Seanad Éireann - Volume 139 - 23 March, 1994
Social Welfare Bill, 1994: Second Stage.
Question proposed: “That the Bill be now read a Second Time.”
Minister for Social Welfare (Dr. Woods) Michael J. Woods
Minister for Social Welfare (Dr. Woods): The annual Social Welfare Bill  is the most important piece of legislation to be debated in the Houses of the Oireachtas each year. The measures in the Bill affect 822,000 social welfare recipients and their 627,000 dependants, accounting for over 40 per cent of the entire population.
The purpose of the Bill before the Seanad today is to give legal effect to the increases in social welfare payments announced in the budget and to provide for other improvements to strengthen the social welfare code for families, workers, carers, lone parents and others who rely on social welfare. The total cost of these improvements in a full year is £168 million.
I introduced an amendment to the Bill on Committee Stage in the other House to provide a legal basis for my Department to enter into contracts and joint ventures with various bodies for the provision of skills, including technical skills, and services overseas. This new provision is contained in section 33 of the Bill as amended by the Select Committee on Social Affairs.
The various skills which have been developed within my Department have resulted in numerous approaches from public and private organisations overseas seeking support on a consultancy basis. Over the past number of years, many groups from all over the world have visited Ireland to study how my Department operates. In the past month alone delegations from Poland, Russia and Slovakia have been here and a group from the Republic of Albania is scheduled to visit within the next few weeks.
In what I hope will set a new trend for Government Departments, my Department is to use our social welfare business expertise on a commercial basis. This is a new and exciting venture in public administration. With the opening up of eastern European countries many opportunities are presenting themselves. My Department is well positioned to maximise these opportunities in the development of new markets, which is an essential component of the Programme for Competitiveness and Work. This new role reflects the Government's determination  to develop joint ventures between public and private sectors and to create commercial units within Departments which will develop and market the considerable expertise within the Civil Service, thereby bringing returns to the taxpayer in terms of business opportunities and jobs for young people.
For example, my Department is currently working with the Digital Equipment Corporation, our main computer supplier, to identify opportunities for marketing specialist products and services from Ireland to social welfare authorities in other countries. A number of approaches have been made from interested parties and these are being pursued. In addition, my Department is in discussion with European Union officials with a view to providing social welfare expertise for the emerging states.
It is widely recognised within the EU and the developing states that we have a considerable expertise in the social security area. The challenge is to translate that high level of expertise into the creation of skilled jobs for Irish people while at the same time assisting these developing countries to make the successful transition to a modern European state.
I now outline the main provisions of the Bill. Sections 3 and 4 provide for increases in the weekly rates of social insurance and social assistance payments with effect form July 1994. Those increases will more than maintain the real value of social welfare payments given the anticipated rate of inflation over the next year. The increases will give an extra 10 per cent for 112,000 people getting disability benefit or unemployment benefit, an extra 6 per cent for 185,000 people on the lowest payments such as unemployment assistance and supplementary welfare allowance which will bring those rates up to the priority rates recommended by the Commission on Social Welfare and an extra 3 per cent for over 822,000 people and their 627,000 dependants, including pensioners, widows and lone parents.
Section 3 also provides for an extra increase for some 1,100 invalidity pensioners  who have attained 66 years of age. From July 1994, they will have their weekly pension boosted by an extra £10.20 a week for a single person, bringing to £71 the new weekly payment. A married couple currently getting £100.90 will receive £112.30, an increase of £11.40 a week. This is a significant improvement for those who are among the most vulnerable in our society and is in line with the recommendation of the National Pensions Board. This is an extra measure, introduced since the budget and it will be especially welcomed by invalidity pensioners who have passed the age of 66 years.
Section 5 gives an increase in child benefit for 270,000 children. It provides for an increase from £20 to £25 in the monthly rate for the third child and from £23 to £25 for subsequent children. These new rates will come into payment from the first Tuesday in September 1994.
Section 6 provides for further improvements in the rates of family income supplement. This supplement, more than ever, is giving much needed support to workers trying to bring up families on low pay. Take-up under the scheme has shown a dramatic increase of almost 25 per cent on this time last year. There are now 9,600 families getting family income supplement and over 30,000 children benefiting from this payment. It is clear that the substantial improvements brought into effect last year are now having an impact on take-up under the scheme. We made a special effort last year to improve the situation and this has been reflected in the increased take-up.
The weekly income thresholds below which families can qualify for family income supplement are being increased by £10 at each threshold point. The effect of this is to give family income supplement recipients an additional £6 per week in their weekly payment from July 1994 as will as bringing extra families into eligibility for the payment.
As a special contribution towards job maintenance and the creation of extra employment, we are introducing a package of measures to support jobs in hard pressed labour intensive sectors, such as  clothing manufacturing and footwear and services, and to help those at work on low pay. These measures include PRSI reliefs for employers and levy exemptions which will amount to a cash injection of some £89 million in support for jobs in labour intensive sectors.
Sections 7 to 10 provide for a number of important PRSI restructuring measures which will being about significant changes in PRSI contributions and income levies directed at supporting jobs in labour intensive industries and those at work on low pay.
The main elements of the PRSI package are, first, a reduced rate of employer's PRSI contribution of 9 per cent, down from 12.2 per cent, which will apply across all sectors of employment where the employee earns £173 or less a week — the cost of this concession is about £31 million this year. In order to offset some of this cost, the contribution ceiling on the employer's contribution has been raised to £25,800 instead of £22,200. This will contribute an estimated £3 million this year bringing the net cost of these PRSI changes to £28 million in 1994. The full year investment in this concession is £46 million.
The introduction of a new employer's PRSI exemption scheme will operate on a similar basis to the successful 1993-94 scheme which generated some 3,770 jobs over the past two years. Under the new scheme, employers who take on additional employees from the live register between 6 April 1994 and 5 April 1995 will not have to pay the employer's share of PRSI contributions in respect of those employees during the two year period 6 April 1994 to 5 April 1996, provided the employees concerned represent a net increase in the number of employees in their employment over that applying on 21 February 1994. The value of this concession to an employer is considerable; it can be worth £1,268 a year in respect of a new employee with earnings of £200 per week.
The health contribution and the employment and training levy for low paid workers will be waived. Up to now  they have been responsible for paying these levies on behalf of employees who are medical card holders. These levies amount to 2.25 per cent resulting in an employer's PRSI contribution of 14.45 per cent in some cases. It is estimated that 100,000 workers have medical cards so the measure will represent a significant benefit — up to £200 per employee — for their employers. This move will not only reduce PRSI costs but will also simplify administration of the system for all 125,000 employers. This measure is in line with the advice of the expert working group on the integration of the tax and social welfare systems in its interim report delivered before Christmas 1993. The waiving of these levies, provided for in sections 34 and 35 of the Bill, is not confined to people with medical cards, but it will also provide a boost to the take home pay of all lower paid employees and self-employed people who do not have medical cards. From 6 April 1994, employees who earn £173 or less per week and self-employed people whose annual income is £9,000 or less will no longer be liable to pay the 2.25 per cent levies.
