Tuesday, 14 December 2010
Social Welfare Bill 2010: Second Stage
This Bill will give legislative effect to certain social welfare measures announced in the Budget Statement of 7 December which are due to come into effect from 1 January 2011. Last month the Government outlined in the national recovery plan the blueprint for a return to sustainable growth in the economy. In particular, it sets out the measures that will be taken to restore order to the Government finances and specifies the reforms the Government will implement to increase employment and accelerate economic growth. The plan is necessary to bridge the gap between Government expenditure and revenue which is being filled by borrowing. Unless the rate of borrowing is reduced, the burden of debt servicing will take up an increasing proportion of tax revenue. This would mean expenditure on vital schemes and services such as those provided by my Department would become increasingly unsustainable.
My Department accounts for approximately 38% of total gross Government current expenditure which will increase to 39% in 2011; therefore, it is not possible to stabilise and reduce public spending without an impact on the Department's budget. Accordingly, the plan provides for significant reductions in expenditure by my Department in the next four years. These will be achieved through a reduction in the number on the live register through economic growth; more intensive labour force activation measures designed to help people to get back into employment and, therefore, reduce live register costs; enhanced control measures to better direct expenditure only to those who need and are entitled to it; major structural reform of the welfare system to rationalise and simplify supports available to people of working age and ensure there is always an incentive to take up a job; and such reductions in rates of payment as may be necessary to ensure the overall savings targets are met, although this would be very much a last resort.
From my Department's point of view, our focus will be on enhancing fraud and control measures to try to make the bulk of the savings there; on labour activation measures which would lead to a reduction in number on the live register, and on structural reform. If we can make substantial progress in these key areas, reductions in individual rates of payment can be limited over the period of the plan.
Budget 2011 is the first step in achieving the goals of the national recovery plan. This will involve a reduction of €873 million in expenditure by my Department. Even after this reduction, expenditure by my Department will amount to €20.62 billion in 2011. As Minister for Social Protection, I am fully aware that the expenditure changes in the budget will affect the living standards of many citizens in the short term. However, if we put off these changes, there will be a greater burden in the future on those who can least to bear it, including people with disabilities, families with children, the unemployed, carers and pensioners. In the context of a very tough budgetary environment the Government has done its utmost to protect as far as possible the most vulnerable in society and the improvements made in the past decade in these areas. The savings to be made in 2011 will be achieved by greatly enhanced control measures; proactive labour activation initiatives, including the introduction of a brand new community work placement programme called "Tus" operated by my Department; structural reform measures designed to deliver more effective income and housing supports in a sustainable way; and reductions in rates of payment.
Before I detail the areas in which changes are being made, I would, first, like to outline the supports being fully maintained at current levels to provide reassurance for those who had been concerned that their payments might be cut. Similar to last year we have been able to maintain pensions and other payments made to people aged over 66 years at current levels. They include payments for pensioners' dependent spouses aged under 66 years. This means that approximately 490,000 people aged 66 years and over and their dependents are being fully protected in the budget. Extra allowances paid to pensioners who live alone and those aged over 80 years will continue at current rates.
I have preserved welfare supports for pensioners generally as I believe all pensioners are entitled to a minimum level of guaranteed support by the State. For many pensioners, social welfare pensions, be they contributory or non-contributory, are their only source of income and most of them do not have an ability to earn. However, pensioners who can afford to pay towards economic recovery will contribute through changes in the taxation system which were announced last week by my colleague, the Minister for Finance.
A number of valuable other payments have also been maintained. These benefit not only pensioners but also people with disabilities, carers and all those on low incomes, regardless of age. They include the household benefits package which includes the free television licence, electricity-gas allowance and telephone allowance, as well as the fuel allowance and the free travel scheme.
The half-rate carer's allowance scheme and the extra payment for caring for more than one person are retained, as well as the respite care grant at its current value of €1,700 per annum. The half-rate illness benefit and jobseeker's benefit payments for widows or lone parents will also remain. The current payment arrangements for lone parents and people with a disability who participate in community employment schemes are being retained without change. The family income supplement scheme which benefits lower income families with children is also unchanged.
Bearing in mind the recent bad weather, I am providing for a special once-off additional two weeks fuel allowance payment worth €40. This will be made to most recipients in the next two weeks, with the remainder receiving the payment in early January.
Unfortunately, in this budget it will be necessary to introduce a rate reduction in working age payments from January 2011 to produce the necessary savings required in 2011. Whereas there have been some increases in inflation in recent months, consumer prices are back at April 2007 levels and we have managed to maintain the payment rates for all aged 25 to 66 in 2011 at rates higher than those paid in that year. No reduction is being made to the qualified child rate which will remain at current levels. In addition, the reduced rate of €100 per week for jobseeker's allowance recipients aged under 21 is also unchanged. Accordingly, the weekly rates of payment to those aged under 66 are being reduced by €8 per week or an average of 4.1%. Increases for qualified adults on working age schemes are being reduced proportionately. This will bring the personal rates of jobseeker's payments, one parent family payment, illness benefit and associated schemes in 2011 to €188 per week or €2.20 per week in excess of the rate which applied in 2007.
Even taking into account the reductions that were applied in 2010 and 2011, this Government has delivered unprecedented increases in welfare rates since 2004. Over that period, jobseeker's payments, disability allowance and one-parent family payments have increased by 39.5% while the cost of living has increased by 11.8%. The Government appreciates that reductions in rates will be difficult for people but we also know that if action is not taken now, we risk putting social welfare payments at greater risk in future. The weekly rate of supplementary welfare allowance will be reduced by €10 per week, or 5.1%, and supplementary welfare allowance is normally paid to persons who are awaiting entitlement to another welfare payment. The rate of the rural social scheme and community employment scheme will be revised in line with the changes in social welfare rates to €208 for a single person.
Issues have been raised relating to the blind pension, invalidity pension, disability allowance and widows' and widowers' pensions as well as the carer's allowance. I have looked at the issue of disability in detail since I was appointed to the Department of Social Protection. I accept there is a need for long-term reform in payments for people with disabilities that is much more tailored to individual positions and levels of disability. I will work to my last day in this Department to progress this agenda.
Much has been said and written on the reductions in these payments and in this context I must point out that to exempt all these recipients from the rate reduction would have meant exempting approximately a further 260,000 people. The effect of this to achieve the same savings would be to have required a cut of €11 per week in a jobseeker's personal payments and €18.30 per week for a couple. It must be remembered that people on disability allowance are also entitled to the full household benefits package, free travel pass and companion free travel pass where appropriate. These are worth approximately €20 per week. Disability allowance, blind pension and invalidity pension are paid to more than 150,000 people at present.
I have empathy for people with disabilities who have no capacity to work. It is urgent now that we develop a system that would allow us to differentiate between various levels of disability in a way similar to the partial capacity scheme which is contained in the Social Welfare (Miscellaneous Provisions) (No. 2) Bill 2010. This would allow for differentiated payments based on the level of disability and would allow for a more nuanced approach based on people's individual need. Within the present schemes and within the timeframe that I have been in the Department, however, it has not been possible for me to bring such a proposal to fruition yet. I would urge whoever succeeds me in this Department to make the development of this type of approach a priority.
On supports for children, between 2000 and 2010, the monthly rates of payment for child benefit increased from just €53.96 for the first child and €71.11 for the third and subsequent children to €150 and €187 respectively. In the same period, overall expenditure on child benefit grew from just €638 million to approximately €2.2 billion per year. As a result, approximately 10.6% of gross social welfare spending in 2010 went on child benefit. This Government is proud to have been able to deliver such significant increases in payments to families when the resources were available. In the current economic environment, however, we simply cannot afford to keep spending at the same level as we did when our tax revenue was much higher. In that context, we have decided to reduce overall spending on child benefit. In considering the various options for making savings in this area, we were conscious that the payment can be an important source of income for all families for different reasons. Accordingly, the Government has decided against withdrawing child benefit completely from any family.
From January, the lower rate of child benefit which is paid in respect of the first and second child is being reduced by €10 to €140 per child per month. The payment for the third child is being reduced by €20 to €167 per month and the payment for the fourth and subsequent children is being reduced by €10 to €177 per month. I appreciate that cuts in child benefit will make life difficult for some families but it should be recognised that the payment will still be very generous compared with other countries and that the Government is also making a substantial contribution towards child care provision, including the continuation of a free preschool year. The qualified child increase payable with welfare payments is fully maintained. The domiciliary care allowance paid to parents and guardians of certain children under 16 who are ill or who have a disability is also unaffected and the family income supplement and back to school clothing and footwear allowance are unchanged.
Some questions were raised about multiple births and I confirm that additional benefit and grants for multiple births will continue to be paid. The rate of child benefit payable in respect of triplets remains payable at twice the normal levels. Child benefit support in 2011 for a family with triplets will be €894 per month or €10,728 per annum. The special grants payable at birth and at ages four and 12 are unchanged at €635 per child.
My Department will initiate a number of reforms to the rent supplement schemes to generate savings of €60 million next year. These reforms include entering discussions with the Department of the Environment, Heritage and Local Government with a view to aligning the minimum contribution payable by household couples more closely with that paid by equivalent households under the local authority differential rent scheme. Reforms also include reviewing entitlement of people who refuse local authority housing, the reduction of payments made to landlords with a corresponding reduction in rent limits, where appropriate, and increased control activities through efficiencies arising from the transfer of the community welfare service staff to the Department of Social Protection.
The introduction of a €2 differential between the rate of basic supplementary welfare allowance and other schemes from January 2011 will generate more than €10 million in savings in the rent and mortgage interest schemes. These will arise as entitlement to rent and mortgage interest supplement is based on the weekly rates of supplementary welfare allowance. Pensioners, carers and people on supplementary welfare allowance will not be affected by this change. Following these reforms it is estimated the rent supplement scheme will still cost €465 million in 2011.
The value of the household benefits package is being fully maintained in 2011. I am considering a number of reforms, however, some of which may require legislative change, to make schemes work more efficiently and at less cost. As announced in the national recovery plan, expenditure on the free television licence and free travel schemes will be capped at the levels provided for in the 2010 Revised Estimates. This will not affect individual entitlement but does generate savings in the long term.
The availability of job opportunities with real financial incentives to take them up is crucial over the next few years. Beyond the immediate financial benefit to the worker, work benefits an individual's psychological and general health as well as the wider community and the economy generally. Activation and support for those who are unemployed is a key priority for the Government.
