Tuesday, 16 December 2014
Social Welfare and Pensions (No. 2) Bill 2014: Committee Stage
I move recommendation No. 1:
I welcome the Minister of State, Deputy Kevin Humphreys, to the House. This is a sensible recommendation and I hope he will consider it. To give just one example, the cut in the respite care grant in last year's Social Welfare Bill left disabled people with a 30% reduction in their payment. This reduction affected 5,000 families, for many of whom it is the only payment they receive. In bringing forward this legislation, the Government is able to claim there are no further cuts in provision and, in fact, €5 is being restored to the child benefit payment. There is no reference, however, to what was done in the preceding years.
In page 3, between lines 11 and 12, to insert the following:"Review of all expenditure reductions
2. The Minister for Social Protection shall review all expenditure reductions within her Department resulting in a reduction in a rate of payment or the ceasing of a welfare payment or scheme since 2011, review options for restoring those payments to their previous levels and shall bring forward a report on same.".
Any government must be concerned with reviewing its priorities. The area of disability, which saw the largest percentage cut in any allowance, should be one of those priorities. The reduction in that case was more than €300 out of a €1,700 payment. I recall it very well, but it is just one example. We are seeking, in this amendment, to place a statutory obligation on the Minister to report back on cuts imposed in previous budgets, how those payments might be restored and, if they cannot be restored, why that is the case. I am sure my colleague, Senator Paschal Mooney, wishes to comment on the proposal. I look forward to hearing the Minister of State's view.
Our preference would have been to table a proposal seeking a restoration of the cuts that took place since 2011, but such a provision would most likely be ruled out of order. This recommendation represents our attempt to go at it from a different direction. I look forward to the Minister of State taking the opportunity in his reply to outline what the indications and sentiments are within the Department.
It is of course welcome that €5 is being restored to recipients of child benefit, but that measure obscures the reality of the impact of reductions in a range of important social welfare provisions which impact the vulnerable in our society. Lone parents, for instance, people on jobseeker's allowance and many others are really hurting. We hear stories almost every day of the week about families who are finding it very difficult to survive. In my own part of the country, I have been amazed to discover that households I assumed were surviving quite well, relatively speaking, are actually relying on the assistance of non-governmental organisations to get them through the Christmas period. It is a very sad reality and I am sure the Minister of State has encountered similar cases in his own constituency, which includes a broad mix of demographics, economic and otherwise.
From that point of view it would be important if the Minister were to outline the Government's views in his response.
To clarify, this Social Welfare and Pensions (No. 2) Bill is a money Bill and they are recommendations rather than amendments, which I may have said earlier, but the position is clarified now. I call Senator Norris followed by Senator Cullinane.
I welcome the Minister to the House. By way of comment on the Leas-Chathaoirleach's observations, it is utter lunacy in a democracy that this House cannot make amendments to finance Bills but I discovered to my horror the other day in the newspapers, and the Minister might confirm if it is true, that Members of the Dáil are not allowed make amendments either. Only members of the Government can do that. In a democracy that is absolutely asinine. For what are we elected? The civil servants, saving the presence of the two fine gentlemen behind the Minister, made a thorough balls of the economy, as did the other House. I do not know why on earth we should not be allowed our hand's turn.
I support this amendment. Senator O'Brien and his colleagues are not looking for a reinstatement of the savage cuts that were made and I imagine the Minister of State, as a member of the Labour Party, would want to restore these cuts as soon as possible, as would I am sure the Minister, Deputy Burton. To keep the matter under review with the intention of ameliorating the situation is a reasonable demand and I hope the Minister will feel able to accept it.
This is a clever amendment and one that should be supported, although it states that we should review all the social welfare cuts since 2011. I would go back to 2007 because there were many cuts made by the previous Government as well-----
-----but I fully accept the thrust of the amendment which I support.
I said on Second Stage when the Minister was in the House that the test of any Government is whether, at the end of its term, it has increased or reduced poverty and inequality. In terms of all the reports, even the right wing ESRI, which is so-called independent, has indicted the Minister's Government with regard to the past four budgets. The ESRI report on the recent budget showed that the top 40% benefited the most and the bottom 60% benefited the least. The previous three ESRI reports on the Government's three previous budgets were even worse in that they found they deepened inequality. That is the legacy the Minister, her party and this Government have left behind, namely, more people in poverty and more inequality.
In recent days we had the tragedy of two homeless people found dead in Cork. A few weeks ago, unfortunately, Jonathan Corrie was found dead only a few yards away from Leinster House, the seat of Parliament. We have children in this State who go to bed hungry and go to school hungry. Families cannot afford to pay basic bills. If we look at some of the cuts made by the Minister's Government in recent years, it is giving a small amount - crumbs from the table - in terms of a meagre increase in child benefit in this Bill but it has cut child benefit twice. It does not make up for the cuts made. The cut in the respite care grant was seen as cruel. There have been cuts in benefits for older people, the telephone allowance and lone parents allowance. The Minister should know that the rental cap is causing huge difficulty for families in Dublin and across the State where people cannot get access to housing.
I am appalled at the society we have now where children are in poverty, people are dying on the streets, there is structural inequality and low pay, and people who put in a week's work do not have money to provide basic needs for their family. That is the society we have now. When we raise these issues the Minister, his party and the Government say the money is not there. The money is there but they are not prepared to tax wealth and the people at the top to get that money to provide the services people need. I thought that was what they were elected to do. That is the promise the Labour Party made to the people of this State.
It is a shame on this Government, and on all of us in the Oireachtas, that we have a society in which there is so much poverty and suffering for those at the bottom.
If I was in government, if I was in the place of the Minister of State, sitting in his chair, I would look at those ESRI reports, and not just those reports but the reports from Social Justice Ireland, the Irish League of Credit Unions and others. All of the independent reports which have been done in regard to his party's participation in government have consistently shown that more people are living in poverty and we have more inequality, and this budget has not done anything to make up for all of the cuts we have had since 2011. While I will reluctantly support the Bill today because it gives something back to people, and I would not want to be voting against an increase in child benefit because those families need whatever extra income they can possibly get from the State, the Minister of State has to accept that all of the independent analysis, on which he might comment, has shown there are more people now in poverty than there were when his party and this Government took office. I accept it took over in very difficult economic circumstances but that is still the legacy of the Minister of State and his party.
We need to review all of these policies. One of the things my party has called for, as have some Independent Senators, is that all budgets should be equality proofed and poverty proofed. We should not be passing budgets that increase poverty. I would have thought that is a basic principle of the Labour Party, namely, it would equality proof and poverty proof budgets so we would not end up with a budget where a right-wing organisation, such as the ESRI, is saying the top 40% have benefited the most and those at the bottom have again taken the hit.
I wonder sometimes do politicians in government really care about those at the bottom and the suffering that is out there. Are they even conscious of it? Is it something they just pass over and are they just immune to it at this stage? I am not. I see it every single day in my constituency office, as I am sure we all do, but I am prepared to do something about it. I am prepared to argue for a fairer society. I am prepared to argue for fair, just and progressive taxation. It sickens me that we have budget after budget which increases inequality and poverty, while at the same time does not ask the wealthy in society to make any contribution at all - not one red cent extra in income tax did the Minister of State's party seek from the top earners in society. There were regressive taxes like the property tax and water charges but not one extra cent in wealth tax or higher taxes on higher earners, yet we are happy to allow children go to school hungry and have more adults in poverty. We are happy to see that happen and allow it to continue, but let us not talk about increasing taxation on those who can afford to pay it. Then there is this nonsense that if we do it, it will cost jobs. It is low pay and poverty that is driving the inequality and the injustice that many people have to put up with in this State at the moment. Unfortunately, this Government has done nothing to address it.
While I will support the Bill, the legacy the Minister of State and his party have left the people of this State is shameful. We reluctantly support the Bill because it includes provisions for Waterford Crystal workers as well as the increase in the child benefit. However, the Government cannot be applauded for bringing it forward today because of the cuts it has imposed on people over and over again in the past four budgets. I am sure we will have a lot more to say on all of these issues.
Senator Norris pointed out we cannot even make amendments to the Bill and most of the recommendations are again ruled out of order. This is a consistent theme. We go to the trouble of putting down recommendations and we are then told they are ruled out of order. Where is the debate? Where is the political reform and the new politics that the Minister of State's party promised us? There is no evidence of it at all. The Government has trampled over the rights of the Seanad time and again, and then, when we in an earnest way try to put down recommendations and have a debate, we cannot have it as they are ruled out of order, as is the case with many of the recommendations today. Anything that is in any way critical of Government is ruled out of order. It is more nonsense from the Government.
This is a clever recommendation tabled by Fianna Fáil which I am prepared to support. It gives us an opportunity to remind the Government of its past failures and of the deep inequality and poverty which is in this State because of policies the Government has pursued - not as an accident but because of the policies which it has pursued and supported.
It is a shame on all politicians and the Oireachtas that so many people are in a desperate situation but the Government is not prepared to do anything about it.
Will the Minister respond to the ESRI report? Thankfully, the ESRI has published a report on income distribution and the effects of the budget. The Government used to have such a report in the budgetary documents. It used to tell us who gained and who lost, but it stopped doing so this year because we would have gone to that page and immediately seen that every budget the Government has put forward has hit the poorest hardest. Its own figures show this so it has stopped publishing them. We now have the ESRI to thank for giving us the details.
The graph in the report shows the bottom 10% lose the most under the budget and the top 10% gain the most. The ESRI found the top 30% gain and the bottom 70% in the country lose under the budget. One difference between this and the previous Government is this would have been completely reversed. We did not like passing the budgets we did, and the Opposition bitterly opposed them at the time, but the top earners lost more than the bottom earners. The Government has done completely the opposite.
The Labour Party has completely abandoned all of its principles. Why support a Government which consistently hits the poorest in society the hardest?
This is not why the Minister of State was elected. It is not what we think Governments are meant to do. Irish Governments are meant to bring people together in one society in which those who can contribute most pay most and those who need most gain most. The Government has turned this on its head to look after a narrow bunch who, unfortunately for the Minister of State, will predominantly vote for Fine Gael. They will thank Fine Gael and the polls continue to show this. It is working out for Fine Gael in the polls. In the recent poll the top 10% very much favour Fine Gael returning to power and it is no wonder because it is gaining under successive governments. The Minister of State can shake his head, but this is what the ESRI says.
Contrary to what Senator Cullinane stated, the ESRI is an independent body which conducts independent research. One would probably find these figures somewhere on a shelf in the Department of Finance or the Department of Public Expenditure and Reform as they used to publish them and tell us their own view, but they had to stop doing so because it was so embarrassing for the Government. With all this talk of giving this and giving that, in reality the Government is taking away much more from the poorest in society. If the Minister of State wants to know why there are huge demonstrations on the streets and why the Labour Party poll ratings have come down dramatically, the graph in the ESRI report tells him all he needs to know. He does not need to go any further. He has hit the poorest hardest.
I compliment my colleagues Senators O'Brien and Mooney on tabling this recommendation. Like other speakers said, and I heard Senator Norris say it, I do not see how it can be opposed. If the Minister of State were to suggest going back a couple of years prior to 2011, I certainly would not object to it. It could be amended on Report Stage but at least it would be done. There is too much political spin about what people will gain without speaking about the losses. We have had this consistently since day one of the Government. Its mantra has always been that there has been no change to the basic social welfare rates, but everything else has been changed and there have been some dramatic cuts.
The Government has divided society and, unfortunately for him, the Minister of State will pay the price for it. Small groups of people have been hit really hard. For example, the respite care grant, which is the subject of another recommendation by Senator Cullinane, has been reduced dramatically. The previous approach was that while everybody faced a cut, those who could afford it were cut most of all. We did not divide society into little sections. The Minister of State in trouble now. He states a reduction in USC was given to low earners, but he never says the six day week for social welfare was reduced, which removed the entire benefit of the USC change. This is why no one is thanking the Government. People can see it in their pay packet every week and they know. Those who earn little enough to pay this low rate of USC are, by and large, part-time workers who would have benefited from the dole but it was cut to pay for the USC. The USC was cut but so was social welfare, all to give a bit of a spin that low earners are being helped, but this is not happening.
I am sure the Minister of State will speak about the low pay commission. There is also the National Competitiveness Council, and there is tension between the Minister and the Minister of State. We will wait and see what happens. I and my party believe in a society where everyone is brought together and we do not divide society between left and right.
We are saying we are one country, we are one people coming together and we will all muck in and do our bit in accordance with how we can do it and our means to do so. It is very important for that voice to remain at the centre of Irish politics and I think it will.
This recommendation surely is unarguable, from a Government point of view, and I hope we can do this without playing the blame game. I am more than happy to go back to 2009 because, in fact, in that last Government the decreases in social welfare during the period were a reversal of the increases given from the start of that Government. The decreases were terrible and it was awful voting for them for which I paid the electoral price, as did Senator Darragh O'Brien. We definitely tried and our Minister's guiding philosophy was to charge the high earners more and that is why there is a high rate of USC. That is why the civil servants at the top were cut most of all. That is why the USC higher rate is not likely to be reversed as a straightforward cut because higher earners would benefit because they are the ones that were targeted by it - those at the very top.
This Government's legacy in regards to keeping society together and keeping everyone mucking in together, is disgraceful. The whole thing is falling apart. The centre is not able to hold because of the policies which have led to the ESRI graph.
