Dáil Éireann - Volume 428 - 24 March, 1993
Social Welfare Bill, 1993: Second Stage (Resumed).
The following motion was moved by the Minister for Social Welfare on Tuesday, 23 March 1993:
That the Bill be now read a Second Time.
Debate resumed on amendment No. 1:
1. To delete all words after “That” and substitute the following:
“Dáil Éireann deploring:
(1) the inadequacy of the increases provided and the long delay in their implementation,
 (2) the failure to reverse the social welfare cuts introduced in 1992 which have caused such widespread hardship,
(3) the decision to withdraw unemployment assistance from students and school leavers which will penalise a substantial number of young people.
(4) the lack of progress towards integration of the tax and social welfare system, declines to give a second reading to the Bill.”
—(Deputy De Rossa.)
Éamon Ó Cuív Éamon Ó Cuív
Éamon Ó Cuív: Aréir bhí mé ag caint i dtaobh na social employment schemes a bhfuil muintir an iarthair ag baint an oiread sin leasa astu. Last night I referred to the social employment schemes which have been so successful in the west. These schemes give a good indication of people's willingness to work provided work is available. I have always believed that at times we have a rather Victorian attitude towards our social welfare system — this goes back a long way. We tell people who receive social welfare that they must be available for work and we tell people who work as a self-employed that very strict penalties will be imposed on them if they try to evade paying tax. I know that the Minister has made great strides in this area and is endeavouring to deal with the anomalies which exist. I should like to see the introduction of a family income supplement scheme for the self-employed. This supplement could be based on the previous year's tax declaration and paid to the self-employed so long as they did not enter the PAYE system. This issue needs to be addressed in view of changing work patterns and the availability of work.
In regard to the question of making work available for people when they require it, the position of third level students has to be taken into account. I have been surprised by some of the remarks made by people in regard to this issue. Their comments clearly show a lack of understanding as to who was gaining  under the present regulations. In my experience the situation was as follows. I will refer first to the position of a third level student from Galway who was receiving a grant and whose parents were on social welfare. If he applied for social welfare benefit during the summer months he was means tested and, depending on his parents' income, he would receive a maximum of £27 per week. Second, I wish to refer to the position of a student who did not come from a university town and whose parents were well off. If that person stayed in the university town during the summer months — in other words, did not reside with his parents — and his parents' income made him ineligible to receive a third level grant, he could receive full unemployment assistance and in some cases a supplementary allowance for rent. Surely the purpose of our social welfare system is to direct resources to those people who are in greatest need. It is a total contradiction in this scenario that those people who are least well off are at more of a disadvantage than those who are better off. Therefore, the system had to be changed to ensure that our resources are directed to those in greatest need.
Reference is often made to the futility of making payments, particularly to young people, without giving them the opportunity to work. The Minister has stated clearly that if no work is available the payments will be made, but that it is his intention to make work available for young people. When I was in college there was a movement among students to do voluntary work during the summer months. I believe most young people would grasp the opportunity to get involved in community work during the summer months as long as they received payment for it. The notion of making community work available is a positive step in the right direction, and I hope the Minister, in drawing up the scheme, will make it attractive to students. This concept has much to offer. I am disappointed that instead of putting forward proposals on how the resources can be directed towards those in greatest need and ensure that useful work is carried out, the Opposition  are criticising the proposals in this respect. I am convinced that the vast bulk of young people and communities at large regard this as a good idea which needs much development and ironing out and which has much to recommend it.
I wish to refer briefly to our tax and social welfare systems. A question has to be raised regarding the overlapping of our tax and social welfare codes. The overlapping of the income limits for family income supplement and the thresholds or exemption limits for tax is anomalous. This overlapping means that a person could receive family income supplement during the same week as he pays tax. This anomaly has to be addressed. I know it is basically a tax issue, but in view of the overlap I hope this nettle will be grasped by the Minister for Social Welfare during the next few years. It means that as income goes up there is no increase in take home pay.
Another matter which has to be sorted out between the Department of Social Welfare and Revenue is the criteria used in deciding certain cases. In the Social Welfare code cohabiting couples are treated as if they were married, whereas under the tax code a couple must be legally married before they get the benefit of the tax free allowance. In the case of a cohabiting couple where one is working, the other is not entitled to claim social welfare benefits because the income of the working partner will be taken into account. On the other hand, the working partner cannot claim a tax free allowance in respect of the partner who is not working. That kind of anomaly must be dealt with.
I recently came across a sad case involving a grandparent who had looked after a young child from birth. The child is now aged ten or 12. The grandparent was in receipt of a widow's pension and of a child dependant allowance from the Department of Social Welfare. There was also a small income of £400 or £500 a year from self-employment. The Department of Social Welfare had no problem in paying the child dependant allowance to the grandparent, but the tax authorities would not recognise, for tax  exemption purposes, the child as being dependent on the grandparent without legal custody. As a consequence, because of the very low exemption limit for widows, the income was taxable and a small amount of tax had to be paid. That is a crazy anomaly which should be eliminated. In such circumstances it is wrong that tax should have to be paid.
In certain cases people have to wait up to three months for a means test and the final decision regarding eligibility for unemployment assistance. The Minister might consider carrying out a preliminary examination based on self-declaration of income and on documentary evidence such as the P. 45. An applicant for unemployment assistance who passed such a test should be paid immediately, pending verification of entitlement in a full means test. Such a system would not cost anything. Where people are waiting a long time for a decision on their application for unemployment assistance, they are generally paid by the community welfare officer. It would be simpler to make conditional payments of unemployment assistance by the means I suggest, with provision for recoupment of any overpayment following the decision. This would be better than the current system.
I welcome the change in the carer's allowance. To the outsider it looks as if the rate has increased slightly. It is much more significant because the allowance has moved from the short term to the long term rate. This will make a great difference in many cases, particularly in rural areas. Pensioners often lost their free electricity allowance and free television licence because there was a son or daughter living at home in receipt of unemployment assistance. These sons and daughters were also acting effectively as carers, but if they transferred from unemployment assistance to the carer's allowance the rate of payment dropped by more than the value of the free electricity allowance and the free television licence. They could not declare themselves as carers because of the consequent loss. That anomaly has been removed. Such people will be able to transfer to the carer's allowance and will  not have to declare themselves as available for work. The old people will be able to retain their entitlement to free electricity and free television licence, which is so important. That is a small but very significant change which I welcome.
Some years ago the Minister introduced a provision whereby the lump sum received by a pensioner from the sale of a place of residence would not be means tested. That provision was widely welcomed. It meant that if a nest egg was put away by somebody moving to a smaller house or into a home, it would not be means tested for social welfare purposes. The Minister should do something similar in regard to redundancy lump sum payments. Many people who are made redundant do not get alternative employment during the 15 months when they are in receipt of unemployment benefit. Then they are means tested for unemployment assistance. Those who have used the lump sum wisely by putting it into the bank are penalised at the rate of 10 per cent on the capital sum. That rate is usually higher than will be paid by the bank for the money on deposit. I suggest that this is encouraging people not to save this money but to spend it. The exemption of redundancy payments from means testing would encourage people to hold onto the money and to use it as a nest egg. Currently people feel they would be penalised if they do not spend the money.
I refer to the need for a direct debit payment scheme in respect of essential services. I should like to see a voluntary scheme of this kind introduced as quickly as possible. It would mean that people would not have to worry about putting money aside for council rents or electricity bills. Obviously this would be the choice of the client, but it is important that the service should be available.
There is a long delay in dealing with appeals. The Minister should consider devising a system for dealing in a summary way with appeals which will obviously not be successful. The client would get a quick answer. There should be a preliminary examination of appeals and where it is decided that there is no  case the client should be informed, without having to wait three or four months. I accept that in other cases a more thorough examination has to take place.
Molaim go leor atá sa Bhille seo. Tá plé le déanamh fós faoi agus bheadh súil agam le hathbhreithniú iomlán ar an gcóras leasa shóisialaigh le linn na trí nó ceithre bliana a bheas an Rialtas seo i gcumhacht.
Mrs. Doyle Mrs. Doyle
Mrs. Doyle: I wish to share my time with my colleague, Deputy Kenny. In the limited time available to me I would like to concentrate on two areas that I do not think have been touched on by other contributors. I wish to add my voice to those who raised certain issues and urge the Minister, if possible, to take them on board.
First, I would be pleased if the Minister, or the Minister of State, would consider the ongoing difficulties resulting from the lack of social welfare payments to widowers as distinct from widows under the social welfare code. The Minister will be aware of the ever increasing number of cases of widowers who feel discriminated against under the social welfare code, particularly those with young children who are struggling to keep the family together, perhaps hold down a job and ensure that the children are not affected anymore than they have been by the loss of a mother. There are many well documented cases. I appeal to the Minister to take a personal interest in discrimination against widowers in the context of the lack of a widowers pension.
The Minister should look at the ongoing difficulties of pensioners who have mixed or intermittent insurance contributions going back to 1954. A man in my constituency in the mid-fifties joined Wexford County Council and was temporary for the first nine months before his appointment was made permanent. During those nine months he was paying a full PRSI contribution and subsequently went on the public service rate. Now he is working in the private sector and when he retires in seven years time he will only have 13 years contributions  but they will be reckoned back to the mid-fifties when he started in employment and had nine months at the full PRSI rate or stamp rate at the time. There are many anomalies for pensioners because of mixed and intermittent contributions. Great hardship is caused to elderly people who have worked most of their lifetime here and maybe some years abroad. The Minister should resolve the anomalies that still exist as a matter of urgency.
The Minister should look again at the whole concept of the carer's allowance which has been improved nominally in the budget. Apart from the justice of rewarding carers for the job that virtually no one else could do there are actually economic reasons for the State to reward them properly for doing that job. Carers looking after elderly or very infirm people are saving the State hundreds of pounds each week, money the State would otherwise have to pay to keep these infirm and elderly people in our institutions at £400, £500 or £600 a week which is the going rate. To quibble over whether to give them £70 or £58 or £59 a week is nonsense; it makes no sense in not recognising the work they do and it makes no economic sense as far as the State is concerned. I make those three points in passing as I feel very strongly about them, because I want to go to two other matters that have not been touched on.
I would ask the Minister to look at the ongoing difficulty being experienced by share fishermen under the social welfare code. I represent a maritime county. Indeed, there are dozens of maritime counties where fishing is a very important industry, particularly in some of our more remote and peripheral regions. If the Single Market in looking after the peripheries, is to mean anything, it means we support our remote fishing communities. Share fishermen, as defined in the McLoughlin judgment in 1986, are self-employed; they are no longer employees of their skipper or the boat owner. As a result major problems have arisen with regard to their entitlements under the social welfare code.
