
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More and more people live below the breadline.

Martin Mansergh (Fianna Fail)
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For three children one received £99 per week. Today one receives €515, which does not allow for children under the age of six who receive €1,000.

Michael McCarthy (Labour)
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That budget is nine or ten years old.

Martin Mansergh (Fianna Fail)
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I listened to Senator McCarthy in total silence. Perhaps he will do me the same courtesy. In 1997, the general increases in social welfare were £3. I readily acknowledge it is more in euro. It was a little ahead of inflation. If it is difficult to live on €209.30, I do not know how difficult it was to live on a post-budget £67.50.

Michael McCarthy (Labour)
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That is a comparison between 1997 and 2006, which is a difference of nine years.

Martin Mansergh (Fianna Fail)
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It shows what enormous improvements were made. As for social welfare spending as a percentage of GDP, one must not lose sight of the fact that unemployment has dropped from approximately 8% to 4.5% and that will naturally reduce social welfare spending. The 1997 budget was a pre-election budget which included a package of £525 million, again it is more in euro. This year we have spending of more than €1.5 billion.

I want to get away from partisan politics. I congratulate the Minister on his three years in the Department of Social and Family Affairs. I believe I am correct in stating that in each of those years the social welfare package was larger than the income tax package. According to speculation he may not have chosen this Department. However, he has made a tremendous impact, not only in the increases in social welfare rates but also in the reform of schemes. I congratulate him on his ministerial tenure of office during the past three years.

Great improvements were made in the basic rates and the previous two budgets were warmly welcomed by the Conference of Religious of Ireland which includes leading experts on poverty. It sought the gear shift on lowest payments. The Ministers for Finance and Social and Family Affairs no longer bother to give percentage increases because they are so much larger than the rate of inflation. Inflation is no longer as closely shadowed as was the case in the past.

Undoubtedly we used our national wealth to substantially increase payments to the less well-off in society. While accepting a great deal more needs to be done, we can be proud of how much has been achieved, particularly getting through the €200 barrier for the pension payment and increasing the jobseeker's benefit to €180.

Progressive social reform is signalled to be carried out over a three-year period. I was going to use the phrase "individualisation of social welfare" which does not have the same pejorative meaning in a social welfare context and nobody contests it. People will receive pensions in their own right. I congratulate the Minister on signalling that.

There has been a ten-year moratorium on child dependant allowance which, if I recall correctly, dates from an interdepartmental report produced in 1996 or 1997 when Proinsias de Rossa was Minister for Social Welfare. I am not criticising him because at the time, it was the correct conclusion to take. There was a problem concerning the tax wedge being a disincentive for people to take up employment. The Minister is correct in saying that we have now moved far beyond that stage. It is right to have something targeted and focused at people in this category. Very few things are necessarily devised for all time. They must be adjusted and adapted as one goes along.

It is important that the fuel scheme be increased, particularly in light of the increases in fuel prices, although they are possibly a bit lower than was originally announced. Another particularly enlightened measure, which was started last year, is the income disregard for those on the old age non-contributory pension. One would certainly hear complaints from older people receiving this basic pension that income disregards applied to everyone else. In particular, teenagers, be they at school or college, were entitled to go out and earn and increase their income. The only people who were not allowed to do so were old people on the old age non-contributory pension. Clearly, the experiment undertaken last year of allowing a disregard of €100 in income earnings was successful and the Minister has now doubled that to €200.

Paddy Burke (Fine Gael)
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Senator Mansergh must conclude.

Martin Mansergh (Fianna Fail)
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If I have any reservations about this, it is that it does not seem to be extended to people who are self-employed or farmers.

I make a final plea. It does not necessarily all come within the Minister's remit. Some of it may be under the remit of his colleagues. Former public sector workers who left the public sector some time ago are stuck with the terms of much more frugal pension schemes. I would like to see those anomalies ironed out and a generous spirit adopted. Neither the numbers nor the amounts involved are very great. That such things are precedents and what applies in one area may have to be applied in another is always a deterrent. There are small cohorts of workers, such as telecommunications workers who possibly retired before 1984, I may not have the exact date, whose situation——

Paddy Burke (Fine Gael)
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Senator Mansergh must conclude.