I will keep the possibility of further concessions on PRSI under review. The current sound financial state of the social insurance fund is one of the factors which has allowed me to make the present concession. This is in part due to the continued success of our efforts to reduce black economy working. The value of these activities is clear in that they improve receipts to the fund and they allow rates for the legitimate economy to be set at the lowest possible level. Having regard to the primary objective of the Social Insurance Fund, which is to provide pensions and benefits for workers, I hope to continue down the road of shaping the PRSI system so as to encourage employment.
The legislative basis for the introduction of the new survivors pension scheme is contained in sections 11 and 14 of the Bill. For the first time in the history of the State we are introducing a contributory pension for widowers which will put widows and widowers on equal terms  in relation to survivor's pension provision. This new pension is a huge breakthrough in the development of our social insurance system and it puts Ireland foremost among our European Union counterparts in providing equal treatment for men and women who become widowed.
Over 9,000 widowed men and their families will benefit for the first time under the new arrangements which will come into effect from next October. Under those arrangements, men and women who are widowed will be able to qualify for a contributory pension on the same basis on their own behalf or their late spouse's PRSI record and subject to the same contribution conditions. The cost of the new survivor's pension is about £6 million this year and up to £27 million in a full year.
There are currently over 85,500 widows receiving a contributory pension at an annual cost of £2 million. I want to make it clear that their situation will not be changed in any way by the introduction of this new “equal treatment” measure. This progressive move is a practical recognition of our changing family structure. Given our young population increasingly both spouses are participating in the workforce. In these circumstances, a surviving spouse — whether a woman or a man — with the responsibility of a young family is clearly in need of income support.
Sections 15, 16, 18 and 30 provide for improvements to the means tests for social assistance schemes. Section 15 deals with improvements in the lone parent's allowance in the case of lone parents with income from employment or self-employment. The current earning disregard of £6 for each child is being replaced by a flat rate disregard which will be prescribed in regulations. The new disregard will be set at £30 a week, inclusive of the initial means disregard of £6. In addition, where earnings exceed the new disregards, the amount of lone parent's allowance payable will be reduced by £1 for each £2 earned, instead of the current £1 for £1 arrangement. These improvements in the means test will  mean that a lone parent with one child earning £80 per week will be better off in their lone parent's allowance to the extent of £18.90 a week. The changes will come into effect from 21 July 1994. This is an important development. Senators will note that a lone parent will be able to earn £2 and be reduced by only £1 or £30 and be reduced by only £15. This is a major change in the system and, in conjunction with the new £30 per week disregard, it will encourage lone parents to join the workforce. This provision will be welcomed by them.
Section 16 improves the existing provisions for the assessment of means for carer's allowance in the case of a carer where the spouse is in employment or self-employment. For the first time, a prescribed amount of earnings will be disregarded in the assessment of means. The earnings disregard will be set at £100 a week. This section also increases the initial means disregard from £2 to £6. These improvements will come into effect from 28 July 1994 and will ensure that an additional 500 carers will get the allowance for the first time and a further 350 existing carers will get increases in their weekly payments. For example, a full-time carer with a spouse earning £160 a week, who would not previously have been entitled to any payment, will now receive a weekly carer's allowane of £34.
Section 18 introduces a number of improvements to the current arrangements for the assessments of means for the purpose of various social assistance schemes. These include disregarding of the maintenance element of higher education grants for the purpose of the third level allowance scheme; disregarding mobility allowances or rehabilitation training allowances for all social assistance payments; exempting child benefit payments received from another EU member state; extending the exemption of home help income so as to include employment by an agency approved by a health board; and taking regulatory powers to exempt income derived from prescribed activities. What I have in mind here is exempting certain traditional  activities such as seaweed collection along the western seaboard. This is important because a major factory is located in that area and there is a possibility of building a second one. The income from the collection of seaweed is taken into consideration. This gives me the regulatory power to exempt income from certain prescribed activities.
Section 30 brings the provisions for the rounding of means in the case of the supplementary welfare allowance scheme into line with those applying to unemployment assistance.
Section 17 provides for changes in the maternity benefit scheme arising from recent developments here and abroad. Maternity benefit will now be payable in the case of a still-birth after 24 weeks of the pregnancy; the current duration is 28 weeks. In addition, this section provides that the rate of maternity benefit payable may not be less than the rate of disability benefit which the claimant would have received if entitled to it. This brings Ireland into line with EC Directive 92/85 on the protection of pregnant workers.
Section 19 will exempt people engaged in casual employment from the condition of having to have sustained a substantial loss of employment before qualifying for unemployment benefit. The precise definition of casual employment for the purposes of the exemption will be set out in regulations which I propose to make as soon as the Bill is enacted. This section also provides for improved arrangements governing the linking of claims for unemployment benefit. Senators will be aware of my commitment to review this matter as one of the issues remaining from the measures introduced in 1992.
Section 21 provides for the discontinuance of pay-related benefit payable with unemployment benefit in the case of any new claim made after 20 July 1994 and also increases the weekly earnings disregarded in calculating the weekly rate of pay-related benefit from £80 to £97.50.
The personal rates of disability benefit and unemployment benefit have been  singled out this year for an overall increase of 10 per cent, or £5.40 a week, which puts them on a par with the new long term rate of unemployment assistance, which is £61.00 a week. This special additional increase in the basic personal rates arises from the decision of the Government to discontinue pay-related benefit payable with unemployment benefit in the case of new claims with effect from next April. The savings from that measure are being devoted in full towards this special increase which will also apply to disability benefit from which pay-related benefit was discontinued in 1992. I should mention that, in addition to utilising the available savings, this special additional increase will cost £2.7 million this year.
Mr. Cregan Mr. Cregan
Mr. Cregan: How much are we saving?
Dr. Woods Dr. Woods
Dr. Woods: There is a saving of approximately £21 million but this is being ploughed back into the basic rates. I always said this should happen when pay-related benefit finally went. The report of the Commission on Social Welfare recommended the phasing out of pay-related benefit over time, and it has been reduced consistently over time. At this stage the balance is being removed but is being used to pay increases in basic rates, hence the 10 per cent increase in unemployment benefit and disability benefit. To provide for this increase, £2.7 million this year will be required in addition to the savings of approximately £21 million.