 The Minister should look at the system operating in other jurisdictions and amend the social welfare code. We need a special category for share fishermen, virtually all of whom do not fish from December to February because of the weather. There is enforced idleness there and, because of the history of difficulty with their PRSI contributions, particularly since the McLoughlin judgment, they are not entitled to unemployment benefit, they cannot prove their entitlement to unemployment assistance, get medical cards or get a reduction in their rent. They have all sorts of mortgage repayment problems. I can show the Minister a file I have on Wexford share fishermen alone with regard to the problems they have had, particularly since the appalling storms of the winter of 1989 when Kilmore Quay was devastated and many boats wrecked. Countless families would have been hungry but for the local parish collections and the local St. Vincent de Paul Society. Indeed, the national St. Vincent de Paul Society came to Wexford to support our fishing families when the social welfare system could not because of the way the code is formulated. Countless families are hungry and miserable for several months during the winter. It was ten weeks this winter; we had a very stormy December, January and February and the fishermen got back to sea sometime around the second week in February. There were virtually no payments to these fishermen who have worked hard all their lives to eke out a living in remote rural communities. I appeal to the Minister not to let another winter come before sorting out this problem. There have been public meetings at Kilmore Quay and in other maritime constituencies and yet we have failed to resolve this problem under the social welfare code.
The Minister recently met the Irish Fishermen's Organisation to discuss this general situation. It has been particularly difficult since last year's clarification in the High Court of the position of share fishermen in relation to PRSI. Many options were discussed when the Minister met the IFO. He met the chairman, Mr.  Joe Maddock, and the general secretary, Mr. Frank Doyle, to discuss this issue. The Irish Fishermen's Organisation needs a sub-committee to look after the interests of share fishermen specifically because there are divided loyalties among the executive there between the skippers and the share fishermen which are causing problems. The Minister wanted companies to be set up around each boat and the share fishermen to be paid as employees of those limited companies. Apparently that is unacceptable to the fishing industry for various reasons.
However, other options can be considered. The share fishermen could be allowed full benefits for the 7.7 per cent class A employee contribution and those benefits regarded as part of the individual's taxable income. The Minister, apparently, was not enthusiastic about that but it seems a very reasonable option. The upper limit could be set for the period during which short term benefits could be claimed during the year, for example, 12 to 16 weeks. That is another option that could be employed by amending the social welfare code. The Minister could consider allowing the lower limit of benefit to be claimed without a time limit or — I prefer this option — a special fishermen's PRSI contribution could be established which would qualify for full PRSI benefits as happens share fishermen in the UK. Share fishermen in the United Kingdom will be paying £7.75 per week from 1 April for what they call an insurance stamp. The system is being changed there. The fishermen will now be issued a bill every 13 weeks in arrears and their first payment will be made at the end of June. The fishermen in the UK will have 28 days to pay their insurance contributions to stay in benefit and to protect them and their families during bad weather or at times when there is no fishing. With quota restrictions in fishing, bad weather is not the only reason fishermen are forced off the seas. Often if a particular species has been fished to its quota in any year the fishermen have no more work. This problem gets no airing  in social welfare debates but there are thousands of families around our coast suffering misery every winter because of difficulties in the operation of the social welfare code for share fishermen.
I would like to raise another point in response to the Minister's reference to work return supports. In view of the major problems with the numbers unemployed, the tragedy for the families of those unemployed, particularly second generation unemployed and the sub culture that is now creeping particularly into bigger urban areas where children have not known their parents or grandparents ever to work, will the Minister consider the creation of district service companies as part of the scheme of work return supports? These are new concepts which help those who have been on the dole queues for a long time to use their talents and work their way back into full employment. I suggest that the Minister look specifically at well documented proposals for these district service companies. Their legal structures, their management and staffing have all been put on record over the years and they remove a blockage to employment creation. A person who is long term unemployed is losing skills rapidly and is rapidly losing even the ability to motivate himself to work. There are major problems in the tax code relating to the incentive to work, but I will not dwell on those because I do not have time.
At the moment if one wants part-time or short term work done in any area — perhaps engineering, painting, gardening or help on the land, in a pub or in a shop — one virtually cannot get that work done without having to resort to the black economy. One cannot take a person off the live register for short term or part-time work because of the bureaucratic difficulties experienced by such a person in trying to get back into the social welfare system once the work is completed.
There is a great deal of work to be done here and there are hundreds of thousands unemployed, yet apparently, because of bureaucratic complications in the tax and social welfare codes, we cannot marry  those who want to work with the work that has to be done.
District service companies, which would be private limited companies and would be formed in all major urban areas, would ensure that those who are willing to work and join the companies voluntarily receive each week a minimum payment equivalent to their social welfare rate. The companies would market the skills of the local unemployed on strict commercial terms. Those who employed people through a district service company would benefit in that the money spent on their work would be tax deductible. That would be an incentive for employers to come out of the black economy and use district service companies. As individuals who registed with the district service companies set up in each exchange area increased their workload and found an increased demand for their work they would slowly be able to work themselves off the unemployment register and towards a full-time job, having developed their skills or having acquired new skills. This system would benefit the unemployed and the community. Society at large would benefit from a reduction in the huge number of unemployed, particularly in the urban areas, who cannot get themselves off the dole queues because of bureaucratic restictions and because of the length of time they are unemployed, which effectively results in a loss of skills and a loss of ability to motivate themselves to work.
Time does not allow me to develop my very strong views on district service companies. I ask the Minister and the Minister of State to examine this concept as part of the work return supports referred to by the Minister. Unemployment is the single major tragedy in our society and anything that any of us can contribute to the debate that might alleviate the problem must be taken seriously. I hope I shall have more time on another occasion to develop my views, and the views of others who are much wiser than I am, on the concept of district service councils, which is well worth serious examination. What is needed to help those in our community who feel  that they have absolutely no hope of getting employment in the short or medium term is novel, radical thinking.
Mr. E. Kenny Mr. E. Kenny
Mr. E. Kenny: In 1943 the late Eamon de Valera looked into his heart and proclaimed his view of the Ireland of the years to follow. Fifty years on, Ireland has immense social problems. Indeed, Ireland has moved a long way from the days of former Taoiseach, Jack Lynch, who said that if our unemployment rate exceeded 100,000 the Government of the day should remove itself from office.
The problems facing the Minister for Social Welfare and his Government are partly of their own making but they are enormous. Payments of £10 million a day to social welfare recipients of all descriptions represent an immense charge on those who pay through taxes, PRSI and other contributions. Projections for the future are not at all good and have been compounded by the action taken by the Government in the budget to place a 1 per cent levy on all income.
It would be true to say that in the past five years a great number of prominent people in the Irish business world and in the area of high finance have been subjected to the rigors of various laws for straying across the line of conventional behaviour, both moral and ethical. It is no wonder that the unemployed become cyncial and feel very strongly when they learn of the level of alleged activity taking place at the higher scale. The anti-establishment feeling that exists would become very much more real and would be expressed much more strongly were it not for the fact that this country has a thriving black economy.
The whole concept of our employment exchanges is wrong. Employment exchanges are areas where the unemployed sign on for receipt of various social welfare benefits. Those exchanges are not employment exchanges, they are unemployment centres. Employment exchanges should be areas where the unemployed would be welcome to attend and where they would have not only the right to receive with privacy their due social welfare payments but also access  to opportunities for training, education and advice and encouragement as to the way in which they should and could remove themselves from the unemployment register. It is sickening to see every week lines of young and middleaged people standing outside dirty, grey, drab buildings, often in the rain, as if they were unwanted people, waiting to go inside and sign for payments made under the various social welfare codes. It is my opinion that if this country can spend £10 million a day on social welfare payments it should be possible to consider the idea of bringing employment exchanges into the nineties and making them places of encouragement, initiative and employment. Those incentives should be found in the one building for the people who have to attend there.
There are very important aspects to the Bill, some with which I agree and some with which I do not agree. I should like the Minister to indicate when the bilateral agreement between the United States Government and the Irish Government will come into effect. The agreement will benefit a great number of returned Irish emigrants who were forced to leave this country in times gone by when this State was not able to offer them anything. Those emigrants made their living in America in the fields and in various other walks of life and they often kept their people here alive by way of the traditional monthly cheque from the United States or the parcel from America, as the case might be. Some of those emigrants have returned to Ireland to find that they are not eligible for benefits. I have raised this issue throughout the past ten years and an agreement has finally been reached. I commend the agreement to the Minister. I hope the Minister will tell the House the number who will benefit under the agreement, the cost to be incurred to the State and when the scheme will come into operation and allow returned Irish emigrants who are now pensioners drawing social security benefits from the United States to avail of those benefits in this country.
Many people are refused payment of  children's allowance on the grounds that application has not been made in time. Surely this is an anomaly. Having become a parent fairly recently myself, I am able to understand that people might forget to apply for the allowance in the time specified. The requirement to apply for the allowance by a particular date should at least be made less rigid and the time for application extended; after all, the children have been born and eligibility should not rely on a date of application.
Many speakers in the debate have referred to the carer's allowance. The love, concern and humanity that is traditional in our family life and in our society is neither rewarded nor seen to be rewarded through the carer's allowance scheme. Hundreds and thousands of families are looking after their elderly and next of kin. Those in need are being given love, concern and affection in the privacy of their own homes, qualities that would not be available in State institutions. Our carers save the State millions of pounds every year yet because the spouse in a household might be working the carer who looks after someone — a full-time job — is denied the carer's allowance. We should have some mechanism whereby carers are paid for the care and attention they give.
I have a concern in relation to the free telephone rental allowance. In Ireland there used to be tradition of “marriages by matchmakers”. Many pensioners now find that because their spouse is many years younger the free telephone rental allowance to which they should be entitled is denied them. If they are married and living in the same house and if one reaches pension age he or she should not have to seek a doctor's certificate to enable him or her to apply for assistance. In cases of that kind they should be entitled to free telephone rental allowance.
In regard to medical examinations there is an increasing number of cases where people send in a doctor's certificate that they are unable to work. However, a doctor attached to the Department of Social Welfare can test  a person's reflexes and decide that the person is fit for work. This involves an appeal to a third doctor. If a GP issues a certificate to say that a patient is unable to work professional ethics should dictate that it is acceptable to the Department. There are many anomalies which I should like the Minister to examine.
Mr. E. Walsh Mr. E. Walsh
Mr. E. Walsh: I should like to share ten minutes of my time with Deputy Michael Ahern.
An Ceann Comhairle Seán Treacy
An Ceann Comhairle: Is that agreed? Agreed.
Mr. E. Walsh Mr. E. Walsh
Mr. E. Walsh: I should like to put on the record the elements which we have included in our Programme for Government which contain guidelines in regard to this and subsequent budgets: (1) to at least maintain the real value of social welfare payments, to protect the income of pensioners and to continue implementation of the recommendations of the Commission on Social Welfare; (2) to increase child benefit this year to £20 per month per child — our target is to raise child benefit even further over time following the integration of the tax and social welfare systems. (3) We are committed as a long term policy to the maintenance of the social insurance system. (4) We will examine measures to faciliate unemployed people who wish to study or to take up further education. (5) Anomalies in the system will be removed. (6) The administrative requirements of the social welfare system will be simplified and made more compatible with human dignity. The system of payments will be streamlined.