Earlier this year, the Taoiseach announced a number of changes to improve the delivery of employment, training and community services to the public by bringing together related responsibilities in these areas. These changes include the restructuring of departmental responsibilities with the aim of providing a streamlined integrated response to the income support and job search needs of people who are unemployed. In this regard, the employment and community services operated by FÁS are transferring to my Department in January, as provided for in the budget day Estimates. As part of this integration, the national employment action plan is already being revised to provide more efficient interventions with jobseekers on a more frequent basis. This process commenced in October. A key element of the new initiatives will be more intensive and more regular engagement by our Department's services with unemployed people in helping them get back to work and ensuring that all jobseekers are genuinely available for and seeking work.
I am also introducing a new community work placement programme entitled Tús. It is intended that this will become operational in the near future. It will provide up to 5,000 places and will provide quality targeted short-term working opportunities for people who are unemployed while carrying out beneficial work within communities. The 52 local development companies, the Leader-partnership companies, will have responsibility for delivering the work opportunities. Community and voluntary organisations will be asked to provide quality working opportunities for potential participants and a number of national, sporting, cultural, social organisations as well as caring and disability services will be given the opportunity to participate.
Participants will work for 19.5 hours per week for a duration of 12 months and there may be some degree of flexibility in the schedule of hours. The rate of payment will be equivalent to the maximum rate of the person's underlying social welfare payment plus an additional top-up of €20 per week. The employment will be insured for all benefits under the social insurance system. Participants will be selected through the processes used for the national employment action plan. My Department will contact people on the live register who satisfy the scheme criteria and offer them the opportunity to participate. Those interested in participating will be referred to the local development company which will maintain a panel from which recruitment will be made. As is required by law, persons in receipt of jobseeker's allowance must be genuinely and actively seeking employment. Where a person refuses a work opportunity, including a work opportunity on the new scheme, his or her continuing entitlement to a payment will be examined.
This is an important new initiative to provide quality short-term working opportunities for people who are unemployed. It is essential that it is properly targeted on those who will most benefit, can be easily accessed and administered, does not impose excessive burdens on community organisations and provides quality suitable work opportunities and beneficial outcomes to the community. It is anticipated that the scheme will cost up to €30 million in 2011 and provision is made for this in the budget day Estimates.
Overall, it is anticipated that activation measures generally, including the refocused and reinvigorated national employment action plan, will save up to €100 million next year. In addition, the skills development and internship programme and work placement programme operated by the Department of Education and Skills will provide up to 10,000 places in the private and public sectors.
Welfare fraud is theft. It is a serious crime and the Department of Social Protection is doing everything it can to crack down on people who abuse the system. More than 600 staff are working in areas related to control of fraud and abuse of the welfare system. Between January and the end of October this year, more than 585,000 individual claims were reviewed. When high risk areas are identified targeted control measures are put in place to reduce the risk of fraud and abuse of the system. For example, certification was introduced in relation to child benefit claims from non-Irish nationals and other customer segments in schemes where any form of high risk has been identified.
Next year my Department will begin the phased introduction of the public services card with key security features, including a photograph and signature, which will be used to authenticate identity of individuals. One of the anticipated advantages of the public services card is that it will help to reduce fraud and error which result from the incorrect identification of benefit claimants. These cards will issue to approximately 3 million people in the next number of years. They will replace cards currently in use, such as the social services card and the free travel card.
Fraud detection systems have also been improved through data matches with organisations such as the Revenue Commissioners using commencement of employment data, the General Register Office on marriages and deaths information and many other organisations, including the Departments of Justice and Law Reform, Environment, Heritage and Local Government and Education and Skills as well as other State bodies. I assure Senators that my Department will continue to use every available means to crack down on welfare fraud and savings will be generated by streamlining our approach in line with international best practice.
I will now look ahead to the welfare system of the future. Structural reform of the welfare system is crucial in the short to medium term to deliver better targeted supports while always encouraging participation in work. If we do not reform our systems, we will have no alternative but to make further cuts to achieve these savings. I favour making savings from structural reform when and where possible.
In recent weeks, my Department has published three reports which will assist with key areas of reform. The reports cover important areas of social welfare, namely, child income support payments as well as payments to people of working age and people who are ill or have a disability. The reports will make a valuable contribution to the transformation agenda and share common themes with the main objective being the improvement of outcomes for people and their families who are dependent on my Department's support.
Structural reform changes could include the development of a rebalanced and integrated child income payment system and the development of a single social assistance payment to replace the different means tested working age payments, including some secondary and supplementary payments, as part of a more purposeful labour activation strategy. The new single working age means tested system would help to minimise the existing benefit traps and incentivise recipients to move back to work or from part-time employment to full-time employment. Implementation will have to be done on a step by step basis to make the system more friendly to atypical working. The disability allowance review proposes that customers should have their employment capacity assessed at the point when they first apply for the allowance to facilitate a greatly improved matching of services and needs.
I will bring proposals before the Oireachtas this week with regard to sovereign annuities in a separate Bill, the Social Welfare (Miscellaneous Provisions) (No. 2) Bill.
Significant changes are being made to the PRSI system in the Bill. As Senators are aware, the social insurance fund is in deficit and faces significant liabilities in the coming years, particularly from rising pension costs. These measures will increase social insurance fund income and work to safeguard the future sustainability and integrity of the social insurance system. Among the measures being put in place is the abolition of the employee PRSI ceiling, a progressive measure which will increase fund income by some €145 million in a full year. The self-employed PRSI rate is also being increased by 1% to 4%. State benefits, particularly the contributory pension, are very valuable and we must ensure that those in receipt have made adequate contributions to the fund.
A number of changes to the base of income on which PRSI is being charged are also being put in place. These include the abolition of PRSI relief on employee pension contributions and a halving of the relief on these contributions for employers. Irish social insurance contributions are low by international standards. These measures go some way towards achieving the necessary balance between contributions to the social insurance fund and expenditure from the fund. They also increase the fairness of the system. The Bill also provides for miscellaneous amendments to the social welfare code.
I will outline the main provisions of the Bill. Section 3 together with Schedule 1 to the Bill provide for the reduction in the weekly rates of social insurance benefit payable to people of working age, as provided for in the budget, with effect from the beginning of January 2011.
Section 4 together with Schedules 2 and 3 to the Bill provide for the reduction in the weekly rates of social assistance payable to people of working age, as provided for in the budget, with effect from the beginning of January 2011.
Section 5 provides for reductions of €10 each in the monthly rates of child benefit for the first and second child and the fourth and subsequent children, as well as for the introduction of a new rate of child benefit for the third child, with effect from 1 January 2011.
Section 6 clarifies the legislative provisions in relation to the payment of various increases with disablement pension so as to ensure the increases of disablement pension for qualified adults, children etc. can only be paid where the disablement pensioner is entitled to an incapacity supplement.
Section 7 provides for changes in the reduced rate of jobseeker's benefit for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the national employment action plan. This change is consequential on the reduction in rates provided for in section 3. Section 8provides for changes in the reduced rate of jobseeker's allowance for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the national employment action plan. This change is consequential on the reduction in rates provided for in section 4. Section 9provides for changes in the reduced rate of supplementary welfare allowance for claimants who refuse to participate in an appropriate course of training or to participate in a programme under the national employment action plan. This change is consequential on the reduction in rates provided for in section 4. Section 10 provides for repeals consequential on sections 7, 8 and 9.
Section 11provides for the abolition of the income ceiling of €75,036 applying to the PRSI contributions payable in the case of employees, voluntary contributors and optional contributors - those engaged in share fishing - with effect from 1 January 2011. The section also provides for a number of consequential amendments to the Social Welfare Consolidation Act 2005.
At present PRSI is levied on gross income, less any superannuation contributions payable. Section 12provides for the abolition of PRSI relief on employee superannuation contributions, payable with effect from 1 January 2011. At present both employer and employee PRSI is levied on gross income less any superannuation contributions payable. While section 12 provides for the abolition of PRSI relief on employee superannuation contributions payable, section 13 provides for a reduction of 50% in the PRSI relief available for employer PRSI contributions arising from the employee superannuation contributions payable.Section 14increases the rate of PRSI contribution payable by self-employed contributors by 1% to 4%.
Section 15 provides for the abolition of the health contribution payable under the Health Contributions Act 1979 with effect from 1 January 2011. This section also provides that any liability for health contributions assessed after 1 January 2011 in respect of tax years before 2011 are payable and that matters relating to the estimation, collection, recovery or refund of those contributions, or of interest thereon, or other proceedings relating to those contributions or that interest, can be enforced.
As I stated at the outset, the Department of Social Protection accounts for approximately 38% of the total gross Government expenditure and will account for 39% in 2011 and, therefore, it is not possible to stabilise and reduce public spending without any impact on my Department's budget. Failure to take action now on the level of expenditure by the Department of Social Protection would mean that supports to pensioners, carers, people with disabilities and jobseekers, among others, would become increasingly unsustainable. If we do not make these changes we risk making the economic situation far worse in the long term for everyone, including welfare recipients.
I commend the Bill to the House and look forward to an informed debate. Molaim an Bille don Teach and tá mé ag súil le tuaraimí na Seanadóirí a chloisteáil maidir leis na míreanna éagsúla atá ann.
I welcome the Minister and thank him for his speech. He is probably the most in touch Minister with responsibility for social welfare there has been. It is regrettable he has not been in his position long enough to put in place the changes he wishes, as he stated in his speech. Fianna Fáil has been in Government for the past 12, however, years and successive Ministers for social welfare have done nothing to support people, especially those with disabilities.
This budget and the Social Welfare Bill, in particular, will bring families who have been seriously affected and devastated during the economic downturn into further deprivation and poverty. Children, unemployed people, the disabled and carers will feel the brunt of the €873 million cuts to the social welfare budget, which is extremely unfair. I and my party are completely opposed to it. According to Barnardos, between 2008 and 2009 the number of children living in poverty increased by 26,684 to 91,954. These children did nothing to deserve this. According to our Constitution we must cherish all children. They are the future of the country and yet these little ones will feel the pain of the budget. This Social Welfare Bill and the resulting cuts in welfare payments will hurt children who live in poverty. Barnardos stated this will mean that many of them will go without one full meal every week. I have raised this matter in the House. Once again the vulnerable of our society are hurt the most. This Bill will do nothing to protect them and will only make their situation worse.
I am strongly against this Bill because, among other matters, it cuts payments to the most vulnerable - children, the disabled, widows and widowers and carers. Cutting €10 a month from the children's benefit is an incoherent and confused approach to reducing costs. In 2010, the Government applied a flat rate cut to child benefit and increased the qualified child increase and the child component of family income supplement to counteract the impact on low income families and those on welfare. This year, no such increase has occurred which means low income families are hit disproportionately harder than high income families. Introducing new child income support would have counteracted any disproportionate hardship that will now affect low income families. Such a new support would mean that child income supports such as child benefit, family income supplement, qualified child increase and the back to school clothing and footwear allowance would be amalgamated so that while everyone would continue to get a payment, low income families and families on social welfare would be targeted much more effectively. This structural change would result not only in savings for the Government but would also ensure struggling families would not be made more vulnerable.