Martin Mansergh (Fianna Fail)
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I conclude by congratulating the Minister, not only on this budget but on his three-year term of office and the amount he has achieved during this period.

Fergal Browne (Fine Gael)
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I welcome the Minister and his officials to the House. I have a point to make in respect of the debate between Senators Mansergh and McCarthy about the budgets. In 1997, we had a budget surplus. If we did not, we would have been accused of being economically irresponsible. I was either a teenager or in my early 20s when Proinsias de Rossa was appointed Minister for Social Welfare, but those in Fianna Fáil created the impression that he was going to bankrupt the country and give huge increases. He is now being criticised for not doing enough when he was being responsible. He increased allowances in accordance with the times and we should avoid comparing unlike with unlike in debates.

Martin Mansergh (Fianna Fail)
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I did not start it.

Fergal Browne (Fine Gael)
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I know the Senator did not start it, but I will not blame anyone. It is time we moved on. We should always encourage responsible fiscal management of the country and budget surpluses. To throw money at people and go into debt is not the way forward. It happened between 1977 and 1979 and it bankrupted the country. Senator Brady agrees with me but I will not engage in that debate today.

I broadly welcome the announcements made in the budget on social welfare and believe there is cross-party support for them. However, I will pick up on five or six key points when I have the opportunity to do so. My colleague, Deputy Stanton, raised them with the Minister in the Dáil.

The first issue is my hobby horse and concerns the bulk payment of the fuel allowance. Getting a fuel allowance of €18 per week is fine if one is getting briquettes or bags of coals delivered to one's house. If a person uses oil and gets a minimum delivery costing €200 or €300, one is in trouble. I fail to understand why the option of receiving the fuel allowance in a bulk payment is not explored. The Minister will say that recipients could drink the money or spend it irresponsibly. If this was the case, pensions or other payments should also paid by day or by the hour, but we do not do so. I understand that 80% of local authority houses in County Kilkenny use oil for fuel so there is a need for this method of payment.

The Minister has not acted so far but I urge him to investigate the possibility of a bulk payment. I know he is interested in looking at it. Perhaps his civil servants are holding him back or his political advisers are not too sure, but I urge him to seriously consider giving the option to people to receive a bulk payment possibly once or twice a year, instead of receiving it on a weekly basis for six months. He could do so through a voucher system that links in directly with the oil company or whatever company is involved, be it in terms of deliveries of coal, wood pellets or whatever fuel they use. It would make far more sense.

I have spoken with community welfare officers who have told me they have been inundated with people coming in because they get a €300 bill for oil which they cannot afford to pay. It is not possible to tell an oil company that one will pay it back through weekly payments of €18 for the next few weeks. The company will not deliver. I raised this issue with the Minister before and I thank him for his courtesy in listening to me, but I urge and encourage him to look again at this issue. It would be a very successful initiative and would free up considerable time for community welfare officers who must deal with problems arising from the current method of payment. We should give people the bulk payment and see how they spend it. If they avail of such a payment and come back looking for more, they will not receive it. I imagine most people will use the scheme and that it will not be abused. It is worth examining.

My second question concerns refuse collection. The refuse service in Carlow was privatised, which I welcome. The only difficulty is that there is no waiver scheme as a result. The Minister might advise that people can claim it back on their tax but a pensioner who is not paying tax because he or she does not have an income cannot do so. This issue needs to be looked at. A waiver scheme or some system to offset the cost of refuse collection for pensioners is needed.