This budget is one of a series in a programme covering four years and I am pleased that a number of issues which I am concerned with have been addressed in it. I am also pleased that the budget has increased by 3.5 per cent all weekly social welfare and health board payments. These increases will apply to personal rates and adult dependant allowances. It will come into effect at the end of July and will cost £113 million in a full year and £50 million this year. I  welcome the special increase of 4.9 per cent on all short term payments at a cost of £7 million. I welcome in particular the fact that child benefit is being increased to £20 per child for each of the first three children and up to £23 for the fourth and subsequent children, an increase of £4.20 per month. I particularly welcome this development as it was raised on many occasions during the election campaign. It will be of great benefit to young married mothers and single parents who have difficulty in coping. The £12 increase in the family income supplement is also very welcome. An increase of £6.20 per week in the carer's allowance, which will raise it to £59.20, is also very welcome. There have been difficulties in regard to this scheme, but I have no doubt that over a period of time there will be major improvements in this area. Due recognition for the work of carers will be given in further developments.
I welcome the increase of £5 in the minimum and maximum rates of maternity benefits and the new grant of £200 for mothers who give birth to twins. There is also a better deal for unemployed people who qualify for third level education; the maintenance element of the higher education grant will be disregarded in determining their allowances. I have a particular interest in this matter as I have been involved in the educational system for most of my life. On many occasions I advocated the participation of unemployed people in the educational process. I welcome the pilot scheme developed in Tallaght which allowed unemployed people to return to full time education. This provision further strengthens that commitment and I look forward to further long term developments in this area as I operate part of this scheme by teaching people who come off the unemployment register. This is probably the most imaginative provision in regard to the unemployed and I look forward to further developments in that area.
I also welcome the extra £1.37 million in grants to the voluntary sector to assist in measures to counteract moneylending. We all know the evils of moneylending  and in difficult times, when people have to resort to these measures, any help is welcome. The sum of £1.37 million is not much money but it will go some way towards alleviating the problems which these people face. An additional grant of £100,000 to the Combat Poverty Agency will also be welcomed by this group. Of course they could do with much more money, but in difficult times anything is welcome and I am sure it will be put to good use. I greatly admire the work done so far by the Combat Poverty Agency and I look forward to further developments in that area. I will do what I can to enable such developments to take place.
I also welcome the changes in recent measures which adversely affected people claiming unemployment assistance and disability and treatment benefits. Pensioners were adversely affected by the increase in the contribution condition requirement of five years instead of four years. However, they will have their benefits restored to them and the former contribution conditions will apply. I also welcome the commitments in regard to supplementary welfare allowances; the total expenditure on these payments by community welfare officers is now a staggering £112 million. There is to be a detailed review of the operation of the scheme, which I welcome as there are many anomalies in this area. There are many instances in which the community welfare offices use their discretion where people are not quite sure of their entitlements. Clearer guidelines will probably be required to make sure that people are treated fairly where the discretionary element of social welfare is not working properly.
The suitability of dealing on a regular basis with periodic household bills for people in exceptional need will be addressed. I am concerned at the effects on my constituents in Dublin South-West of some of the disputes in the area and the confusion they caused. I would welcome clarification so that these groups of people will not feel they are being deprived of anything to which they are entitled. The Government has allowed  an extra £11 million overall to the supplementary welfare allowance for 1993 to meet current and exceptional needs of those on social welfare.
I also welcome the commitment to part-time workers, a very large group in society. As a teacher who dealt with students in the past, I understand the difficulties these people experience on first entering employment. They usually start as part-time workers and anything which improves their conditions and rights is welcome. I also welcome the fact that the Department of Social Welfare will allow people with colour television to be issued with a free licence if they were entitled to a free licence for a black and white television.
I welcome the provisions in the budget, although I appreciate that they do not meet all the demands of the Commission on Social Welfare or, indeed, of everyone in society. However, in the circumstances and the difficult times in which this budget was framed the commitments given in the Programme for Government and by the Labour Party prior to the general election and thereafter are being honoured. This Programme for Government, continuing over a four-year period, will show a development of such commitments in a more beneficial manner for social welfare recipients. This is to be welcomed.
Mr. M. Ahern Mr. M. Ahern
Mr. M. Ahern: I am glad to be afforded an opportunity of saying a few words on the provisions of this Bill. I contend that the benchmark of a caring, Christian society is how it treats its less privileged members — the elderly, the unemployed, the sick, the disabled, the young and the homeless. Taking all of these considerations into account I contend that Ireland would feature very high on any league table for care despite the shortfalls obtaining in our system.
Over the past five years in particular social welfare policies have been rigorously pursued to render the system more efficient, effective and user-friendly, increasing benefits to those in real need. The control and/or elimination of waste and fraud has been and continues  to be the aim of this Government. In this respect I should like to congratulate the present and former Ministers, Senator Brendan Daly and Deputy McCreevy, who played an important role in effecting improvements in our social welfare system. I should also like to pay a tribute to civil servants at all levels who do a tremendous job in difficult circumstances.
Social welfare payments have been increased continuously, year on year, in order to ensure that those dependent on assistance benefit are adequately helped. In addition, certain sectors of our society who have been excluded from benefit for many years, such as carers, are now being catered for, thanks to the present Minister, Deputy Woods, who introduced a carer's allowance a number of years ago. On its introduction, and in fact to date, this allowance has been much maligned and misrepresented by Members of the Opposition, who when in Government over many years never catered for or thought of such carers. I welcome the percentage increase proposed in this budget and the changes wrought to ensure that people with carers will not be deprived of their rightful benefits as had been the case heretofore.
Despite the scepticism uttered and cynical articles published, the family is still recognised as being of central importance to our society. Indeed, in the provisions of this Bill the Government has recognised the importance of the family. For example, there has been a substantial increase in child benefit, a grant for mothers who give birth to twins and the income ceiling raised with regard to eligibility for the family income supplement. In addition there have been increases effected in the minimum and maximum rates of maternity benefit and a special increase of 20 per cent in the orphan's non-contributory pension. There has been an extension also of the after-death grant. All of these benefits illustrate that the family features highly in the priority of this and former Governments.
I agree with what Deputy Ó Cuív said with regard to the extension of the family income supplement to self-employed  people. I would ask the Minister to ascertain whether any method can be devised to allow such benefit to small business people and farmers in need of such. I look forward to hearing the Minister's response in that respect.
I contend that education constitutes the gateway to employment opportunities. Many members of our society formerly did not have an opportunity of availing of education beyond primary level. For example, in the fifties and sixties to a large extent it was not the general trend for people to continue into secondary and/or third-level education.
The present Minister for Social Welfare, in a previous period in office, initiated a more flexible approach to unemployment payments, especially in regard to providing educational opportunities for the unemployed to extend their education. Resulting from that initiative there are now over 2,000 unemployed engaged in second level courses and approximately 330 people engaged in fulltime, third level courses. I am glad to note the Minister's expressed intention to encourage young, lone parents to continue their education, a most worthwhile objective.
Job creation is the central objective of this Government, a recognised priority on the part of members of all sectors of our society. The introduction of the new PRSI exemption scheme in October last was of enormous help to employers, the dates specified for the employment of people being between October last and March 1993. I am glad to note that the Minister had decided to extend its closing date to 19 September 1993. This will afford employers enormous scope to recruit people under the provisions of this scheme, thereby effecting considerable savings for themselves while reducing our present unemployment levels.
The Minister's decision to disallow students claiming unemployment assistance during the summer holiday period has been hitting the headlines in recent days. I contend that this is not an unwise decision since our resources are not unlimited and such funds as are available should be allocated to those in real need.  There were anomalies obtaining with regard to that scheme in that sons and daughters of well-off people if they did not return home during the summer holiday period could claim unemployment assistance and rent allowance from the relevant health boards, while others in dire need of State assistance were deprived of such. I am glad the Minister has introduced this proposal because I believe that students who legitimately qualify for aid will receive it under the new scheme. I look forward to the relevant regulations being published. The concept of summer work schemes is a good and proper one. Idleness is of no benefit to anyone. I cannot understand people who say that they should be paid over three months for doing nothing. It has been my experience in the past that students always were willing and eager to gain work experience, whether paid or unpaid. If the Minister intends devising schemes for people who experience difficulty in obtaining employment and pay them for doing so, I cannot then understand why they should complain.
The report of the Comptroller and Auditor General for 1991 shows over-payments of social insurance written off in the sum of £3,723,000 and over-payments of social assistance written off in the sum of £4,128,000, totalling £7.8 million, representing .02 per cent of the total social welfare budget. Although the percentage is small, the sum itself is not insubstantial. It is important that over-payments, whether caused by fraud, negligence or accident, be reduced. I would request the Minister to tighten up on the regulations to ensure that such over-payments do not recur.
We have been awaiting the new Social Welfare (Consolidation) Bill for many years. I am delighted to note that the Minister has announced its publication in the very near future, all the more so since he has said that a layman's guide will also be published. There are many voluntary workers advising members of the community on social welfare matters to whom it is important that such a guide be made available. Reading through an entire  Social Welfare Bill can be quite confusing when benefits included in its provisions can often be lost through ignorance of their existence.
Will the Minister consider assessing income on the amount of actual interest earned rather than use the standard figure of 10 per cent? A number of years ago the self-employed were required to pay into a State pension fund. However, those people who were aged 55 years and over will not benefit from the payments they have made under that pension scheme. In the past the Minister promised that he would review the scheme and consider whether these people should be allowed “to buy” years. I ask him to outline the up-to-date position.
I welcome the fact that money is being made available to eliminate the need for people to go to moneylenders who are parasites in our society. This will be of help in cleaning them off the face of society. Deputy Doyle referred to share fishermen. There are many such fishermen along the Youghal-Cobh coastline and these are encountering difficulties in the area of social welfare. I ask the Minister to try to resolve their problems.
In conclusion, I welcome the Bill as it continues the improvements which Fianna Fáil began to make in 1987. I know that in the years to come we will make our social welfare system better for those in need in our society.
Ms F. Fitzgerald Ms F. Fitzgerald
Ms F. Fitzgerald: I am concerned that, once again, the Social Welfare Bill shows the signs of a lack of what I would call a coherent strategy or reforming intent. The social welfare system has been examined by a number of bodies, the Commission on Social Welfare, the Commission on Taxation and the NESC, while various recommendations have been made to improve the quality of the system. Its quality, ethos and direction have a profound influence on the lives of many families in Ireland, women, men and children. There is no doubt that any changes made to the system have profound implications for their well-being. It is extremely important, therefore, that any changes made in the system are  thought through, part of a coherent strategy and have a reforming intent. I want to focus on a number of areas in this Bill where this is lacking.
I want, first, to mention child benefit. While I welcome the increase, which is long overdue, I have to ask why is child benefit not increased routinely? Women are delighted that child benefit is being increased this year but it is a number of years since there has been an increase. Two-thirds of Irish women have no independent income and, given our problems in relation to equality as evidenced from the report of the Commission on the Status of Women, child benefit forms an incredibly important part of their income. I ask therefore why is it not increased routinely? This question should be examined. Why do we have to wait for a number of years before there is an increase in child benefit? I ask the Minister to address this issue.
