Bernard Durkan (Kildare North, Fine Gael)
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70. To ask the Tánaiste and Minister for Social Protection how provision can be made to address any issues arising from cutbacks forced upon her Department arising from the memorandum of understanding she inherited, with particular reference to families, adults and children with special needs; and if she will make a statement on the matter. [33632/15]

Bernard Durkan (Kildare North, Fine Gael)
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72. To ask the Tánaiste and Minister for Social Protection the extent to which she has examined the overall social welfare budget, with a view to identifying those areas and persons whose payments were most severely impacted on during the economic downturn; the extent to which she expects to be in a position to address these issues in future years; and if she will make a statement on the matter. [33634/15]

Joan Burton (Dublin West, Labour)
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I propose to take Questions Nos. 70 and 72 together.

Throughout the crisis, this Government protected core weekly welfare rates and maintained a very strong social welfare safety net. ESRI research has showed that, unlike the position in other countries, income inequality has fallen in Ireland in recent years, largely because of the overall maintenance of the welfare system.

Social transfers play a crucial role in redistributing resources to those most in need. In 2013 (the most recent data available), social transfers (excluding pensions) reduced the at-risk-of poverty rate from 38.4 per cent to 15.2 per cent, thereby lifting almost a quarter of the Irish population out of income poverty. This represents a poverty reduction effect of 60.4%. Ireland is the best performing EU country in reducing poverty through social transfers (excluding pensions).

Social impact assessment is an evidence-based methodology to estimate the likely distributive effects of policy proposals on poverty and social inequality, including the impact on family types, life cycle groups and gender.

The Department published integrated social impact assessments of Budgets 2013, 2014 and 2015 (using the ESRI SWITCH model) which included the main welfare and tax measures. The analysis for 2015 found that, for the first time since the recession, budgetary policy resulted in an increase in average household incomes of 0.7 per cent (equivalent of €6 per week). The distributive impact varied according to the component measures. Welfare increases favoured lower income households, while tax reductions were more beneficial to middle and higher income groups.

One of the key objectives of Budget 2015 was to assist unemployed families to return to work.

I introduced the new Back to Work Family Dividend scheme, which enables long-term unemployed jobseekers with children who leave welfare to return to work to retain the child-related portion of their social welfare payment on a tapered basis over two years. This includes One Parent Family Payment recipients who similarly go back into the workforce.

The Dividend will help increase the pace of the progress we are making in helping people back to work, thereby reducing poverty. It will help boost the recovery, reduce welfare expenditure in the long-run, and, most importantly, help the families in question to build a better financial future for themselves.

The Budget also provided for the expansion of JobsPlus to provide subsidies to employers to recruit and employ an additional 3,000 long-term unemployed jobseekers. This scheme has proven to be particularly successful with the longer-term unemployed (i.e. unemployed for more than two years.)

I was also pleased to be in the position to increase Child Benefit from €130 to €135 per month, which will benefit over 611,000 households with children. This helps all families with children but also has the additional benefit for unemployed families in that it is work neutral as it is retained in full when they return to the workforce.

I also announced a number of welfare initiatives which would benefit pensioners, carers and people with disabilities who are in receipt of a welfare payment. These initiatives included the re-introduction of a Christmas Bonus and an increase in the Living Alone Allowance.

The Christmas Bonus was abolished by the previous Government in 2009. I was pleased to be in the position to partially restore the Bonus last year. A bonus of 25% was paid in the first week of December to long-term welfare recipients including all pensioners, people with disabilities, carers and long-term jobseekers at a cost of €65 million in recognition of the position of vulnerable households.

I also increased the Living Alone Allowance by €1.30 per week from January, bringing the rate up from €7.70 to €9 for pensioners and people with disabilities. The Living Alone Allowance is a payment made to pensioners and people with disabilities who live alone and was last increased in 1996.

Looking ahead to Budget 2016, the Government’s Spring Statement, published last April, stated that“On the basis of present estimates, Budget 2016 will include a package within the range of €1.2 billion to €1.5 billion, to invest in services, support employment and boost growth potential while still maintaining fiscal prudence.”

The Government has decided that this ‘fiscal space’ will be split evenly between taxes and expenditure. The expenditure component, of up to €750 million, will have to address public sector pay demands, as well as capital and current expenditure. It is within this context that deliberations for Budget 2016 will be considered.

I held my annual Pre-Budget Forum on 3 July, during which I listened to the views and recommendations of almost 40 community and voluntary groups in relation to the their priorities for the upcoming Budget. The National Economic Dialogue held later that month was also a valuable contribution to the overall budgetary process. The scale and composition of the 2016 DSP Budget package is currently under consideration and will be announced on October 13.