This budget, which targets low income families for areas of savings, will increase these families' reliance on moneylenders, something that is already evident. Merely to get through the month people will have to depend on moneylenders. The measures will ensure more children will go hungry, wait longer for crucial treatment for illnesses that demand early intervention and leave school early. More young people will become involved in drugs, according to Barnardos. It is a breakdown of our society.
With falling wages there needed to be a reduction of €8 a week in social welfare for those with the ability to work. I agree with the Minister there must be activation and encouragement for people to work. Cutting €8 a week from the welfare payments of society's most vulnerable, namely, widows, carers, the blind and the disabled, is unnecessary, however. The exclusion of these groups from the cuts would have cost the State €96 million. Fine Gael's proposal to overhaul the welfare system completely by establishing a single payments and entitlements service from the more than 20 Government bodies that currently administer entitlements would make massive savings in administration, reduce fraud and rule out mistakes.
Under this Bill €8 a week will be cut from the incomes of widows, carers, the blind and the disabled. Cutting this amount from these vulnerable groups makes no economic sense. Supporting carers should be a major concern for the Government but the Minister's Government has decided to cut their payments and abandon them. Carers are the only welfare recipients who work for their money. In the long run they save the State money. Ireland's 160,917 family carers provide 3.7 million hours of care each week, saving the State the sum of €2.5 billion each year according to the National Carers Association. They work for their money and save the State money, so the Government should support rather than punish them. If carers are not supported, they will experience physical, financial and emotional hardship and eventually will burn out. The result of this is that the cared-for person will end up in expensive hospital or nursing home care and the carer's health will deteriorate. I know this from first-hand experience, as I am sure does the Minister from meeting carers in his clinics. This benefits nobody. Fianna Fáil has once again shown zero support for carers and abandoned them as it did in the budgets for 2009 and 2010. We have witnessed the abandonment of the national carers strategy and carers' payments have again been reduced. Now carers are faced with a reduction of €8 per week and a change in the home carer tax.
This budget will have a serious impact on the disabled, who must face a cut of €8 a week in their welfare payments. This is on top of a cut of €8.30 last year and results in a cut of €16.30 per week in just two years. The Minister stated he would like long-term reform in regard to payments for people with disabilities. If he is cutting their payments again, it is not very reforming. This shows Fianna Fáil's lack of commitment to supporting society's most vulnerable. It has been shown many times that there are substantial extra costs associated with having a disability, including the costs of transport, heat, household adaptations and supports. Fianna Fáil is currently targeting the vulnerable for cuts, which I seriously oppose.
Fine Gael's proposed budget made a commitment to protect the rate paid to people with disabilities. The Minister of State responsible for services for the disabled, Deputy John Moloney, published draft policy proposals recommending a shift from existing disability service models towards a system of individual support and individualised budgeting. The Minister referred to this in his speech. This system would result in greater choice and control for people with disabilities, would help them with the cost of living and would result in savings at the same time. Fine Gael's former spokesperson on disability, Deputy David Stanton, has been calling on the Government to implement this change for years but, sadly, nothing has happened. This is a primary example of where the Government could reform and improve public services while saving money. It could have done this rather than making cuts to badly needed payments for people with disabilities.
Low-income and middle-income families are the ones who will be affected most by this Bill. These families are the ones who will bear the brunt of this seriously unfair budget. In addition to facing cuts to social welfare payments, families are faced with the prospect of massive increases in income tax. Fine Gael would not have increased income taxes for 2011. Instead, it would have saved €250 million through public service payroll reductions and reformed the tax system in other ways that generate extra revenue but that do not damage incentives to work.
One major element missing from this Bill is the Government's plan and intention to tackle social welfare fraud. Fraudulent claims cost the State between €2.2 billion and €3 billion per year according to a recent "Prime Time Investigates" programme. The programme estimated that one in every ten social welfare payments could be fraudulent.
The Government has failed to reach its annual fraud savings targets. In 2009 it saved only €484 million of a €616 million target. The Government's track record on fraud savings is appalling and must not continue.
I appreciate that Fianna Fáil has taken on board our "smart identity system" to help combat social welfare fraud. How many years has this taken? The system ensures that a photograph of the owner of each PPS number can be stored on a secure central database accessible by social welfare staff. This is the way forward. I cannot understand how it has taken so long to bring this into play.
I welcome the fact the Minister did not cut the pension of the 490,000 people over 66 and has protected the old. Why is this the case? Has it much to do with the fact that the Minister is afraid of the grey brigade? I welcome the fact the Minister showed some compassion in regard to the once-off €40 fuel allowance payment.
The Minister referred to serious circumstances in referring in his speech to child benefit. He said our rate of child benefit is very generous by comparison with that in other countries. In other countries, there is entirely free education and there are school dinners. There is free medical care for children. Sadly, this is not the case in Ireland. It is a bit rich to say we give very generous child benefit payments when there are school dinners and free education in other countries.
With regard to the health and income levies, I am sure a certain lady in Balbriggan who contacted me contacted the Minister also. She has calculated that, owing to the loss of her medical card, she will not be exempt from the universal social charge. Her income will be reduced by 9% or approximately €68 per week. Her husband is a PAYE worker and she is receiving social welfare and has one child. A decrease of €68 per week is huge. I would like the Minister to address this.
I will forward the Minister the details.
Lip service is paid regarding certain issues. The Minister is speaking out of both sides of his mouth in saying he does not want to hurt the most vulnerable while at the same time imposing these drastic cuts. I would like people, including Members, to be honest. Inclusion Ireland has called for this. Henceforth, one must be straight and honest with the people.
I rise to speak with a heavy heart, as do most today, because it is not easy to discuss cutting social welfare payments and the necessity of having to do so. I take issue with the contention that the Minister is somehow cutting the payments of the vulnerable and that this is somehow a choice he has. There is not very much choice in respect of what we must do. Unfortunately, the economy and bigger picture dictate that these cuts need to be made.
With regard to the four year plan, it is important to have money to pay people. The alternative choice, which is stark, is one that people do not want. From having walked up and down the streets of Wexford and from having discussed matters in my clinic during the week, I noted that people accept, albeit very reluctantly, that this is their lot and that they must take the cuts. They are not happy about it and would rather see a few bankers going to jail. They would rather see the people who caused this crisis being brought to justice and held to account.
The Minister is one of the Deputies with the biggest social conscience in the Oireachtas. I congratulate him on the fair and balanced nature of this budget. Although it is so hard even to say that, I believe the Minister must bring his influence at Cabinet to bear on bringing to justice those who have forced us to make these decisions.
There are many people in receipt of social welfare, be they among the 400,000 people on the live register or the 1.1 million in receipt of child benefit. Making the cuts in the manner achieved by the Minister is probably the fairest approach although it is unpalatable. We must remember our budget is still €20.9 billion, which compares to a budget of €17.8 billion in 2008. The social welfare budget was €6.7 billion in 2000. That speaks volumes. It is not easy for any Minister to put forward a balanced portfolio of cuts but we must recognise - it is disingenuous of anyone to accept otherwise - that our economic situation necessitates this and if we were not to do it in this measured and controlled way, it would be much worse. No one would say that the Minister's priority is not to protect the vulnerable. I would certainly feel that such is the case. If we must, first and foremost, stabilise the public finances to have the money to pay people, anyone who ignores this is not living in the real world.
I commend the Minister on leaving the State pension for senior citizens unchanged. It is important we protect the people who have built up this country through their blood, sweat, tears and taxes. They have made this country what it is and those in it what they are.
I have been heartened by the number of senior citizens who have spoken to me in recent days and told me they would have taken a cut but at the same time accept and are delighted at the knowledge and recognition of their work over the years. It is important to note as well that senior citizens do not have an ability to raise income in the future and to protect what they have. They deserve their special treatment for that. I do not accept for one minute Senator McFadden's contention that Fianna Fáil is somehow afraid of the grey vote. She, too, welcomed that old age pensioners have been protected and one cannot have it both ways. Her party more than likely will be in government after the next election and she needs to be clear on where she stands in that regard. She either is in favour of protecting it or should state her party will not cut it because it also is afraid of the grey vote. It is one or the other.
We also need to recognise the benefit to older persons of the free television licence, free bus pass and gas allowance. All of these are most important and they have been brought in by successive Fianna Fáil Governments over the years. It is important to have an elderly population with a good standard of living. I am delighted the Minister has been able to retain it and I would say that was a big battle.
We also must recognise that the Minister has retained the half rate carer's allowance and that will continue to be paid to those caring for one person or more. There have been other elements of the budget that he has managed to retain such as the family income supplement, the back to school allowance, the footwear allowance, the domiciliary care allowance and the widowed parent's grant. These are all matters that we must welcome in the context of cuts.
The fact that child benefit has been reduced by €10 for the first two children and by €20 for each subsequent child is not something that sits easy with me. I am someone who receives child benefit, and God knows the day will come when I will need it, but there are people who do not need it. I think the Minister agrees with that even though I am not sure of his stand on it. Perhaps he would expand on it. I understand the concept of a universal payment and all children need to be treated equally, but at the same time in this context there is need for serious reform of this benefit. There is even an argument to look at those suffering from serious poverty to see whether there is any way of making that payment in a better way to ensure it gets to the children and that it assists their standard of living. On both ends of the scale it is skewed. It is skewed at the lower end of the scale and the well off in society do not need it. In that regard, it saddens me that for a series of budgets we have stated that we cannot reform the system because we do not have the time. I understand the pressures the Minister and his Department are under are immense but at the same time somewhere along the line we must take time out to devise a better system, and that is what I would look for.
On the €10 less in the payment, we need to recognise that the children's allowance has increased by more than 300% in a ten year period. Given that we are in a deflationary period, the purchasing power of that payment has increased. That is a reasonable comment to make. Our Fine Gael colleagues need to look at their own record when they were last in Government on children's payments to see that it is not all that easy, but at the same time those who are on high incomes should not receive child benefit at a time when we are borrowing to pay ourselves. No business person would do that and we should not do it here either.
We must acknowledge that our benefits are still higher than those in the UK. If we look at where we have come from as a country and where we are going to when the four year plan is implemented, in an effort to be positive about the future, I would hope all these payments, the social welfare and child benefit payments, would be increased again when we are back on our feet. At the same time, we will be looking at increasing employment and activation measures to try to ensure we get back on our feet. These matters are important to look at because the last thing most want is to be dependent on any payment. People prefer to be working for themselves. There is an issue where people who cannot do so, and that needs to be acknowledged.