Another question that is probably more problematic is free travel for people living in remote rural areas. If I live in Dublin and have a free travel pass, I can use the Luas, the DART, the train service and buses without difficulty. However, if I live in a rural part of counties Carlow, Galway or Mayo, I cannot use the service. I recently met with a group of pensioners who suggested a vouchers system for the use of taxis or hackneys could be a way around this. The Minister is originally from Galway, but I am not sure if he is a city man or from a rural part of the county. However, I am sure he understands the isolation felt by people in the country and would agree there is discrimination between those living in the city and those living in rural areas. Even though they have the same free travel pass, people in urban areas have a much better service by comparison with those in more remote rural areas.

In his radio programme on Today FM, Ray D'Arcy spoke about paternity leave and maternity leave. He made the point that if a woman has a baby, she can take a total of 47 weeks between the minimum amount and the additional leave, but a man can only take three days. I am not too sure if those figures are correct. One individual suggested the possibility of splitting leave. The roles of mothers and fathers have changed dramatically. I was reared by my mother and my father put food on the table. However, he was not a very hands-on person. The set-up in respect of the new generation is completely different, as my brothers-in-law can attest. Fathers now take an active role in the rearing of their children. Would it be possible, therefore, to split the arrangement? For example, a couple might decide that instead of one person taking the 47 weeks, one could take 23 weeks and the other 24. That might not suit everyone but I am sure people provide care for their children on such a basis. Perhaps we should move away from the stereotype of a woman having a baby and then automatically caring for it and recognise that many fathers play a far more active role in rearing their children and that they might require more time off work.

As far as I am aware, BUPA will announce today that it is withdrawing from the Irish market as a result of the policy of risk equalisation. Consequently, there will be difficulties in the health insurance sector. The nursing home payment announced recently by the Minister for Health and Children, Deputy Harney, will also give rise to major problems. Prior to her announcement on Monday last, I suggested to the House that perhaps it is time to consider introducing a special fund into which people might pay in respect of future nursing home charges. Only 5% of people will end up in nursing homes. None of us knows whether this will be our fate. If a person ends up in such a home, he or she does not know whether his or her stay will last a few months or for much longer.

People have great difficulty with their family homes being used in calculations relating to their nursing home care. Some 50% of citizens have private health insurance. People have displayed great willingness to pay premiums for better health services. In my view, they would not have a difficulty paying an extra small sum towards possible future nursing home costs. Either the Department of Social and Family Affairs or the Department of Health and Children should encourage the VHI and other private health insurers to introduce special schemes into which people might pay money so that if they end up in nursing homes, they would be in a position to draw down funds. This would mean that their family homes would not be brought into the equation. It will be difficult to use the value of people's homes when calculating the cost of their nursing home care. It is fine to state that a 15% levy will apply in the context of the value of people's homes but if a someone's estate has not been finalised perhaps ten to 15 years after his or her death, what will happen? It must be remembered that awful rows can arise in families in respect of the settling of estates, etc.

I am not sure whether action should be taken by private health insurers in this regard or whether the Department of Social and Family Affairs should introduce a scheme similar to that which applied in respect of SSIAs. Most people might not need to use the money saved and if not, they could get it back. If individuals were obliged to enter nursing home care, they could draw down funds from the scheme. This would mean that their family homes would not be tampered with. Such a scheme would be a great success and consideration should be given to its introduction.

The number of 85 year olds is going to treble in the next 30 years and the number of those over 65 will double in the same period. Problems will arise in that regard in future and it is time we made preparations in this area. It is also time that people accepted responsibility. In addition, the Government should provide people with incentives and encouragement and either put in place a private fund or encourage the private health insurance companies to do so.

Cyprian Brady (Fianna Fail)
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I welcome the Minister and congratulate him on what is another step forward. The Department of Social and Family Affairs has made great strides in recent years and not just in financial terms. For example, there have been major improvements in the delivery of services. It is 16 or 17 years since I worked in the then Department of Social Welfare and the changes that have occurred in the interim are phenomenal. It is not just a matter of euros and cents, we are concerned about the delivery of services and how such services impact on people's lives. The past two to three budget packages relating to social welfare show that the Minister and the Government are placing the most vulnerable people to the forefront when it comes to framing budgetary policy. There is no argument against that. We are in a fortunate position in that we possess the financial resources to be able to cater for the needs of vulnerable people. This did not happen by accident, rather through good management and prudent use of the moneys that accrue to the Exchequer.