I note from the Bill that child dependant allowances are being increased in the normal way. The report of the Commission on Social Welfare and other reports have suggested that this can lead to the creation of a poverty trap for families, for large families in particular. Surely we should have continued the strategy of indexing child benefit each year to remove families from the poverty trap in which they find themselves. This was recommended in the NESC report. We must make every effort — this is mentioned on a number of occasions in the explanatory memorandum — to remove families from the poverty trap and I welcome the initiatives which have been taken in this regard. This issue needs to be examined.
The second issue that I would like to mention — this is referred to on page 2 of the explanatory memorandum — is the extension of the provisions mentioned to the pre-retirement allowance. I do not know whether the Minister has a policy on the report of the review group on households dependent on social welfare but I would like to know if he is extending to the social welfare system and, in this case, to pre-retirement allowances a policy in relation to payments to couples.  Does this mean that elderly pensioners — a couple — will have less income from now on? Would the Minister clarify this issue? Again, I make the point we have not heard what is his policy in relation to this matter. I would like to know what it is as it has profound implications for many couples. This provision has slipped in without any real explanation being given.
In the explanatory memorandum there is the following phrase, “clarification of the basis for the assessment of non-cash benefits as means for lone parent's allowance”. I note that the Bill contains a provision whereby non-cash benefits can be taken into account and a comment about the income which the children of lone parents receive. What exactly does the Minister have in mind here? Is he giving himself the power to make regulations in relation to children's income? I do not understand what it means and I ask the Minister to clarify the matter. It is unclear — I am referring to the amendment of the Third Schedule to the Principal Act on page 14 of the Bill — and I am sure that lone parents would like to know what it means.
In relation to other reforms I would like to comment on social insurance contributions which are dealt with on page 7 of the explanatory memorandum where the moves that the Minister is going to make in relation to these contributions are mentioned. Again, there is no restructuring. In the budget a rather lazy tax was introduced — an income levy. In line with the reports of the NESC, the Commission on Social Welfare and the Commission on Taxation what we ought to be doing is reforming and restructuring social insurance contributions and perhaps removing the ceilings. Certainly a determined effort should be made to reform the system as opposed to introducing an income levy. This area should have been examined and a more reforming and thoughtful approach should have been taken in dealing with this issue instead, as I said, of introducing a lazy income levy which penalises people further. In relation to pay-related benefit, is there an upper ceiling? Section 6 provides for an increase from £78 to £80 in the  amount of weekly earnings which may be disregarded. I would like the Minister to address this question.
I would now like to deal with the issue of maternity benefit. I note that in his speech the Minister said he was providing improved benefits such as better maternity provisions, including entitlement to maternity benefit, on their return, for volunteer development workers. While I welcome this — it is an improvement — there is a bigger question in relation to maternity benefit and that is why the Minister has not reversed the “dirty dozen” cuts which were made last year when the general maternity scheme was abolished? Under that scheme maternity benefits were provided to women who satisfied the contribution conditions but who were not in employment. I understand that the number of women claimants in respect of the year 1991 was 620. In addition, the minimum payment in maternity benefit at that time was reduced from £76 to £60.
In relation to the section which deals with maternity allowances, section 8 (1), I would like to know if the Minister intends to reverse the decision taken last year in the regulations referred to. This is not clear. These women should be entitled to maternity benefit and it was anti-family and children to introduce this regulation in this way. The least we can do for women who find themselves in this situation is to deal with this issue, given that the number affected is not enormous. In a sense we are reducing maternity coverage and removing entitlements.
From the point of view of policy and reform, is this an attack on entitlements? Surely, if people have entitlements one does not remove them arbitrarily. It appears that is what has been done in this case to the detriment of women. This is extraordinary given that many Irish women are living in poverty. I am concerned because the issue of the provision of social security for women during pregnancy and the period after birth is of considerable importance in the overall context of our social welfare system,  given the number of births per annum. This area has received little detailed consideration.
The social welfare provisions have developed or in some cases disappeared without any great discussion on the intent of maternity policy. In 1991 the Minister announced a pilot scheme for expectant mothers on unemployment benefit which would mean that they would not have to sign on for a period of 12 weeks and payments would be made through the post. What were the results of this pilot scheme? Let me point out that the maternity allowance covers a limited category of persons: it does not cover the self-employed, as do similar schemes in Denmark and the United Kingdom. Indeed we are out of step with a number of our European partners in terms of both the duration and amount of maternity benefits. While I am conscious that the European Directive on maternity is in place, this lays down the minimum standards and we should be aiming for an improvement on these. In fact, we should be trying to lead the way in the development of appropriate allowances in this area. I urge that it be prioritised, given that it is a support for families.
There is also evidence from a recent survey that the means-tested maternity grant and the exceptional needs payments under the supplementary welfare allowance scheme are not, in many cases, being taken up by those eligible for them. Apparently many applicants have been deterred from applying because of the difficulties of receiving these benefits. The number taking up the maternity grant declined from 6,108 in 1984 to 3,963 in 1988 — about 7 per cent of the total number of births. This is quite a low take-up, given that all mothers who have a medical card are entitled to this grant and 35 per cent of the population is covered by the medical card. I would like to see a review of these benefits as well as a comprehensive policy in this area. Resources should be directed in this area so that support to families can be developed. I would like to see an information campaign on this issue.
I was concerned at some of the comments  made by the previous speaker who seemed to imply that students were fraudulently claiming social welfare. If there has been fraud, it should have been investigated and appropriate action taken. We should not remove entitlements on the supposition of fraud until it has been proven and steps taken to eliminate it. We have evidence that many low income students are debarred already from third level education. Indeed I was speaking to a lecturer this morning who told me about the poverty that many students are living in and the great efforts they have to make to continue their education. I think that we do not have enough respect for students and for those who try to put themselves through third level education, very often with extreme difficulty. I was told there are numerous requests for endowment grants and many students can hardly feed themselves properly.
We should not make assumptions about students when the reality is often very different for many of them. I contend that this provision will also hit the families of those students who find it very difficult to go to college in the first place. It will prove a further barrier to young people availing of third level education. How does this fit in with the Labour Party promises in the Programme for Partnership Government to make education more equitable and accessible to a wider group in our society? Will the Minister clarify the hardship criteria that will apply to supplementary welfare allowance? Surely further hardship will be caused to many students by their disqualification from supplementary welfare allowance.
There are many assumptions behind this. There is the assumption that parents will support young people right through their education, although we know that is not always possible. There is an assumption that low income single parent students will get through the summer months. Surely tighter policing of the system is required if one is concerned about fraud. Has the fact that certain groups of people are suddenly no longer entitled to sign on more to do with reducing the number on the live register than  any real concern about the cost to the system? I suggest it has.
I acknowledge that work has been done in implementing the equality Directive, and that it is expensive to implement. I call for a clear information campaign once again on equality. My colleague, Deputy Allen, gave figures for the number of women who have been forced to seek legal advice to get what is owed to them, and this is not acceptable. Why should people have to consult a solicitor to get their entitlements? We should have an information campaign setting out clearly what equality measures will be enacted in the coming year and what payments will be made to women. Clearly there is confusion and we need a targeted information campaign to clear it up.
There is no doubt that carers are one of the most unsung groups in our society. Increasingly men are taking on this caring role. The carer's allowance is a step in the right direction. The increase in the allowance is very welcome but we need a greater extension of eligibility for it because it is still too narrowly based. We should make it more accessible and this should be undertaken in conjunction with the development of community care services in addition to the provision of more residential accommodation. We should clarify who is eligible for support in residential accommodation. There are pre-requisities if we are to support those who are caring for others. Let me point out that the priority rates set out in the Programme for Economic and Social Progress are not being achieved. Payments were increased by 5 per cent but a 10 per cent increase is necessary to bring the level of payment up to the commitment in the Programme for Economic and Social Progress.
Will the Minister clarify the question of the personal number? Clearly the public have to be convinced that there are adequate protections built into this development and that adequate confidentiality is ensured so that it is not abused in any way. People need to feel confident that the personal number will  give us a better and more targeted system.
In conclusion, of course I welcome the increase in the carer's allowance and a number of other provisions in this Bill. Sadly, however, it does not contain a reforming strategy as evidenced by the number of areas I highlighted which shows that we have not yet taken on board the implementation of the recommendations of the Commission on Social Welfare which in 1987 the Minister committed himself to do. The Minister said then that he would be operating within the framework of the Commission on Social Welfare. I urge the Minister to become more reforming and tackle some of these very difficult issues. I am not suggesting that these are simple reforms, but in the four areas I mentioned, the unit of payments, child benefit and child dependency, social insurance contributions and the concept of a couple in relation to pre-retirement allowances, reform is needed. I have put some questions to the Minister and I look forward to hearing his responses.
Minister of State at the Department of Social Welfare (Ms Burton) Joan Burton
Minister of State at the Department of Social Welfare (Ms Burton): There is no doubt that this year's Social Welfare Bill has been introduced against a difficult economic background, but in spite of this we have managed to make significant improvements. In this House yesterday and in earlier statements Deputy De Rossa joined the bandwagon of attacks on Labour's participation in Government. It is regrettable that Deputy De Rossa, who is not here at present, should display the sort of culpable ignorance of the position which is normally associated with other commentators.
The Labour Party's participation in Government is solemnly reflected in this Bill, in particular in the major improvement in child benefit, in the overall level of increases and in the reversal of the major cutbacks introduced last year. One of the aims and objectives of Labour participation in Government has been to stop and reverse the drift of policy  towards more and more cutbacks that had a severe and unfair effect on many disadvantaged families. We made this an election issue and, with a degree of poetic licence, some colleagues coined the phrase “dirty dozen” to draw attention to the dramatic form of those cuts. In Government we have succeeded in doing what we promised. The most draconian of the cuts have gone completely and others have been substantially modified. Deputy De Rossa, therefore, is flogging a dead horse.
In regard to exceptional needs payments, it has been reiterated again and again that the circulars issued by the Department of Social Welfare do not limit the discretion of community welfare officers in dealing with families in need but, more importantly, we have provided an extra £12.5 million for this scheme this year. How could a 14 per cent rise in money available be possibly considered a cutback? This is a major boost for the scheme. The scheme needs a total and rigorous review and this is taking place at present. We must examine other ways of helping families to cope. We are doing that and at the same time we are ensuring that substantially more money is available for the scheme. We are involved also in talks with various agencies and commercial operations such as the ESB and the gas board in regard to payments for fuel.
The Minister and I read with great interest and concern the reports produced by the Combat Poverty Agency, which highlight the deficiences in the current scheme. As a constituency Deputy, I am aware of the type of difficulties which users of the scheme experience and express to Deputies on all sides of the House. For example, some people are included in the scheme, others are excluded and it may appear that community welfare officers are not exercising their discretion fairly. This is a complex scheme but many people are dissatisfied with it. Our objective is to make the scheme more acceptable to those it serves and to target the most needy. A figure of £12.5 million extra for this scheme cannot be described as a cutback.