In that regard, I commend the Minister on the Tús scheme that has been introduced by his Department. I want to know a little more about it, but something that includes 15,000 more places for persons to work on community schemes is to be welcomed. Given that there are 60,000 places in enterprise and community employment schemes and under back to education allowances even before this scheme is implemented, an additional 15,000 places is to be welcomed. The manner in which the Minister has thought this out is good, bringing persons in to work in the community and voluntary sector. Perhaps he would flesh it out a little more in his response. It is a commendable scheme and, if I may say so, it has the stamp of the Minister, Deputy Ó Cuív, all over it.
The internships which involve bringing persons such as architects, solicitors, etc. into work to ensure they are keeping up their skills and which is being introduced with the Department of Education and Skills answers something I was calling for last year, namely, the need to ensure those who are highly educated are kept up to speed. If employers are to play their part in that, that must be welcomed too. I am not sure whether many employers would like to have qualified persons, what are called the white collar unemployed, working for free in their offices because the nature of an employer is to value the worth of the employee, but at the same time we need to look at some sort of boosting payment system and I would like to hear from the Minister on that. Perhaps it is not his direct remit but if it is, I would like to hear him on it.
The internships in the public service will also assist persons. Very much unlike Senator Quinn, I employ only two persons in my practice. At the same time, it is two persons more than would be otherwise employed. It is difficult to understand where they would be working otherwise. As a nation which likes to work and wants to work, we need to understand there are many right now who would work for free because they are bored and want to keep up their skills. We need to find some way around that. Perhaps some sort of an advertising campaign would be in order because I am not sure many know about the internships and the possibility of working for a year for free. We need to look at all that to see whether anything can be done to highlight it. I am inundated with persons - solicitors, secretaries and even office runners or whatever - looking to come in. It is difficult to take someone on in that regard and I repeat my suggestion of a boosting payment.
The incentive for young persons to up-skill themselves is something we introduced in the last budget. This is where we were making persons under 24 go on to education and training courses. That is working to a certain extent. I would like to see more diversity in the courses available. I know much work is being done behind the scenes on this, but it needs to come more to the fore because we need courses that activate the mind and get people interested in what they are doing, not ones which are absolutely irrelevant in the current economic environment.
I acknowledge the fact that fraud control measures in the Department have saved €533 million this year and that no one has done more on this front than the Minister. It is welcome that the public services card is finally being introduced. I would like to hear more about certification and the electronic means to be used and how it will work. Is it possible to see where a person is, as one can with the new iPhone and Facebook systems? There are the means to do this, but I am not sure whether it is within the remit of the Department's computer system. Much is happening with regard to fraud and such measures could be brought to bear even more. I am concerned about what Senator McFadden stated about attacking fraud. It sounded more like a Gestapo style and I am not sure the public would take it. The fact that it is happening is something that needs to be highlighted. It is definitely the way to decrease the number signing on and working in the black economy.
There are other comments I wish to make, but I will leave them for another day. The Bill contains good proposals. It is not easy to make cuts of this nature. We must acknowledge, however, that the cost of living has decreased to April 2007 levels, but the standard rate of payment is still €2 above this, as any reasonable person would acknowledge. We face huge challenges in returning people to employment, an issue on which we need to move as a matter of urgency. I must acknowledge these are very difficult times and nobody wants to introduce cuts. However, in this regard they are a necessity. I commend the Bill to the House.
I welcome the Minister of State, Deputy Andrews. Today I have been reading the annual competitiveness report from the National Competitiveness Council and it seems this is the big challenge we face. The Taoiseach began the foreword to the publication by stating, "The Irish economy is going through a very challenging period." We went through something like this in 1987 when some very tough decisions had to be taken. The Government has to take such tough decisions in the Social Welfare Bill and I am sure the next Government will have to make the same tough decisions. We got out of it after 1987 because those very tough decisions were taken. We managed to succeed and get back on track. That things have gone wrong in the past three or four years is unfortunate.
It was interesting to hear Senator McDonald speak about getting people back to work and even encouraging them to work without pay. Approximately 18 months or two years ago I met a young woman who was a lawyer and could not find work. She offered to work for nothing and did so to such an extent that after a couple of months of working two or three days a week she could not be done without and was taken on. We have to remind everybody that we can do things ourselves and that we should not rely on the State do everything for us. It is possible to achieve much more. We must ensure we do not make it less attractive to go to work. We must make it attractive to do so.
When the Government has to make a decision and make a number of reductions and cuts, as has happened in this case, let us ensure it takes into account the fact that we have had a reduction in costs. As we have had a reduction in the cost of living, it is possible to make a cut without reducing our full standard. It must be difficult for any Government to state it will make a cut in one section but not another. It must be very difficult to explain to somebody who is blind why he or she must take a cut, while somebody else who is older does not.
The measures include an approximate 4% reduction in most welfare benefits. While this is regrettable, we need to address the social welfare system. When one takes into account the cuts in the public and private sectors, such a cut is not unreasonable, especially as they will return approximately to 2007 levels. We cannot fail to remind ourselves that social welfare payments have increased by 130% in the past 12 years. While the cuts are not easy to make, the cost of living has dropped significantly. We must try and move towards a system in which it will be much more beneficial for somebody to take on work or avail of training opportunities than to stay on social welfare.
I would like the Minister of State to examine the position in Sweden which The Guardian described recently as "the most successful society the world has ever known". In contrast to most of the European Union, Sweden is not suffering from the downturn. In fact, its economy increased by 6.9% in the third quarter after recording a revised 4.5% growth rate in the second quarter. The record level of expansion - the fastest since 1971 - has been much stronger than expected, making the krona swell to a one month high versus the euro. Last month the Swedish finance Ministry stated Sweden's export-driven economy would expand by 4.8% this year and 3.7% in 2011. The Economist stated that, partly because the Swedish Government's reforms had made work pay more and unemployment pay less, the recovery had seen the creation of far more private sector jobs than previous recoveries. If there is one message I would like to see stitched into everything we say today, it is that we much encourage people to get back to work by making it more attractive to work than not to do so. We have to look to moving towards making employment much more attractive financially.
Despite our relatively high social protection levels, the level of homelessness will increase and will be a major problem owing to the downturn if we do not adequately address the problem. The European consensus conference on homelessness took place in Brussels last week. Eoin O'Sullivan, a lecturer at Trinity College, presented research and stated, "There is considerable evidence on homelessness in Europe, but our knowledge remains very uneven for the lack of data and understanding on some aspects of homelessness." We cannot become sceptical about funding homelessness programmes. An interesting precedent has been set by the Kaakinen programme in Finland which began in the 1980s when that country had approximately 20,000 homeless people. The homeless population has since been reduced to 8,000, with 3,000 living without a roof or in emergency shelters. This has led to an annual saving of €14,000 for each person making the transition to permanent housing. I would like the Government to look at this programme and see how a similar one could be implemented here.
Another point I wish to make brings me back to the words used by the Minister, Deputy Ó Cuív, who stated we were looking back to where we were a few years ago. Yesterday I was in Drogheda and as we sat looking out at the volume of traffic on the road, we realised that compared to three, five and certainly ten years ago we were still much better off than we were. Therefore, when we hit a real crisis, as we have this year, we have to take some very tough decisions. A new government will also have to take such tough decisions.
Approximately 18 months ago I raised in House the case of two men who had been both made unemployed, having been earning reasonable incomes. One of them stated his aim was to reduce his golf handicap. The other asked him what he was talking about and he explained he was earning more unemployed than he had been while he was employed. When I brought it up, the then Minister stated this should not happen and that we should never allow it to happen. We must ensure we make it attractive for people to come to work, or at least to attend training programmes. Far too often we have turned a blind eye to the fact that we were discouraging people from working. It is possible to do this as there are many employers willing to take people on, which brings us to an issue on which we will probably touch later. I do not have a problem with the reduction being made in the minimum wage, because our minimum wage is still far higher than the average in Europe, which makes us less competitive. My main concern is that there are many SMEs around the country whose owners would happily take on an extra worker, but cannot take them on at the higher wage. It would cost them too much to employ somebody at an extra €1 an hour for 40 hours a week. There are people who are willing to work at the lower rate: unless the minimum wage is lowered, jobs will not be created for them. One of our objectives with the Social Welfare Bill must be to ensure we make it attractive for people to come to work, and most new jobs will come from SMEs. I would like to mention how things have changed from my experience. Ten years ago, supermarket employees packed people's bags and wheeled their trolleys out to their cars for them. They no longer do this because of the rate of pay of the minimum wage. However, there are people who would be willing to do that, whether teenagers or others, and it is a service that could be encouraged. It could be the first step on the ladder to encourage people back to work.
My real objective with regard to this Bill is to point out that we as a nation must take tough measures. It is easy enough for those of us with jobs and an income to say this, but we must recognise the need to create more jobs and to recognise that these jobs will come through SMEs. These enterprises would be happy to take on more people, but it must be made attractive to them to take them on. My concern is that if we do not take the tough decisions, we will not encourage people to return to work. If we allow a generation that has not had the experience of work to grow up without work, our nation will finish up in and even tougher position than it would otherwise. I find it difficult at any time to stand up and say I support cuts to those who are less well off, but on this occasion we must recognise that we do not have a choice. We have gone through difficulties before and have been able to solve our problems. Let us make sure we do that again this time.
In debating the Social Welfare Bill, we need to consider the scale of the moneys involved - €22 billion. Even allowing for the adjustments provided for in the Bill, we are talking about a level of spending that is over 40% of the total spending of the State each year. That is unsustainable in the medium term. We must also take into account the levels of increases that have happened over the past ten or 12 years. I was surprised to hear that since 1997, the rate of growth in social welfare payments has been 117%. If we take into account the underlying rate of inflation over that time, the real value of social welfare payments has increased by 75%.
It is a matter of regret that the Green Party has not been able to implement its policy in the area of social welfare. We believe social welfare payments should be linked to the consumer price index, which would mean the levels of increases would not rise above that. It would also mean that in a period of deflation, the rates of payments would decrease so that the relative purchasing power of the payments would remain the same. Social welfare policy is an area in which we seem to have dug a deeper hole for ourselves in that we have adopted a spend more, tax less policy. Such policies were the policies of all three main political parties in 2007. All three parties said they would spend more money, particularly in the area of social protection, and that they would tax less. If we learn anything from this crisis, it must be that this was the maddest political logic ever. We must make a series of adjustments in various areas, one of which is social welfare. This is the second year running we must make adjustments and the relative decrease is still more or less in line with the deflationary period we have experienced.
That said, there are alternative approaches. The one alternative that does not exist for this or any alternative government is that there can be no cuts in social welfare. I find it hard to understand the Fine Gael argument that there can be cuts in some areas of social welfare, but not in others. We probably need a wider debate as to the relativities of different social welfare payments. Reference has been made to the question of the pension for the blind and disability benefits and to how these relate to other payments. Senator O'Toole made a good contribution on the Order of Business the other day and suggested that one of the ways we could adjust the relativity of such people was to look at forms of secondary benefit that would recognise their particular situation, particularly with regard to guide dogs and the like. That type of creative thinking should be followed by the Department of Social Protection.