Section 20 allows injury benefit and unemployability supplement, payable under the occupational injuries benefit scheme, to be integrated with disability benefit. No one will lose out on their entitlements as a result. People who would have qualified for injury benefit or unemployability supplement arising from an occupational accident or disease will instead be entitled to disability benefit. In their case, the normal contribution conditions for disability benefit will not apply and their rate of payment will be at the full rate in all cases. This integration  measure will result in significant streamlining and easier administration.
Section 22 provides for an increase from £5 to £10 in the minimum weekly rate of unemployment assistance payable to single people whose means are assessed under the benefit and privilege rules.
Section 23 provides for an increase to be paid under the supplementary welfare allowance scheme in respect of a person aged 18 or over for a period of three months after completing or leaving second level education.
Sections 24 and 25 give power to the Minister to make regulations to enable participants in special schemes for the unemployed or “second chance education” initiatives to retain secondary benefit entitlements under the supplementary welfare allowance scheme, such as rent or mortgage interest supplements. The retention of secondary benefits has proved an important factor in encouraging long term unemployed people to participate in schemes of that nature.
Section 26 gives legislative effect across all social welfare schemes to the six weeks after death payment of the adult dependant allowance, where appropriate. This is a substantial expansion of this payment and I am sure it will be welcomed by Senators.
Section 27 provides that the limit imposed on couples, one of whom is in receipt of a pre-retirement allowance and the other in receipt of another single welfare payment, will not apply to those in receipt of the pre-retirement allowance on 2 April 1993, when the limiting arrangements came into force.
Sections 28 and 29 extend to contractors and subcontractors a number of existing provisions relating to the production of records for inspection by social welfare inspectors and the liability in certain circumstances to repay social welfare payments irregularly received by their employees. Section 28 also gives statutory authority to social welfare inspectors to investigate claims made by people resident in this country who are seeking payments from another EU member state, provided the other member state has  requested the investigation. The same arrangements will apply in relation to countries with which Ireland has concluded a bilateral social security agreement. It facilitates countries with whom we have such agreements if our inspectors can inquire about conditions or circumstances relating to clients of theirs and it saves them considerable administrative costs.
Section 31 provides for regulatory powers under which entitlement to certain occupational injuries benefits may be extended to categories of workers not covered at present for those benefits. It is my intention to use the regulatory powers in this section to extend occupational injuries benefits to workers the nature of whose work may require them to become subcontractors and thereby insured for PRSI pensions only, rather than remain as workers insured for the full range of social insurance benefits. Changes in working arrangements in the construction industry will receive particular attention. Over recent years the status of many workers, such as carpenters and others, has been changed from that of employee to contractor or subcontractor. This puts them into the self employed category as far as social welfare is concerned. They have limited cover for widows and orphans and other pensions. They are not covered for occupational injuries. This is a bad arrangement for people working on sites. I want to make arrangements to cover them and to have the power by regulation to look at other areas where this is a particular difficulty. This will be done after the passage of the Bill.
Section 32 provides for a number of consequential amendments to the 1993 Consolidation Act arising from the introduction of a standard rate of child dependant increases from July 1994.
Section 33 provides a legal basis for my Department to enter into contracts and joint ventures with various bodies for the provision of technical skills and services overseas as I mentioned earlier.
Sections 34 and 35 provide for consequential amendments to the Health Contributions Act, 1979, and the Youth  Employment Agency Act, 1981, arising from the PRSI restructuring referred to above.
Before concluding I would like to bring some further developments to the attention of Senators. The amount of £45 per week which is deducted from the earnings of a working spouse is designed to cover the expenses associated with being at work. An additional amount of about £10 per week may also be allowed for travelling expenses. The £45 disregard recognises the fact that the household does not benefit from the full net income of a working spouse because of such expenses.
In order to meet the need for equity of treatment as between claimants whose spouses are in different work situations, that is, both full-time and part-time work, and to meet the changing pattern of employment today, local offices of my Department were advised that the working allowance should be tailored to the actual number of days worked. The £45 weekly disregard allowance from spouse's earnings was converted to a daily rate of £7.50.
The purpose of the disregard from earnings is to cover expenses associated with being in employment such as the cost of lunches and so on. A person who works for less than a full week would not incur the same level of expenses daily as a person working full-time but would, nevertheless, require a minimum amount of disregard to meet such expenses. In order to improve the position of those who work just a few days a week I now propose to introduce a minimum amount of £30 disregard from earnings for a spouse working for three days or less each week, instead of the present £7.50 daily disregard. A spouse working four or more days per week would get the full £45 weekly disregard from earnings.
In the case of a spouse working one day per week the improvement means an increase in the disregard from £7.50 to £30. This will significantly improve the position for those spouses who work part-time while introducing greater equity in  the treatment of households with different employment situations.
Senators will be aware from recent media coverage of my concern about the effects on Irish emigrants to the United Kingdom and on the rights of Irish people living there of the UK Government's proposal to introduce a residence test for people seeking certain social welfare payments in the UK. Earlier this month I met with the British Secretary of State for Social Security, Mr. Peter Lilley, in London to discuss the proposal and its implications for Irish people generally. I received his assurance that the proposed new residence test was not intended to interfere with the traditional working arrangements and patterns of migration between the two countries. I welcome very much the Secretary of State's assurance in this regard and look forward to a satisfactory outcome to the matter.
In that connection it was agreed that a high level group of officials from both Departments would meet to agree a formula which would ensure that there is no negative impact on the traditional working arrangements and patterns of migration between the two countries. Those meetings are continuing this week.
The students' summer job scheme, which I introduced for the first time last year, will run again this year but with a number of important improvements. Last year's scheme proved to be a major success despite the short time available to get it off the ground. It was a very positive initiative which unearthed a large reservoir of community based jobs, a significant number of which were successfully completed by participating students. The scheme last year was of great benefit both to the students who participated and to the local communities who provided the jobs. Almost 6,000 students were approved to participate and approximately 4,600 of them took up the opportunities offered. The number of sponsors approved last year was 2,125 and they offered 9,083 jobs to eligible students.
I am improving this year's scheme by increasing the weekly rate to £45 this year compared with £40 last year. This will  enable participating students to earn a total of £540 over the period of the scheme, which is £140 more than last year. Senators will remember that the £40 last year related to 16 hours of work a week for ten weeks with voluntary or community organisations. Instead of applying the normal budgetary increase of 3 per cent, which would bring the rate to £42, I am increasing it to £45. I am also extending the duration of the scheme to 12 weeks this year compared to ten weeks last year and extending the period during which the work under the scheme may be carried out from the beginning of June to the end of September, which is a month longer than last year.
I am pleased to be introducing another students' summer jobs scheme this year with improvements which I know will enhance the scheme for both students and sponsors. I expect that participation will be substantially higher than last year for the benefit of both students and their local communities.