I welcome a number of provisions in the Bill, especially those which concentrate on the alleviation of child poverty. I have come across children living in poverty on a number of occasions. Through no fault of their own, these children have no hope and see no future for themselves. On occasion, a very small amount of money can make a huge difference for particular children and their families. Again, this comes back to framing budgets and putting in place ways or means of paying people. I am aware of instances where the meals provided in schools are the only meals certain children get during the day. This year, the allocation in respect of school meals will increase by €3 million to €16 million. This is where the difference is made.

A previous speaker referred to one-parent families and I welcome the increases in this regard. Again, it is the simple measures that count. Changes are being made in respect of credited contributions for one-parent families where the recipient of the allowance takes time off to have another child. This can make all the difference to people who, for whatever reason, are trying to raise children on their own, and it gives them hope.

Senator Cox referred to the back to school and clothing and footwear allowances. Many people claim such allowances and it is not always easy for them to apply in respect of them. However, even the small amount provided by means of these allowances gives people the opportunity to cope better. The concept of a welfare system is that it should — whether through the provision of a large or small sum of money — top up people's incomes and provide them with assistance that enables them to cope better.

There is a great deal of local authority housing in my area and I welcome the changes in respect of rent supplement and the rental accommodation scheme, which will make a huge difference for many people. One of the changes to which I refer means that people may work full-time and still qualify for the rent supplement. I have come across many cases of single people in low-paid jobs. The rent supplement makes a major difference to those obliged to pay out a portion of their incomes on what, in some cases, is accommodation of a low standard, and it helps them to improve their personal circumstances. Increasing the disregard in respect of savings or capital to €5,000 will allow people to make an effort to save some money and try to improve their personal circumstances.

The Minister and the Government have worked for a number of years on the supports being introduced for retired and older people and also carers. The benefits are there for all to see. When I talk to senior citizens, regardless of whether they live in local authority or private houses, they inform me that the extra money they receive gives them independence and an opportunity to provide financial assistance to their children or whomever. I welcome the increase in contributory and non-contributory pensions to more than €200 during the lifetime of the Government.

An entitlement to a free travel companion pass can make a difference to a person's life, as can extending — to ensure elderly people's security — the telephone allowance scheme to include mobile telephones. The simple things make all the difference. This Minister is to be congratulated on moving so quickly to offset the effects of the increases in energy prices. The extra units are to be left in place although energy costs have reduced somewhat.

I always put in a plug for widows and widowers at budget time because previous Administrations have somewhat ignored that group. A person of any age can become a widow or widower. The increases in their pensions, which have kept pace with old age pensions and other social welfare payments, can make a significant difference to people's lives, especially if they are struggling to raise children.

Senator McCarthy rolled out the statistics on poverty levels and so on. There are many supports available, apart from basic social welfare payments, for example, the family income supplement and various allowances. The Department has improved in its use of technology to provide information, which is welcome because in the past people were not aware of many of the allowances and benefits to which they were entitled.

Much has changed in regard to social welfare over recent years. It is no longer confined to unemployment benefit or assistance or pensions. I see at first hand the benefits enjoyed by community groups and organisations which receive small grants from the Department that make all the difference to their work. A total of €15 billion is a large sum for this country to spend on social welfare and this did not happen by accident. I congratulate the Minister and wish him well with the Bill.

Séamus Brennan (Dublin South, Fianna Fail)
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I thank the Senators for fine, thoughtful contributions to the Social Welfare Bill and a constructive debate, which I found useful. The Senators offered some good pointers for the future. I will think about Senator Terry's remarks about Clanbrassil Street and although it does not fall within the remit of my Department, I will bring the request to the attention of the relevant Department.

I will ensure the legislation is clear about qualified adults, mainly women, being paid in their own right and directly. It is intended to make the payment directly unless the recipient writes to the Department and asks for it to be paid in some other way. We must retain that option for those who take the trouble to write to the Department about it, but the default option is direct payment.