However, we have a huge problem in Ireland. While demographically we should be well positioned as we have a replacement birth rate and a large proportion of our population in paid employment, the dependency ratio between those in paid employment and those dependent on social welfare is well out of line with similar competitor countries. We need to readjust this balance and to redress the unacceptable welfare traps that exist in our system. Yesterday, I spoke to an artist who told me he had a period of unemployment last year and that he felt his lifestyle while unemployed was akin to people on incomes of €40,000, taking into account their expenditures in terms of tax and his social welfare payment. That kind of connection is being made. In the wake of the budget decisions, my constituency office was visited by people who outlined how they saw their income declining as a result of the scale of the proposed cuts, but at the same time they revealed a level of disposable income that is higher than that of the person who works in my office, who is a single parent with two children. When we have this type of welfare trap, where someone working in a relatively well paid job with two children attending university has less of a disposable income than someone in similar circumstances on social welfare, it is a difficulty.
We can have valid, political debate in this area, but because of the nature of the problem we are experiencing currently and the need to try and repair our national finances, we are avoiding some of the more important issues of real reform in the area of social protection. There are models we could use. There is some degree of innovation in this Bill, but innovation can only exist to the extent to which circumstances allow it. People must be given alternatives, such as employment or training. I welcome the proposed extension of community employment and social employment options. As someone who lived through the 1980s when we had a combination of different employment schemes, starting with Manpower Ireland and then moving on to AnCO, the youth employment bureau and to what became FÁS, I am aware participating in these schemes can become a soulless activity. I believe community employment should not be structured through any one State agency or Department. There are areas of social and community employment in which all Government agencies are involved, environment, tourism, sport and culture, education and so on. I believe that because of the scale of the budget in the Department of Social Protection, we should look at ways this particular part of the budget could be better managed and directed. The Minister has some experience of doing this from his experience with his previous portfolio in dealing with the rural employment scheme, which shows that we can use a social employment measure in a non-traditional manner, outside of the Department of Social Protection or the Department with responsibility for employment.
The challenges facing us have been listed in the four year plan and we expect other political parties to say how they would tackle further changes in the social protection budget, which remains a huge proportion of the overall budget. Questions must be asked whether we need further cuts in rates or whether pensions can be directly protected. The proposals in this area from Fine Gael are vague even though it has clear policies on jobseeker's payments. If we are to have a real debate on the reforms that need to be introduced, these figures must be put on the table. We cannot use the excuse that we have to tell people what they want to hear in an election environment. Political honesty is needed on these financial decisions. If we are to correct the €15 billion imbalance and make €3 billion or €4 billion adjustments in the budgets that will follow in the coming three or four years, we will have to revisit this area. Until we realise that, we will continue to practice the soundbite politics that has bedevilled the issue and does little to help those in need of social protection.
I welcome the Minister of State at the Department of Health and Children, Deputy Barry Andrews, although I regret that the Minister, Deputy Ó Cuív, had to leave for another engagement.
We are debating the Social Welfare Bill 2010 but never in the history of this State has the word "welfare" been more out of place in legislation. It should be called the social harm Bill because that is what it will cause to every welfare recipient in this country, including those in receipt the State pension. "Harm" is a mild description of the effects it will have on millions of people. The Bill is an arrest warrant for our future. The opportunity for children to develop physically, socially and educationally will be put behind bars. The parents of these children are headed for the labour camps and the poor house and the Bill is corporal punishment for the elderly.
There is so much wrong with the Bill that it is difficult to know where to start. However, it is not difficult to see where it is going to end. Since this Government began to make welfare recipients and low income earners pay for its criminal incompetence, there has been a spike in violence on the streets and behind closed doors, drug and alcohol abuse has been on the rise and, as the increase in suicide rates indicates, our country's mental health is failing. Towns and villages that never before had to deal with drugs are now facing what were once understood as big city problems. Children are being forced into poverty and the elderly are dying in the cold. I have visited houses in which older people had to wear coats in June and July. Not only was the recent period excessively cold but older people do not retain heat to the same extent as the young. Businesses are closing and our young people are leaving the country while the Government holds the door open. Instead of speaking about ghost estates, in the future we will be speaking about ghost towns.
What is most galling is that the Government could have chosen the alternative route of deciding to make the wealthy pay their fair share. Given that nobody who supports this Government appears to understand the word, "fair" means reasonable and acceptable to social norms. When a party that has been in Government for longer than all the other parties combined loses 70% of its support, it can hardly claim to be acting in accordance with social norms.
I will show how this Bill passes the test of reasonableness by referring to some of its provisions. The average income loss for families from the combined tax and social welfare package is estimated at €43 per week. The allowance for people who save the State hundreds of millions of euro by caring for family members is to be cut by €8. The same cut is being applied to those with medically assessed disabilities and individuals aged over 25 years receiving jobseeker's payments. VTOS and FÁS training allowances are to be reduced by more than €11 per week. The personal weekly rate of supplementary welfare allowances will be reduced by €10. As Senator McFadden noted, Barnardos predicts that the cuts to these payments will push 30,000 more children and their parents into poverty and more mortgages will fall into arrears. Those on the minimum wage will pay more in the universal social charge than those on the highest rate of tax. Older people will suffer disproportionately from fuel levies because they will receive a mere €40 instead of the promised voucher scheme.
While these people are battered by the so-called Social Welfare Bill, the other half of the budget's despicable duo, the Finance Bill, will help the rich to get richer. The message Ireland is sending to the world is that some wealthy people will be better off because of the most severe austerity budget in our history. Anyone who thinks that passes the reasonable test has no business being in this or any other respectable forum.
Like everyone else in public office, I have encountered many people in my office or on the streets who are genuinely upset. Some of them are trying to access services or facing the loss of special needs assistants for their children. In one case, a young boy with insulin dependent diabetes required his mother to give him as many as four separate injections during the school day. His mother subsequently underwent a Caesarian section while giving birth, which meant she could not drive for six weeks. When I asked the authorities about getting a special needs assistant for him, I was told he could not get one because his mother had previously provided the service. I was advised that the best solution was to take the child out of school. I did not think it fair or reasonable to require a child to miss schooling simply because he could not get the help he required but we were ultimately able to secure a special needs assistant. This incident took place during the height of the boom in 2007. Recently, the hours for that boy's special needs assistant were cut from 30 to six hours per week. His diabetes remains uncontrollable because it is very difficult to regulate insulin levels in a growing child. He needs frequent monitoring by someone with the appropriate skills. His mother continually worries about him because she cannot predict when he needs to be tested for low blood sugar.
People are worrying about their medical needs, the loss of local services, FETAC and FÁS training allowances, employment schemes, the cost of Christmas and their futures. From January they will have to meet higher costs in almost everything out of reduced incomes. This budget will not help them. It is not appropriate to cut the minimum wage at this time.
This is the worst Social Welfare Bill I have ever encountered. I am interested in hearing the Minister of State's response to the issues raised by Senator McFadden and other speakers.
I hear a lot about the wealthy. I recall an interview with Vincent Browne in which a self-appointed politician made a point about the wealthy. What are we speaking about here? Who are these wealthy people, where are they and how do we get at them? Is a wealthy person one who set up his or her own business and has now become a billionaire? I would like some definition of how many of these wealthy people there are, what amount of wealth they possess and whether we are talking of taking that wealth from them, making them pay tax or otherwise. I would like the point clarified because it arises in almost every debate.
Senator Quinn referred to work. An advisor to the British Parliament noted that people can be mentally conditioned from working age to believe they will never have to work and will get a handout from the state for as long as they live. That is bad for the person and for society in general, creates issues of anti-social behaviour and can create a burden for the health service. It is a major problem in our own welfare system.
A person who is working should receive at least 20% more than a person on social welfare but that is not happening. Senator Quinn alluded to a situation where a person in Drogheda, when made redundant, got €5,000 more per annum than when he was working. One can get up to €52,000 on social welfare, with family income supplement and various other bits and pieces.
We regularly hear complaints in regard to getting people back to work. A person told me recently that members of the public service can retire early and then go onto the open market and take up jobs that young people should get. I am not sure how we can address this issue. With regard to the abuse of social welfare, the former Minister for Social and Family Affairs, as it then was, Deputy Mary Hanafin, came to grips with that issue but there is still a major problem.
With regard to homelessness, it is often asked how people are homeless when so many houses are empty in cities and towns and whether something can be done about this. The other question that arises is whether people voluntarily choose to be homeless, although I do not know the answer. I watched a television programme recently about a person who had become homeless. The man gave a great account of how he became homeless and how he got back with his family. He had been homeless for three or four years and was lucky to survive to tell the story.
A budget should be about fair play for people. I was very disappointed a cut was made to payments to blind people because they are among the most vulnerable in society. Senator McFadden referred to school dinners but I understand dinners are still being provided in schools in disadvantaged areas.
With regard to getting people back to work, community employment schemes are being fairly well administered in most cases but there can be a lack of sufficient supervision and checks. Complaints have been made to me that people do their own thing and come and go as they please, with no discipline, order or pattern. It is an issue we must examine. If we are putting these schemes in place, we must look for accountability, ensure the taxpayer is getting value for money and ensure proper checks are in place. I have undertaken many investigations in this regard so I know this is not happening at present in many cases.
Another problem is that we have huge departmental bodies, such as the HSE, which from one day to the other does not know what it is doing. It has a surplus of staff and I understand some 1,100 of its staff have no work to do. I am told a hospital in Cashel has 200 staff who go into work each day but have no work to do because they did a deal with the unions. I got a friend of mine to telephone that hospital one day. He said he had broken his ankle and the receptionist or porter he spoke to shouted to other staff, asking whether they could do anything for my friend. The staff member then told my friend to come to the hospital as they could possibly put a bandage on him, although the hospital was not really open. This type of experience is widespread. Money is being wasted in such areas with no supervision or checks. We must follow up on these issues.
As Senator Quinn said, it is very difficult to explain to a household where all the members are unemployed why the banks are getting big handouts, given the thievery they were involved in. The public in general believe very little heed is being paid to them by those in authority. We saw the recent skirmish on the bank bonuses but that is minute in comparison to the overall situation.
We must get the social welfare structures right and ensure the taxpayer is getting value for money. While people are entitled to go on holiday, I know some who go on three or four holidays a year, something I could not do. When I was in a chemist's shop recently, I met three ladies who told me they go to Spain nearly every month with no problem, and all on social welfare. I said that was great but-----
They are. If one gives handouts to people, it is very difficult to police this. Handouts were given for free food, including butter, and in some cases people who got vouchers bought bottles of whiskey with them.