 In relation to treatment and disability benefit, the main concern which arose from last year's cutback in treatment benefit was the effects that would have on the long-term unemployed. This benefit is being restored to the long-term unemployed and to some pensioners who have been adversely affected by the changes. This is a major reversal of last year's policy. Similarly, disability benefit is being restored to the long-term unemployed. Therefore, we will not have a repeat of the scenes which occurred last year of unemployed people who became ill having to go the community welfare officer for assistance.
We have significantly improved the position for people on unemployment assistance who get casual work. The amount of the earnings to be disregarded is to be increased by 50 per cent. This will restore the incentive for people on unemployment assistance to take up casual work.
As I have outlined, we have reversed many of the cutbacks; but I would like to emphasise the positive shift in policy towards improvement in child benefit, the first such improvement in many years. Child benefit improvement was the cornerstone of the Labour Party's election programme. It is an essential weapon in the fight against family poverty and it is our intention to continue that improvement. Research, both in Ireland and abroad, shows that child benefit is used to very good effect and benefits in particular families in need. Child benefit has no effect on the incentive to work. Therefore, it is preferable to route extra help for families through this benefit. All the evidence suggests that child benefit is well spent and is a major benefit for all families, especially for those who are less well off.
As Deputies are aware, it is paid to the caring parent, who in most cases is the mother, and that is an additionally desirable feature of the scheme. As a Labour Minister of State, I am proud to be associated with this measure and hope to see child benefit become the major instrument of child support. It is difficult to understand how anybody can say that the Labour Party has not had an impact on  this Bill and on social welfare policy when there has been such a major improvement in this key policy measure.
The question of incentives, which has been brought up by many Deputies during the debate, brings me to an issue raised yesterday which is part of my brief — the integration of tax and social welfare. I intend to make an announcement in the near future in regard to the formation of a working party to examine this area and to bring forward proposals for change. This will be a small expert group who will initially identify the poverty traps caused by the current lack of integration. It is my intention that these traps be rectified as soon as possible and that the working group then tackle the longer term problems of integration. I intend to ensure that this will not be a lengthy process and I hope that the initial phase will produce some proposals for adoption in next year's budget.
Some of the difficulties arising from lack of integration between the income tax and social welfare codes, such as the existence of poverty traps for those in low paid employment, are clear-cut and Deputies from all sides have detailed them on many occasions. Correspondingly, integration of the tax and social welfare systems is often seen as a solution; but integration means different things to different people, alternative sets of reforms which can all claim to be unifying the tax and welfare systems. There are, therefore, important choices to be made in regard to the overall shape and direction of reform in the medium to long term.
The implications of some of those choices can be teased out analytically, but many require empirical analysis to show the difference in costs, tax rates and so on required to finance the changes as well as the broader redistributive and incentive effects of the various reforms. Even if long term goals are agreed, many important questions about the process of reform need to be answered. It is sometimes argued that a big bang approach is needed to avoid the reform process being stalled by the opposition of those who have a vested interest in the status quo.  There is some merit in this argument, but it is not clear that such an approach is feasible. If an incremental process must be used careful attention should be given to the phasing and packaging of various measures and in some cases to the issue of whether interim payments cushioning losses would be provided to avoid the process becoming stalled in this way. There is need for a long overdue and honest debate in this House on the integration of the tax and social welfare systems with a view to the best way of approaching such reform. Inevitably in this process there will be changes which will affect some people for the better and may have adverse effects on others. We must face up honestly to the process and to the political questions which such reform involves.
In regard to the provisions in the Social Welfare Bill relating to students, I represent a constituency which probably has more deprived communities than any other constituency, including areas such as north Clondalkin, Cherry Orchard, parts of Ballyfermot and west Blanchardstown. I am very conscious that the vast majority of students do not come from deprived backgrounds. I do not regard students as unemployed during their summer holidays and therefore I have no problem with the removal of entitlements from them during the summer months. It should be remembered that the age of qualification for unemployment assistance — 18 years — was introduced at a time when relatively few people stayed in school up to that age.
However, I am also conscious that it is very difficult for students from unemployed or otherwise deprived backgrounds to survive to and through third level. I am pleased that in the proposed scheme students whose parents' income is solely from social welfare will be eligible to take part in a community work scheme or for the equivalent of their unemployment assistance entitlements during the summer months provided they apply from their homes. This provision will be incorporated in regulations. It  will ensure that students from deprived backgrounds will receive every assistance possible to complete third level education. As somebody who until very recently worked in third level education and who went through third level by way of scholarships and part time work, I am very conscious that families have to struggle to send their children to third level education, particularly those from deprived working class backgrounds where parents are unemployed. In my experience as a teacher for many years in a third level institution, unfortunately the number of such students attending third level institutions is very small. I make no bones about saying that any assistance by way of the social welfare code should be directed at those students with the greatest need.
It is envisaged that mature students will be exempt from the regulations under section 14, contrary to statements and letters I have seen in the newspapers. I was surprised to hear the Progressive Democrats spokesperson on Social Welfare use the term “droning on” in respect of the reference by my colleague, the Minister for Education, to deprived children. I regret that references to the poor and marginalised and to a determination to bring them in from the margins should so bore Deputy O'Donnell. The Deputy will have to listen to many more boring statements about the poor and marginalised in the future.
In relation to equal treatment, a matter raised by a number of Deputies, the provisions for paying equal treatment arrears to married women for the period December 1984 to November 1986 are contained in the European Community Social Welfare Regulations, 1992, Statutory Instrument No. 152 of 1992. The regulations provide for, first, the payment of a higher personal rate in the case of social welfare payments; second, the extended duration of unemployment benefit; third, payment of a household supplement in respect of a dependent husband and/or children; and, fourth, payment of unemployment assistance.
In order to ensure that married women affected by the equal treatment provisions  were aware of their rights to claim arrears the Department carried out a survey of potential claimants in June and July 1992. Some 111,000 married women were identified from these records and were issued with personalised claim forms. There was also an extensive advertising campaign in the media and as a result a further 9,500 claim forms were issued, totalling 120,500. A separate section was set up in my Department to process the claims. Payment of arrears is made on a phased basis in 1992, 1993 and 1994 at a total cost of £57.5 million. Arrears due in respect of the higher personal rates and the extended duration of unemployment benefit have been made within three months of the decision of the deciding officer. Payment of arrears in respect of household supplement and unemployment assistance entitlement will be made in 1993 and 1994. Therefore there is no reason for women whose claims have been recognised to fear that payments will not be made. Provision was made in the budget for the payment of such claims.
I welcome the increase in the budget in moneys made available for the various schemes operated by the Department for community and voluntary groups and locally based women's groups. In many deprived areas such as those in my constituency I mentioned earlier, in areas where unemployment is at an unacceptably high level, community schemes involving partnership between the local community and other agencies, which are partly assisted by funding from the Department of Social Welfare, have given hope. With the developments that are taking place at present in terms of the national plan and county enterprise boards, together with the work being done by the Department of Social Welfare, we are developing a participatory model of community development. It is important that there be community involvement and that development takes place from the bottom up. I am pleased the Department has been able this year to announce substantial increases in the amounts of money being made available in this area.
 In the case of locally based women's groups, many groups involved in these schemes have done a great deal of work in their own communities in terms of the personal development of women. This adds to the growth of the community and helps identify solutions and the kinds of development deprived communities want to see.
In addition this year we are making substantial extra resources available for schemes to combat moneylending. In many deprived areas families who unfortunately are not in a position to budget properly have to resort to moneylending. Pilot moneylending schemes operated by the Department involve detailed work with families experiencing difficulties. The extra money allocated in this year's budget will allow for an expansion of these schemes. The work involved in assisting families in terms of budgeting is slow and tedious, but this is a worthwhile scheme that will bear fruit.
From 1 May the Department, on a pilot basis, will make arrangements at a number of selected exchanges to allow people on social welfare to make direct payments in relation to matters such as rents and utilities. This will ensure that people on social welfare have the same facility as have people with bank accounts. It will probably take some time to develop this system but it is important to offer the same consumer facilities to families on social welfare as are available to families with access to banking and other credit systems.
Mr. Cox Mr. Cox
Mr. Cox: I welcome some of the points made by the Minister of State but I would like to know more about them. The Bill, like the budget, is deeply conservative. The Minister's speech yesterday, the contents of the Bill and the budget did not indicate an appetite for a radical overhaul of the social welfare system to bring about an integration of tax and welfare or to bring about with any vigour the kind of change people would have expected on foot of the apparent will for change in the minds of the electorate in the recent election. Yesterday in a statement the Minister said:
 This year's Social Welfare Bill is the first major piece of legislation to come before the House in fulfilment of the new partnership Government's programme to protect and improve the position of those dependent on social welfare.
The protection and improvement of the position of those dependent on social welfare has been the agreed consensus in the case of every administration for almost two decades. That consensus is shared by the Progressive Democrats. The Minister simply restated what is accepted by all and the statement was unexceptional in terms of the ambition of any welfare Bill. That was a very limited statement of intent. We were entitled to presume that in this the first welfare legislation of the Government we would see change and that it would have signalled an appetite for change. The Bill does not do that.
I was most disappointed that neither the budget nor the Social Welfare Bill have produced any significant policy signal with regard to what is being explored in this public forum, the integration of the tax and welfare codes. There are different models one could look at and they have different costs and implications for individuals. I urge the Minister, in the context of my response to this Bill and to the budget, not to hang about on this. The Minister described this as the something that potentially can take a long time. Of course the Minister wants some basis to help him wade through choices, but he should not let some science about all this bamboozle us, because what we have is failing. It is trapping too many people into a web of dependency. Some of those people could be lifted out of it. There is no point in perpetuating the politics of dependency where it is possible to remove people from that web.
Apart from the integration of tax and welfare, which is a very big issue, many things could have been considered this year but they were not. Each year we hear talk about taking people out of the tax net but they slip back into it. Will  someone in the Department of Social Welfare begin to talk seriously to whoever organises exemption limits, for instance, in the Department of Finance and recognise that it is a useless way to try to meet the objective of keeping lower paid employment on the map for people who might be able to take it? Under the conventional system when one takes up employment one loses the FIS, the medical card and various other rights but there must be some way to induce more people from dependency into work. The Minister should not allow the big plan to get in the way of solid progress in the meantime. I am disappointed that the Bill does not show an appetite to progress even within the conventions we have. The Bill only tinkers with the problems but it does not display any novelty. It is disappointing when we have a new partnership Government who loudly proclaimed the kind of things it wanted to do, that we cannot find, in its first major welfare legislation, even a hint of the imagination or innovation we expected. Improvements could have been made in the system without a big plan for radical change.
