Paschal Mooney (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Cathaoirleach for including this matter on the Commencement list and the Minister of State for taking this debate. I was informed by the Department of Social Protection that neither the Tánaiste nor the Minister of State, Deputy Kevin Humphreys, was available this morning, so I am particularly grateful that the Minister of State, Deputy Deenihan, is present instead.

The matter is self-explanatory. Community support groups are doing invaluable work, but a decision seemingly taken in recent weeks has been causing them some consternation. I have been in contact with groups in my county of Leitrim. I know of an example in County Mayo that my colleague, Deputy Calleary, mentioned in the Lower House, that being, Killala. The Department's decision not to incorporate the increase in the minimum wage, which becomes effective on 1 January, in the annual allocations will have an adverse financial impact on community support groups, which struggle for money normally and rely to a large extent on fund-raising to pursue their valuable activities.

Childhood Days is a special needs group in Drumshanbo. It does extraordinarily good work with severely handicapped children. It provides a wonderful service in our hometown and is open to everyone in the country and the wider catchment area. Like other support groups, it raises funds and receives State allocations. It was the first to raise the red flag with me regarding this issue. When it attended a meeting in Mayo of similar support groups a few weeks ago, word came through from Pobal that the imminent increase in the minimum wage to €9.15 would not be absorbed.

I appreciate that a significant number of people employed in community support services are paid more than the minimum wage, but there are those who are not because of the nature of their work. I was disappointed to learn through Deputy Calleary's raising of the issue in the Lower House that the Department's response was that this had never been the case. I queried that with the support groups, which assured me that increases had been incorporated in their allocations since 2006. Obviously, there is some distance between what the Department and the support groups are saying. I hope that the Minister of State will clarify, as I have raised this issue with the Department in the past 24 hours.

Overall, this is an opportunity to raise an important matter and express our solidarity with the support groups. I hope that the Department will not leave them swinging in the wind and that, if the support groups find themselves in financial difficulty after the implementation of the increase, there will be a positive response from the Department, under whose aegis they fall.

Jimmy Deenihan (Kerry North-West Limerick, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Senator Mooney for raising this matter. I am taking this Commencement matter on behalf of my colleague, the Minister of State at the Department of Social Protection, Deputy Kevin Humphreys.

Senators will be aware of the many community companies that provide services across the country. The Department of Social Protection supports service provision through a number of programmes and schemes. The community services programme, CSP, only supports community companies that operate on a community business or social enterprise model. Companies supported by the CSP generate and use income from the services they provide to pay staff, meet overhead costs and to contribute to future development. The CSP provides a contribution to the wage cost on the basis that the services are not fully self-financing or the cost of provision would be prohibitive on users.

Today there are 398 active contracts in place with community companies, representing commitments from the Department of Social Protection of €42 million per annum. The programme directly supports 2,110 full-time positions. Of these positions, a financial contribution of €32,000 per annum is made to support the employment of managers - 312 at last count. Funds are also provided as a contribution to employing people in some 1,800 full-time equivalent positions. The Department estimates that some 2,800 people are employed across these companies with direct CSP support. Another 1,100 people are employed in these companies without public funding support. Additionally, the companies provide some 1,500 work placements under CE, the rural social scheme and Tús. These companies are valuable to the social fabric of the country and provide very good quality services, particularly in poorer urban areas and rural villages where services are few and far between.

In recent days, a number of service providers on contract to the community services programme raised queries about the value of grants in 2016. Since the CSP became operational in 2006, it has helped companies to move from a situation where the minimum wage was paid to a position today where 60% of employees are paid above this level. The Department of Social Protection is committed to working with the remaining companies to work towards paying a reasonable wage. The resurgent economy will support this move. A core requirement of the programme is that service providers generate non-public revenue from their operations by the sale of goods, charging fees for services delivered or fundraising. Companies in contract with CSP must be a not-for-profit, social enterprise or community business in nature. That does not mean that they should not aspire to make reasonable returns from their activities that allow for a good wage to be paid. I recognise that this is a challenge, but there is a commitment to work towards achieving it. CSP funding is expressed as a fixed annual contribution towards the costs of employing a specified number of full-time equivalent positions and, in the case of 312 contracts, a manager position. The current value of contribution is €19,033 per full-time equivalent and €32,000 per management position annually. The CSP operates very clearly on the basis that it provides "a contribution only” to offset the wage costs of service provision. It is entirely a matter for each service provider to set its own wage levels.

An analysis of the June 2015 returns from the companies indicated that 45% of full-time equivalents were paid the minimum wage, contrary to the requirements of the programme to pay the local pay rate; 10% were paid above the proposed living wage of €11.50 per hour; and the remaining 45% were paid between these ranges. The development of the programme and the companies in recent years has ensured that the majority of companies do not continue to operate with a low-pay model. I commend that commitment and achievement. The Department of Social Protection is working with Pobal to put in place arrangements that will allow companies to apply in a structured manner to access short-term financial support if that is needed to deal with the issues identified in recent days. Companies will be advised of the arrangements which are being prepared early in the new year.

Paschal Mooney (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am grateful to the Minister of State. Like myself, he will be aware from his long experience that when it comes to Commencement motions, it is not so much about the devil being in the detail, but it is usually the last two paragraphs that give the real meat and drink of any of these replies. I am particularly grateful that the Minister of State has addressed the core of the issue, in that the Department is now working with Pobal to put arrangements in place for anybody who needs financial support in the context of the increase in the minimum wage, which is to be welcomed. I should have stated on the record that I unequivocally welcome the increase in the minimum wage and I am sure that, like myself, the Minister of State, Deputy Deenihan, would wish it were more and that it would come closer to the living wage of €11.50. Can I take it that in the context of the remarks contained in the last line of the second last paragraph, "short-term financial support if that is needed to deal with the issues identified in recent days" really means the issues we are talking about, that a concern has been expressed that they may not be able to meet their financial requirements?

Jimmy Deenihan (Kerry North-West Limerick, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Senator Mooney for raising this matter. A number of companies were in contact with me about it in recent days, so I am delighted to be here just to clarify that position. That is my understanding of the response I have given here today to Senator Mooney's motion. That is my interpretation, namely, that companies that have a need will be able to work with the Department in resolving issues if they have them.