Senator Terry and I have many debates on pensions. The Government has made great progress on this issue which is on the national agenda and was at the top of the partnership talks. The Green Paper is not an exercise in long-fingering. I am firmly committed to publishing it in March. It will cover occupational and State pensions, averaging and all the issues related to eligibility and so on. I will ensure it does not dodge those issues but lays them out strongly because there are stark choices, which other countries, including the United Kingdom, have had to make recently.

I take the Senator's point about compulsory, being compulsorily required and the protection involved. I continue to try to ensure the Pensions Board has the strength and statutory clout to root out any bad behaviour, about which Senator Terry is concerned. The main weapon I have is to ensure it has the necessary clout. I note her other points about the importance of child care.

I thank Senator Cox for her words on the budget overall. She spoke about the so-called coping classes, the people who often get squeezed between welfare and the top tier. Everybody on a minimum wage has been taken out of the tax net. Nobody earning below the average industrial wage, which is between €32,000 and €33,000 per annum will pay more than the 20% rate and that group is no longer in the 41% rate. That will be a significant change for that middle band of income earners and should help considerably.

The Senator mentioned the child benefit and child dependant allowances. Having listened to what has been said in this and the other House and to organisations such as St. Vincent de Paul and so on, the National Economic and Social Council has worked on a second tier of child payment. I decided that instead of spreading child benefit across the board to 1 million children, we would select the 300,000 of those in families on welfare and put an additional €60 million into that bottom third.

To an extent there are two tiers of child benefit. The top two thirds receive child benefit while the bottom third receives child benefit and the child dependant allowance. In this budget those two can amount to an increase of €32 per week. The top two-thirds of children receive an increase of €10 per month.

That is the start of a second tier which will make a strong impact on child poverty and enable us in future to focus on a two-tier child benefit system. If we were to start the child benefit system again with a clean sheet, we would do so in that way. We would have universal payments but would tilt the bottom third upwards.

Senator Cox is right in what she said about the back to school and clothing and footwear allowances. She mentioned a sum of €285 for older children. That is not intended to meet the bill but as a contribution, as are most welfare payments. Nobody suggests that any welfare income meets all requirements. I know from my family and other families in my constituency how difficult it is in August, September and October to round up the necessary money. The Senator gave a good list of prices for runners, anoraks, jumpers and so on. It is a long list but this is intended as a contribution.

We have doubled the sum in two years, increasing it by 50% again this year. The new child dependency payment, the new back to school allowance, and raising the threshold for the family income supplement to €186 per week reflect serious attention to child poverty. It is not unreasonable in the 21st century to expect that we can eliminate it completely. That is why I rail against the measures of relative poverty about which Senator McCarthy spoke. They are a distraction because they are academic measures. I do not support the constant measurement of relative poverty. It is fine for someone who wants to write a thesis. According to official figures in the past seven to ten years we have taken 100,000 children out of poverty. We now need to root out the remaining few thousands who remain in poverty. I would like to do that.

I thank Senators for their contributions on pensions. We have a distance to travel in this area but I believe the budget is a significant one in this regard.

The Department of Social and Family Affairs is the largest spending Department in the State and accounts for €1 in every €3 of Government spending. As I stated on my first day in this House as Minister for Social and Family Affairs, I am not a believer in the ATM definition of welfare whereby we just pay money. I have always been committed and determined that we would improve incomes and the money available, but in the context of reform to ensure every cent we spend helps people to get to a better place. It is an active model of welfare as opposed to a passive one. We move people to better places so they can build better lives for themselves. I am pleased that philosophy is at the heart of the Social Welfare Bill. I thank the Leas-Chathaoirleach and Senators for their consideration of it.

Paddy Burke (Fine Gael)
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When is it proposed to take Committee Stage?

Margaret Cox (Fianna Fail)
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Tomorrow.

Committee Stage ordered for Friday, 15 December 2006.