I shall first respond to Senator Norris. I have great sympathy with his point about not being able to make amendments to money Bills. For his information, the money Bill provisions are set out in the Constitution. He made an excellent point and it should be considered for both Houses. I would support his suggestion if it went to the Constitutional Convention or for further debate in both Houses. He made an excellent point and I agree that there is an argument for change in regard to this matter. I thank him again for pointing that out in the way that he has done so.
In regard to Senator Byrne's comments, there are different reports and different elements. One can also point to the ESRI report which states that income inequality has changed. One can look at the ESRI's recent report and its remarks on the last budget. The reports do not take into consideration the money spent on benefits, the €2.3 billion that has been invested in social housing or the additional money that is being spent on the homeless sector but it is "Yes" when it is done.
In terms of an analysis of the budget, the Department is preparing a social impact statement on the main welfare tax and other measures in the 2015 budget. It will be finalised when the switch model is updated by the ESRI to take into account the measures relating to water affordability. It is intended to publish the analysis as soon as it is feasible or when available. That model will be published. I hope my response answer's the Senator's query.
I wish to point out that the Department of Social Protection conducts a pre-budget submission forum. One of the key areas of the pre-budget forum, comprised of different voluntary groups, was that we should in some way acknowledge the living alone allowance. That was done and it is the first time the allowance has been increased since 1996.
Child benefit elements were also highlighted. While only €5 has been recouped from the original €10 cut I still think the measure is welcome. As somebody said in the Seanad when I appeared here last, a €5 reduction would have been considered to be massive but when it is a €5 increase it is considered to be only crumbs. The measure is a step in the right direction which I hope will be acknowledged.
It is very important that older people are acknowledged and, therefore, the 25% Christmas bonus is welcome. It was unfortunate that the Christmas bonus was abolished in 2009 in its entirety so a reintroduction of 25% is welcome.
There has also been a post-budget forum comprised of the same groups which acknowledged that the key points were, in some way, taken on board. There has been that level of consultation and there has been a review in the process.
In many ways, I find it difficult to take some of the remarks made by Fianna Fáil. I am not going to get into this party thing of "You done this and we done that" because the list we could read out of what happened in the early periods would be a multiple of any list of our failings.
There was a huge concentration on the Government and whether it is being re-elected or not. It is this Government that has taken on the process of rebuilding the country. Whether or not we are re-elected is not the important issue. The important issue is that we get this country back up on his feet.
That is the direction we have been working. I do not mark my time in the Oireachtas wondering whether I will be re-elected or not. I mark my time trying to get this country back on its feet. That is the attitude of most of the Independent Senators, and especially my colleagues here. They have been working on re-establishing the independence of this country. It has been difficult and there have been difficult decisions. I do not deny that. The Labour Party, as we are constantly reminded, is paying a price at the polls, but so be it if we can get this country moving again and get people back into their jobs. The shortest way out of poverty is back into employment. There are a number of elements. I do not propose to accept the amendment. As I have outlined, there are areas in the pre-budget forum, we have a post-budget forum and there is the switch model that is being tabled. I thank Senator Cullinane for his support for the social welfare Bill. It is important that those payments are made and are made on time and I thank the Senators for what is sometimes constructive criticism, although sometimes it is just scoring party political points and I want to move away from that.
I am grateful to the Minister of State for his reply. I have great empathy with the Minister of State at a political as well as a personal level, because I could not help but be reminded, as I was listening to him talking about the decisions taken by this Government in the national interest, of the exact same rhetoric, which I listened to in the dying months of the last Fianna Fáil-led Administration. Keep in mind that the Administration that Brian Cowen took over in 2008 was faced with the virtual economic collapse of the country. What happened before that was a prior Government's decision.
What has been lost in the argument and the justifiable anger of the electorate in recent years, is that from 2008 on, that Government attempted to rebuild the nation's finances and get us out of penury. In the closing months, when the Green Party decided to pull out of government, there was great debate within the Government as to what direction to take - whether it would go to the country at that time, October-November 2010, or stay in power in the national interest and put forward a budget. We know what happened. The budget was framed and it was passed, in the national interest.
The Fianna Fáil Party was then decimated because of the decisions it took, not in a selfish way, but from its patriotic duty and responsibility to ensure the country would get out of the economic mess it had got into. I am not putting that forward as a reason for the Government to pull back from the patriotic decisions it is taking in the national interest, and I have no doubt that is its motivation, but the electorate can be very cruel. While both of us can argue about the merits or otherwise of that Administration, there is no doubt in my mind, and I will be convinced until I leave this House and beyond, that the decisions taken by that Government, with Brian Lenihan as Minister for Finance, helped to provide the framework from which the new Government, when it took over, was able to carry on its economic agenda.
It is equally ironic that the four-year plan published by the outgoing Fianna Fáil Administration in its dying months was effectively the model used and implemented by the current Government up to and including the point at which the troika left. I am sure we could have a very interesting debate about it but it is important to put it on the record. Around Christmas, in particular, I reflect on those months because it was at Christmas time that all of this happened.
While I welcome the increase in the living alone allowance from €7.90 to €9 per week, this increase works out at €0.20 per day. That is the reality of it. My colleague in the Dáil went into great detail about the various decisions taken by this Government. I do not want to be ultra-political about it, but in the context of the Government's own presentation of the improvements in social welfare and the increase in payments, I wish to point out that although €196 million is being put back into social welfare, the Government took almost €2 billion out of it in the three preceding budgets. Outside organisations and NGOs have indicated that this has widened the gap between rich and poor by a minimum of €500. As a result of the budget, a single unemployed person gains €46.80 per year. A couple with two earners on €125,000 per year gains €1,226, which is nearly 30 times more. The budget gives about €0.90 per week to an unemployed single person, and €14.30 per week to a single person earning €75,000. That does not sound like a progressive policy to me and it is impacting on the vulnerable.
I have a lot of other statistics before me here but am taking my cue from the Minister of State and will not go into them all. I will stand over the record of previous Fianna Fáil Administrations in the area of social welfare. The primary reason there was a grand alliance of the electorate from the left, centre and right was the policies pursued by successive Fianna Fáil Administrations aiming to help the poor and the vulnerable. If we sound a little sensitive in this area it is because it is in our party's DNA to protect the vulnerable at all times. That is why we are critical of this Government and this Department in terms of how they are addressing the most vulnerable in our society.
We are on Committee Stage and a new recommendation has been proposed by Senator O'Brien and the other Fianna Fáil Members. It is unhelpful to the general debate of the Social Welfare Bill to have a history lesson on which party and which Government did best. I ask Senators to stick to discussing the recommendation insofar as they can.
Absolutely. I commend the Minister of State for his commitment to the regeneration of the country, despite sectoral party interests. I believe that is genuine and I salute the Minister of State and the Labour Party for it. I believe they are going into the wilderness but they are doing so in what they see as a good cause.
The Christmas bonus is very welcome but it is only 25% of what was there before and is therefore a small amount. It is a case for one hurrah rather than three cheers.
I would like to ask the Minister of State about the explanatory and financial memorandum as a matter of information. It states on pages 1 and 2:
The following other social protection measures which were announced in Budget 2015 relate to non-statutory schemes and do not require any legislative amendments-(a) The new Water Subsidy worth €100 per annum for all recipients of the Household Benefits Package and for all recipients of the fuel allowance who do not already receive the Household Benefits Package,
(b) the doubling of the number of employees supported by JobsPlus from 3,000 to 6,000,
(c) additional funding of €12 million in 2015 for the introduction of new employment services (JobPath), and
(d) additional annual funding of €2 million for the School Meals Programme.
That is telling us what the Bill does not address. I do not see the point in that unless it is a kind of political advertisement: "We gave this" and "We did that". One might as well say this Bill does not address climate change. It does not because it is not about climate change.
I do not think I have ever seen in an explanatory memorandum before a recital of things that the Bill does not do. Is there an explanation for that?
It was not my intention to get involved in a party political debate, but we are here to scrutinise legislation and also to hold the Government to account. Very often when Ministers are trying to bat away criticism, the notion of a party political debate is peddled. It very much depends on what side of the Chamber one is sitting on.
We have a job to do, to critique the Social Welfare and Pensions (No. 2) Bill 2014 and to critique the Government's approach to social welfare. This recommendation goes back to 2011 and asks for a review of all the reductions that have taken place and the impact they have had on citizens.
The Minister of State said in response that getting people back to work is the best way to lift people out of poverty. I agree with that. In reality that should be the case, but in Ireland it is not the case because many in low paid employment are in poverty. Many people in work are in poverty and cannot afford to pay basic bills. They fall into poverty traps. They may have an income up to €300 a week but they do not qualify for any of the benefits they would qualify for if they were on social welfare. We end up paying family income supplement and so on, which can be called corporate welfare because it subsidises employers who do not pay their staff enough. We have a significant difficulty with low pay and the Minister of State should be reminded and should be aware of the recent OECD report that showed that of all of the OECD countries, Ireland had the second highest number of people in low-paid employment. That is another international report which has indicted this State in terms of pay. We have a significant disparity in pay from those at the top to those at the bottom, both in the public and private sectors.
This is an issue that the Minister of State, when in Opposition, would have been talking about as well. I am sure if the Minister of State were standing where I am, and a Sinn Féin Minister were sitting in the Minister's chair, and we had done what the Minister of State's party has been doing for the past four years, he would be criticising us. He would not be doing what he is doing now, which is looking for credit. The Minister of State says that it is the responsibility of his party and the other party in Government to rebuild the economy. We are all interested in rebuilding the economy and the country. Unfortunately, what we have been left with is a country that has deep and structural inequality and more people living in poverty. We have a two-tier economic recovery and all of the evidence that we pointed out to the Minister of State has shown that to be the case. There is something fundamentally wrong with rebuilding the economy on the backs of people on welfare and at the expense of people in low-paid employment, with the people at the top benefiting the most. There is something fundamentally wrong with that. I am in favour of fairness in our economy. I want to see the issue of low pay dealt with. I know there is a commission on low-paid employment which will publish its report.
I brought to the attention of the Minister during the Second Stage debate that I took on the responsibility of drafting a report for the Joint Committee on Jobs, Enterprise and Innovation, acting as a rapporteur to look at the concept of a social wage, that is, a living wage and the relationship between low-paid work and access to public services. The Minister of State made this point when responding to the ESRI report. There are people who might earn €250 per week working full time. I met 17 people who work in a crèche, looking after children, who earn €250 a week. They had taken an 8% pay cut because of cuts in funding to the crèche. It costs them more to work, but they are prepared to work because it gives them dignity. Let us not suggest that those people are better off in work. They are not better off in terms of their access to services. They do not qualify for most of the benefits. They find it difficult to get access to health care for themselves or their children. They must pay for education at primary, second, third and fourth level.
We do not have access to services. We have a housing crisis, as I am sure the Minister of State is aware. All of these issues are important in the context of the recommendation before the House.
I would like to speak about the rebuilding of the country. In recent years, some €90 billion has been put into the banks so that bondholders could be repaid. They have got their money. They are away on their toes. That is them paid. We borrowed the money from the troika. We emptied the National Pensions Reserve Fund. All of that money is gone. It was spent on putting it into failed banks. Some €30 billion of it was put in by this Government. On the other hand, we have all the cuts about which we have just spoken, including those that are affecting older people. I will give a final example. The Minister of State spoke about how older people will benefit from this budget. The bin waiver that was in place in Waterford city for many years has been abolished by the local authority. When the waiver was in place, older people had to pay €50 to have their bins collected, but they now have to pay €300. That is another example. I suggest that the conservation grant that is being applied to the water charges will go the same way. Older people know they have not benefitted from this Government, which has cut many of their allowances since 2011. Older people and their families feel those cuts in their pockets. There is something fundamentally wrong when all of these cuts are being imposed, and inequality is deepening, after €90 billion of our money was put into the banks to pay back bondholders.
Members of the Government have said they do not care about their seats. People do not care about anybody's seats, but they care about fairness. They see something fundamentally wrong with all of these cuts. I am sure the Minister of State sees the poverty and the suffering out there. All of this is happening after money was being pumped into the banks to pay back bondholders. There is something fundamentally disgusting about what is happening in our society. It does not matter to me who is in power. If there are people dying on the streets, children going to bed hungry and people living in poverty, it should not matter who is in government. If Sinn Féin was in government, I would be here criticising them as well. It is wrong that we have such a two-tier society. As I have said, all the evidence shows that the Minister of State, his party and the Government as a whole have deepened that inequality. In James Connolly's famous phrase, the quality of a nation should be judged on how it treats the poorest class. The Government has treated the poorest class in this State very shabbily. I hope the Minister of State will support this recommendation, which gives us an opportunity to provide for some sort of poverty-proofing of previous decisions made by this Government, including when it cut social welfare.
When the Minister of State dismissed the ESRI study, I asked myself where I had heard that before. The last Government did not listen to voices that did not agree with it. We must learn the lessons from the crisis. We must listen to people who do not agree with us and accuse us of doing certain things. We cannot just say that the Christmas bonus was brought back in and that it was terrible when it was abolished by Fianna Fáil. People should read the ESRI study, which goes through the entire list of austerity measures that were introduced from the budget of October 2008 onwards. Significant income tax changes were made. The progressive tax measures that were introduced had the hardest effects on the wealthiest people. The hated universal social charge is a progressive tax measure that hits the wealthiest the hardest. The elimination of the PRSI ceiling by this Government hit all workers exactly the same, regardless of whether they are wealthy. That is the difference. That is how that happened. I could also mention the changes in welfare rates and the reduction in child benefit rates from that period. I meant to refer to the removal of the PRSI allowance. I probably confused the Minister of State. That is my fault.
