Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

Cuirim fáilte roimh an Aire go dtí an Teach. Baineann an cheist gur mhaith liom a ardú os comhair an tSeanaid leis na bónais Nollag a bhí á íoc ag an Stáit dóibh siúd a fhaigheann airgead leasa sóisialta. Tá a fhios againn gur chuireadh ceal leis an íocaíocht sin i mí Aibreán na bliana seo. Agus muid ag tarraingt isteach ar an chéad seachtain de mí na Nollag, tá gá ann an íocaíocht a dhéanamh. An bhfuil sé ar intinn ag an Rialtas tarraingt siar ar an chinneadh atá déanta agus an airgead seo a íoc chuig na 1.3 milliún duine a bhraitheann go mór air le linn an Nollag?

This matter concerns the need for the Minister for Social Welfare, Deputy Hanafin, to reintroduce the Christmas bonus. The wording of the motion may not be correct in that I should have made it clear that I was talking about the Christmas bonus for social welfare recipients. When we consider the legislation passed in the House recently or some of the information we received, it is clear that bonuses are still being paid. In regard to NAMA, bonuses are being paid to the bankers who are being allowed to receive salaries of €500,000. Only a few weeks ago we heard that Professor Brendan Drumm who is earning a salary of over €400,000 had been paid a bonus of €70,000, yet in the April budget the Minister for Social Welfare decided to cancel the Christmas bonus for approximately 940,000 social welfare recipients and their dependants. Approximately 1.3 million people are dependent on some of the lowest payments from the State, many of them receiving €204 a week on which to survive. I am not talking about people who have lost their jobs in the last month or recent months or those who may have had savings in the bank but about those in receipt of long-term social welfare payments, for whom the €204 a week is all they have to survive.

The term "bonus" is probably flawed because in real terms this double payment which was usually paid on 4 December was a necessary part of budgeting for those on the lowest incomes. In 2007 the then Minister said repeatedly that Christmas was one of the most expensive times of the year and that payment of the bonus would go some way towards meeting household Christmas costs. When the current Minister introduced the bonus last year, she said that, even in the challenging budgetary environment, the payment of this additional money to social welfare customers was a clear sign that helping those most in need of support remained the key priority for the Government. Since the Minister has decided to cancel the payment for 1.3 million people, it is clear the Government's priorities have changed. What are its priorities if they are no longer helping those most in need?

I have always found the Minister of State to be a fair person, although it is a pity the Minister cannot be here at this late hour in the Seanad because it is she who should be questioned on the issue, although I accept it is a Government decision. The reality is that by cancelling payment of the Christmas bonus for those paid €204 or even less a week the Minister is, in effect, cancelling Christmas for them. That is not just my view or that of Sinn Féin. Other organisations such as the Society of St. Vincent de Paul which work with the most vulnerable and those at risk of poverty are of this view also because the additional payment was used to buy extra bags of coal to provide more heating, presents for grandchildren or new clothes for Christmas.

A report issued today by Older and Bolder states many pensioners are deciding to heat only one room at a time because they cannot afford to heat the entire house and that many have forgone buying new clothes because of the restrictions the Government has imposed in the budget.

I ask the Minister to consider an alternative to the cancelling of the Christmas bonus. The Government has told us it has no alternative because it must save the €223 million the Christmas bonus costs, but that is a flawed premise. If it were to pay the Christmas bonus, everyone who would receive it would spend it in the local economy. It is not like Professor Brendan Drumm and his salary of €400,000 and bonus of €70,000. He will not spend all his money, but the person who depends on the €204 a week would spend all of the bonus in local shops. There would be an immediate comeback for the Government in VAT receipts of approximately 21%, but it would also boost the local sectors into which the money would be injected. It amounts to a withdrawal of support from the local economy. In my county 54,000 people are dependent on social welfare payments. That is a huge number of people who next week will do without, many of them for the first time since the 1980s, the double payment at Christmas. It is estimated that the loss to the local economy alone will be €9.5 million.