Overall, there is much tidying up to be done in this area. There is no point throwing money at people if it is not being utilised properly, which is not happening in many cases at present.
Cutbacks hurt the old, the poor and the disabled. The House should remember it. This is what they are introducing here. We should be serious about jobs and honest about putting a value on work but this Bill and this budget do not do that. The Bill discriminates against people.
There is a 4% reduction across the board in social welfare. We hear the mantra about the cost of living coming down. Let us consider this claim. Since this budget, the cost of petrol, diesel and the carbon tax have risen. Utility bills under the leadership of this Government have risen. In particular, aside from the specials in the supermarkets, the cost of food and general shopping has not reduced. Despite this great mantra from some of the those on the far right who peddle the idea that the cost of living has come down, I do not accept it because I and the people I meet every day do not see it.
Senator Prendergast made reference in particular to elderly people coming to their doors. Almost every day in Cork South-Central I meet elderly and, increasingly, middle-aged people wearing coats and jumpers within their own homes.
People are afraid to turn on the heat because they do not know what to do given the money that has been cut by the Government. I have received texts and e-mails and have met people in this regard. I am not talking about a mass e-mail campaign but about genuine ordinary citizens who are struggling. The Government is putting people under pressure, causing stress and upsetting the lives of ordinary people. Those opposite may well smile and laugh at me.
The architects of our downfall are walking around town scot free. The Minister and the banks would again have been in a cosy cartel in regard to the €40 million in bonuses only for the fact that ordinary people and the Opposition took up the issue. The Minister could not do anything last week but all of sudden yesterday he found a loophole to ignore the court order.
What do the Minister, Fianna Fáil and the Green Party have against carers? In the past two years carers have taken a 10% cut as a result of the abolition of the Christmas bonus and this year's and last year's budgets. There has been a severe and a savage attack on the carer, the blind person, the widow and on those on disability. Some 42,000 carers give almost 3.7 million hours of their time per week to help those in most need. How does the Minister show his appreciation of them? He cuts their payment again and makes them feel unworthy, like second class people. These people save the State a fortune and that is the appreciation shown to them.
The Government's mantra has been fix the deficit and the banks and everything will be okay. It has forgotten about the ordinary citizens. The task of the Government is to protect and look after citizens but it has ignored them. Why has it ignored them and cut their payments? The Taoiseach, the Ministers and Members of this House and the other one can take a pay cut. We are well paid for what we do but other people are not. The Government did not have the bottle to cut Members' pay because it wanted to get the troops through the Tá lobby in the Dáil. However, it is okay to cut other people's payments.
I fully accept we are living in stringent times and that we must implement unpalatable measures. However, this Government has failed to protect the citizens. That is the first task of government but this Government has been in dereliction of its duty in that regard. The people should tell it that through the ballot box.
This is not about politics or elections; it is about people. The Government has lost sight of that because of its cosy cartel of bankers and developers. The Minister of State, Deputy Barry Andrews, can say what he wants. I am not afraid of him.
Whether we like it, there is a new Ireland. The Government should talk and listen to the people. It has created a new tier of poverty in middle Ireland. I know the Minister of State and Senator Brady are embarrassed by, and ashamed of, the Government and I do not blame them.
One in three of those under 25 is unemployed. Half the unemployed - 6.5% - are long-term unemployed. That is five times more than in 2007. Some 88% of job losses have been among those under 35. Some 55% have been among those under 25. That is the Government's record and we do have the emigration figures yet. That is the Government's legacy and yet it asks the people to take unfair cuts while it protects its friends.
People say the Taoiseach has been great over the past two weeks and that Fianna Fáil has put the country first for the past two years, but it did not do so for the past ten or 12 years. Fianna Fáil bought the 2002 and 2007 general elections and it went on a complete splurge. It was like a junkie with the people's money. It lost respect for the people. However, the people have lost respect for this Government. This Bill illustrates how far it has gone and it should be rejected. If Members opposite have any conscience, they should walk through the Níl lobby and vote against this Bill.
I welcome the Minister of State, Deputy Barry Andrews. The two previous speakers could swap speeches in six months' time if they swap sides of the House. That is what we will see in the future.
Everyone recognised these were difficult times for the Government and hard decisions would have to be taken. The Government has taken them. In fairness to it, the fact the focus of Opposition speeches has been tightly confined to a number of points reflects fairly well on it. However, it should look at them anew. What drives people to distraction is that if the people about whom we are talking - in my case, the carers and the blind - had a strong enough influence, they would be listened to. The reaction of the Government to the debacle in the banks in the past two days is a classic example of what I am talking about. Instead of Governments running in front of public opinion, they should listen to see if there is an argument and if it can be moved forward.
Last week I said I would support the Government's budgetary proposals as far as I could because I could see from where it was coming and knew it would be difficult. However, I find myself in an impossible position when it comes to carers and blind people. I heard the Minister say there are issues here and that he is not too comfortable with them, etc. I said I could have lived with the taxation of children's allowance because the objective of social welfare is give to those who need it and to take from those who do not. That is what we are trying to achieve.
The Minister has had to take hard decisions but could he revisit two of them? There are many things I do not like but I know the Minister of State, Deputy Barry Andrews, who sits at the Cabinet table, will have heard the arguments and will know that hard decisions had to be taken, that the members of the Cabinet had to vote for things with which they were not comfortable. I heard the Minister and various members of the Government defend the fact old age pensions were not touched and they made a very compelling case. However, blind people have other problems, in particular looking after a guide dog. I do not know if the Minister of State, Deputy Barry Andrews, has any cats or dogs which he must look after but it is a very expensive operation. Even feeding a guide dog can cost a lot of money for someone on a restricted budget. I cannot table an amendment because we are unable to table amendments which impose a cost. However, I ask the Minister to consider giving back what has been taken from the blind pension to those who have a guide dog. It would be a gesture that would be useful and practical. Blind people have to care for their guide dogs as the dogs are their eyes. The Minister does not appear to have a closed mind. He referred to a system of grading. I, therefore, ask for an allowance for those members of the blind community who have a guide dog.
I refer to carers. If there was ever a group who have done the State some service, it is the people about whom I speak. I refer to the programme carried on RTE last night about the care of the aged which I did not see in its entirety. It must be acknowledged that caring for the aged is very difficult. With the best will in the world, dny family member who has had to care for an elderly relative would express his or her frustration. It is a continuous commitment. We should recognise that carers need support, counselling and advice. It is very difficult for them to continue in what is an almost impossible situation. Taking money from them is unconscionable and we should not do it.
In justification for not touching the old age pension, the Minister said people of that age did not have a choice or an option and that they had contributed throughout their lives. These are very compelling arguments and I compliment Ministers on not touching it. A few weeks ago I asked that the old age pension in its various forms should not be touched. I am glad the Government managed to get through the budget without changing it.
I again ask the Minister to look at the two areas I have highlighted. Any of us who have relatives who are blind will understand more than most how dependent they are on the support they receive in the world around them. I ask the Minister to consider offering support for the upkeep of guide dogs which is expensive as it includes visits to the vet a couple of times a year, meeting various dietary needs which is not cheap, as well as regular medication. The Minister could make a reimbursement on the production of invoices.
I acknowledge the presence of the Minister of State, Deputy Andrews. As I try to live in the land of political reality, I have to accept that at a time of grave economic distress for the country, the social welfare bill, at €20.62 billion, is significant. It behoves all of us, no matter on which side of the political spectrum we reside, to try to recognise this fact. We have a responsibility to explain from where the funding should come. This is a Department which is allowed to make choices and the Minister for Social Protection can support or cut funding for schemes.
I have a difficulty with a number of the measures outlined in the Budget Statement last week. Most speakers have raised the issue of carer's allowance, not simply because of recent media coverage or last night's television programme. All of us are aware of the significant social contribution made by carers the length and breadth of the country. Last night on television a lady reminded us that those in receipt of carer's allowance were the only social welfare recipients who had to work for their money. For instance, a person in receipt of jobseeker's allowance or a disability or invalidity pension is unable to work, but a person in receipt of carer's allowance has to work, perhaps, 140 hours a week to earn that allowance. I was disappointed that carers were not granted the same exemption as old-age pensioners. I recognise the money available to the Minister and his choices are limited, but we have to use the legislation to make a statement on our priorities. There was a time when, if a Minister announced a reduction in child benefit, there would have been a national outcry. Nobody likes to see child benefit rates being reduced, but it was deemed politically and economically achievable on this occasion. Everybody in receipt of carer's allowance is receiving less than €200 a week in assistance, yet the person concerned is saving the State hundreds of euro a week. The nursing homes scheme has been established. However, a large number of people who are eligible for assistance under the fair deal scheme administered by the Department of Health and Children are not benefiting under the scheme because they are able to remain in their own homes because a carer is available, in most cases, a family member. I am disappointed, therefore, that carer's allowance is being reduced. The Government is hitting the vulnerable - the person being cared for and the person providing the care. It is a bad statement of political philosophy and the decision needs to be reviewed as soon as possible.
The social welfare budget is €20.6 billion and no political party has stated it should be increased. The cut made in blind person's pension requires reflection by the Department. The blind person's pension and the carer's allowance schemes should be separated from the general body of cuts made in the budget. We would all prefer if there were no cuts and allowances were increased, but most of us try to live in the land of political and economic reality. We know that difficult choices have to be made, but these two decisions are wrong.
On the other side of the equation, if additional payments are to be made, savings have to be found elsewhere. I note what has been said about the rent allowance scheme. This issue was addressed in the House on previous occasions. Approximately €600 million a year is being paid out under the scheme. When the issue was debated previously, the Minister claimed the scheme represented value for money. It would be if rents were falling, yet they do not seem to be. It would also be value for money if we were able to use it to house a significantly greater number of people. It needs to be reviewed urgently. It is difficult to accept at a time when local authorities have virtually no houses available that tens of thousands of houses are lying empty across the country. It should be possible to marry the vacant houses with the tens of thousands on housing waiting lists in order to reach a reasonable and fair solution.
The rent allowance equation should be part of that solution because I do not believe we are getting the value for money we should be getting for a rent allowance bill of €600 million which should be reviewed and amended. We should be forcing landlords to drive down the rents being charged and I believe there is scope for saving there.
Across the spectrum of social welfare schemes, we must consider rationalisation not in the moneys being spent but on the number of schemes we have. I appreciate it is not possible to have a universal one-size-fits-all social welfare scheme but we need to review the amount of money being lost in administration on a plethora of schemes. Many years ago the former Taoiseach, Dr. FitzGerald, spoke about the concept of a basic income-type social welfare scheme. It was not taken on board even though all the political parties gave it a degree of consideration. The fewer schemes we have, the easier they are to administer, resulting in greater savings. On the basis that the economy will not boom and bloom in the next two to four years, we need to appreciate that the extra benefits that some people desperately require will need to come from within administrative savings and I believe there must be scope in that regard.