I thank my colleague for his help. I apologise for causing confusion but the progressive measures were introduced by both Governments. We brought in two thirds of the austerity but we tried to do it in a way that hit the wealthiest the hardest. I did not like the way the changes to child benefit were made. I would love to have seen a means test brought in. No Government has had the courage to deal with that.
The reduction in the jobseeker’s allowance for the young unemployed was started by the previous Government and continued by this one. The public sector pension levy hit the public service but it was highly progressive because the highest earners paid the most and the lowest earners the least but it was very difficult for them. There were cuts in public sector pay in 2010 and again under this Government with the Haddington Road agreement. The public service pension cuts were a huge issue but that was a progressive measure.
The property tax was not progressive because it does not affect people according to their income but according to the house they live in or the location. The abolition of the Christmas bonus in 2009 and its partial restoration are included in this study and the cutbacks in the household benefits package, which were insidious because they benefit people over the age of 70, the disabled and carers. While this was being cut the Government was saying basic social welfare rates have not changed but those receiving the benefits could see exactly what was being changed. All these matters are included in the Economic and Social Research Institute, ESRI, study including the partial restoration of the Christmas bonus this year which we welcome. That shows the cumulative, relative impact of austerity and that the poorest suffered comparatively the least in percentage terms and the wealthy suffered the hardest. One can make that case only by going back through all the measures brought in since the famous budget in October 2008.
The measures this Government has brought in have hit the poorest the hardest. The Minister of State should examine this and try to change course by supporting this recommendation, consider the expenditure cuts and restore them to the level they were at before the last Government cut the rates. Other Departments have a role as well. He could consider the options for changing the graph because the poorest in society have been hit very hard by the choices this Government has made.
The Government talks about the International Monetary Fund, IMF, agreement forcing it to do this or that but there were many things in that agreement that were not done, including some progressive taxation measures, reform and regulation of the legal profession, of the medical consultants and the top levels of various other professions. This Government decided to hit the poorest hardest and to let the wealthy away relatively lightly in comparison.
Senator Norris has just left the Chamber but on JobsPlus that was a briefing document, which was part of the normal briefing to Members before the Bill was published. This does not need to be dealt with in legislation but it is important that it is there for the information of the Seanad.
I take Senator Byrne's comments in the spirit they were made. This is an extremely difficult time. When the last Government was in power, 1,000 jobs were lost per week. We are in a better situation now when 1,000 jobs a week are being created. The Senator said that this Government has cut the social welfare budget by €2 billion. The amount is actually €1.6 billion. Much of that is reflected in the number of people who have returned to work, meaning there is a lower pay-out which has given us some flexibility.
I take all the Senator’s points on the bank bailout. The Labour Party and the Tánaiste voted against that. I will not remind the Senator of his own party’s history in that respect. The Senator constantly brings up the ESRI report. I do not agree with the element in the report that stated older people took less of a hit because many factors were not taken into consideration. That is why 25% of the Christmas bonus and the living alone allowance were included. The Senator is right to say that the living alone allowance is quite small. There has not been an increase in the allowance since 1996, the last time the Labour Party was in government. The increase is approximately 17% of the living alone allowance. It is important to recognise that because it is as costly to heat a home for one person as for two and often there is no income. I would like the allowance to be acknowledged more in the future, to help people. Sometimes cooking one dinner is as cheap as cooking two. None of this is taken into consideration for older people. There are contradictions in the ESRI report and I do not think Senator Byrne would agree with what it states about how austerity measures have hit older people. Senator Byrne probably feels, like me, that they were hit harder and that was not captured by the ESRI study.
The switch programme is being carried out and will be published as quickly as possible and made available. I do not intend to accept the recommendation.
- Sean Barrett
- Thomas Byrne
- John Crown
- David Cullinane
- Terry Leyden
- Marc MacSharry
- Paschal Mooney
- David Norris
- Darragh O'Brien
- Denis O'Donovan
- Ned O'Sullivan
- Trevor Ó Clochartaigh
- Brian Ó Domhnaill
- Averil Power
- Feargal Quinn
- Kathryn Reilly
- Mary White
- Diarmuid Wilson
- Ivana Bacik
- Terry Brennan
- Colm Burke
- Eamonn Coghlan
- Paul Coghlan
- Michael Comiskey
- Martin Conway
- Maurice Cummins
- Michael D'Arcy
- John Gilroy
- Aideen Hayden
- Imelda Henry
- Lorraine Higgins
- Caít Keane
- John Kelly
- Denis Landy
- Marie Moloney
- Mary Moran
- Tony Mulcahy
- Michael Mullins
- Hildegarde Naughton
- Catherine Noone
- Mary Ann O'Brien
- Susan O'Keeffe
- Pat O'Neill
- Jillian van Turnhout
- John Whelan
- Katherine Zappone
I move recommendation No. 3:
If I can, I will speak on the thrust of the other recommendation under the section. The issue relating to recommendation No. 3 was debated extensively in the Dáil on Committee Stage and Report Stage, but we feel it is worth restating the position. The lough payment scheme is something on which we were lobbied by MABS. In 1997 the household budget scheme, HHB, was extended to include the lough payment scheme. The lough payment scheme was jointly managed by The Lough credit union and Cork MABS and was established to facilitate MABS clients nationwide to pay additional creditors other than the local authority and utility companies. In early 2014, approximately 25 MABS services supported more than 400 clients to pay debts via the lough payment scheme. Examples of debts being paid via the scheme include credit unions and Garda fines. Levels of financial exclusion are higher in Ireland than in 12 of the 15 EU countries.
In page 4, between lines 7 and 8, to insert the following:
“Amendment of Social Welfare Consolidation Act 2005
3. Section 290(3)(c) of the Social Welfare Consolidation Act 2005 is amended by the insertion of “the Parish of the Travelling People or any credit union for the purposes of the Lough Payment Scheme, or” before “any other body that may be prescribed”.”.
In the past ten years, in an attempt to promote access to legal financial services and reduce the reliance of many on illegal moneylenders, the National Traveller MABS, NTMABS, has promoted the use of the lough payment scheme. NTMABS has worked extensively with a number of partner organisations, local MABS, Clann Credo, Dublin City Council, Wicklow County Council and the Parish of the Travelling People to provide small loan and loan guarantee schemes in an attempt to provide alternatives to illegal moneylenders for members of the Traveller community. All of the loan and loan guarantee schemes use the lough payment scheme as a method of repaying the loans.
As part of the criteria of each of the schemes, the lough payment scheme was identified as the sole method of repayment by the participating organisations. They include credit unions and the organisations I previously listed. The Social Welfare Act 2012 made changes to the creditors that can be paid under the HHB scheme. It requires An Post to have an agreement in place with all relevant creditors to make deductions from an individual's social welfare payment. In future, reductions can only be made for the following creditors - local authority rent, ESB, Bord Gáis, Eircom and Airtricity. The change impacts on the current MABS arrangements with The Lough credit union and the lough payment scheme.
A lengthy presentation was made to us by the National Traveller Money Advice and Budgeting Service. I read some of the transcripts into the record. The recommendation is straightforward. The provisions in the 2012 Act resulted in changes that excluded the option for Travellers to repay loans or pay fines by the previous method, which was proving to be successful. MABS has lobbied us and we feel it is important to keep pushing the issue, including to a vote, because it impacts on vulnerable people. I have made the argument and I will listen to the response of the Minister of State.
In fairness, the matter has been debated on Committee Stage in the Dáil and the Tánaiste has given a commitment to Deputies which I will repeat to Senators that the matter will be further examined and when the 2015 Estimates are discussed by the Joint Committee on Education and Social Protection the Tánaiste will make a full report. At this stage I do not propose to accept the recommendation but I give a commitment that the matter will be examined further and a report will be carried out in January.
I move recommendation No. 4:
The Minister of State will be acutely aware, both in his role as Deputy and more recently as a Minister of State, that the question of appeals has been a main area of controversy, in particular for public representatives who have been struggling with an extremely bureaucratic system for some time. This is an old chestnut in one sense, but in the context of the Government’s reforming zeal in recent years I would have thought there would have been more success in the area. I have spoken to colleagues in the House informally about the various areas of the social welfare system that are creaking under the weight of the appeals system. There must be some positivity about it. I hope the Minister of State will give some indication of what efforts are being made within the Department to address delays in appeals, in particular for invalidity benefit and carer’s allowance, which appear to be among the more long-running sores, if I could put it that way, that are experienced by public representatives at all levels throughout the country. The reason we tabled the recommendation was to try to bring order to the appeals system. That is why we asked that an appeals officer would decide an appeal within a prescribed time of 60 working days from the date of receipt of the appeal. I do think that is too short a time. It is two calendar months.
In page 4, between lines 7 and 8, to insert the following:
“Amendment of Social Welfare (Consolidation) Act 2005
3. The Social Welfare (Consolidation) Act 2005 is amended by inserting the following after subsection (4) of section 311:
“(5)(a) An Appeals Officer shall decide an appeal within a prescribed time of 60 working days from the date of receipt of the appeal.
(b) Where notice of a decision under section 311 is not given to the appellant who made the appeal concerned before the expiration of the period specified in section 311(5)(a), a decision upholding the appeal shall be deemed to have been made upon such expiration.
(c) An Appeals Officer may apply to the Chief Appeals Officer for an extension of time to consider the appeal in exceptional circumstances but the Appeals Officer must demonstrate the reasons for the delay and the appellant shall be informed of the reasons for the delay in writing.”.”.
We also ask that an appeals officer may apply to the chief appeals officer for an extension of time to consider the appeal in exceptional circumstances. We are introducing some flexibility into the recommendation. An appeals officer would have to demonstrate the reasons for the delay and the appellant shall be informed of the reasons for the delay in writing. The last part of the amendment is the most controversial. It is a bit like when one is standing on a train platform waiting for a train or waiting at a bus stop for a bus. I accept the situation has improved with Bus Éireann and Iarnród Éireann in that regard, but there was a time not that long ago when one could be standing at a bus stop or waiting for a train to come and not be told the reasons for the delay. Interestingly, it still happens in airports, in spite of all the modern technology available. Time and again, one gets airlines that do not inform the public of what is happening.
The biggest single issue that arises is not so much the inconvenience of the delay but it is the fact that there is no communication. Nobody has any idea of what is going on. In this day and age it is not the function of either county councillors, Senators or Deputies - certainly not a Minister - to have to be the person who is communicating back to a constituent the reasons they believe there is a delay because they got a response from the relevant civil servant in the section to say they are really sorry but there will not be progress for at least two months or three months or the appeals officer is out sick, or the case is with the appeals officer and the case file is overloaded and the person is saying off the record that it will take longer than the Government has specified. Public representatives have heard all of those reasons. Irrespective of the other aspects of the recommendation, communication is vital. Surely a system could be put in place for communication with clients to let them know the reason for delays. It could be nothing more than a simple letter to say the delay is due to A, B or C.
Having done that, there is a need to address a long-running problem, which goes back to the core of the recommendation. I appreciate the Minister of State inherited the problem and it is not necessarily a direct result of the Government’s actions but it is long past time to deal with the matter, in particular in light of those who increasingly receive social welfare benefits, especially those in vulnerable areas. While I do not wish to categorise those on social welfare, it could be a matter of economic life or death that appeals for invalidity benefit or carer’s allowance are addressed as quickly, efficiently and expeditiously as possible.
I second the recommendation. We all have experience, as I am sure the Minister of State and other Members of the House do, of people getting in touch with us who experience extraordinarily long delays in getting an initial decision on their application and then an appeal. The motion proposes 60 days or two months which should be long enough. It is extraordinarily unfair when people end up waiting between six and eight months for a decision. I have cases of this happening where people sought the carer's allowance, disability allowance and invalidity pension. These people are really sick but they have had to wait this length of time to hear the result of an appeal.
There is a sense in some respects that in pushing out the timeframe, the Government hopes for attrition. People have often said to me that the Government must hope 10% will drop out of the process due to getting fed up with the requests for extra information. People get exhausted by delays, particularly when ill and in receipt of an illness payment or where they have a serious disability. If a person gets a favourable decision at the end of an appeal, he or she must be paid anyway so there is a cost to the State. The recommendation is about timing and ensuring people receive a decent and efficient service, to which they are entitled, and are not made to wait for excessive periods for decisions to be made. The proposed timeframe is extremely reasonable. Two months is not a difficult target to meet. As Senator Mooney has pointed out, the recommendation contains the provision that when there are genuinely exceptional circumstances, the timeframe may be longer, but at least reasons must be given for doing so.
I support the recommendation. As Senator Power has said, any public representative who holds clinics or assists people with social welfare applications or applications for payments will inevitably have dealt with people who have been waiting for very lengthy periods for their appeal to be heard. Part of the problem is a communication failure between the appeals office and the person concerned or even between the social welfare office and the person concerned. I do not know how many times I have had to make representations in these cases. We are quite limited in what we can do. All we can do is make sure that a person's application has been properly looked at and that the officers have all the information they need. It is not our job to do their job. We just make sure that they have all the information.
I have found it frustrating at times when I have phoned the appeals office only to be told they are waiting on documentation, something that was not communicated to the individual. That is the reason a claim or appeal is held up. I commend the Minister on introducing the Intreo service which has some level of public interface, but it is not enough. The service has been rolled out and is a much improved service. Many people get very frustrated, however, when they go to the local social welfare office. They must queue up to find out information, but when they get to the counter they must deal with staff who are frustrated and under pressure. People do not get the information they need which leads to them feeling very distressed, and then they have no choice but to approach politicians about the matter. There is no privacy for them either. There is no real place, forum or space for them to go to and get the information they need. I am sure the Minister will agree that we must empower people and not have situations where people are forced to go to politicians. We must empower people in order that they can get the information they need from their local social welfare offices. Unfortunately, they cannot do so and then they phone the numbers provided which takes God knows how long to get through. When people do get through on the phone, they leave a message which goes into the black hole that is the answering service, one where 99% of messages are never answered. I took up this matter with a community welfare officer in Waterford. She told me that staff cannot respond to the messages because they do not have the time or resources to do so. That is the reason so many claims go to appeal.