I ask the Minister to get her priorities right. Last week my party highlighted the areas where money could be raised, whether through additional taxation, including wealth taxes, or the standardisation of discretionary taxes. There are many avenues open that not only my party but others have highlighted, but, unfortunately, the Minister and the Government have decided that the first port of call is those who are dependent on a sum of just over €200 a week. I cannot understand the reason the Government did not consider asking those earning more than €200,000 a year to pay a little extra, but instead it has decided to take the Christmas bonus from those dependent on €204 a week. It does not make sense. I ask the Minister to listen not just to my plea on behalf of the 940,000 who would have been due to receive this payment next week but also to that of the many groups, charities and organisations which work with the most vulnerable which are stating this is one of the cruellest decisions the Government has made. It is Scrooge-like and mean. Of all the decisions it has made, this is the one on which it will look back with regret. A society is judged by the way it treats its weakest and most vulnerable members; we should not be screwing them. I use that terminology because I believe that is what the Government is doing to the most vulnerable and those most in need of this payment.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
Link to this: Individually | In context

Bhí an cheist i mBéarla agus mar sin, tabharfaidh mé freagra i mBéarla. I thank the Senator for raising this matter which I am taking on behalf of my colleague, the Minister for Social and Family Affairs, Deputy Hanafin.

Promoting social inclusion, protecting the most vulnerable and recognising the contribution older people have made to the country have always been major priorities for the Government. When we could, we provided for unprecedented increases in welfare payments and ensured, for example, that the value of the State contributory pension more than doubled in the past ten years from just €113 a week to more than €230. Even throughout the economic difficulties of the past two years, the Government has done its best to prioritise social welfare. The October 2008 budget provided for increases of between 3% and 3.8% in the basic payment rates at a time when inflation was expected to be 2.5% in 2009. In reality, prices have actually dropped considerably this year.

In framing the April supplementary budget very tough decisions had to be made across a range of Government expenditure items. In that context, the provision of €21.3 billion for social welfare services in 2009 - 20% more than the amount spent in 2008 - was a clear demonstration of the Government's commitment to protecting the most vulnerable in society. Both tax rates and borrowing had to be increased to fund this extra expenditure on social welfare. Providing a 100% Christmas bonus this year would have added another €223 million to the bill, money which, unfortunately, the State does not have. In seeking to contain the increased welfare budget to €21.3 billion, there were no easy options and I assure Deputies that the decision not to pay the Christmas bonus was not taken lightly. The increases provided for in the October budget were taken into account, as were the April forecasts for price deflation this year. The decision not to pay the bonus was announced in April so that people would have nine months' notice.

I appreciate that non-payment of the Christmas bonus effectively amounted to a 2% cut in the annual social welfare basic payments to those affected. It is important to recall that basic welfare payments were increased last January and that by September 2009 the consumer price index had fallen by 6.5%. The average decrease in the CPI is now expected to be between 4% and 5% this year.

Given that tax revenue has deteriorated even further since April, putting increased pressure on the public finances as a whole, it will definitely not be possible to pay a Christmas bonus this year. Welfare cuts are difficult for people to cope with but if the Government does not take steps now to reduce overall public expenditure and restore stability to the public finances, we risk making the economic situation much worse for everyone, including welfare recipients, in the long term.

Pearse Doherty (Sinn Fein)
Link to this: Individually | In context

The Minister of State is right about the consumer price index. It has fallen by 6.5%, but when we are talking about those on the lowest incomes, many of the items on which they spend most of their money have increased. Fuel, transport and education have increased by up to 11%. The CPI talks about mortgages and new cars but very few old age pensioners or people depending on €204 are buying houses or new cars.

In preparing for this Adjournment matter, I looked at the press statements released by Ministers when announcing the Christmas bonus in previous years. Each press release had two main points, that the payment would be made to about 1.3 million recipients, and that Christmas is a difficult time where people should avoid falling into debt and avail of services such as MABS. Does the Minister of State acknowledge that by cancelling the Christmas bonus, they have made that situation worse, something that has been acknowledged by different Ministers down the years? They are driving old and vulnerable people and those on low incomes into the arms of ruthless, unscrupulous moneylenders, thus burdening them with more debt. Does the Minister of State agree that many of these people will turn to moneylenders to avoid the cancellation of Christmas?

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
Link to this: Individually | In context

The Government is borrowing €400 million per week to run the country. It receives €34 billion in taxes and more than €21 billion of that is spent on social welfare. The Government must look to the country. It is not easy at any time to reduce payments to anyone but in the long-term the country must get its public finances correct. That applies to long-term recipients of social welfare.