On the tax/welfare interaction with employment, under the last administration in which my party took part, we introduced in welfare terms, the second chance education process. So far as it goes, it has been good. Two thousand people who were unemployed are availing of second level education and 330 are in full-time third level education. What is happening in this area, in trying to get more people into voluntary work and with regard to the PRSI exemption, is marginally useful. The schemes are of significance but we are failing to sell them to many people who, sensitised to their wroth, would probably want to go back for a second chance in education and take up voluntary work. We are failing in this.
With regard to the FIS, for instance, genuine attempts were made in the past few years to push this scheme. We must impress on people the worth of schemes that lift them out of unemployment, that give them hope while looking after their welfare needs. Some of the ideas have  been there for some time and they are good as far as they go. Why are they not reaching more people? There is a problem which must be addressed in relation to policy and the Department finding a better way to advertise some of the innovative material which has been tried and tested and which works reasonably well. The Minister yesterday talked about supporting people returning to work and said:
I am considering at present a new programme of measures to support people in making the transition back into the workforce.... This programme of measures will build on the success of the area-based companies set up under the PESP working closely with the new County Enterprise Partnership Boards.
The county enterprise board idea first saw the light of day in a period of bad political and economic weather which my own party was riding out, along with the Minister's party, in Government last autumn. It was a bad week because, regrettably, unemployment always seems to set an historic record every time we examine it and because various companies were contemplating closing down plants. Lo and behold, up came this umbrella on a wet day which was called county enterprise boards. Ever since then, like the Kit-Kat advertisement on television, we have not been able to work out whether it is a biscuit or a bar. As a result, months after we discovered this phenomenon we still do not know what it is.
God bless the Minister for Employment and Enterprise, Deputy Quinn, who he is now stuck with something which the Department of the Taoiseach wisely got rid of, because they did not know what to do with it either. I have two fears about it. The first is that it will turn into an awful bureaucracy with over 40 chief executives, who theoretically are interested in partnership and bottom up development. However, because of the manner in which the wheels grind and systems work, I wonder, as I look at the Leader programmes and the amount of  bureaucracy being forced on these partnerships, just how flexible our systems can be in terms of the State. My second fear is that they will be full of political mickey mouse gimmicks. I am worried about it. If we want to encourage a return to work on a partnership basis there are many models that can be examined and the idea is excellent. There is a question mark about the worth of the county enterprise boards. I realise money has been provided in the budget, but I suggest to the Minister for Enterprise and Employment — through his colleague the Minister for Social Welfare, Deputy Woods — that if the Minister were to have some mature reflection on the matter and decide there was a better way to approach the task, he would have the full support of my party. I do not think he should get into this awful Banquo's ghost haunting this administration when the last administration used it as an umbrella on a wet political day. By all means encourage a return to work, but I have grave doubts about the kit-kat formula being the best route to follow.
The Minister alluded to the PRSI exemption scheme which was introduced last year. I am glad to note that it brought 1,100 people back into the workforce, though I thought the figure would be greater. I query the level of penetration of these schemes. One can bring a horse to water, but that is as much as one can do. I am surprised it has not had a better outreach and that it has not gone further down into the system. As the Minister told us, for anyone on the average industrial wage of £260 per week the PRSI exemption amounts to a subsidy of £31 per week or £1,647 per year. I accept the Minister's description of the PRSI exemption as a subsidy in that context. In regard to PRSI in ordinary employment, even hitting people the minute they earn money, since there is no allowance system of substance, like the tax free allowance system, PRSI is a tax on employment and when it is removed it is implicitly an employment subsidy. If we are to integrate these systems we will have to cut out the mickey mouse formula of regarding taxes on work as something  else. We know that PRSI contributes substantial funding and that the funding rules allow certain entitlements, but the plain fact is that if Paul Newman can get Barrettstown Castle for £1 per year we could devise a scheme that gives funding rights for £1 per year and get down to the tax welfare integration, including PRSI. There are plenty of schemes that could be examined. I do not accept the logic that one is always stuck with the fund process. There are ways of getting over it. Even at the lowest rates of pay one is liable for PRSI, which is another disincentive, unlike the tax free allowance system. I welcome the logic which the Minister sees in extending the exemption scheme. Extending it is a subsidy and continuing the way we approach it is a tax on work and we have got to face the logic in both directions.
On the matter of the integration of the systems, I would urge the Minister of State to make haste but not to ignore changes in our conventional system. In the meantime I hope that when choices have to be made they will be discussed in this House and that the political choices on reform will be made in this Chamber and in the Seanad and that, no matter how committed we are to partnerships, we will not hand over the right to choose in the public interest to various other consensus seeking bodies unrelated outside the Houses of the Oireachtas. I believe in having a consensus approach if it works — and it beats the hell out of conflict — but it cannot be used to siphon away from the democratic process the general public will in this House and in the Seanad. If we are to make basic political choices let us have the opinions of those who should be heard, but let this House decide and let us not hand over to others outside the House basic choices for our society.
I should like to turn to the question of students. I listened with great interest to the Minister of State, who spoke about her own background going to college, how she got there, how she worked there and how she knows students and so on. I know it well, I too went down the same  road, but I have a problem with a few things concerning students. The Minister told us yesterday that about 12,000 full-time third level students take up unemployment assistance and an unspecified number claim a rent allowance, because they live away from home, which costs in the region of £8 million per year. He went on to say that:
This cost could rise to at least £60 million a year plus the cost of rent allowance if all students were to take up this practice.
I do not know whether the Bill hides something I did not see, but when I examine section 210 of the Social Welfare (Consolidation) Act, 1981, I know that if I am unemployed and want assistance I must put in a claim. The claim is means tested and is in accordance with section 210. I know section 210 (d) refers to the value of benefit or privilege enjoyed by such person, which includes the income of that person's household, if there is any contribution. I wonder whether this item has been dropped from the legislation. All students could not benefit because the rules would not allow them.
Dr. Woods Dr. Woods
Dr. Woods: If they moved out of home.
Mr. Cox Mr. Cox
Mr. Cox: In respect of what the Minister has presented to the House — and as my time is almost up I will not develop the point at length — the voluntary jobs aspect is one which my party supports in principle and which we would like to see extended to other areas. The Minister will give voluntary work-dole a bad name if he has consulted nobody, has done no homework, has set up no schemes but has used it to drive people off the dole. That is what has been presented so far.
Dr. Woods Dr. Woods
Dr. Woods: This is a new Government. It is only in office a very short time. Give us a chance.
Mr. Cox Mr. Cox
Mr. Cox: We will give the Government every chance, but it should not introduce a bulldozer provision which will remove 12,000 students from the live register if it does not have an alternative policy in  place. All this provision will do is reduce the number of people on the live register. Essentially, it is a Cromwell-style policy — “To hell with wherever you are at and move to somewhere else because we do not give a damn and we have not even consulted.” The Minister can say it is a new Administration and that it needs time. If the Government needs time it should take time, but it should not introduce Mickey Mouse, half-baked, ill thought out measures which do not add up to anything and only drive people off the dole.
Dr. Woods Dr. Woods
Dr. Woods: One minute the Deputy says that the House should be involved——
Acting Chairman Acting Chairman
Acting Chairman: Tá an t-am istigh.
Dr. Woods Dr. Woods
Dr. Woods: If the Deputy wants the House to be involved——
Acting Chairman Acting Chairman
Acting Chairman: Sorry, Minister.
Mr. Cox Mr. Cox
Mr. Cox: If I may, I wish to make a final comment — I enjoy the cut and thrust of debate.
Dr. Woods Dr. Woods
Dr. Woods: If the Deputy wants the House involved——
Mr. Cox Mr. Cox
Mr. Cox: I do not want the House involved. The Minister should bring back the scheme——
Acting Chairman Acting Chairman
Acting Chairman: I must ask the Deputy to conclude as the next speaker is losing time.
Mr. Cox Mr. Cox
Mr. Cox: I wish to make one brief comment.
Acting Chairman Acting Chairman
Acting Chairman: It has to be very brief as the Deputy has to finish.
Mr. Cox Mr. Cox
Mr. Cox: The Minister of State referred to the contribution made by my colleague, Deputy O'Donnell, and her reference to the Minister for Education droning on about people who are underprivileged. It is not that we lack any concern, compassion or sympathy for people who are underprivileged. The question  Deputy O'Donnell asked was how somebody in Cabinet who was worried about the underprivileged could turn a blind eye to the Cromwell boot being used to remove from the welfare system very many needy students who draw the dole. These students have been told, “We might come up with a scheme; we have not come up with one yet as we are only in office a short while; we will come up with a way of getting rid of you this summer, whether or not we have a scheme”. My colleague was perfectly correct in asking if the Minister for Education with all her concern for the underprivileged had bothered to speak up and ask questions.
Mr. R. Burke Mr. R. Burke
Mr. R. Burke: I wish to share my time with Deputy Dan Wallace.
Acting Chairman Acting Chairman
Acting Chairman: Is that agreed? Agreed.
Mr. R. Burke Mr. R. Burke
Mr. R. Burke: I welcome this Bill and compliment the Minister on the improvements he has proposed in the social welfare area. Of course, the Minister is carrying on his tradition — he has shown himself to be a man of great skill in the Department of Social Welfare and a man who cares greatly for social welfare recipients.
The main improvements proposed in the Bill include the increase of 3.5 per cent from next July in the weekly rates of social insurance and social assistance payments, a special increase of 4.9 per cent from next July in all short-term payments and a subtantial increase of 26.6 per cent from next September in child benefit, bringing the rates to £20 for each of the first three children and £23 for the fourth and any subsequent child. There will be increases also in the income supplement from next July. All families in receipt of the family income supplement will be £12 per week better off. This improvement has to be welcomed. There will also be a special increase of 11.7 per cent in the carer's allowance giving a new rate of £59.20 a week, which is in line with the long-term rate. This increase is to be very much welcomed. There will  also be increases in the minimum and maximum rates of maternity benefit and a special increase of 20.6 per cent in the orphan's non-contributory pension which will be the same as orphan's contributory allowance of £39 per week.
In the limited time available to me I wish to concentrate on a few points. I would like to draw the Minister's attention to two facets of our social welfare system which I regard as anti-family and which require urgent attention. The first deals with the situation where in most cases young people cannot avail of unemployment assistance unless they are prepared to leave their homes. At a time when our young people are under extraordinary social pressure due to the national unemployment crisis, I find it astounding that we should be offering incentives to vulnerable young people to leave the protection and comfort of the family home so as to accommodate artificial regulations. The position is that unemployment assistance is means tested on the income of the household, with no regard being given to the independent needs of the young applicant. The consequences of this regulation is that in most cases the young applicant will receive no payment while living at home but if he is prepared to move out of the home into a flat or digs the social welfare system will pay him, even adding a rent allowance.
Young people are suffering frustration and depression as a result of the shortage of job opportunities. We must be concerned about the influences which young people, scarcely adults, will fall under once they leave the protection of the family home. A substantial proportion of our crime is committed by young people, some of whom may be under the influence of drugs. How can we pretend to be a caring society if we force young people out of their family homes before they can collect a few pounds in dole? I call on the Minister, whom I know to be a caring man, to address this problem immediately and to re-establish the reality behind the Irish reputation of a society  in which the integrity of the family is highly cherished.