It is also not communicated properly to people that they do not have to appeal directly and can call for a review of the decision instead. Such information would help people and should be made clear or put more simply to them. That is an option, but unless one understands it, the word "appeal" jumps out so people opt for an appeal and not for a review. Many improvements could be made in communicating that fact which in turn would improve the situation. The Minister has gone some way to change the system along those lines but a lot more must be done.
The logic behind this recommendation is correct. People should not have to wait such a long time to have an appeal heard. Some examples have been given of people having to wait 12 months or more for an appeal, which is an outrageous period to wait for a payment. Therefore, I support the recommendation.
I agree with the sentiment of the recommendation but I disagree for a number of reasons with stating a time. I have dealt with the appeals office and found on numerous occasions that the office was not waiting for documents from the client but it was the case that the Department of Social Welfare had not returned a file to the appeals office. The appeals office had written, I had been on to them about the matter, and they had also sent reminders to the Department. It is the process in the Department that needs to be tightened up.
The Minister has appointed a number of new appeals officers and I am sure the Minister of State will update us on what their appointment has done for the appeals system. If an appeal goes straight to the appeals office and the office feels the Department can deal with the case better than it can, the case is sent back for a review which is a much quicker option than an appeal. The problem is a lot of the time the right medical evidence is not submitted with medical application-based appeals. The delay is within the Department.
The Senators are right that we should communicate more, and let me explain why. It is okay if I ring up and the appeals office says it has not got the file back from the Department in Killarney, Galway or wherever the case may be, but the client should be told that the appeals office is still waiting for a file from the Department. It is the Department that must tighten up more than the appeals office. Will the Minister of State update Members on the impact of the appointment of new appeals officers on the length of time taken for appeals? I have found that some appeals have become a bit quicker to issue.
The Senator is probably correct that it is better to get a lot more knowledge out about the review option. The period laid out in the recommendation is not viable because it can take up to six weeks to organise an oral hearing and, therefore, a 60-day element is impractical.
We have a very flexible system because, at every stage, it is open to the client to give additional information. Where a strict time period operates, the appeals system normally operates only on the basis of the information that is supplied in the first instance. In our system we allow additional information to be submitted at every single stage, which is a much more flexible position. I would hate to lose that flexibility. On many occasions I have seen people benefit in the review from additional information that was provided rather than going back to the beginning again to submit a whole new application.
As many as 15 additional appeals officers have been appointed. I acknowledge that during the period from 2010 to early 2013 there was an unacceptable delay in the appeals process due to a dramatic and unprecedented increase in appeals numbers which placed considerable pressure on appeals officers. Prior to 2009, the average number of appeals received per year was in the region of 15,000. By 2012, the number of appeals received had more than doubled and peaked at 35,000.
The number of appeals currently being received remains high. In 2013, the social welfare appeals office received a total of 32,777 appeals, or the second highest annual number of appeals received since the office was established. However, significant effort and resources have been devoted to reforming and improving the appeals system. An extra 15 appeals officers have been appointed and ten former community welfare service appeals officers joined the appeals office in 2011, bringing the total number of appeals officers to 41.
Let me give examples of the improvements made. I know one can always build on those improvements and we all want the system to be as speedy and fair as possible. For example, the time taken for an appeal involving an oral hearing has dropped from 52.5 weeks in 2011 to 29 weeks at the end of October 2014, which is a reduction of nearly six months. The time taken for a summary decision has reduced from 25.1 weeks in 2011 to 21.6 weeks in 2014, and I can list further reductions for the Senators.
It must be remembered that the social welfare appeals mechanism operates on a statutory basis and social welfare appeals officers are required to be quasi-judicial in the performance of their functions. Certainly we would all like to hit the target of 60 days for many reasons. If it was to be done, the system would have to be reformed out of all recognition. I do not know whether one could continue to add additional information once the initial application was made. I am not proposing to accept the recommendation but I am committed to trying to improve the times further and to getting that information out better. For example, one does not necessarily always have to seek an appeal but a review which often proves as successful as a full appeal for a fraction of the time involved.
I thank the Senator whose points are well made. He understands the system well enough to realise that we probably cannot hit that target of 60 days for many reasons. However, we have to strive to improve the time element for applicants. I thank the Senator for his comments in respect of the Intreo offices. I have visited a number of those offices, where I have witnessed a much better service for the customer. All the information is available at one location. I expect to see a roll-out of further Intreo centres in the new year. The removal of the glass barriers in the reception area enables queries to be dealt with there and then. The Intreo offices in place are good but we need to expand the service around the country as quickly as possible. I thank the Senator for his positive comments in respect of the centres.
I thank the Minister of State for providing the information. I am somewhat reassured by his continuing commitment and that of the Department to try to reduce the appeal time. I am interested to know whether the appointment of the 15 new appeals officers is coming from within the Department or if they are new employees. I am aware that a public service embargo is in place. I ask the Minister of State to correct me if I am wrong but I understand from recent comments by the Minister for Public Expenditure and Reform that there has been a loosening of the public service embargo in the sense that where there is a real need within Departments it will be addressed. It would appear that if one is taking 15 people out of one area of the Department and moving them to another, one has to make up the gap. Perhaps he would clarify that issue.
It would be helpful if the Department's press office was to issue, say, quarterly updates of the nature the Minister of State has provided here to reassure the general populace. Irrespective of all the good work he has outlined - I will not be critical of it - why is it that there is still a continuing flow of people to constituency clinics who have a problem with the appeals process? Given what the Minister of State has said and the complexities surrounding the appeals process, to ensure fairness and equity, because, as he correctly pointed out there is a quasi-judicial aspect to this also, perhaps the issue is about communication. I do not have the answer but if there is some way of communicating to the general public about an issue which, on an individual basis, is probably very painful for people who are waiting in certain categories, it might help to assuage them in some way. Perhaps it could be done through a structure for Deputies and Senators. I thank the Minister of State for the information he has provided.
I always enjoy listening to the Senator's contributions because, invariably, I always learn something. Some of the staff are FÁS employees who have come in to the Department of Social Protection. Some of the additional 15 staff are from FÁS and some are from a reallocation within the Department. There is a great deal of reform taking place in the Department and staff are being deployed to pressure areas. We would certainly like to see the numbers reducing. The Intreo offices will have access to the public and will be in a better position to give information to the public. The Intreo offices will play a strong role in ensuring that people understand the process. There is always room for improvement and we have to strive to improve the service to the public. In fairness to the Tánaiste and Minister for Social Protection, Deputy Joan Burton, and the officials they have been doing their utmost to reduce the numbers. That is clear from some of the figures I have given in percentage terms. While progress has been made I am anxious that further progress be made. I will look at any avenue where we can help to improve that.
Recommendation No. 5 in the name of Senator David Cullinane and others is ruled out of order as it involves a potential charge on the Exchequer. Similarly, recommendation No. 6 in the name of Senator David Cullinane and others is ruled out of order.
I move recommendation No. 7:
In page 4, between lines 7 and 8, to insert the following:"Amendment of Social Welfare Consolidation Act 2005
3. Schedule 5 of the Social Welfare Consolidation Act 2005 is amended in paragraph 1(4) by deleting the words "Irish Water," (inserted by section 20 of the Social Welfare and Pensions Act 2014).".
The Government recently announced a more modest and affordable system for water charges. As part of this package, the Department of Social Protection will administer a new water conservation grant of €100. Arising from the revised charge structure which is simpler and more affordable, Irish Water will no longer require PPS numbers. As a consequence, there will no longer be a need for Irish Water to be listed as a specific body in Schedule 5 of the Social Welfare Consolidation Act 2005 for the purpose of using PPS numbers. Therefore, the only time householders will have to provide their PPS numbers is when registering for the €100 water conservation grant to the Department which is the official agency that issues the PPS numbers. This will allay many of the concerns that have been expressed on this matter.
I am afraid that has not allayed peoples' concerns as the Minister of State would have, noisily, heard last Wednesday when ten of thousands of people gathered outside Leinster House to voice their frustration in respect of water charges. He referred to the water conservation grant which this recommendation is about. This is not a conservation grant at all - let us be honest about it. Let us accept what this is - it was a partial climbdown by the Government in regard to the charge. On the one hand the Minister of State said the cost at €160 for an individual and €260 for a family will be reduced to €60 and €160 through the so-called water conservation grant. However, water conservation has gone out the window. While I disagree with SIPTU and Jack O'Connor's position on water charges, he was right when he said we have a bizarre situation where we are paying for the water we use but nobody is paying a penalty for the water that is lost in the system. That is what we have ended up with, a cap system. To call it a water conservation grant is nonsense. How does providing a grant of €100 conserve water? Will the Minister of State explain how that grant will save one single solitary drop of water? It does nothing of the sort.
This follows the complete mess made by the Government on water charges. It is trying to clean up the mess and do its best to allay people's fears but that has not happened. We have ended up with the convoluted system of a change on the one hand and a water conservation grant on the other and a relationship between the Department of Social Protection and Irish Water. It is all a complete mess of the Government's making. Our recommendation seeks to remove that element of it from the Bill because we are opposed to the charges. This makes a mockery of the notion that water charges were about conservation because it has been proven, given that the Government has capped the charge up to 2019, that it is about establishing the principle of the charge, getting the revenue in and getting people accustomed to paying for it.
The final point I wish to raise with the Minister of State is the issue of the bin charge waiver scheme in Waterford, which I raised earlier. I am sure it is not the only area that has had such a scheme in place. It was abolished at the last council meeting by Fianna Fáil and Fine Gael but not by Sinn Féin who voted against it. I want to set the record straight on that. People were given the same logic when charges for waste collection were first introduced, namely, that there would be a nominal fee that would be quite small but then the charges went up and up every year. We were told it was not about privatisation, rather it was about improving the service and that the State could not be a regulator and a provider of the service. All those excuses and arguments were made. The charge increased to a certain amount and all the local authorities withdrew from providing that service, the private operators came in and now I do not believe a single local authority in the State provides the service. It was privatised and the bin waiver scheme, which was in place to protect the vulnerable, has been abolished and now there is no protection for them. It was interesting that the chief executive office of Waterford City and County Council, Mr. Michael Walsh, when supporting the abolition of the waiver, asked why does the Department of Social Protection not have a bin waiver scheme for everybody, that it is its job and should not be the job of a local authority. The Minister of State might want to respond to Mr. Walsh on that. I saw that comment as a cop-out by the council. We can see the same is happening with the water conservation grant. That is a temporary measure - that is all it is. It is a con job on the people. I will be pressing this recommendation because I believe this is a complete mess for the Government and entirely of its own making. For that reason, I do not accept the Minister of State's response.
I support this recommendation as outlined by Senator Cullinane, The respected commentator in The Irish Times, Noel Whelan - I mean that sincerely as he is a very respected political commentator and I declare an interest in that I have known him for many years - wrote a column at the height of the Irish Water controversy when it first started some months back and outlined that I was the only Member of either House to have raised the issue of personal public service, PPS, numbers being required under the legislation. I am not boasting about the fact but just pointing out that it was something that the overwhelming majority of Members of both Houses and all parties did not pick up on at the time. I was somewhat taken aback by the fact that first, this was being introduced in a social welfare Bill and, second, that when I raised the issue in an exchange with the Minister of State's line Minister, Deputy Burton, it was pointed out to me that the main reason PPS numbers were being sought was to ensure the allowances that were to be given to children under the age of 18 would be accurately calculated. It seemed, on the face of it, a fair response if it was going to mean that households would be paying less and that such information was needed in that respect, but I was deeply uncomfortable about a semi-State agency - at that stage we were not sure exactly what the status of Irish Water would be - would have detailed and intimate information in order to provide this allowance. I was concerned, and I raise it again in the context of this recommendation, that there was real danger that Irish Water could sell on or could give third parties access to those numbers, even though the Minister assured that would not be the case. As it transpired the Data Protection Commissioner became very exercised about this issue, so much so that he raised serious concerns about it. That was the background and the context.
Like all public representatives I am lobbied and receive representations from a wide variety of both individuals and organisations but in all the time I have served in this House I have never received as many e-mails on the Irish Water issue as I have in the past three days. I stopped counting them at 2,500 e-mails and they are still pouring into my e-mail account. The same is the true for all Senators and particularly Senators because the issue is being addressed to Senators as this matter is coming before us later in the week. My initial reaction was that this was a concerted lobby from some vested interests but it is not because I have replied to some of these people. It is impossible to physically reply to all of them but I have replied to some who have raised particular issues about the Irish Water legislation. Some very sad cases of family circumstances have been outlined to me in those emails.
In the context of Senator Cullinane's recommendation about the deletion of Irish Water form this legislation, this is a matter that seems to have exercised the nation far more than any other issue of which I am aware. It is therefore incumbent on the Government to ensure there are no traces of Irish Water in a social welfare Bill.
It should take it out and get rid of it, in the same way as I believe it should get rid of Irish Water.