This Bill continues the long standing process of maintaining and safeguarding the position of those who depend on social welfare. In line with the programme for Government the real value of social welfare payments is being maintained. The general increases this year are above the expected rate of inflation and well above the rate of inflation last year. The additional increases, which will benefit 20 per cent of people on social welfare, will significantly boost incomes for these people. The increases apply to 40 per cent of the population as a whole.
Pensioners' incomes are protected and the additional increases for invalidity pensioners, improvements for carers and the “free schemes” extensions announced earlier will all contribute substantially to improving the position for pensioners. The introduction of the new survivor's pension marks a major breakthrough in social security provision in this country and the PRSI changes will directly support the creation of new jobs and help workers on low pay.
I look forward to a constructive debate on the measures proposed in the Bill and I commend it to the House.
Mr. Cregan Mr. Cregan
 Mr. Cregan: I welcome the Minister and congratulate him on his commitment to social welfare, the introduction of this Bill to the House and the points which he made in his speech, many of which are very relevant.
However, questions are being asked by the PAYE sector as regards payment of PRSI. While the Minister is talking about summer jobs schemes for students, there is a thinking in the community, whether we like it or not, that there is no easy answer to the issue which we should be discussing. The Minister is even admitting in his speech that we are just trying to keep benefits in line with inflation and creating a situation where we are taking from some to give to others because of the cost of social welfare. It is increasing by another £168 million this year, which is a great deal of money. Over £11 million is spent every day, which is serious for the taxpayer, of whom there are now fewer and fewer, particularly in the PAYE sector.
There was not enough emphasis in the Minister's speech on what is happening as regards the PRSI payments. PAYE workers are losing a large amount of money and there was an impression in the speech that as part of the EU regulations each person would be getting the same. I have always said — and I make no apologies for it — that we should regulate more the amount of money which is paid to each person. Whether people are on unemployment assistance, invalidity pension, disability pension or old age pension, everybody should get the same amount except those in receipt of the carer's allowance and those over 80 years. That is probably coming about slowly. Unfortunately, the amount of money paid every week, not by just employees but employers, who have to pay 12.2 per cent for every employee earning over £180, is being slowly deleted.
There are regulations in other parts of the European Union stating that everybody should get the same. That is what equality is about and it is evidenced by what happened with widowers. In the past we argued the widowers' case and  at last we got a result. While people in Government might take credit for granting equal recognition, the fact is that the equality legislation had to be implemented. If it had not been implemented the widowers could have taken a case to the European courts. I see no reason why anybody should take the credit now that widows and widowers are being treated equally. I congratulate the Minister for doing this after such a long period, but it was done unfortunately because of bad publicity in recent years.
I worry about the impression in the Minister's speech that some social welfare recipients will get a 10 per cent increase. There is a tightening up in the Department of Social Welfare in many areas, particularly that of disability benefit. I have brought many cases about which I am concerned to the attention of the Junior Minister. The Minister said that everybody will be better off, but that is not true, as I have already said, with regard to the PAYE sector and PRSI payments. I make the same point with regard to disability benefit.
Unfortunately, there are now graduated disability benefits, of which there is no mention in the speech. There is also no mention of the people who are being questioned and investigated by the State and the State's doctors to ascertain whether they are entitled to disability benefit. After long and expensive arguments between doctors and consultants, it has been proved that these people are entitled to disability benefit; but because of the graduated allowance which was introduced as part of the dirty dozen reductions many people are not getting the full allowance.
I brought a case to the attention of the Junior Minister, and I mention it to the Minister now, because we will be bringing it up on Committee Stage. It involves a person who was first on unemployment assistance and then disability benefit. He was questioned by the State on the basis of arguments made by the State that he was not entitled to disability benefit. After two years and at enormous cost to  the State, his consultants proved he was entitled to disability benefit; but because he was not receiving benefit or credit benefit in the previous two years, he is now only on graduated disability benefit.
We should not give the impression that everybody is being treated in the same way because they are not. The Minister will not deny that there is a policy in the Department of Social Welfare to investigate every case where money is paid where it should not be paid. I am not saying such a policy should not exist, because one is dealing with a black economy. However, people were investigated by the State and after the State admitted it had been wrong, a husband, wife and three children were left to live on a graduated disability benefit of £72 a week. I emphasis this particular case, but it is one of many and I am not getting any answers.
It baffles and frightens me to think that the Department of Social Welfare and the Minister in particular are prepared to take the glory and say that people are better off now. That may be the overall impression, but whether we like it or not, it is a fact of life that a husband, wife and three children are being asked by the Department of Social Welfare to live on £72.60 a week. I defy anybody to question me on that. This man has to go to the community welfare officer every week for more money. While the investigation was in progress he was not prepared to go to the community welfare officer because he felt he was within his rights.
I do not see any logic in having the Department of Social Welfare pay out a certain amount of money for welfare and the Department of Health pay out a supplement for other social problems such housing and allocations for rent. That is an area which the Minister should examine. One Department should take total responsibility for all problems relevant to health and social welfare and no other Department should be involved. The Minister spoke proudly of his involvement in discussions to establish joint ventures with social welfare staff and I agree with this. The Minister in particular and  his Department have built a structure of which many countries in Europe are conscious. When one considers the amount of money being spent in other parts of our social structure, one has to ask if one Department should be in charge of all contributions or spending in the area of social problems. This is an issue which the Minister did not mention.
Sadly, no one is prepared to say that this country is on top of the social welfare problem. More money is spent on social welfare every day and, as the Minister said, an extra £168 million will be spent this year. There has been a reduction in unemployment in other countries. It was evident in Great Britain in the last few months, but it is quite the opposite here. If there is a reduction in unemployment on any scale I would like to be informed of it because the impression outside the doors of this building is that there is no reduction.
People are not prepared to employ and I defy anybody who would say a reduction for employers from 12.2 per cent to 9 per cent for employees earning £180 a week is an incentive to create employment. I would like the real figures for job creation over the last two years because it does not seem to be working. The area should be seriously examined because we do not seem to be gaining. We are now being questioned by EU Commissioners about spending on FÁS schemes and job creation. Job creation presents a serious problem and we should not be slapping ourselves on the back and taking credit when the situation is in fact deteriorating and an extra £168 million has to be spent.
I welcome the increases and I will always welcome them. I welcome the fact that the report on social welfare is now being implemented and that we finally recognise that a basic rate has to be paid, something long overdue. At the same time let us not give the impression for a moment that we have solved the problem, that we can say that people are doing better and are better off. All of us, especially the well off, have a duty to look after the less well off.