I wish to make an earnest appeal to the Minister on behalf of the thousands of families who are suffering from the most flagrant prejudice. I am referring to those families where, unfortunately, the mother has died, the father has become a widower and the children have been orphaned. A structure is in place whereby a family which loses the father is supported by the State. While there is always room for improvement, it must be admitted that these supports are wide-ranging in terms of the State's ability to pay. The absence of a similar structure for a family which loses the pivotal presence of the mother is inequitable and grossly unjust. I am sure all Members know of cases where a man has had to adopt both the role of the father and the mother in the family. His life may be turned upside down by not only having to provide for the economic needs of his family but also to give them the level of care, attention and protection they require, a task which he previously shared with his partner. Admittedly, the lone parent's allowance covers widowers but it is means tested and widowers are excluded from the State insurance schemes. Furthermore, the State penalises the family by taxing the wage earner as a single person, thus drawing money from them. This is an horrendous penalty to be paid by people who have fallen victims to the loss of a mother.
Much has been made in recent weeks of the denial of equal treatment to half our population when they were refused membership to an exclusive private club. I ask the advocates of equality to join with me in championing the cause of families who have fallen victim to the most pernicious and destructive prejudice by the State on the basis of the person's gender. Explanations have been given about the complications which arise in giving relief to the families of widowers. Even if only one family in the State suffered such inequitable treatment, the excuse of administrative inconvenience or cost would be grossly insufficient. I call on the Minister to  address these issues at the earliest possible opportunity. I know that there are many other demands on the resources of the State, many other provisions the Minister would like to have included in the Bill and many changes he would like to introduce in the social welfare code generally, but these two issues, affecting as they do families, the young in our society and widowers and their families, are central to our social welfare system.
Mr. D. Wallace Mr. D. Wallace
Mr. D. Wallace: Before dealing directly with the different aspects of the Minister's proposals, I wish to refer briefly to the context in which the Bill has been drafted. There are a number of factors in our society which combine to place a particularly heavy burden on our social welfare system. The high level of unemployment continues to exert huge demands on the Department's resources. Changes in the structure of our population are having a major effect on the level of unemployment and a range of other matters which, in turn, have a direct impact on the need for social welfare support. For example, the high birth rate, particularly during the seventies and early eighties, led to a major increase in the number of young people. In addition, increased life expectancy has resulted in a growing number of elderly people in our society. These population trends have led to a sustained increase in the level of revenue required to fund schemes such as the children's allowance, old age pensions and a range of associated social services.
Anyone who refuses to acknowledge the effects of such population dynamics on the fundamental ongoing needs of the Department is unlikely to play a constructive part in any attempt to improve further the quality of support given by the State to those with the greatest need. I stress the need for more realism when examining current social welfare proposals. The revenue available to carry out improvements is limited. This year's budget provides £3.7 billion for the Department of Social Welfare but there is great need in the community.
I pay tribute to the Minister, Deputy  Woods, for his foresight and his listening ear. He has introduced enlightened schemes and made changes to eliminate bureaucracy and anomalies. This is evident also in this Bill, which shows his continuing concern for those most in need. I appeal to the House to support him in this matter. The Minister has managed to introduce a number of welcome proposals. An overall view of this Bill shows that increases have been made across a wide range of services in line with the rate of inflation. In a number of areas increases exceeding the likely rate of inflation are evident. I welcome the significant increase in short-term unemployment benefit and disability benefit. The substantial increase in child benefit is likely to be of great help to many families who depend on it as a supplement to their weekly cashflow.
One is aware of the extra financial strain imposed on young couples by a multiple birth. The grant of £200 to mothers of twins is imaginative and welcome. The relatively high rate of twin births may surprise some people — it is approximately one in 80.
These provisions are supplemented by a number of other positive proposals covering a wide range of services and including the carer's allowance, maternity allowance, orphan's pension and limits placed on the family income supplement. A number of smaller changes add to the generally positive nature of the proposals. The decision to provide a free colour television licence to certain pensioners is an example.
Improvements in the PRSI exemption scheme are welcome because they provide an incentive to employers to increase staffing levels. There are also proposals which will directly benefit the individual. For example, recipients of pre-retirement allowance may be exempted from liability for self-employment contributions.
I strongly support the Bill's specific proposals and its general shape and direction. The Minister, and his staff, have managed to achieve significant progress within major financial constraints. The revenue needed to fund the Department  of Social Welfare is enormous, with daily requirements exceeding £10 million. Almost half our population receive weekly payments from the Department. This very high level of demand places a major burden on the State's income and consequently places severe limitation on the ability of the Government to carry out much needed improvements in our tax system. The full acknowledgement of the major revenue requirements of Departments such as Social Welfare, Health and Education must be made before we can realistically consider any proposals regarding tax reform.
The size of the social welfare budget makes it imperative that every effort be made to detect and eliminate systematic abuse of the system, which ultimately reduces the resources available for genuine recipients. Progress in detecting such abuse must not lead to a reduction in the level of courtesy and respect shown to the genuine recipient.
The high level of demand on the Department of Social Welfare highlights the urgent need for the creation of greater national wealth. This can only take place when we have a systematic and sustained period of industrial development and growth. Such growth will only be possible through the joint efforts of all the social partners. I strongly support the maximum possible level of co-operation between the Department of Social Welfare and all other Departments which are directly or indirectly involved in economic development. It is vital that the quality of information coming from the Department of Social Welfare in terms of the skills and potentials of the unemployed be of the highest possible standard. Such information should play a central role in determining the location and nature of new industries. Similarly, comprehensive information on the skills base among the unemployed is fundamental to the design and operation of training programmes which are likely to have the greatest impact in terms of job creation. I stress the twin needs of maximum co-operation between related Departments and agencies and quality  information if we are to make early and significant progress in reducing unemployment.
Every Member is aware of the major problems in society and the need for support from the State. It is important to realise that the cake is only a certain size and we must ensure that it goes to those most in need. That does not always happen. We have a job on our hands and we must ensure that we play our part in supporting the Minister and the Government in their endeavours to channel assistance to those most in need of it. We have made significant improvements over the years but there is still a tremendous need for support. I compliment the Minister again on his initiative and foresight and the way he has tackled this very difficult area. He has made welcome progress but more needs to be done.
Mr. Connor Mr. Connor
Mr. Connor: I wish to share my time with Deputy Finucane.
Acting Chairman (Mr. Browne, Carlow-Kilkenny) Acting Chairman (Mr. Browne, Carlow-Kilkenny)
Acting Chairman (Mr. Browne, Carlow-Kilkenny): Is that satisfactory? Agreed.
Mr. Connor Mr. Connor
Mr. Connor: I welcome the opportunity to speak on this Bill. The over-bureaucratisation and other ills of social welfare have been much discussed in this House. The major report from the Commission on Social Welfare has been lying on the shelves for years. That report pointed the way out of the difficulties under which the system labours, but few of its recommendations have been implemented. We have heard much reforming rhetoric from the junior partner in this Government but we are disappointed to find that they have basically tackled only six areas in this Bill, most of them traditional ones. The Bill does not strike out into any new area and does not tackle the weight of bureaucracy on the social welfare system. Above all, it does not address the new needs in the system. While one welcomes the increases, although they are barely in line with the rate of inflation, one must express disappointment that other areas  have not been tackled. That comes in the light of the rhetoric we heard about what would be done if certain people got their hands on the reins of power. I expect the traditional attitudes of Fianna Fáil to remain pretty much the same, but in respect of the Labour Party and social welfare I am very disappointed.
Because my time is limited I will speak about a few marginalised groups in society who rely on the social welfare system to survive and about the bureaucracy which they have to deal with, which does them an injustice. I come from a rural constituency. Because of the economic situation there and the lack of outreach of Government economic policies to do anything positive for us, we find that the majority of the population rely to some extent on social welfare payments of one kind or another.
Because it is widespread in my part of the world, I would like to deal with the question of small farmers who receive social welfare payments as a supplement to their income by way of small farmers' dole or small farmers' assistance. The method of means testing for these benefits has long been a contentious issue. The procedures I see adopted towards small farmers and old age pensioners is particularly unjust. Back in 1984 this House introduced a new system which took us away from the national assessment of income based on poor law valuation to an actual/factual system of assessment.
The system that the Department operates could not be further from that. I know this from practical experience, because I have gone before appeals officers on behalf of constituents. Let me pay tribute to the fairmindedness of the appeals officers, all of whom I have met. Many other officers of the Department of Social Welfare, because of their lack of independence, have closed minds on so many issues. We are told that there is nothing notional in the system of assessing small farmers; but there is, because when totting up expenses the social welfare officer will not allow for a car or for depreciation of fixed assets on a small farm. However, someone who comes  under the tax code is, by definition, better off than the poor unfortunate who is looking for social welfare, and here there is a similar system of assessing means where one can write off depreciation of fixed assets, motoring expenses and a whole lot of other items. The unfortunate social welfare applicant cannot write off these things. I submit to the Minister that that is a grave injustice to people who are on a very low income and who are only trying to improve their marginal income by the addition of a marginal sum which the Department can add.
I would particularly mention the part of the method of determining income where it says that while the value of sales may be fixed at £4,000, the social welfare officer because of regulations has to estimate the value of sales, and that estimate always goes up. When one substracts the amount for expenses from the notionally inflated amount per gross income or value of output, one reaches an artificially inflated level of income for that person. It is artificially inflated by the introduction of this notionality which we were told was abolished in 1984 by Act of these Houses of the Oireachtas. The adding in of a notional aspect to people's incomes is wrong and unjust. I understood it had been legislated out of existence by this House and that we should be dealing only with actual income in the year of operation.
I want to speak about another group in society, widows. There are about 104,300 widows in this country. I am not quite sure how many widowers there are, but they are included in the system now. I have great sympathy for widows because I meet so many of them during the course of my constituency work. They are very badly treated under the social welfare system. They are people who get themselves caught in the poverty trap within the social welfare system. I was talking to a widow last week whose husband died some time ago. He was in receipt of the full rate of non-contributory old age pension and also of the full adult dependant allowance for her. Because they lived alone he was in receipt of a free electricity allowance and some other fringe benefits.  However, once the husband died the widow was reduced to the basic widow's pension with no fringe benefits other than an entitlement to apply for a fuel allowance. Widows, particularly those who live alone or who live with dependent children, should be eligible for things like free electricity, telephone rental allowance and the other fringe benefits that apply to the ordinary old age pension. I appreciate fully that that will cost money, but because widows are a group in society that we have not done well by we owe it to them to extend those benefits to them.