An issue was raised by my colleague and our environment spokesman, Deputy Barry Cowen, in the Dáil when he said that based on the information provided by the Minister, Deputy Kelly, last week, the water charges issue has been considerably more muddied because of the €100 conservation grant that will now be issued from the Minister of State's Department, as it means we still do not know how much net income will come in to Irish Water. The Minister, Deputy Kelly, was not able to provide that information. It is not within the Minister of State's brief to do so but I am anxious to know how this €100 grant will be implemented. What costs will be incurred on the Department for it, and will it even happen? I am not in any way trying to score a political point but rather reflecting a widespread view across the country when I say that the sooner Irish Water is done away with, the better this country will be as a result.
I call the Minister of State to reply. We should avoid the Irish Water issue in so far as we can because before this week is out, and perhaps some of next week, this House will be deluged with a debate on water services.
The Members will have a long-running conversation later in the week on Irish Water but I would say to Senator Mooney that the Department of Social Protection has considerable experience in paying people's entitlements and I have no doubt the professionalism and capability of those in the Department will result in that €100 grant being paid.
I repeat that as a consequence there will no longer be a need for Irish Water to be listed as a specified body in Schedule 5 of the Social Welfare Consolidation Act for the purpose of using the PPS number. I am sorry, I have a heavy cold, as Senators may have gathered. I know Noel Whelan also. I would not be a good friend of his but he ran with Eoin Ryan for Fianna Fáil in Dublin South East.
Yes. He should look forward because many people in Fianna Fáil ran in Dublin South East, and many candidates went on to be President, so he might not always be a columnist for The Irish Times. He may be in the Phoenix Park at some stage.
The €100 grant will assist people in the conservation measures and I hope it will be used for that purpose. I do not have much more to add because if I do that I will be getting into the Irish Water debate. I would say, however, and Senator Cullinane mentioned the bin charge waiver in Waterford at length, that I served on Dublin City Council from 1999 until I was elected to this House and we were able to maintain a bin waiver while providing the service. We lost the service because those in People Before Profit were intent on ensuring that nobody would pay for that service and it was no longer financially viable for Dublin City Council to carry it out. I believe it was an important service. If people had been more constructive in the anti-bin charge campaign, many more local authorities would still be providing the service and a waiver system would be in place. The outcome of that People Before Profit campaign has worsened the situation for many people across the State because local authorities provided a very good service but, unfortunately, the financial viability was removed by protestors for the sake of protesting, with the result that people were led up the garden path.
I will not go into the Irish Water debate-----
You are an outstanding Leas-Chathaoirleach who is very aware of the importance of Committee Stage in scrutinising legislation. I will not hold up the House at all on this issue. I asked one specific question about the water conservation grant. How will it conserve water?
I will use the water conservation grant to install water butts in my house. There are many ways to use it. The €100 will be paid to people as a water conservation grant. They can use it as a discount or as an aid in conserving water on their properties. There are many ways in which that can be done.
The Minister of State may be able to afford to use that €100 to invest in water conservation measures, but the vast majority of people will not. That is the reality. That is not what this is designed to be. If the Minister of State from the Labour Party is saying to people who genuinely cannot afford to pay water charges that the €100 could be spent on rainwater harvesting, it is a new dimension to the tragedy that is Irish Water.
We should try to avoid the general debate over water. The Senator will have ample time to discuss it. Neither the Minister of State nor Senator Cullinane should move down the rapids of the water debate now. This relates to a specific item in the Social Welfare Bill.
- Thomas Byrne
- Gerard Craughwell
- John Crown
- David Cullinane
- Terry Leyden
- Paschal Mooney
- Trevor Ó Clochartaigh
- Brian Ó Domhnaill
- Darragh O'Brien
- Averil Power
- Feargal Quinn
- Kathryn Reilly
- Mary White
- Diarmuid Wilson
- Ivana Bacik
- Terry Brennan
- Colm Burke
- Eamonn Coghlan
- Paul Coghlan
- Michael Comiskey
- Martin Conway
- Maurice Cummins
- Michael D'Arcy
- John Gilroy
- Aideen Hayden
- Imelda Henry
- Lorraine Higgins
- Caít Keane
- John Kelly
- Denis Landy
- Marie Moloney
- Mary Moran
- Tony Mulcahy
- Michael Mullins
- Hildegarde Naughton
- Catherine Noone
- Mary Ann O'Brien
- Marie Louise O'Donnell
- Susan O'Keeffe
- Pat O'Neill
- Jillian van Turnhout
- Katherine Zappone
I welcome the Tánaiste. We had a very interesting debate with the Minister of State prior to the vote. This discussion is going to be a continuation of that. I appreciate that the Tánaiste may not be up to speed on what was said earlier. In that context, a number of recommendations relating to section 3 were ruled out of order, which is fine. However, we engaged in a discussion on a number of issues. One of those relates to why recommendations or amendments are continually being ruled out of order. Another matter that arises is why we are dealing with recommendations rather than amendments in the context of the Bill before us. The question of Opposition Deputies and Senators being in a position to table recommendations or amendments to Money Bills should be considered in the context of political reform. Before he left, the Minister of State provided a commitment to the effect that he would have the matter examined.
Section 3 presented the Government with the opportunity to reverse many of the cuts it made previously. The Minister of State made an interesting point about an advisory group or commission that has been put in place to examine alternative budgets or pre-budget submissions. When we discuss the budget and the Finance and Social Welfare and Pensions Bills each year, I make the point that there should be much greater pre-budget scrutiny in the Dáil and Seanad. We end up debating the relevant issues after the fact, in other words, after the budget has been presented rather than beforehand. If we could consider all of the relevant issues prior to the budget's introduction, we could examine the impact of measures that were put in place in the past and, potentially, what might be contained in-----
There is not much evidence of that latitude, all I can hear are interruptions. The Leas-Chathaoirleach, when he was in the Chair, allowed for a proper and free-flowing debate.
When we seek to highlight such issues, namely, the need for proper pre-budget debates, we are informed that we should raise them when the legislation comes before the House. When we do that, we are informed that our amendments or recommendations have been ruled out of order. When are we to raise the issues? I would argue that this is the time to do so. The Social Welfare and Pensions (No. 2) Bill is currently before the House and it presented the Government the opportunity to make changes in respect of social welfare, which it has not done.
The first of the recommendations that were ruled out of order related to the respite care grant. We could have focused on any of the cuts made by the Government in recent years but the one to respite care grant is seen as being particularly cruel.
The cut to the respite care was seen as a particularly cruel cut on people who do a very good and very difficult job. Yet the Minister cut the respite care grant in the last budget. Through the amendment in this section we sought to overturn the cut to the respite care grant. That was one of the amendments we tabled.
I wish to speak about two other amendments on overpayments that were ruled out of order. That is a very important issue because as the Minister knows many people are in poverty. We set social welfare rates at the minimum amount of money people should be living on. I do not know if the Minister read the submission made to the Department by the round table discussion on social welfare law that was commissioned by the Community Law and Mediation Service. It made two recommendations. I will be brief on this because I accept we need to move on to the other amendments.
Its first recommendation was that section 13 which was amended in previous Social Welfare Bills be reformed through amending legislation and that at a minimum the previous position where no one is forced to live below the State's minimum level of basic income based on the supplementary welfare allowance rate of €186 be restored. As the Minister knows that is no longer the case because of changes made in the past.
For example in the case of a single person the allowed deduction amounts to €28 per week compared with €2 before the enactment of section 13. That means if the personal contribution of €30 per week for those on rent supplement is taken into account, a single person is expected to live on €130 a week if they have to make an overpayment. That is even below the supplementary welfare payment. The first recommendation is that we would deal with that.
The report's second recommendation called for the introduction of a statute of limitations. It recommended that a limitation period be introduced whereby the Department of Social Protection must act to recover an overpayment within a specified time period after which the Department is stopped from pursuing such a recovery process. It recommended a limitation period similar to that contained in the Statute of Limitations 1957, which is six years in the case recovery of a debt from the date on which it first becomes due. If this period is deemed too short it further recommended that the limitation period should not exceed 12 years which is the limitation period applicable to the enforcement of the judgment.
That covers the amendments that were ruled out of order. I am sure the Minister will accept that the Community Law and Mediation Service put a lot of work into this report. It made some interesting observations. If the Minister is not in a position to accept its recommendations this year, I hope she will consider them for future budgets.
I have a simple question. Why is the Minister retaining the references to Irish Water in the Social Welfare Consolidation Act 2005, which is referred to in the Social Welfare and Pensions (No. 2) Bill under the definitions in section 1, which specifies that the “Principal Act” means the Social Welfare Consolidation Act 2005? Why is the Minister leaving that in if it will have no relevance whatsoever? I do not understand the sense of leaving in references to Irish Water and the PPS numbers, a matter that the Minister and I discussed in the House at the time. As it is irrelevant, why is it not being taken out?
I will take the last point first. As the Senator is aware, the Government has announced a revised package regarding Irish Water. It is a much more modest and affordable system for water charges. It puts in place the potential for the vital investment that has to go into improving our water system, providing everybody with clean healthy water and providing for very significant capital investment for water treatment plants. I know many Senators are rightly very concerned about the environment. Raw sewage going into watercourses, rivers harbours and lakes is a national scandal. As Senators know, over the next ten years investment of approximately €10 billion is needed to address those issues. Irish Water affords a very good mechanism for doing that. Otherwise that necessary investment, as most Senators know, would need to come from education, health and other areas of expenditure, which are very dear to Senators' hearts.
Regarding the references to Irish Water and PPS numbers, with the new structure the PPS number is no longer required. It was only ever required for simple validation purposes, but that is no longer required and therefore it is not necessary to be there. The only time that householders will need to provide a PPS number is when and if they decide they wish to receive a water conservation grant, as is the case with all services from the Department of Social Protection and indeed with the Revenue Commissioners. As I am sure the Senator knows, a PPS number is required as the unique identifier for the person or household seeking a refund.
On a point of information-----
The Senator is well aware that, as I said in direct response to his question, the PPS number is no longer required by Irish Water. However, if and when people wish to apply for a water conservation grant as with other payments from the Department of Social Protection or interaction with the Revenue Commissioners and the tax authorities in general, they would of course use their PPS number - that is the person who is paying on behalf of the household and who has applied.
There was a question about the respite grant. The amount being spent on respite care was €752 million up to 2010 and that it will be almost €806 million in 2014, an increase of €53.9 million compared with when we came into office. That is an increase of 7.2%. As I am sure the Senator is aware, overall the number of caring recipients has increased from just over 76,000 in 2010 to almost 84,000 in 2014. This is an increase of 7,815 recipients or 10.3%. The number of respite care grants will have increased from 75,351 in 2010 to 88,710 in 2014, an increase of more than 13,000 or 17.7%. The Government is expending very significant additional resources on the respite care grant.
I have no desire to press the Minister on this. In the context of all the debate that has taken place, Senator Cullinane tabled an amendment seeking the deletion of references to Irish Water under the Social Welfare Consolidation Act 2005. If, as the Minister has pointed out, it is the Revenue Commissioners and her Department that will be dealing with PPS numbers, why is there a continuing reference to Irish Water in the legislation?
That is all I am asking. Why is it there? Take it out. If it is not being taken out, can the Tánaiste please explain to the public why it is being left in? All the Tánaiste is doing by leaving it in is raising more hares.
The Tánaiste did not address the point about the overpayments. It was presumably just an oversight, and I ask that she would come back to me on that issue and the report I cited.
To pick up on the previous discussion with Senator Mooney on this section, Irish Water is still referenced in the Bill and it is linked to the water conservation grant on which the Tánaiste spoke. I questioned the Minister of State on this and he was not able to respond or, if he did, it did not make any sense to me. How in God's name is this a water conservation grant? How is this about conservation at all? Perhaps the Tánaiste can explain to the citizens and the people why this €100 grant, as she is calling it, has anything to do with conservation. Can she explain to me how a single drop of water will be conserved by this grant being put in place?
We had a vote ten minutes ago to remove the power of Irish Water to hold and demand PPS numbers and the Government voted against that recommendation. The Seanad has not yet even seen the Water Services Bill. The Dáil has not passed it yet. We were giving the opportunity to the Government to go ahead - quickly - with the recommendation by Senator Cullinane. It has refused. We are assuming the Water Service Bill will pass through the Dáil unamended. We are assuming it will then come to the Seanad and that the Seanad will deal with it. I do not think the Seanad will deal with that Bill before Christmas. Perhaps we should come back on Report Stage on the PPS issue, simply to reverse what the Tánaiste did here. I compliment Senator Mooney. He was the only person in the Oireachtas to raise this issue at the time the legislation was going through. If we had people who did this on the Road Traffic Bill or other flawed legislation that has come from the Government, we would not be rushing everything before Christmas, as has happened. It is a very simple recommendation.
The Tánaiste should come back on Report Stage on this Bill. We are only on Committee Stage now. We are not dealing with Report Stage yet. Just delete it. Get it over and done with. Forget about the Water Services Bill for the time being. We will deal with that in due course. As I am sure the Tánaiste is aware, the Seanad is independent and not controlled by the Government. Senators are willing to co-operate on issues like this. We will support any recommendation she puts forward on this and urge the Tánaiste to bring forward such a recommendation.
To return to the issue of the overpayments, as the Senator is aware, because he has raised this issue on a number of occasions, if a person had an overpayment in the region of €1,500 and the recovery of the overpayment was restricted so that the net social welfare payment being made could not go below the supplementary welfare allowance rate, as is suggested in this particular recommendation by the Senator, this would result in such a debt being repaid over a period of 14 and a half years. In the case of a serious fraudulent debt, the Senator is in effect proposing that money that has been defrauded from social welfare to the serious harm of other social welfare recipients - people such as pensioners who rely on their social welfare income - would, in the case of a debt of €7,500, be repaid over a 72-year period, as it would not be possible to recover, as the Senator well knows, more than €2 a week.