 When I read the last part of the Minister's statement in regard to our students I wondered whether in creating these schemes we are taking opportunities away from the long term unemployed. It is only creating a situation where people do not employ a person in the normal way — they take on somebody for 16 hours a week for 12 weeks at £45 per week. We need to be very careful there. Nobody can deny that many people, young people in particular, are employed on FÁS schemes. Many greedy employers avail of the opportunity to take these people on a 12 week basis and get payment from one Department or the other. We are creating a false economy, we are giving the impression that people are working when in fact they are being paid by the State and greedy employers are gaining from their work. This is a very sad reflection on us.
The family income supplement has been increased by 25 per cent this year, which is long overdue. We must recognise that this area is relevant to creating proper long term work, particularly for people with families. If the family income supplement was advertised properly we could create many jobs because many people are not aware that they are entitled to these benefits. The employer is asked to give information about the amount paid to people on family income supplement. I am not saying that this is wrong, but the State should not cause undue embarrassment to the family receiving the supplement. The present system of collection should be changed. I see no reason why PRSI or any other benefits which have to be collected on behalf of that employee should not be deducted from the amount the employer is paying to the State so the family in question will not be embarrassed by having to go elsewhere to collect the family income supplement. The present system of payment is not logical.
I wish to get some information from the Minister's officials in regard to the cost of implementing that particular scheme, not the amount of money paid out in family income supplement but what it costs per family to supply the  books and the amount paid to the Post Office for administering the scheme. That is a very important point. We will bring that up on Committee Stage.
The Minister is talking about the low paid worker, particularly in our clothing and manufacturing and footwear services. When the Minister, Deputy Ahern, brought in VAT in these areas in the budget, it was argued that the low paid worker would be affected. Now it is coming home to roost with job losses and with the migration, as the Minister calls it, between one country and another. I did not know we were cotton pickers. We should not be talking about migration between Britain or any other country and here. The fact that the Minister is prepared to speak about the migration of workers between Britain and Ireland reflects badly on the Government. We must never give the impression that Irish people have to go to Britain to get involved in cotton picking or in building when the British economy is right. We are proud of the fact that our emigrants when they go to other countries are not recognised as a particular type of person doing a particular type of work. The word “migration” gives the impression that they are needed for particular types of work and I resent that.
In regard to emigration, jobs in the clothing industry have been lost to Ireland because of the VAT charges which were implemented two years ago. Is it not true to say that particular manufacturing organisations that were set up in Ireland have moved to Britain and set up there at a lesser cost? In the labour intensive areas of clothing and shoe manufacturing we are now prepared to take less PRSI and lower levies from employers. It has now been proved that the measures introduced in that budget were of no help in creating and holding jobs in the clothing manufacturing area. Have we made money from the increases in VAT and charges on the clothing industry? The question must be asked, as we are talking about £89 million.
I wish to speak about the labour intensive industries, the building industry and  the black economy. I have been very conscious of that for many years and the Minister has tried to bring in schemes to make sure everybody is protected. The Minister is talking about the self-employed, people working in areas which are contracted out, such as carpenters, masons and others. The Minister is worried that they are not covered under all the schemes. We need to be very careful that we do not create a disincentive to work. There is always an incentive to work in the black economy. All the schemes and regulations that we implement do not make it easier for people to work for themselves; they make it more difficult. If it is not the Department of Social Welfare or the Revenue Commissioners, somebody else is involved.
It was shown that a person who was prepared to start up a business for themselves had to visit 11 or 12 different agencies, and we must learn from that. The Minister is putting a strong emphasis on people who want to work for themselves or who have to work for themselves because of the structures which have been set up in the construction industry, because they will not get work otherwise. People are employed as subcontractors. That started on a large scale when Margaret Thatcher was in power in Britain and it is now being done here. The Minister should not create a situation where they are encouraged to work in the black economy. I notice the Minister is putting the responsibility on employers to pay back any social welfare money claimed by any of their employees while working. I see nothing wrong with that. However, if we are creating benefits for the protection of spouses and families in certain categories we would want to look more closely at that. The Minister did this for part-time fishermen and I see no reason it cannot be implemented for people in the construction industry or other sectors. What goes for one should go for all.
Serious questions can be asked as to whether we are treating everybody equally because I do not think we are. From a political party point of view we seem to be protecting people in certain  relevant areas. The Minister is prepared to give benefits to people who gather seaweed for the seaweed factories which he is not prepared to give to people in other areas. That is why, on Committee Stage, we should discuss whether everybody should be entitled to the same benefits.
I was at a conference on loan sharks in Cork attended by the Minister and his Minister of State. I was surprised at the statements made by the Minister of State about authorities not caring properly for less well off people; I thought he went too far. It would be irresponsible of me not to say that because a lot of publicity was given to those remarks. The facts are that local authorities are caring for the less well off and the proof is there, particularly in my own local authority. I recently investigated cases of people who are in the hands of loan sharks, and every effort is made to help them. I have abundant proof of that. I resented the Minister of State's remarks which I never expected to hear from someone in the Department of Social Welfare. The Minister knows local authorities are looking after disadvantaged people, although the prevailing situation was not reflected in media coverage of the Minister of State's remarks. As Opposition spokesman on Social Welfare, I thought those remarks were very unfair and if the Minister of State was in the House I would say the same thing.
I congratulate the Minister on changes in benefits for widowers which are long overdue. At long last we have recognised that all widowed persons are equal and entitled to the same benefits. Over the past 40 years very little recognition was given to widows but none at all was given to widowers. We are now, rightly, giving allowances to people like carers who look after the elderly at home. This reflects a changing attitude which is very welcome and is the result of long arguments over the years.
While the lone parent's allowance is welcome, let us not create a situation where we are taking from one group to give to another. People should not suffer because some have benefits and others  do not. The Minister must be careful of this because lone parents are now entitled to earn up to £30 per week extra although they could lose £15. We must examine whether that system would take from other areas of benefit. For example, would an employer hire one category of worker rather than another because of unequal income levels? We cannot achieve equality where people can work for varying levels of income. While we mean well in dealing with lone parents, carers, widows and widowers, we must not create a society of greedy employers. I will elaborate on that on Committee Stage I would welcome the Minister's views.
Are all payments due on 28 July 1994? If so, they might not be paid until August. I remember when Budget increases were paid in March, that was changed to May/June and now it is 28 July. That is a long way into the year before people get their benefits. Something similar happened to the benefits paid at Christmas. At one time the payment was 100 per cent, then it was reduced to 70 per cent and some people were not entitled to it at all.
While I congratulate the Minister on social welfare improvements and the percentage increases in certain categories, a more important question needs to be asked. Should we tell the PAYE workers that PRSI means nothing, that it is just a payment? Why not introduce one tax? PRSI will no longer be paid to employees; it is being taken from them and given to the long term unemployed. I am not saying we should not be doing that, but let us not create the false impression that the pay related insurance scheme is still relevant. It is not, because one no longer receives any benefits from it.