Another aspect of means testing is the disregarding of a certain small sum of money by way of income by the Department when making an assessment of means. In the case of widows it is £6 a week and £7 a week in respect of non-contributory old age pensioners. That was introduced by the Department in about 1972 and has never since been adjusted upwards. I asked a question in the House as to whether that sum has been adjusted to take account of the value of money in all the intervening years since then. It amazes me to find that if that adjustment were made that figure would now be of the order of £30 per individual. It means that in assessing means for old age pensioners or widows who may have a small business the first £30 of income would be disregarded. I ask that this figure be brought up to date. I would also ask that that figure be extended to applicants for unemployment assistance, who do not at present benefit from it.
I see my colleague, Deputy Finucane, almost straining at the leash to get started, so I will hand over to him.
Mr. Finucane Mr. Finucane
Mr. Finucane: I want to thank Deputy Connor for sharing his time with me. I listened with interest during the last two hours, particularly to the Minister of State. The Minister of State would appear to be a very sensitive type of person. Any time I have seen her in the Dáil or on television speaking about the performance of the Labour Party she complained about the attacks being made  on the Labour Party within this Coalition and about the poetic licence that was taken in classifying the social welfare cuts as “the dirty dozen”.
The Labour Party made those cuts very much an election issue which contributed to the success of many Labour Party Deputies, including the Minister of State, Deputy Burton. Many Labour Party Deputies would not have been elected to the House if they had not given so much prominence to the issue. The Labour Party gained the benefit at the polls but its Deputies in Government have to face the music. Minister Burton said that many of the so-called dirty dozen social welfare cuts had been abolished but that is only the position in regard to some of them. Minister Burton should realise that she is not above criticism in this regard.
I wish to refer to the apparent element of contradiction in the budget. The PRSI exemption announced by the Minister is welcome and represents an incentive to employers to create more jobs. On the other hand, the Minister for Enterprise and Employment has decided to abolish the employment subsidy which was a vital mechanism to encourage people into employment. The subsidy resulted in the creation of about 7,000 jobs at a cost to the State of less than £3,000 per job. It is regrettable that the subsidy has been abolished. It behoves all of us to encourge as much employment as possible.
Many Deputies have spoken about the poverty trap. The Bill offers nothing to make a dramatic improvement in the position of those caught in that trap. Throughout my constituency, throughout the country, many of those in work have an income inclusive of overtime payments of about £8,000 per year. We all recognise the frustration of those people, if they have a few children, who find that the extra incentives built into the social welfare system such as eligibility for a medical card make it more attractive to be unemployed than to be in work. I admire those who continue in work although it is not financially attractive for them to do so. The taxation and social welfare codes do not remedy that  imbalance, which remains a dilemma and reinforces the poverty trap. It is estimated that the value of a medical card is almost £500 a year, a significant sum. Eligibility for a medical card can often tempt someone who is in employment and has a family to decide that the balance tips on the side of social welfare assistance as opposed to continuing in employment. Neither the Bill nor the budget contains measures designed to correct the imbalance and alleviate the poverty trap.
The issue of eligibility for payment of the disability benefit is a great frustration for many, including public representatives. On many occasions I have been surprised when someone comes limping into my clinic, almost crippled with arthritis, and says that a medical officer has determined that he or she is not eligible for disability benefit and should be able to work. Often a medical officer determines that someone is not entitled to payment of the disability benefit even though that person has obtained medical opinion to the contrary. The amazing outcome is that the person concerned is frequently put on unemployment assistance. The objective of unemployment assistance is that one has to be physically available for work. People can be put on to unemployment assistance when it is patently obvious, either because of age or a medical condition, that they are not able to work, and no employer would give them a job in times of high unemployment. There is conflict between professional advice and medical opinion preferred on behalf of a patient and a medical referee's interpretation as to eligibility for disability allowance. The problems need to be examined and the system should be simplified. In previous social welfare legislation the appeals system was introduced in a ministerial attempt to correct concerns but inherent deficiencies remain.
The principle of the family income supplement was to give extra incentive to those in employment so that the difference between social welfare assistance and low-paid employment might be bridged. Special surveys commissioned  from time to time show that more families are eligible for payment of the family income supplement than are taking advantage of the scheme. It is regrettable that information on this scheme does not appear to be percolating to the employee. Various attempts have been made to publicise the availability of the family income supplement but it seems that the information has to be more directly accessible to the employee. Would it be a good idea to advertise the scheme by way of giving each worker likely to be eligible for the family income supplement a leaflet setting out details of the scheme and what payment of the supplement would mean for a family that was eligible? Distribution of such leaflets to all workers in factory-type employment would be a means of getting the message through to those who count.
When the self-employed pension scheme was extended in 1988 many farmers, and other self-employed people, welcomed it. The scheme was attractive in that after ten years' contribution one would at least be entitled to a contributory pension. However, many people were caught in so far as they would not be able to make a full ten years' contribution. Strong feelings are evident because the self-employed feel they are paying into a scheme yet when they arrive at pension age they will not be eligible for the contributory pension. If they so desire, they will be able to claw back a certain percentage of the total amount of contributions made through the years. In many cases a farmer who decides to go ahead and claim the old age pension is forced to hand over the farm before doing so because the scheme is means tested. Why was it never considered that a pro rata payment might be made for people in the self-employed pension scheme? I envisage a system whereby someone who had made contributions for eight years might receive four-fifths of the pension and someone who had made contributions for six years might receive three-fifths. My idea may sound simplistic but such a move would help to pacify many of those who are very upset at the impact the scheme has on  them. There is a common perception among the self-employed that they pay in for many years but will receive no material return.
The increase in child benefit is welcome. It is regrettable that the increase takes effect only from September next. Those who will benefit from the increase, mainly the women of Ireland who claim the benefit, are extremely concerned at the degree to which the increase will be eroded as a result of the VAT increase in clothing and footwear. Yesterday those involved in the clothing industry held a demonstration to express their extreme concern about the punitive increase. The consumer is equally upset at the increase in the VAT rates. It seems that what the Minister is giving a family by way of an increase in child benefit is quickly being taken away by the increased cost of clothing and footwear.
Acting Chairman Acting Chairman
Acting Chairman: I am sorry to interrupt the Deputy, but his time is almost expired.
Mr. Finucane Mr. Finucane
Mr. Finucane: I welcome the decision to extend the free colour television licence allowance to certain pensioners. That measure will be achieved without incurring significant cost. It was anomalous for someone to have to meet the difference between a black and white and a colour television licence. I discussed this anomaly with the Minister's predecessor, now Senator Brendan Daly. I am glad the provision is in the Bill.
Dr. Woods Dr. Woods
Dr. Woods: That provision was made especially to mark my return to the Social Welfare portfolio.
Mr. Finucane Mr. Finucane
Mr. Finucane: The Minister displays a certain amount of imagination in that Department at times.
Mr. B. O'Keeffe Mr. B. O'Keeffe
Mr. B. O'Keeffe: I welcome the opportunity to speak on the Bill. Any Minister who is given the authority to look after 1.5 million people every day has an extremely onerous task. It is incumbent on him to ensure that that money is spent  wisely, particularly so when one realises that we spend £10 million per day, which is a major drain on the State. Any Minister therefore must look at how the money is spent and if there is a return on the pay-outs. He must also ascertain whether there is any hope that these people will return to the workforce.
There are many positive aspects to the Social Welfare Bill. I am particularly glad that the Minister has restored disability, dental and optical benefits and entitlement to treatment benefits for workers earning up to £30,000 per year and £60,000 if there are dependants. The increases in line with inflation — in some cases above it — are also welcome as so many people are unemployed. We are now spending £3.7 billion per year on social welfare. The Minister has done exceptionally well in ensuring that he can bring these increases forward. I also welcome the PRSI exemption scheme and the fact that the Minister has extended the time limit. It is interesting to note that many people called for increased employment by reducing PRSI from October to March. During that period 1,000 people were taken off the dole. In many respects this is not a great number of people; one would have thought, given the sentiments expressed in this House, that at least 5,000 people would have been employed during that period. However, it is a good scheme which offers an incentive to employers to take people off the dole. During the extension of this period I will be interested to see the exact take-up by employers in regard to this scheme, particularly as the Government examined provisions which would inspire confidence in the money markets. It held its nerve, the borrowing requirement was kept within the limits set out and now interest rates have fallen dramatically. The Government, in particular the Minister for Finance, can take great credit for the fact that when everybody around them were losing their heads, they were objective and singular in what they wanted to achieve. Now, within a very short space of time they have reaped the reward of low interest rates. The prognosis is that by the end of  the year interest rates will be down to single figures. The Minister for Social Welfare must be very pleased because it will mean that people will be willing to borrow money and to invest in projects which heretofore had been put on the long finger. I hope there will be a great uptake in regard to developing projects which will lead to increased employment and provide more money to the Minister to ensure that he can do even more for people who need it.
I was a member of the Oireachtas Joint Committee on Employment set up during the lifetime of the last Government but which has not been re-established. One of the areas at which we looked was the suggestion that people would work for their dole and have that money topped up by local authorities, health boards or other statutory bodies. Members of the committee thought this was a worthwhile scheme and were interested to see how it would proceed. As part of our mandate we asked local authorities all around the country to give us an indication of how many people they could take on board if unemployment benefit was paid directly to the local authority or health board. We asked how much more would be needed to give a meaningful wage. As I understand it, we could create up to 50,000 jobs within health boards and local authorities if that scheme was in operation. Will the Minister state the present situation in regard to this proposal? One of the suggestions I made when debating this issue was that if we provided a training element we could apply to the EC for funding. If we could show that part of the employment we were giving under this arrangement had a training element the EC would provide 75 per cent of the funding, thereby making a major saving to the Exchequer. At present we must pay 100 per cent unemployment assistance directly from the Exchequer.
In his speech the Minister referred to encouraging training and education. I was also very pleased that as part of the Programme for Government it was intended to look at the role of the Departments of Labour and Education as it pertained  to training, apprenticeships, etc. We should initiate a scheme of training within local authorities and health boards which would perhaps allow us to get 75 per cent funding from Europe. It would be a worthwhile investment of time and energy and I strongly urge the Minister to seriously consider this in consultation with the other Ministers concerned.
I am also delighted that the Minister has provided an opportunity for part time work which includes payment of a weekly allowance by the Department. It also provides an opportunity for people to do voluntary work without interfering with their unemployment benefits. I should also like to draw the attention of the Minister to local partnership schemes and the difficulties caused by the 12 pilot projects, particularly in Cork. The Minister will be aware that the scheme applies to the northside of the city, but unfortunately the southside, where I live, does not benefit from the scheme. In a school last Christmas four people were employed, two from the northside and two from the southside. The two employees from the northside received the double payment at Christmas but the employees from the southside did not. Obviously, they felt they were discriminated against. The difficulty about pilot schemes which go on over a long perod of time is that they can lead to legitimate claims that there is discrimination against a particular sector. Will the Minister look at the pilot scheme to assess whether it provides a basis on which we can work?
I come from a regional college background and I am interested in the provision in the Bill which relates to third level students. Prior to the Social Welfare Bill there were extremely lenient regulations defining who could receive unemployment assistance.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
Dáil Éireann 428 Social Welfare Bill, 1993: Second Stage (Resumed).