I suggest to the Senator that the principle on which social welfare operates is that people make contributions out of hard-earned income through taxes and PRSI and they rely on the Department of Social Protection to ensure, as far as is possible, that this goes to the people for whom it is intended in the correct amount. Almost everyone who uses social protection claims only the correct amount, nothing more, nothing less. Almost all of the people we deal with are, thankfully, extremely honest. The Senator is suggesting that instead of recovering very significant losses, as we do now, at the rate of 15% of the individual's principal payment, and nothing else, we should revert to a situation of recovering fraudulent payments such as the €7,500 I have suggested over a 72-year period. If the other people living on the same road with someone who had been doing this discovered it, they would rightly feel that the person from whom the overpayment was being recovered was perhaps putting up two fingers to the people living beside them, people who work to pay their taxes and their PRSI or, in the case of people getting a social welfare payment, people who deal with 100% honesty with the Department. As the Senator is aware, almost everyone who receives social welfare deals with 100% honesty with the Department. I do not propose to accept the Senator's recommendation. We have had this discussion before. It is appropriate to make appropriate collections.
On the Irish Water issue, the Government announced a more modest and affordable system for water charges. As part of that package, the Department of Social Protection will be administering on behalf of the Department of the Environment, Community and Local Government the new water conservation grant of €100. Arising from that revised charging structure, which is simpler and more affordable, Irish Water no longer requires PPS numbers. I see the Senator nodding his head, so I think that is agreed.
As a consequence, there will no longer be a need for Irish Water to be listed as a specified body in Schedule 5 to the Social Welfare (Consolidation) Act for the purposes of using the PPS numbers. Therefore, the only time that a householder will have to provide his or her PPS number is when, and if, he or she is registering for the €100 water conservation grant to be paid through the Department of Social Protection. As I have said, the Department of Social Protection is the official agency, over a long period, for the issuance of PPS numbers and dealing with any other related matters. I am very confident that this will allay any concerns expressed on this matter.
There are a number of related changes that need to be borne in mind. Provision is being made for the supply of information by Irish Water to the Department of Social Protection for the purposes of the water conservation grant. My colleague, the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, is currently progressing the Water Services Bill 2014, which provides for all of the changes on Irish Water announced by the Government, through the Houses. As the Senators know, that legislation is before the Dáil and is due to come before this House before the end of this week. Section 11 of the Water Services Bill provides for the deletion of Irish Water as a body specified to use PPS numbers. Section 11 also provides that this change will come into operation by way of a commencement order to be made by the Minister for Social Protection in consultation with the Minister for the Environment, Community and Local Government.
The points I have raised on overpayments have been raised in the past and we will continue to raise them. I found the Tánaiste's response to be somewhat flippant and in stark contrast to the Minister of State's, who was quite engaging on the issues. The Tánaiste knows full well from previous discussions we have had on this that there is a clear distinction between those who are engaged in fraud and criminality and who are trying to defraud the social welfare system and situations in which genuine mistakes were made by the Department or individuals themselves resulting in overpayments. We are trying to be fair and to ensure there is a fair process. There are many people who, because of genuine mistakes, sometimes not of their doing, end up living below what is the minimum threshold because of the 15% reduction.
The final paragraph of the Community Law and Mediation report, which for me sums up the argument, reads:
This potential effect was flagged in the joint Community Law and Mediation-Free Legal Advice Centres submission in December 2012, which is referred to in the document. It further reads:
Based on our experience of dealing with clients who have received overpayment letters and have been subjected to deductions of 15%, and on the feedback of attendees at the roundtable, we submit that these cuts are indeed forcing people into destitution and poverty and are in clear breach of the Department's own threshold of a "basic minimum income" in the form of the [social welfare assistance rate].
Many participants at the roundtable, in particular those working with the Citizens Information Centres and the National Advocacy Service spoke of their first hand experience of the hardship caused to their clients as a direct result of the deduction of €28 from their basic payments. In many cases, the overpayments related to historic debts, some over 20 years old. Clients had received letters from the Department simply advising that the deduction of 15% would be made from the relevant payment and providing neither evidence as to how the debt arose nor the original decisions from Deciding Officers. In many cases, given the age of the debt clients could not recall the existence of the debt nor any details regarding the amount.This is the basis for the two recommendations, namely, that people not be allowed to fall below poverty levels and the introduction of a Statute of Limitations. I would go further. I agree with the Tánaiste that there are people who defraud the social welfare system. Those people will get no support from me and should be dealt with harshly because what they do impacts on people who genuinely need payments. I am speaking in this regard about people in respect of whom the Department might have made a mistake or who themselves may have made a genuine mistake. That clear distinction should be made. Instead, what is being provided for is a one-fits-all rule which I do not believe is fair.
I am not aware of any time restrictions in respect of Committee Stage contributions. We are not trying to hold up the Bill unnecessarily. The provision to allow Irish Water to demand PPS numbers was introduced by way of a social welfare Bill. In fairness to the Tánaiste's officials, they dealt very protectively and carefully with the PPS numbers. By all accounts, they were reluctant to provide them to Irish Water except when forced to by legislation, and even when they did so, they ensured certain protections were adhered to. I pay tribute to the Tánaiste's officials in that regard.
Notwithstanding the Water Services Bill, the Bill before us is the Social Welfare and Pensions (No. 2) Bill 2014. The Tánaiste could by way of amendment delete what has been provided for in this Bill. I urge that she do so, thereby immediately removing the power in relation to access by Irish Water to PPS numbers. There is considerable doubt about the Water Services Bill. I say that based on what is being said by Senators and in the media. Fianna Fáil calls for this change to be effected immediately.
I support my colleagues in that I believe there is a strong argument to be made for a Statute of Limitations and also consideration of the ability of people to pay. With regard to the question of clawbacks in respect of overpayments and so on, my guiding source in economic theory is the game of Monopoly. One of the cards one gets when playing Monopoly states: "Congratulations an error has been made in your favour by the income tax; collect €200." It does not say, "Bad luck, old bean. You've received a €200 overpayment; give it back at once", which seems to be the Government's attitude.
The scheme set out provides, as I am sure Senators are aware, for full notification, advice and discussion between people and the social welfare officers dealing with their cases. I am happy to say that most people are more than happy to enter into arrangements in respect of repayments.
The Sinn Féin proposal provides for the repayment of overpayments by way of only €2 per week. As I said earlier, almost everybody who deals with the social welfare system is 100% honest. However, in the case of those people who may be dishonest, recouping money from them on behalf of other people who need social welfare income at the rate of, as suggested by Senator Cullinane, €2 per week is a proposal that does a severe injustice to everyone who pays their tax and PRSI.
The proposal is also an insult to people such as pensioners in terms of the relatively modest amount they receive, which I wish as a country we had the resources to improve. We were able to partially restore the Christmas bonus by way of this year's budget. The reality of what Senator Cullinane is suggesting, even if from the best of motives, is that some people in the social welfare system would not get the increases they need or would go short because some people would be repaying significant sums of money at the rate of only €2 per week.
I move recommendation No. 8:
This amendment relates primarily to the pension scheme operated by Aer Lingus. I reserve the right to make a contribution later.
In page 4, between lines 21 and 22, to insert the following:“Amendment of Pensions Act 19904. The Pensions Act 1990 is amended by inserting a new section 48A as follows:“48A.A solvent firm shall not be allowed to close a defined benefit pension scheme except where the scheme has reached a minimum 90 per cent funding standard.".".
I thank my colleague, Senator Mooney, for moving the amendment. I have debated a number of these points with the Minister on a number of occasions, including during the debate on amendments tabled by me and Senator Power to the Social Welfare and Pensions Bill 2013.
Recommendation No. 8 provides that a solvent firm shall not be allowed to close a defined benefit scheme except where the scheme has reached a minimum 90% funding standard, which is the standard applied in other countries. The Tánaiste rejected a similar amendment to last year's Bill.
The Tánaiste will be aware of what has happened with regard to the Irish aviation superannuation scheme pension arrangements, that members of the Retired Aviation Service Association, RASA, are taking a six-week pay cut by way of a 2.53% levy per annum, that deferred members, many of whom the Tánaiste met and gave some hope to a couple of weeks ago, will be hit by 50% to 60% cuts to their pensions, and that current members have been bullied into an inferior pension scheme, all of which was agreed at the Aer Lingus EGM last week. The irony is that none of the 15,000 members of that scheme had an opportunity to vote on these arrangements.
The Tánaiste, Deputy Burton, is responsible for the introduction of single insolvencies and for providing profitable employers with the ability to shut down their pension schemes and wipe out any pension liabilities. She is also the Minister who, along with the Minister, Deputy Paschal Donohoe, and her constituency colleague, the Minister, Deputy Varadkar, presided over the doubling, by almost €750 million, of the deficit in the IAS scheme over two years in that she provided the Dublin Airport Authority and Aer Lingus with the roadmap that allowed them to wriggle out of their responsibilities. The Government and previous Governments also had a part of play in that regard. The Tánaiste will probably refer in this regard to the 2009 Act. I have tabled an amendment in relation to that Act because the usual response of the Tánaiste and her officials on this issue is to cite that Act. I am attempting to fix the situation. I thought the Tánaiste was at one stage going to try to fix this, and in that regard met the deferred members in particular.
I am very interested to hear what she said to them. They were under the impression she would do something. Everybody knew there would be an element of cuts, but the Minister and her officials seems to have met these people and gone through proposed amendments with them to no particular end. Nobody considers it fair that people who are retiring next year will have 50% of their pension cut. It would not be done to a member of this Government, that is for sure. It would not be done to the Minister or any of her predecessors, but it is fine to do it to people who have given 30 or 40 years of service to these companies, one of which was a semi-State entity.
Unfortunately, what is being done in respect of this particular scheme will have an impact on many other pension schemes in this country. In fact, I have already seen evidence of private pension schemes using the provisions the Minister has brought forward to unpick their defined benefit schemes. There is a bonanza for employers because even though schemes were under pressure during the financial crisis, with double digit losses in investment, nobody is talking about that fact that in the past three or four years - not specifically with Irish equities but internationally, in the case of standard management funds - there has been double digit growth. That is all forgotten because there is an opportunity for employers - in this instance, Aer Lingus and the Dublin Airport Authority - to say that €500 million has been wiped out from the fund and it is the people who were compelled to join the scheme - they were obliged to do so; it was not an option - who must carry the can for it. As I said, I am aware of other private schemes which are already being wound down, but at least in those instances, people are being given the option to get out of the scheme. Defined benefit schemes are no longer what people thought they were and there will not be a single one left five years from now because of what the Minister has done.
Recommendation No. 9 proposes that the 1990 Act be amended by inserting the following provision:
An appeals mechanism for pension scheme members shall be put in place where trustees have decided upon reduced benefits for members, and such appeals mechanism shall ensure that any category of such pension scheme members have not been unfairly treated in any restructuring arrangement.This is an eminently sensible proposal given that the expert panel which was set up did not take the views of people such as retired staff and deferred beneficiaries into account or have them around the table. Employees will always have an additional ability to negotiate because they have industrial relations tools at their disposal. On the other hand, people who have left a particular company and are yet to draw down their pension or those who already are drawing it down do not have the same ability. In that context, recommendation No. 9 proposes the establishment of a proper appeals mechanism that will take their concerns into account.
Our objective in recommendations Nos. 11 to 14, inclusive, is to offer the Minister another option in the form of scaled reductions in benefits in order to avoid another situation such as that which has arisen in Aer Lingus. Recommendations Nos. 13 and 14 relate specifically to the IAS scheme. My view is that it is not useful in general to table proposals relating, in this instance, to a specific pension scheme. However, it was the Minister's constituency colleague, the Minister for Health, Deputy Leo Varadkar, in his previous Ministry, who brought forward the State Airports (Shannon Group) Bill 2014 which, for the first time in the history of the State, made provision in law to change a private pension scheme. The Minister, Deputy Burton, agreed to that at Cabinet. The irony of all ironies was that she sent a back bench Labour Party Member, Deputy Brendan Ryan, to talk to the current Minister for Transport, Tourism and Sport, Deputy Paschal Donohoe, on the day he was signing the commencement orders on the pretence that she was even remotely concerned about what was happening. Of course, we all know now that she led people up the garden path and did not intend to do anything for them. Our recommendation No. 13 proposes to amend the 1998 Act by inserting the following provision:
The IAS Scheme shall not be allowed to close its pension scheme except where the scheme has reached a minimum 90 per cent funding standard.Unfortunately, this provision probably comes too late, because the Minister and her Cabinet colleagues - the Minister, Deputy Donohoe, certainly - circumvented the whole process by moving forward with the signing of the commencement orders in advance of our dealing with the legislation before us today.
Recommendation No. 14 proposes the amendment of the 1998 Act by the introduction of the following provision:
The IAS Scheme shall not be allowed to close its pension scheme except where all pension scheme members are treated in an equitable manner on the winding up of that Scheme.We realise that what is happening here is effectively not a wind-down, but this recommendation was tabled before the latest developments. Nobody can say that what has happened here is fair. I did not expect in a million years that the Government could come up with €700 million to plug the hole in the pension fund, but I likewise did not expect that such drastic cuts would be brought about in such an arbitrary manner to people's promised standard of living. Members of the scheme who were due to receive pensions of €16,000 or €17,000 per annum - not the €60,000 or €70,000 the Minister will be able to draw down after the next general election should she not succeed in being returned to the Dáil, but approximately one quarter of it - will see their payment reduced to €8,000 or €9,000. That is not fair but, unfortunately, the Minister did nothing to try to change it. I expected more from her. If she checks the Official Report she will see that more than two years ago, during the debate in this House on the Social Welfare and Pensions Bill which introduced the change in the priority order and brought in the single insolvency provision, I made specific reference to the Aer Lingus scheme. I flagged my concern at that time that we would end up in precisely this scenario.