Mrs. McGennis Mrs. McGennis
Mrs. McGennis: The Minister said this is one of the most important pieces of legislation that comes before the Houses of the Oireachtas each year, and I agree with him. I view this Bill, and the role of social welfare, as protecting those who are vulnerable in society as well as ensuring that we create an environment that  promotes job creation and the Minister has identified how this Bill fulfils both those requirements. I wish to comment on a number of issues arising from the Minister's speech. The first one — which is an interesting innovation — is the question of joint ventures, selling our expertise and acknowledging the expertise of our Civil Service. It is worth putting on record that we have a very capable Civil Service whose skills are now being marketed.
The Minister said that a group from the Republic of Albania is scheduled to visit here in the next few weeks. I visited Albania a month ago and if ever a country was in need of all the assistance and advice it can get, Albania would fulfil those requirements. I do not know what the cost of selling these services will be or what price we will charge. During my visit to the Parliament in Tirana I saw that the Government is making great strides in developing and nurturing democracy in very difficult circumstances. The difficulty for the new democratic government carrying out its work is seen in the fact that it is unusual for Members of Parliament to have copies of the Bills being discussed. Members seldom receive copies of legislation or edicts from the President because of the shortage of paper. They do not have paper to print the Bills. They also have no way of recording the business of Parliament and circulating it to members. I ask the Minister when selling our services, to be aware of the problems of emerging democracies and their need for our support. If that support must initially be given at a low, or at no cost, I urge the Minister to do so.
The role of social welfare is to protect the vulnerable. I will now discuss the aspects of the Bill with that purpose. The Minister has announced an extra 12 per cent for recipients of disability or unemployment benefit. That is a huge increase. Even the Programme for Competitiveness and Work has not seen such increases for those lucky enough to be employed. There is a 6 per cent increase for 185,000 people on the lowest welfare  payments, such as unemployment assistance and supplementary welfare allowance. That is in line with the rates recommended by the Commission on Social Welfare. Last year there was a disagreement between myself and another Member of the House when we discussed the supplementary welfare allowance. I wish to put on record my appreciation of the tremendous work being done by the community welfare officers who administer the supplementary allowance scheme. They are very compassionate and helpful. They have a lot of discretion in deciding what the priorities are, and they do so very well.
Section 3 provides for increases of £10.20 per week for single persons on invalidity pensions; there is an increase of £11.40 per week for a married couple currently in receipt of £100.90. These increases reinforce the primary role of the Minister and his Department to protect the most vulnerable in our society. Child benefit has again been increased. It is easy to take such increases for granted. We now expect them and if they are not made there will be a huge outcry of criticism. I remember when there were no increases in child benefit for a number of years because of the need to improve the financial position of the country at the time. Instead of taking such increases for granted or criticising them, the increases should be acknowledged. They are important to the women who are in receipt of child benefit.
During the debate last year on the effects of the budget on social welfare, the Minister of State said that the uptake of family income supplement, which is a support for those on low incomes, was not as great as expected. I am heartened that, because of the initiatives of the Minister over the last 12 months, there has been an increase of almost 25 per cent in the uptake of family income supplement which is an important support for low paid workers.
The other function of this Bill is to promote job creation. This Bill goes a long way to help to promote employment. I welcome the reduction in  employers' PRSI and the Minister's reference to improving and protecting the position of those in labour intensive industries. I have argued in my party and debates in general for the need to pay particular attention to labour intensive industries. It is baffling to me and the community that we should subsidise machinery and penalise people. That was how the issue was perceived. We need to attract multinational corporations to this country. We cannot stand alone and presume that we can solve our unemployment problem by encouraging indigenous industry. I never could understand why there appeared to be a tax on people. I am heartened that the PRSI reliefs will apply to labour intensive industries and to those on low pay.
Another provision in this Bill which helps job creation is the employer PRSI exemption scheme. The Minister said this has generated 3,770 jobs in the last two years. Such statistics are seldom quoted. Usually the negative effects of social welfare and taxation hit the headlines. This scheme is quietly working and the changes the Minister has announced in this Bill will greatly increase that figure. The Minister has obviously heeded the opinions of others and the recommendations of the committee set up to integrate the tax and social welfare systems. I received numerous complaints that there was a disincentive to employ certain categories of workers, particularly medical card holders. I welcome the changes in the employers' PRSI contribution which will represent a significant benefit of up to £200 per employee to employers of the 100,000 workers who have medical cards.
The thrust of this Bill is to integrate the tax and social welfare systems. Senator Cregan has referred in this and previous debates to the fact that we cannot have a social welfare system which is seen to be a disincentive to work. The direction taken by this and last year's Bill towards integrating the tax and social welfare systems can only be seen as an incentive to work.
 Last year I welcomed the changes for the construction industry. The Minister said today that he is in a position to make improvements in social welfare due to the current sound financial state of the social insurance fund. It is no accident that this fund is in a sound financial state. For many years an enormous labour force worked in the black economy. That benefited nobody, certainly not the employees. This loss to the State meant that those who were working and paying their contributions and entitlements were also losing out. It could even be said that the only ones who benefited from it were employers. However, they will not have benefited in the long run because presumably the Minister will pursue any firm whom he feels have operated in the black economy in the past. It is grossly unfair for any company who tenders for work on the basis of paying their proper entitlements, tax and social welfare insurance to lose out, either because of a technicality or out and out dishonesty on the part of other companies who do not make those contributions. The social welfare measures identified last year, which are also mentioned in the Minister's Second Stage speech, will see a bringing in of additional firms into the social insurance fund. If they are not brought into the fund, they do not deserve to operate in the marketplace.
Senator Cregan referred to the new survivor's pension. I am also pleased that the Minister has extended this contributory pension to widowers. I am not in favour of discrimination in any form. It is unacceptable and unfair to discriminate against any section of society by virtue of their gender. Nevertheless, I welcome the introduction of the widower's pension.
In his speech the Minister said that “there are currently 85,500 widows receiving a contributory pension at an annual cost of £282 million” and they will see no change in their entitlements. That effectively means there will be no means testing. There may have been a suggestion or fear that the widows pension would be means tested after the budget. The Minister has categorically assured  the House that this will not be the case. At a time when families are most vulnerable it is not good enough just to make the right sounds. The family should be recognised and supported and this aspect of the budget certainly does that.