The Minister has stated that more than 600 people in the Department are working on fraud, which indicates the size of the problem. Considerable progress appears to have been made in saving on fraudulent payments. I would welcome if those savings could be ploughed back into the system and given to those in genuine need.
I appreciate it is a tough economic time for all of us and especially for those on social welfare. The majority of people on social welfare are stretched to make ends meet at the end of the week. I ask the Minister to reflect once again on the question of carers and blind pensioners who are very disadvantaged by the budget and will find it almost impossible to bear the burden of the cut.
I welcome the Minister of State, Deputy Barry Andrews. It is a somewhat guarded welcome, although I commend him on a number of matters, including his recent performances on television. He has had a lonely and isolated position. He has put forward a reasonable view of the Government's performance in very difficult circumstances and I respect the decency and balance with which he has done it.
There is no disguising the fact that these are dreadful times and the end of the Minister's speech sums it up:
I will outline the main provisions of the Bill. Section 3 together with Schedule 1 to the Bill provide for the reduction in the weekly rates of social insurance benefit payable to people of working age ... Section 4 together with Schedules 2 and 3 to the Bill provide for the reduction in the weekly rates of social assistance payable to people of working age ... Section 5 provides for reductions of €10 each in the monthly rates of child benefit for the first and second child and the fourth and subsequent children.
I see there has been some kind of amendment relating to the third child as a result of the very strong and at the same time witty attack by Deputy Noonan in the other House. I could go on. It is a catalogue of reduction, penury and penalisation of the people. The bill is being presented to the taxpayer and most vulnerable people in our society, which is shameful in my view and that of everyone in the country.
On Sunday I was in St. Patrick's Cathedral, as I always am, and one of the canons, in his sermon, put it on the line for all politicians. He indicated how shameful it is that once again the weakest and most vulnerable are being attacked. I note that the Minister of State has been replaced by his colleague from the Green Party, the Minister of State, Deputy White, who is an old friend of mine and an old colleague from Trinity College. While it does not give me any pleasure to say any of these things, I was concerned several years ago when I noticed the Government was starting to dismantle so many of the institutions that spoke out and represented the vulnerable, marginalised and weak in this society. Abolishing the Combat Poverty Agency was most extraordinary and very foolish. Knowing we were heading into a blizzard, the Government should have invested money in the agency to provide psychological support, advice and services to, and a voice for, these people. Instead the Government took the other direction and disabled the already disadvantaged, which is appalling. It is a shame to see reduction after reduction.
We are told that in bookkeeping terms this is necessary, which may well be. An agreement has been concluded above the heads of the people by a Government that is so unpopular its support has collapsed to an historic degree. Did I ever think Fianna Fáil would sink to having 13% support in an opinion poll? We have an unrepresentative Government concluding agreements over our heads with financial institutions, some of which are themselves mired in this problem and who bear part of the blame. As a result of this agreement, this heavy burden, which for some may not be payable, is placed on the backs of the people. I ask the Government to consider the following. What about the people who simply cannot pay? The Bill contains a series of measures and we are promised further measures. There are hints and suggestions of other legislation coming and other cuts in the pipeline. It is not just one cut. Each individual in each family will suffer an incremental accumulation of cuts in areas in which they are most vulnerable. I sympathise with the people in charge of the Departments, including the civil servants, who need to take these grim decisions. They must be pretty disheartened also. I do not wish to add in any mean-minded way to that feeling of misery and despair. I believe we will get out of it, but it will be a very long time.
Dr. Paul Krugman wrote an article - I believe last week - which outlined what I have been saying for a long time, that it was unjust and immoral to present this bill to the taxpayer. I ask the Minister of State if it is possible for the Government to answer the question I asked last week on the Order of Business. Given that every reputable economist and financial commentator, regardless of the perspective from which they view the problem and regardless of whether they believe in burning the bondholders, have all said that presenting the bill to people, many of whom cannot pay because of their existing vulnerability, is unjust and immoral, how can we erect a decent civil society? How can we have concord among our peoples? How can we have a decent fiscal regime or a decent financial structure when it is erected on foundations that those with the greatest authority tell us are foundations of injustice and immorality? That is the framework problem.
We are turning language on our head. Dr. Krugman said it needed a Swift, who knew what he was talking about. Swift wrote the devastating satire, A Modest Proposal, and also took on an attempt to defraud the Irish people by alien interests when the king granted to his mistress and through her to her friends the right to foist debased coinage on this country. Swift's Drapier's Letters pamphlets were effective in undermining that attempted fraud on the Irish people. Dr. Krugman is right in saying that only a Swift could do justice to what is happening in Ireland. This is a social welfare Bill. In what manner does it address the welfare of the people? It does not. Welfare is not the appropriate word. The Minister is the Minister for Social Protection, but he is not protecting people at all and is in fact exposing them to extraordinary hardship, pain, and misery. When I use the word hardship, my mind goes back to the minister for hardship in "Hall's Pictorial Weekly". In those days we thought it was worthy of satire, but the position is the same today.
The Minister has said the provisions contained in the budget will affect the living standards of many citizens in the short term - they certainly will. He referred to the work placement programme, Tús. I have a reasonable knowledge of Irish, but I have no idea what that word means. Perhaps the Minister of State might explain its meaning. Is it similar to that of the word "tosnaigh", a beginning or a new start? That is certainly what we need.
Many pensioners are willing to pay their share. A taxi driver told me his old mother would gladly give up €10 in order that it could be given to others who were less well off than herself. The means-testing of applications for social welfare benefits is required. All of us in this House and outside it have to pay in this respect. What about organisations like the Jack and Jill Foundation? Its funding is being cut. As a result, seriously ill children will be landed back, as it were, which will cost the Government many millions of euro. This is unjust.
It is disgraceful that the Bill is being rushed through and that the debate on it is being guillotined. For that reason and because I do not agree with it - I believe we should renegotiate - and because I do not believe we should penalise the most vulnerable-----
I welcome the opportunity to voice my opinion and express concern about the implementation of the measures contained in the Bill. I note the absence of many Government representatives from the debate. Are they in hiding? Do they not want to be upfront with the people about the precipice to which the Government has brought us and the reasons it has made the cuts outlined in the Bill?
I want to reflect the reality of life for middle Ireland. I raised in the House only the other day the case of two five year old children who were found scavenging for food on the streets of Kilkenny city in the Minister of State's constituency. I appreciate there might be many other social issues involved-----
Mary White (Minister of State with special responsibility for Equality and Human Rights, and Integration, Department of Justice, Equality and Law Reform; Minister of State, Department of Community, Rural and Gaeltacht Affairs; Minister of State, Department of Education and Science; Carlow-Kilkenny, Green Party)
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Only last week the Senator relayed how she had called to a house in which the occupants were on the breadline. They have worked and contributed to our society, but they have been devastated by the economic crisis that has hit the country. More significantly, it has put them on the breadline. Many such families were not in receipt of social welfare previously. In some cases, both providers in a home have lost their jobs and they are striving, might and main, to make their mortgage repayments, pay their ESB bills, among others, and provide for the necessities in keeping a household. It is a sad reflection on our society that we have arrived at this position as a result of Government policies followed in recent years propagated by the boom in the property market.
Fine Gael has been responsible in opposition. We acknowledge it is necessary to find new ways to keep the public finances in order. The Government deficit is running at €20 billion a year. Somebody should have sounded the alarm bells when we see the devastation caused by the economic crisis. A budget is about making choices. Fine Gael believes bad choices have been made in the budget. As previous speakers said, carers, the disabled, widows and blind people are vulnerable. A figure of €90 million has been mentioned as being the amount required to protect the payments to these categories. The cuts in the allowances paid to them will impact heavily on the most vulnerable in society. Many of them could not seek employment, even if there were jobs available. Carers have to stay at home to care for those who need care. Because of their disability many of the disabled are at a disadvantage in seeking work. The same applies to blind people. Last week on radio I heard blind people speak about their real life experiences. A basic requirement is that they be able to afford to feed the guide dog allocated to them.
On child benefit, as I said last week, the hard decision has not been made. Surely we could find a fairer system or mechanism. There are millionaires who could cope very well without receiving child benefit. I have been told candidly by individuals that they set aside their child benefit payments in a separate account to fund their children's education. At least, it is being spent on the children, but such parents do not need to receive the benefit. Surely we could come up with a fairer way to ensure the funding is targeted at those who need it most - those who are most vulnerable.
There are many hidden measures in the budget that will have an impact on the social welfare budget. My constituency of Waterford encompasses a large rural area. Many of the children in the constituency travel to school by public bus. Serious hikes in the cost of the school transport system are again being imposed on families who are already at the pin of their collar in trying to meet their basic requirements such as their mortgage repayments, heating and lighting bills. This added burden will push many into the poverty trap and towards dependency on social welfare payments.
Fine Gael has offered alternatives. We have said we would have introduced social welfare cuts but that we would done so in a such a way that people would have been incentivised to stay in employment rather than to move to social welfare payments. I was told by two employers in the past week that they had offered a job to a person who was unemployed, at an hourly rate of €12 or €13, but in both cases the person concerned refused the offer of a job because, having regard to their entitlements under the social welfare system as structured, it would not have made financial sense for them to take up the offer. That is the nub of the problem. We should be creating an economic climate in which jobs will be protects jobs and employers incentivised to take people from the dole queues, which would lessen the burden on the social welfare budget.
The issue of social welfare fraud was mentioned. If we were candid, we would admit that there is fraud in the social welfare system. It is a problem that must be tackled once and for all. We cannot afford to continue paying benefits on foot of fraudulent claims. I am sure the Minister can give us examples to highlight the progress made in rooting out fraud, but there is still a long way to go. The net effect of fraudulent claims is that there is less in the system to provide for those who are most vulnerable and most in need.
I mentioned the electricity companies. One month ago I called on all electricity suppliers to show leniency during the recession by not disconnecting a customer's electricity supply, the most demeaning and base action that can be taken. Most people are responsible when it comes to paying their bills. I am glad that the electricity companies have stated they will not disconnect a customer's gas or electricity supply during the current spell of bad weather. I would like the period in which such leniency will be shown to be extended for at least a year or two to allow people to recover from the effects of the current crisis.
Practical measures need to be taken by the Government, State agencies, suppliers and communities to assist those in most need. Now more than ever we need to help those who are vulnerable. Many are on the breadline and need our assistance.
There are only a few points I wish to make on the Bill. I welcome the Minister of State, Deputy White.