I will be pressing each of these recommendations. I hope the Minister might, at this very late stage, take them on board. This issue is affecting people in Dublin West in the same way as it is affecting people in Dublin North. I am sure she has been contacted by constituents and, indeed, by people from all over the country. To be fair, some of her party colleagues did their best to try to convince her and the Minister for Transport, Tourism and Sport to take action. There is no point in her coming in here and saying she could not do anything else; of course she could have done something else. What she has done is shown those, including, in particular, some of her Fine Gael colleagues in government, who might want to sell certain State assets into the future exactly how they can wipe off a deficit in a pension scheme, increase the value of that company and sell it off.
We have been raising this matter for nearly two years and it is quite depressing to see what is happening to the 15,000 members of this scheme. These are normal working people - not people with massive pensions - who paid into the scheme all their lives and gave great service to the company for which they worked. The Minister and her colleague, Deputy Donohoe, have taken the legs from under them. She has a final opportunity now, before the cuts commence on 1 January, to do the decent thing by rowing back from this. I have debated these issues with the Minister before and I could talk about them all afternoon. I hope she will see some way of addressing the matter at this late stage. I do not understand why she spent time meeting groups from these schemes when she apparently had no intention of doing anything. I do not get it, but perhaps she can explain. I appeal to my colleagues on the Government side to do something decent before the end of the year by supporting these recommendations.
We all recognise that there is a serious situation regarding pensions in this country. We are facing a type of cliff having wasted the National Pensions Reserve Fund on paying off the debts of the German and French banks. I wonder who was responsible for the administration of the Aer Lingus pension fund; I am not sure whether anybody has asked that question. How did this situation arise and why did nobody see it coming? There is an absolute moral imperative on Government to safeguard the interests of employees in respect of pension funds. Aer Lingus should never have been taken out of national ownership. Its privatisation was a disastrous mistake and not in the interests of the people.
Like colleagues, I have had a large volume of correspondence from people about this issue, including from one man who is facing retirement with a 60% cut in his pension. It is unimaginable that any Government, particularly one with a Labour Party component, would stand over a cut of that magnitude in people's retirement income. Retirement in and of itself involves a fairly drastic cutback in income.
However, to have that sliced by 60% is appalling. I cannot see any objection to an appeals mechanism. That is part of natural justice, but I can understand why the Government is afraid of it. It is because it is grotesquely wrong and unfair to treat pensioners in this manner, and I imagine that any independently appointed appeals officer would find as such.
Recommendation No. 14 asks that employees be treated in an equitable manner. What has Government got against people being treated in an equitable manner? I will leave it at that.
It is helpful for the Minister, and they are grouped anyway. Before I deal with the deferred pension issue and the Irish airlines superannuation scheme, IASS, I want to commend the Minister for reaching an agreement with the former Waterford Crystal workers. I know Kevin Mulvey was involved as well in terms of trying to get a resolution for those workers. This was a case of a double insolvency.
What we are talking about in terms of the last discussion are single insolvencies but regarding the double insolvency, we have now transposed the EU directive, which should have been done in the past, and we have a resolution for the former Waterford Crystal workers, which was unanimously adopted by the workers themselves. I want to put on the record my appreciation for the work the Minister has done in this area but full praise must go to the workers themselves who, unfortunately, were forced to take a court case, not relating to this Government but the previous Government. They had no choice but to take the State to court.
I wonder if the European Court of Justice had not ruled the way it did would the workers have got the settlement awarded to them. Unfortunately, they were forced to take the State to court but they should never have been forced to do so. There are lessons to be learned from that in terms of the way we deal with pension schemes. I commended the Minister for the Waterford Crystal payout, which is good news for the workers, but the Minister would appreciate the desperate situation in which deferred members of the IASS are being left, not just those in Aer Lingus. Deferred members of defined benefit schemes are vulnerable generally, given their exclusion from the industrial relations process, and the current legislation offers grossly inadequate protections.
I support any amendment which ensures that the deferred members are not impacted on disproportionately in any scheme restructuring. There has to be a fair way to restructure the scheme. I have no difficulty with an associated appeals mechanism - that is only right and appropriate - and also enabling participation of representatives of deferred members in such appeals. We have had lengthy debates on this issue in the past. Last year we debated it also, and there have been lengthy debates in the Dáil as well.
Deputy Ó Snodaigh's office put a great deal of effort into coming up with an alternative scheme which we felt would be a fair way to deal with this issue. In terms of our priority order and what we believed should be introduced to govern the restructuring or wind-up of deferred benefit schemes, first, a PRSI contributions record that is sufficient to ensure eligibility for the full State pension should be purchased from the Social Insurance Fund for every scheme member who has not attained such a record. Second, provision should be made for 100% of pensioners' benefits below €12,000, excluding post-retirement increases, which deals with the point raised by Senator O'Brien that people on pensions of €12,000 will get much less. That is despicable.
Third, active and deferred members under the age of 55 years should have disbursed to them the lower of 50% or €6,000 of their benefits or, if they are aged over 55 years, the lower of 75% or €9,000, excluding post-retirement increases. Fourth, we made a suggestion regarding 75% of pensioners' benefits exceeding the initial €12,000 up to a maximum of €30,000, excluding post-retirement increases. We also suggested that 75% of active and deferred members' benefits exceeding the initial sum up to a maximum of €30,000, excluding post-retirement increases, be the fifth round, as it were. The sixth round entailed the remaining benefits for pensioners, excluding post-retirement increases. The seventh round entailed the active and deferred members' remaining benefits, and the eight related to the remaining pensioners and active and deferred members.
This is a complicated subject. There is no easy way out of it. There is a responsibility on companies to make sure that pensions are solvent. We cannot have a situation where the State has to pick up the tab every time a pension scheme goes into insolvency. We know that in the case of double insolvencies there is an EU directive which has now been transposed, but there is an obligation on companies to make sure that these schemes are profitable.
The effect of the priority order I have outlined to the Minister that Sinn Féin has proposed would ensure a much fairer distribution of funds for everyone in the event of a wind-up or restructuring, regardless of whether a pensioner was in payment, a deferred member or an active member, and it would offer greater protection to deferred members of, for example, the Irish airlines superannuation scheme or any of the other schemes in a similar position.
I urge the Minister to consider changing the Bill. We wanted a separate social welfare and pensions Bill to arise out of this Bill to deal with the issue in a more substantial way. I accept it is complicated and there are no easy solutions but the proposal we have made, the details of which I have read into the record, is in recommendation No. 10 which, unfortunately, was ruled out of order. However, I have made my point. I will conclude by commending the Government for doing the right thing at long last for the former Waterford Crystal workers.
I will begin by addressing recommendation No. 8, which is the crux of the issue in terms of the IASS and other schemes, namely, the single insolvency situation. As Senator O'Brien said, it stems from the legislation the Minister brought through the House which we opposed at the time, namely, the Social Welfare Bill. The OECD has made a recommendation that a defined benefit pension scheme should not be allowed close unless it has received a minimum of 90% funding standard. We put forward this amendment last year as well in anticipation of what would happen with the IASS. The Minister rejected it at that stage but I hope that given the consultations she has had with IASS members and the correspondence she has been receiving, and meeting with the members personally, she will come to this debate with a more open mind.
Whatever about a double insolvency where both the scheme and the company are insolvent, to be able to close down a scheme in a single solvency situation, against the advice of the OECD, which recommends that there be 90% funding, is wrong. There is no minimum funding requirement in our legislation, and we are seeing the impact of that now.
I agree with the comments made earlier. The IASS is the first scheme that has been hit by this but the template set out in the Minister's legislation, and in the Shannon Airport Bill brought forward by the Minister for transport, provides for future savage cuts on members of other pension schemes. That is a dangerous departure. It is extraordinarily unfair. In terms of the IASS scheme it is unfair to pensioners who are losing six weeks pay every year. That is a phenomenal cut more savage than any of the social welfare cuts or other cuts brought before this House. Six weeks pay is a huge amount for people on a pension to lose when they are already on a reduced income.
Active and deferred members are losing 50% to 60% of their pension. That is extraordinary, particularly for people who are on low income. These are not well-off pensioners. Many of them are on very modest incomes who worked for a long time and made contributions. Many of the active and deferred members were persuaded to leave the company and assist with its restructuring on the basis that their pension benefits would be preserved, but now they find out that that promise was not worth anything and that they will lose 50% or 60% of their pension. I know the Minister met some of the individuals involved. I hope she will show some heart and do something about this. It is within her power. I do not know how the Minister or anybody else could listen to their story and not be moved by it.
It is absolutely incredible that any Government, but particularly one including the Labour Party, would preside over such a savage cut to people's pension entitlements. These are people for whom it is too late to make up the income elsewhere. Many active members are within months of reaching retirement age and their pensions are being cut by 60%. This is extraordinarily cruel and unfair.
Senator Cullinane mentioned the resolution to the Waterford Crystal matter and I welcome the fact that this issue has finally been resolved. We now have a bizarre situation whereby the Waterford Crystal workers, who were in a double insolvency, are now better off than Irish airline superannuation scheme, IASS, members. The Waterford Crystal workers had to fight through the courts to get their entitlements and reach this position, but after all of this they are better off than the IASS members. The Minister should pause and reflect on this. Does this mean the only way IASS members will get their entitlements is to take similar legal action against the State? I was at the Retired Aviation Staff Association, RASA, AGM last week where this was spoken about as one of the options on the table. It will take legal advice on taking on the State on this issue. The direct facts of the Waterford Crystal case are different, in that it was a double insolvency rather than a single insolvency and referred to active and deferred members rather than pensioners, but many of the principles are the same and there is EU protection for pensioners in cross-border schemes. Has the Minister taken this into account in the wake of the resolution of the Waterford Crystal issue?
As Senator O'Brien stated, ideally we would like to see the Government row back on this and see the injustice in cutting people's pensions so severely, particularly in insolvency situations. If this is not possible and the Minister is not willing to implement the OECD recommendation for the IASS scheme to be 90% funded, we have tabled fairer alternatives with regard to the distribution of pension benefits which would ensure fairer protection for people. In recommendation No. 11, we set out criteria which would apply instead and would give people fairer protection. It would amend the Social Welfare and Pensions (No. 2) Act introduced last year to ensure the reduction in preserved benefits for members with accrued service in excess of 20 years would be made as follows: where the annual amount is €12,000 or less no reduction would be made as this is a very modest pension; where the annual amount is greater than €12,000 but less than €60,000, the reduction in such an amount would not exceed 10%; and where the annual amount is €60,000 or more, the reduction would not exceed 20%. We believe this would be much fairer. It would be in line with how much money people actually have. It would provide stronger protection for those on the lowest incomes. The recommendation also provides that where the reduction to which I referred would result in the annual amount being reduced to less than €12,000, it would be reduced to €12,000; and where the reduction to an annual amount of €60,000 or more would result in it being reduced to less than €54,000, the reduction would operate to reduce it to €54,000. This is based on ensuring greater fairness. It would be much fairer than what the Minister has in place.
The other recommendation deals with an appeals process, which is an important aspect of natural justice under our Constitution. People have an ability to appeal decisions which affect them and should not have to go to the courts to do so. We should provide in our procedures an open and fair appeals process, and recommendation No. 9 sets out to do so. I second the remarks made by Senator O'Brien in respect of each of these recommendations and I hope, that having consulted with the members of the IASS scheme and listened to how these changes affect them personally and the great unfairness being introduced, the Minister will act before it is too late and have a proper debate with us, find a fairer solution and find a way which does not leave people on low incomes losing 60% of their pension.
I agree again with my colleagues in the Opposition on this issue. Last week, when the Minister, Deputy Donohoe, was in the House I articulated very same points which I will make now. I hate having to repeat myself, but unfortunately it seems to be necessary. I will vote with the Government on the recommendations but I assume and hope the Minister is listening because it is an injustice of an appalling nature. People were persuaded by their line managers to take early retirement and were presented with paperwork outlining their initial entitlements and their entitlements when they reached retirement age. However, the trustees messed up and pensions were cut.
I have no problem whatsoever if a pension or deferred pension is cut, so long as it is fair and equal to everybody. However, where somebody with a pension sees it reduced by 10% but a deferred pensioner sees a reduction of 60%, this is not what I espouse in politics, and I certainly do not think it is what the Labour Party espouses in politics either. The sad reality is many of these deferred pensioners voted for Fine Gael and the Labour Party in the last general election and they feel betrayed and let down. I have no doubt the Minister has heard the human side of this. I was in my office when Senator O'Brien spoke on this issue and I felt compelled to come down and support him on it. It is not too late. The Minister is the Tánaiste of the country and she can make this right if she wants to and I hope she does.