The sections relating to improvements to means tests not only looks after those who need protection but also specifically encourages lone parents to either go back into education or into the workforce. I acknowledge the role the Department of Social Welfare plays in supporting lone parents and their children. That support and maintenance must continue as long as it is needed. However, absentee fathers who can support and maintain their families are currently not, and are not seen to be, pursued by the State. Unless a wife or husband takes their spouse to court for maintenance the State takes no part in making absentee spouses — mainly fathers — support their children. Either this or some other Government will have to bite the bullet on this issue at some stage.
I recently brought in a lone parent to see an official adviser in a Government Department. When asked if the father of the child was supporting her, she said that he was not. Indeed, she said that she would not even take money from him if he offered it to her. The perception that a person has no responsibility after fathering a child must be changed. The only way that can be done effectively in the long term is to make moves towards making parents, and ultimately that means fathers, responsible for their children.
It is widely acknowledged that the carer's allowance should be dealt with by the Department of Health. Both the Minister and his Department have implemented the scheme up to now and have taken the criticism and flak associated with its shortcomings. While no one could claim that £34 a week is a huge amount to receive — it is not — the changes in the budget, and especially the increase in the amount which can be disregarded as income, means that many more people will qualify and be able to  avail of the carer's allowance. It is an acknowledgement and recognition of the tremendous work done by those who willingly give up either any opportunity they may have to further their careers or their leisure time to look after their family. The amount of money it would cost to the State to provide the kind of care for elderly or handicapped members of a family in need of hospitalisation or residential care would be astronomical and would increase the health budget dramatically. The low cost associated with the carer's allowance gives a tremendous service to the State. I urge the Minister, whenever the opportunity provides itself, to increase this allowance each year. The carer's allowance should eventually be administered by the Department of Health; it is currently being done by the Department of Social Welfare.
I am glad to see that the Minister has made changes in maternity benefit, especially in cases of stillbirths. There was a Bill initiated in this House by the Minister for Equality and Law Reform, Deputy Taylor, which for the first time introduced a register of stillbirths. The criteria laid down for the registering of stillbirths was either for the foetus to be 24 weeks old or to weigh 500 grammes. The Minister has acknowledged these changes by paying the maternity benefit to those who suffer this terrible loss.
There are changes in various benefits which the Minister said he will be bringing under the one area. The various booklets issued by the Department of Social Welfare are confusing. There is much uncertainty about people's entitlements, which scheme they are entitled to and what elements of social welfare they can benefit from. The more we move towards the integration of the social welfare system under a smaller number of headings, the better. Certainly, the Minister has stated that this is his intention.
The extension of the provision for supplementary welfare to three months for school leavers is also welcome. The Minister referred to sections 24 and 25, which are an incentive for people to get back into second chance education. It has been  widely proven that there is a strong link between leaving school early and being unemployed. The chances of a large number of those on long term unemployment getting back into the workforce can only improve by returning to second chance education. The Minister has turned the social welfare code on its head by facilitating those who wish to go back into second chance or third level education without losing their social welfare benefits. They would not be able to do so otherwise.
I referred earlier to the changes in the extension of the provision for social welfare inspectors to inspect records so as to ensure a reduction and the eventual elimination of people working in the black economy. This is not simply a case of “big brother” trying to catch people who have evaded the system. The community will benefit from the elimination of the black economy. The Minister said that the healthy state of the social insurance fund meant he could improve many social welfare benefits. The elimination of the black economy will mean that those who are entitled to benefits will receive them because more firms will be brought into the social insurance fund.
I have reservations about the working spouse's allowance. Perhaps this is not the Department of Social Welfare's responsibility, but that of the Department of Finance. The measure whereby £45 a week will be disallowed before affecting the social welfare entitlement is good. I thought the Minister was going to say that those who worked fewer than five days a week would be substantially hit and that their situation would disimprove. However, as he pointed out, he will increase the amount to £30 for those who work three days or less per week.
It must be acknowledged that if two spouses with children go to work — many of them are lucky to have jobs, even if it is only part-time — there are substantial costs for child minders. A recent report showed this is an area fraught with dangers and worries for spouses. When couples with young children go to work they want to ensure they leave their children with the best carers. Such care is not  free or cheap. There are child minding facilities for the small number who are most in need in our society.
Unless there is recognition of the amount which couples must pay to have their children looked after, there is a disincentive for women to go to work, because by the time they pay tax and meet the costs of travel, lunches, child minding, etc. there is little take home pay left. People do not go to work because they greatly enjoy it, but because they need the money to pay mortgages, etc. This allowance must be increased or an allowance for the amount of money people pay for child minding must be included in the tax system.
I disagree with a point Senator Cregan made about cotton picking. I congratulate the Minister for meeting his British counterpart to ensure that the position of Irish emigrants is protected. There would have been a need to criticise the Minister if he had done nothing. However, he met his British counterpart to ensure the protection of Irish emigrants. There has always been a good relationship between the UK and Ireland in terms of the workforce. It would be wrong to pretend it does not exist and to place Irish emigrants in a disadvantaged position in the UK. The Minister would have been criticised and found wanting if he had not taken the initiative. I congratulate him for clarifying the position and for ensuring that Irish people who seek work in the UK are not disadvantaged.
People often ask what last year's crisis was about. Last year's crisis was a suggestion by the Opposition that students should work for the dole. A number of students participated in the scheme and, as the Minister said, a number of communities benefited from it. Not only were the students pleased to participate in the scheme, but I have been told that it looks good on a curriculum vitae. These students are participating in the schemes in order to use their experience in the community and they are also being paid. The Minister has indicated its success, particularly when we were told last year  that there would not be enough places or that students would lose their dole.
Mr. Cregan Mr. Cregan
Mr. Cregan: They could lose the dole.
Mrs. McGennis Mrs. McGennis
Mrs. McGennis: As I understand it, they cannot lose the dole.
Mr. Cregan Mr. Cregan
Mr. Cregan: Could they not lose the dole?
Mrs. McGennis Mrs. McGennis
Mrs. McGennis: No. The Minister said that if places were not available for those who applied last year, they would not lose their dole.
Mr. Cregan Mr. Cregan
Mr. Cregan: They are not entitled to contributions.
An Leas-Chathaoirleach An Leas-Chathaoirleach
An Leas-Chathaoirleach: Senator McGennis, without interruption.
Mrs. McGennis Mrs. McGennis
Mrs. McGennis: Last year's crisis has given students an opportunity to work and it has been of benefit to the communities where students were willing to work. Some £540 for 16 hours work per week for ten to 12 weeks is not bad money. A student I know who is hoping to get into college next year would be happy to avail of this scheme.
This Government has been criticised as a tax and spend Government. The Department of Social Welfare spends over £3.8 billion per annum. I defy anyone in this or the other House to identify how spending in this area should be curbed.
Mr. Quinn Mr. Quinn
Mr. Quinn: I ask for permission to share my time with Senator Sherlock.