Everybody expected the social welfare cuts to be outlined in the budget announced last week. There was an expectation that some of the more vulnerable groups would be exempt from those cuts or treated better than they have been or as proposed in this legislation.
I have spoken on a number of occasions in this House and in other places about the position of carers and Senator Coffey and others mentioned it previously. It is a particularly mean cut because just about every carer in the country does it because he or she is caring for a loved one or family member. Such people certainly do not work because of the big money they get from carer's allowance. The Government is safe and sure in the knowledge that these family members for the most part will continue to look after their loved ones despite the cut in carer's allowance. That is a particularly pointed attack on a sector of society that saves the State billions of euro per annum with the care provided to family members in their homes.
I cannot get my head around the logic used by the Government in cutting the carer's allowance. The lazy option was taken by the Government with a 4% reduction across the board in welfare payments and exemptions should have been made for carers, people on disability and people who are widowed. Different figures have been mentioned for separate groups, with some indicating that approximately €90 million would have prevented such groups from suffering the reduction this Bill imposes. I do not see why the Government could not have adopted a more nuanced approach to the way we spend our money on social welfare. I agree wholeheartedly with Senator Coffey's points.
I met a woman two years ago who was in a panic about a potential cut to child benefit. She announced to me in the same breath that the money was being saved in an account for the child when he turned 18. That woman should not be getting child benefit because for many families the allowance puts bread on the table. That is what it is for. I utterly reject the lazy approach of the Government in implementing a cut across the board and a specifically deeper cut for the third child. A much more thorough reform of the child benefit system was required in the budget.
Mary White (Minister of State with special responsibility for Equality and Human Rights, and Integration, Department of Justice, Equality and Law Reform; Minister of State, Department of Community, Rural and Gaeltacht Affairs; Minister of State, Department of Education and Science; Carlow-Kilkenny, Green Party)
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I am fully aware that the expenditure changes in the budget will affect the living standards of many citizens in the short term. No one likes making these cuts but no one could have envisioned we would have to produce a budget like this because of the problems in the economy in recent years. If we put off these changes, there will be a greater burden in future on those who can least bear it, including people with disabilities, families with children, the unemployed, carers and pensioners. The Government, in the context of a really tough budgetary environment, has done its utmost to protect the most vulnerable people in society and the improvements of the past decade in these areas as far as was possible.
These savings for 2011 will be achieved by greatly enhanced control measures, as mentioned by the Minister; proactive labour activation initiatives, including the introduction of a brand new community work placement programme called Tús, operated by the Department of Social Protection; structural reform measures designed to deliver more effective income and housing supports in a sustainable way; and reductions in rates of payment.
I want to outline the supports being fully maintained at current levels to provide reassurance for those who had been concerned that their payments might be cut. Similar to last year we have been able to maintain at current levels pensions and other payments made to people aged over 66 years. These include payments for pensioners' dependent spouses aged under 66 years. This means that approximately 490,000 people aged 66 years and over are being fully protected in the budget. Extra allowances paid to pensioners who live alone and those aged over 80 years will continue at current rates.
The Minister for Social Protection has preserved welfare supports for pensioners generally as all pensioners are entitled to a minimum level of guaranteed support by the State. For many pensioners, social welfare pensions, be they contributory or non-contributory, are their only source of income and most of them do not have an ability to earn. Pensioners who can afford to pay towards economic recovery will contribute through changes in the taxation system which were announced last week by my colleague, the Minister for Finance.
A number of valuable other payments have also been maintained. These benefit not only pensioners but also people with disabilities, carers and all those on low incomes, regardless of age. They include the household benefits package, which includes the free television licence, electricity-gas allowance and telephone allowance, as well as the fuel allowance and the free travel scheme.
The half rate carer's allowance scheme and the extra payment for caring for more than one person are retained, as is the respite care grant at its current value of €1,700 per annum. The half rate illness benefit and jobseeker's benefit payments for widows or lone parents will also remain. The current payment arrangements for lone parents and people with a disability who participate in community employment schemes are being retained without change. The family income supplement scheme which benefits lower income families with children is also unchanged.
Bearing in mind the recent bad weather, the Minister is also providing for a special once-off additional two weeks fuel allowance payment worth €40. This will be made to most recipients in the next two weeks, with the remainder receiving the payment in early January.
Unfortunately, as Senators are well aware, in this budget it will be necessary to introduce a rate reduction in working age payments from January 2011 to produce the necessary savings required in 2011. Whereas there have been some increases in inflation in recent months, consumer prices are back at April 2007 levels and we have managed to maintain the payment rates for all aged 25 to 66 in 2011 at rates higher than those paid in that year. No reduction is being made to the qualified child rate which will remain at current levels. In addition, the reduced rate of €100 per week for jobseeker's allowance recipients aged under 21 is also unchanged. Accordingly, the weekly rates of payment to those aged under 66 are being reduced by €8 per week or an average of 4.1%. Increases for qualified adults on working age schemes are being reduced proportionately. This will bring the personal rates of jobseeker's payments, one parent family payment, illness benefit and associated schemes in 2011 to €188 per week or €2.20 per week in excess of the rate which applied in 2007.
Even taking into account the reductions that were applied in 2010 and 2011, this Government has delivered unprecedented increases in welfare rates since 2004. Over that period, jobseeker's payments, disability allowance and one-parent family payments have increased by 39.5% while the cost of living has increased by 11.8%. The Government appreciates that reductions in rates will be difficult for people but we also know that if action is not taken now, we risk putting social welfare payments at greater risk in future.
Much has been said and written on the reductions in the blind pension, invalidity pension, disability allowance and widows' and widowers' pensions as well as carers' payments. In this context I must point out that to exempt all these recipients from the rate reduction would have meant exempting approximately a further 260,000 people. The effect of this to achieve the same savings would be to have required a cut of €11 per week in a jobseeker's personal payments and €18.30 per week for a couple. It must be remembered that people on disability allowance are also entitled to the full household benefits package, free travel pass and companion free travel pass where appropriate. These are worth approximately €20 per week. Disability allowance, blind pension and invalidity pension are paid to more than 150,000 people.
On supports for children, between 2000 and 2010 the monthly rates of payment for child benefit increased from just €53.96 for the first child and €71.11 for the third and subsequent children to €150 and €187 respectively. In the same period, overall expenditure on child benefit grew from just €638 million to approximately €2.2 billion per year. As a result, approximately 10.6% of gross social welfare spending in 2010 went on child benefit. This Government is proud to have been able to deliver such significant increases in payments to families when the resources were available. In the current economic environment, however, we simply cannot afford to keep spending at the same level as we did when our tax revenue was much higher. In that context, we have decided to reduce overall spending on child benefit. In considering the various options for making savings in this area we were conscious that the payment could be an important source of income for all families for different reasons. Accordingly, the Government has decided against withdrawing child benefit completely from any family.
From January the lower rate of child benefit paid in respect of the first and second child will be reduced by €10 to €140 per child per month. The payment for the third child is being reduced by €20 to €167 per month, while the payment for the fourth child and subsequent children is being reduced by €10 to €177 per month. While I appreciate that cuts to child benefit will be difficult for some families, it should be recognised that the payment will still be very generous compared with payments in other countries and that the Government is making a substantial contribution towards child care provision, including the continuation of a free preschool year. The qualified child increase payable with welfare payments is fully maintained. The domiciliary care allowance paid to parents and guardians of certain children under 16 years who are ill or have a disability is also unaffected, while family income supplement and the back to school clothing and footwear allowance are unchanged.
Some questions were raised about multiple births. I confirm that additional benefit and grants for multiple births will continue to be paid. The rate of child benefit payable in respect of triplets remains at twice the normal levels. The level of child benefit support in 2011 for a family with triplets will be €894 per month or €10,728 per annum. The special grants payable at birth and at ages four and 12 years are unchanged at €635 per child.
Many Senators referred to efforts to control social welfare fraud. Welfare fraud is theft. It is a serious crime and the Department of Social Protection is doing everything it can to crack down on those who abuse the system. More than 600 staff are working in areas related to control of fraud and abuse of the welfare system. Between January and the end of October this year more than 585,000 individual claims were reviewed. When high risks are identified, targeted control measures are taken to reduce the risk of fraud and abuse of the system. For example, certification has been introduced for child benefit claims from non-Irish nationals and other customer segments in schemes where a high risk has been identified.
The Seanad Divided:
For the motion: 28 (Dan Boyle, Martin Brady, Larry Butler, Ivor Callely, James Carroll, John Carty, Donie Cassidy, Maria Corrigan, Mark Daly, Mark Dearey, John Ellis, Geraldine Feeney, Camillus Glynn, John Gerard Hanafin, Cecilia Keaveney, Terry Leyden, Marc MacSharry, Lisa McDonald, Paschal Mooney, Niall Ó Brolcháin, Brian Ó Domhnaill, Labhrás Ó Murchú, Francis O'Brien, Fiona O'Malley, Ned O'Sullivan, Ann Ormonde, Mary White, Diarmuid Wilson)
Against the motion: 19 (Ivana Bacik, Paul Bradford, Paddy Burke, Jerry Buttimer, Paudie Coffey, Paul Coghlan, Maurice Cummins, Frances Fitzgerald, Dominic Hannigan, Fidelma Healy Eames, Nicky McFadden, David Norris, Joe O'Reilly, Joe O'Toole, John Paul Phelan, Phil Prendergast, Shane Ross, Brendan Ryan, Alex White)
Tellers: Tá, Senators Niall Ó Brolcháin and Diarmuid Wilson; Níl, Senators Maurice Cummins and Nicky McFadden.
Question declared carried
The Seanad Divided:
For the motion: 28 (Dan Boyle, Martin Brady, Larry Butler, Ivor Callely, James Carroll, John Carty, Donie Cassidy, Maria Corrigan, Mark Daly, Mark Dearey, John Ellis, Geraldine Feeney, Camillus Glynn, John Gerard Hanafin, Cecilia Keaveney, Terry Leyden, Marc MacSharry, Lisa McDonald, Paschal Mooney, Niall Ó Brolcháin, Brian Ó Domhnaill, Labhrás Ó Murchú, Francis O'Brien, Fiona O'Malley, Ned O'Sullivan, Ann Ormonde, Mary White, Diarmuid Wilson)
Against the motion: 18 (Ivana Bacik, Paul Bradford, Paddy Burke, Jerry Buttimer, Paudie Coffey, Paul Coghlan, Maurice Cummins, Frances Fitzgerald, Dominic Hannigan, Fidelma Healy Eames, Nicky McFadden, David Norris, Joe O'Reilly, Joe O'Toole, John Paul Phelan, Phil Prendergast, Shane Ross, Alex White)
Tellers: Tá, Senators Niall Ó Brolcháin and Diarmuid Wilson; Níl, Senators Maurice Cummins and Nicky McFadden.
Question declared carried