The Pensions Act does not prevent the outcome desired in the proposed recommendations Nos. 11 and 12. It is the trustees who decide how the provisions are implemented and this is the critical issue. I was a bit surprised, listening in particular to the representatives of Fianna Fáil. I noticed Senator O'Brien wanted to exclude the 2009 Act-----
-----for whom I have great sympathy. I have sympathy for anybody suffering any reduction in their pension entitlements. It is a very great difficulty for many of the people involved. As has been said, when we had the discussion last year we set out to seek to protect in so far as possible defined benefit pension schemes, many of which have been in severe deficit for reasons which may have to do with the performance of equities, general disturbances in financial markets in recent years and other reasons which may have to do with the way in which particular pension funds are managed and organised. I heard in some of the contributions suggestions that people were offered deals on their pensions, as Senator Conway stated, to leave the company. The issue is whether these deals were funded. This is the critical problem with regard to this. As people referenced, unfortunately the deficit involved in this particular pension scheme is just under €800 million.
With regard to defined benefit pension schemes funding in general, in 1997 there were 2,242 defined benefit pension schemes which were subject to the funding standard. At the end of 2007, the number had dropped to 1,319. At the end of 2013, the number of schemes was 890. I want to be clear that 96% of the schemes either meet the funding standard or have submitted a funding proposal to the Pensions Board and the remaining schemes are in dialogue with the Pensions Board.
Part of the reason for the legislation which was passed last year was to seek to get those pension funds over the line to protect to the maximum extent possible the very important pension benefits which members of the fund expected to get. I reiterate that the changes in the structure set out in last year's Act was that anyone with a pension of under €12,000 would have 100% protection. In addition, most people who are in a defined benefit scheme would also have a social insurance contribution record which would entitle them to a State pension valued in the region of €12,000 to €14,000. Therefore, the protected payment, between the defined benefit scheme and the State contributory retirement pension, would amount to something above €24,000. The actuarial information relating to Ireland shows that the average figure is €11,000 in defined benefits or in many cases is significantly below that amount.
The second element of the scheme relates to people with an income from a pension of between €12,000 and €60,000, where the reduction would be in the range of 10%, if necessary. For people with a pension of above €60,000, the reduction would be 20% or up to 20%, as necessary, to get the scheme back.
I accept Senator Cullinane's comments and approval of the Waterford Glass scheme. It is ironic to listen to the Fianna Fáil Senators because Waterford Glass, which was the iconic industry of the south east, became insolvent and came to an end in 2009. Unfortunately, the pension fund was insolvent. The then Fianna Fáil Government-----
As was their right the workers took a case to the European courts which vindicated their entitlements. This time last year I set out to see if a mediated negotiation could be achieved. The details of the negotiation will show the various arrangements which the Waterford Glass workers accepted. I thank the chairperson of the Labour Relations Commission, Mr. Kieran Mulvey, for his work in acting as the agreed nominee for my proposal and he was accepted by the unions. I congratulate the workers and all concerned for the achievement of a mediated outcome. If we could have more mediated outcomes in disputes rather than recourse to the courts, it would probably save the State very significant costs and in many cases would provide for a better outcome.
In the case of the Waterford Glass workers there were no funds. The company was insolvent and so too the pension fund to a significant degree. The purpose of the 2013 Act was to get as many as possible defined benefit pension schemes over the line with a view to providing the maximum protection for the members of those schemes. The previous Government abandoned the pension funding standard so there was no standard. This is all fact-----
-----and the Senator can read the history of what happened. I wish this never had to be and that all of these defined benefit schemes would have been significantly and healthily funded, but the purpose of the Act was to get those schemes over the line in so far as possible.
The Irish aviation superannuation scheme has 5,000 currently retired members and approximately 5,000 workers. An important element is that the companies and the employment that those companies provide currently to 5,000 people is of some significance so that the continuation of that employment is a significant element and also the protection of the existing pensioners is a significant element. I acknowledge the great difficulty for the people who are deferred members.
I refer to recommendation No. 10 proposed by Sinn Féin. I had a similar discussion with Deputy Ó Snodaigh. The recommendation proposes an alternative wind-up priority order and to give first priority to awarding the full State retirement pension. This legislation deals with the distribution of an occupational defined pension scheme fund. I reiterate and stress that there is no direct connection between the contributions made to or benefits received from an occupational defined benefit scheme in the private sector and the actual payment of the State pension. The provisions contained in this legislation have no impact whatsoever on any entitlement to the State pension or to the PRSI contributory system. The contributory principle whereby there is a direct link between social insurance contributions made and a resulting entitlement to a varying range of benefits and pensions that are payable as a right is an underlying principle of Ireland's pay related social insurance scheme. The contributory State pension is paid from the Social Insurance Fund to any individual from the age of 66 who meets the qualifying criteria on his or her State and occupational pensions. It is important to recognise, however, that the benefits of current and former employees who have made contributions to the schemes are also protected. That is why my priority with regard to pensions and payment was to ensure the greatest level of protection was afforded to those on low to moderate pensions. Therefore, it was decided to maintain 100% priority for pensions and payment of up to €12,000 a year and to protect pensions up to this level in the event of the restructuring of scheme benefits. The determination of this benchmark was informed by pension data which indicated that the median pension in the private sector defined benefit schemes was €11,000. This approach facilitates the rebalancing of the distribution of scheme resources between pensioners and current and former scheme members while providing full protection for pensions below €12,000. I emphasise that this is the way the 2013 legislation operates.
Section 50 of the Pensions Act was reviewed in 2009 by the previous Fianna Fáil Government and again in 2013. I have just set out the changes to the 2013 Act. The changes to 2009 essentially provide for the sharing of the risk of scheme under-funding across all scheme members, and this was the basis of the 2009 Act. The issue of how these changes might be applied is a matter for the trustees of the pension schemes.
I just want to repeat what I said at the beginning. The Pensions Act does not prevent the action desired in the proposals and in recommendations Nos. 11 and 12. The trustees decide how provisions are actually implemented. I want to stress that this is a matter for the trustees and I believe Members should give this point consideration.
The provisions in section 50 of the Act do not differentiate between active and deferred scheme members as these members are participating in a scheme during periods of employment where members accumulate pension rights. It is a matter for the trustees of a scheme, who are required under trust law to act in the best interests of all scheme beneficiaries, to deliver a fair and reasonable solution which will secure the sustainability of the pension scheme. It would not be the practice to make a change to the Pensions Act, as Senator O'Brien correctly acknowledged, because of a difficulty in a particular scheme, unless it was apparent that it applied across schemes generally. Some 11% of defined benefit pension schemes had used this provision by the end of 2013 to reduce scheme benefits. Most of these adjustments to scheme benefits applied to post-retirement increases in pension benefits.
As I said, I appreciate very much the difficulties for people in regard to this pension scheme. Unfortunately, as was said, the level of the deficit in this particular scheme is extremely high and the members, deferred and active, have had to deal with proposals which were put forward, and which, in the Act and in pension law, are put forward by the trustees of the scheme.
The Tánaiste has responded as I thought she would, so there is no surprise there. I did not necessarily come here for a lesson on this. I appreciate it is not an easy job that the Tánaiste has to do but she did not answer some of the fundamental questions I asked. She met deferred members with her officials. At that time, I understand, there were discussions around an additional payment of about €54 million. They assumed the Tánaiste was going to do something and she did not.
I actually agree with the Tánaiste on the 2009 Act. However, the reality is that, in this regard, we are proposing an amendment that would change that.
It is an issue. The Tánaiste and Minister for Social Protection is very good at filibustering when she wants to. What she will do is read out a script and go on and on but she will not answer the specific questions that were put to her. Then, when I get a chance to respond to the Tánaiste, she is gone. I know she is the Tánaiste and she may have other engagements. The Minister of State, Deputy Humphreys, who is now in the House, being from Dublin will have a fair idea what is being done to this cohort of people. We are giving the Government an opportunity to rectify it. The Minister of State's party leader does not seem to want to know, which is fine. However, it will not stop here.
I was baffled, listening to the Tánaiste, Deputy Burton, nearly trying to take credit for what happened with the Waterford Crystal workers. The Waterford Crystal workers had to go to Europe. All the Government did was accept a judgment in Europe and it put an extra levy on other defined benefit schemes to pay money that the European Court said was due, and rightly so, to the members of Waterford Crystal. She did not do anything about it. Let us be straight about this. There is no point in her coming in here to say: "Isn't the Government great? Look what we have done for Waterford Crystal." It did nothing for Waterford Crystal. By the way, when it had a chance to do something, it brought about single insolvencies. Waterford Crystal was double insolvent and single insolvent. Does the House know how much money Aer Lingus has on reserve? It has nearly €800 million in cash. Now, it is being given an added bonus of nearly €400 million and perhaps up to €500 million that it has been able to walk away from.
I want to move towards a vote on these recommendations. I thank Senator Conway for his positive remarks in this regard and all my colleagues have been supportive because they see this as an injustice. I did not politicise this at the start but, unfortunately, the Minister did so in her response to me. I am not surprised because she does that a lot and it is part of her modus operandi, which is fine. As I said to the Tánaiste, no one is going to touch her pension of €60,000, €70,000, €80,000 or whatever she gets after the next general election. There are people in this case on €20,000 who are losing €8,000. That is worth talking about. This is not the end and we will continue to fight in this regard for the rights of these workers. I guarantee my colleagues that, in two or three years time, this will happen to a raft of other pension arrangements, given the legislation the Government has passed in the Seanad and the Dáil.
I will be brief as we want to push this matter to a vote. I am sorry the Tánaiste is not here to engage with us but I appreciate the Minister of State, Deputy Humphreys, has come back to the House. While I do not know if it was deliberate, in her brief remarks before she left, the Tánaiste completely missed the point we were trying to make when she said it was a matter for the trustees to decide what the individual distribution is between the active and defined members. Of course that is the case, but they can only decide within the legislative framework that has been put in place. As we proposed in our recommendations, the OECD recommendation is that, in a single insolvency situation, where the company is still profitable despite difficulties in a scheme, that scheme should not be allowed to fold unless it is 90% funded. It was a legislative decision of this Government in the Social Welfare Bill last year not to give effect to that and to bring in legislation where, in a single insolvency situation, a profitable company can opt to fold its pension scheme and, in doing so, there is no protection for the members.
Again, we accept that the trustees are operating within the system but what we are proposing in these amendments is that, at least, we would ensure through legislation there is a minimum level of protection and that the distribution is fairer. I do not understand how anybody could possibly think it is fair for somebody to lose 60% of their pension. We have debated this issue so many different times over the past year. I know there is sympathy among some of the individual Members on the Government side because they have also been contacted by people affected by it. However, in all of the debates we have had, and on the amendments we have put forward to successive Bills in the past 18 months, nobody is able to tell me, and the Tánaiste did not tell me before she left, how it could possibly be fair for somebody on a €20,000 pension to lose €8,000 of that pension. That is shocking and is a direct result of the legislation.
At a superficial level, it is a decision of the trustees, but it is the decision of the trustees acting within the legislative framework the Government has put in place. If the legislative framework were otherwise, the decision would be otherwise, because certain options would be off the table. If they had to protect people according to the minimum protections we have set out here and ensure fairer distribution and fairer protection, then the decision would have to be otherwise. That is the simple fact of the matter.
I was hoping the Tánaiste would respond more directly to the specific recommendations we have tabled instead of just dismissing them and saying the decision has been made by the trustees. That is an abdication of responsibility. As we have made clear in several debates on this issue, we accept there are difficulties with the scheme and that there is a funding problem. This is accepted by Senator O'Brien and Senator Conway, a Government Member who has left the House in disgust at the fact the Tánaiste did not stay-----
I am sorry, a Chathaoirleach. I am sure the record will reflect Senator Conway's remarks. I am sure there are others on the Government side who, like Senator Conway, believe this is wrong. What we are asking them to do is to stand with us on these amendments, do the right thing and do what is fair and just. They should ask themselves how they would feel if they or anyone in their family on a small pension was to have half of that pension stripped away from them within a month of retiring, and with no opportunity to make up that income.
It is wrong, it is a direct result of this legislation and it is not too late to change it.
I cannot let Senator O'Brien away with a comment that this Government did nothing for Waterford Crystal workers. Yes, there was a European Court judgment, but the Government entered negotiations with the unions and the workers, rather than having that go to court and making a decision on it at that point. Some €178 million was provided by the Government for the pensions of Waterford Crystal-----
-----so it is inaccurate to say that this Government has not done anything. It has acted in concert with the workers and the union and Mr. Mulvey must be complimented for his work in reaching an agreement between the Government and the workers.
I must disagree. I was listening outside and thought the Tánaiste answered the questions that were put forward comprehensively. I know the Senator is anxious to press the motion, so I will allow that to happen. I do not propose to accept the recommendation.
- Sean Barrett
- Thomas Byrne
- Gerard Craughwell
- John Crown
- David Cullinane
- Mark Daly
- Terry Leyden
- Marc MacSharry
- Paschal Mooney
- David Norris
- Darragh O'Brien
- Marie Louise O'Donnell
- Denis O'Donovan
- Trevor Ó Clochartaigh
- Brian Ó Domhnaill
- Averil Power
- Feargal Quinn
- Kathryn Reilly
- Jillian van Turnhout
- Mary White
- Diarmuid Wilson
- Ivana Bacik
- Terry Brennan
- Colm Burke
- Eamonn Coghlan
- Paul Coghlan
- Michael Comiskey
- Martin Conway
- Maurice Cummins
- Michael D'Arcy
- John Gilroy
- Aideen Hayden
- Imelda Henry
- Lorraine Higgins
- Caít Keane
- John Kelly
- Denis Landy
- Marie Moloney
- Mary Moran
- Michael Mullins
- Hildegarde Naughton
- Catherine Noone
- Susan O'Keeffe
- Pat O'Neill
- John Whelan
- Katherine Zappone