Enda Kenny (Mayo, Fine Gael)
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Question 137: To ask the Tánaiste and Minister for Health and Children the context in which the foster care allowance, the property of foster parents, was merged with the orphan's allowance payable to and the property of the child; if this merger took place contrary to legal advice that both payments had different functions; and if she will make a statement on the matter. [37325/05]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The 1995 child care regulations provide that "A Health Board shall pay foster parents in respect of any child placed with them in accordance with these Regulation an allowance of not less than such amount as may from time to time be specified by the Minister". Sections 109(2) and 151(2) of the Social Welfare Consolidation Act 1993 provide that the orphan's contributory allowance and the orphan's non-contributory pension, respectively, "be paid to some other person for the benefit of the orphan" if the Minister thinks it fit. The orphan's payments are normally paid to the guardian of the orphan. This is usually the person with whom the orphan is normally resident and who is responsible for the care of the orphan. The orphan's payment is therefore considered to be the property of the foster parent and is not considered to be the property of the child.

Paragraph 5.42 of the 2001 report of the working group on foster care recommended that "Orphan's Allowance and Pensions should not be paid in respect of children in respect of whom foster care allowances are being paid". The working group considered it was not appropriate that both the orphan's payment and the foster care allowance be paid in respect of the same child, given that a fundamental feature of the foster care placement is that contact between the child and his or her family is maintained, and also as the group was recommending an increase in the foster care allowance to ensure that the cost of looking after a foster child would be adequately covered. Until 2001, children who were orphaned could receive orphan's payments from the Department of Social and Family Affairs and foster care allowance payments from the health boards if such children had been taken into care by the health boards and placed in foster care. It became apparent that many foster parents, who were claiming foster care allowance but were unaware of their entitlement to the orphan's payment from the Department of Social and Family Affairs, were not in receipt of their full entitlements. Under new arrangements which were introduced in August 2001, the orphan's payment ceased to be paid directly to foster carers; instead, the Department of Social and Family Affairs transferred the relevant moneys to the former health boards in respect of, and for the benefit of, the foster child. The former health boards combined the orphan's payment with the foster care allowance to make a total payment to the foster carer.

After legal concerns were expressed about the new scheme, the Department of Health and Children referred the matter to the Attorney General for the appointment of senior counsel and the examination of the matter. The legal opinion subsequently received by the Department indicated that the scheme was not in contravention of the statutory or regulatory framework governing foster care allowances or orphan's payment or pension. A working group comprising representatives from the two relevant Departments was established in July 2002 to examine certain difficulties with the scheme and to make recommendations with a view to streamlining arrangements. The group recommended an amendment to the social welfare legislation to disqualify from receipt of orphan's payment children in respect of whom foster care allowance is payable. An amendment effecting the change in operation of the allowance scheme was agreed by the Minister, Deputy Coughlan, and now forms part of the Social Welfare (Miscellaneous Provisions) Act 2003. It should be noted that there is no financial loss to the recipients under the new arrangements.