An Leas-Chathaoirleach An Leas-Chathaoirleach
An Leas-Chathaoirleach: It is a matter for the House to decide, but it is irregular to do so. There is a ruling from the Committee on Procedure and Privileges that spokespersons cannot share their 30 minutes.
Mr. Quinn Mr. Quinn
Mr. Quinn: I intend to speak for ten minutes and I wonder if it is possible to make an exception in this case.
An Leas-Chathaoirleach An Leas-Chathaoirleach
 An Leas-Chathaoirleach: I am reluctant to do so. However, if the House agrees, the Senator may share his time with Senator Sherlock. Is that agreed? Agreed.
Mr. Quinn Mr. Quinn
Mr. Quinn: I welcome the Minister to the House and I also welcome the recognition implicit in this Bill that the PRSI system has a role to play in the creation of jobs. Senator McGennis and Senator Cregan referred to this when they mentioned that the PRSI system is a disincentive to work. The importance of that role is greatly underestimated and the steps taken in this Bill are too little and too timid to have any significant impact on employment and job creation.
There are two positive measures in this legislation. Employers contributions have been reduced for people earning under £175 a week. The rate decreases from 12.2 per cent to 9 per cent. There is also a new scheme to exempt employers from PRSI for two years in respect of extra employees they take on from the live register. We must welcome each little crumb, but these are nothing but crumbs in the face of the problems we are trying to address.
If we want to increase the number of jobs significantly in the short term, we must price the lower paid into work. We must face the fact that we want more lower paid jobs. It is not fashionable to say that, but it is the truth. We must create a situation in which relatively low paid jobs will be more attractive than being unemployed, so that people will be given an incentive to accept such work. At the same time we want to create a situation where an employer will find it attractive to take on low paid people. In other words, the cost of taking on a person offers the employer an advantage in terms of an employee's value.
At present we have the reverse of that intention. When people come off the live register and go to work they have to be paid significantly more than the social welfare benefits to make it worth their while. A large part of the reason for that is that the employees pay PRSI on the first pound they earn and they pay tax on  each pound. PRSI is a tax like any other. There is no logic in that system.
Mr. Cregan Mr. Cregan
Mr. Cregan: That is right.
Mr. Quinn Mr. Quinn
Mr. Quinn: We have tax free allowances on income tax on the principle that one should be able to earn a basic minimum before the State takes its slice, but that is not the case with PRSI.
The same thing happens on the employer's side. On the first pound the employer has had to pay 12.2 per cent, which is now being reduced to 9 per cent but only for those whose wages do not exceed £173 per week. That rate does not apply to the first £173 per week for everyone; it applies only to those below that threshold. That will create a vicious poverty trap when this arrangement is implemented. Even if the employer's rate is 9 per cent that still means more than 15 per cent of the wages going on PRSI at the lowest levels. That is what I mean by pricing people out of work. At the levels we are talking about, that 15 per cent is the difference between a job being created and a person staying unemployed. I have called before for the total exemption from PRSI of the first slice of all income on the employer's side and on the employee's side. I understand the cost would be around £14 million for each £1,000 of income exempted. Where are we going to get that money?
I made a promise when I came into this House that I was not going to make proposals for reducing benefits without making a proposal as to how we could pay for them. The money could be raised elsewhere in the system, notably by abolishing the ceiling on PRSI, in other words, turning the system on its head and putting the exemptions at the bottom rather than at the top. However, we are rapidly eroding our ability to take that option. Year after year we raise the PRSI at the top end, not for the purpose of reforming the system and creating jobs but just to raise a little revenue in the laziest possible way.
This year the ceiling on the employer's side is increased by £4,500 which means that for every employee earning £26,000  a year the employer will have to pay an extra £549. That extra tax — and I use the term “tax” advisedly — has to be paid irrespective of whether the profits are there to cover it. This is an increase in the costs of the business itself. For some companies that will be a significant increase in costs and I have no doubt that jobs will be lost as a result. Every time we sneakily raise these ceilings we increase the cost on business and, more importantly, we reduce our ability to take the one big step we have to take, which is to fund exemptions at the low end of the scale by raising the ceiling at the other. In doing so we must call into question the seriousness of our intent to tackle the jobs crisis.
It is surely not rational to set job creation as the main national objective while at the same time systematically pricing people out of work. It is time we stopped such madness. I will sound a little like the ancient Roman senator who said delenda est Carthago — Carthage must be destroyed — and who kept saying it until Carthage eventually was destroyed. I will repeat for the Minister an incident I spoke about before. I met an American industrialist in America two months ago who was on the board of a large number of companies. On finding out that I came from Ireland he turned to the others at the table and told them what a wonderful country Ireland was and how great it was to holiday and play golf in Ireland, and he told them they must go there.
However, he advised them that whatever they did they should not invest in anything that creates jobs in Ireland. He said he was on the board of many companies and he had set himself a target of never encouraging any of the companies to invest in jobs in Ireland. I was jolted and asked him why. He replied that a company with which he was involved had invested in Ireland and when it went to close the factory it was almost impossible to do so. The Prime Minister was in touch with the chairman, the industrial development authorities, the trade unions and the nation as a whole could not understand why they wanted to close  the factory. He said we did not seem to understand that people who are going to invest in Ireland are taking risks and that we have to take the opportunity to make it more attractive to create jobs there than elsewhere. We must remember when we take steps to protect people who are in work that sometimes those steps work against the interests of those who are out of work. Let us take that into account. One of our objectives should be to get those who are out of work back into work even if, on occasion, it is not in the interests of those who are at work. I add that as a reminder to the Minister although it is not directly related to the matter under discussion. As regards job creation the Minister has taken steps in the right direction but has not gone far enough. We must turn this system on its head in order to achieve this goal.
Mr. Sherlock Mr. Sherlock
Mr. Sherlock: The PRSI contributions system militates against employment. From a local point of view, beginning in the mid-1980s, we pressed our local authority to employ more people and it was pointed out to us that the costs of employing persons, even for ordinary road work, was high. We prepared a document which was submitted to the Department of Social Welfare asking for co-operation between it and the Department of Finance on the question of payment pointing out that to re-employ people would cost very little on top of what they would be receiving on social welfare. We were always advised that the cost of employing a person is prohibitive. The same happened recently when the council agreed to take on an additional 300 or 400 workers for 13 weeks in the next couple of months to do maintenance work on the roads. We were again told that it could not continue because of the high cost of employing people.
I want to emphasise the taxation of unemployment benefit, the greatest injustice ever perpetrated by any Government. I regard it as worse by far than the decision of a previous Government to tax children's clothes and footwear. The taxation of social welfare  payments is an attack of an unprecedented nature on the less well off. The Finance Act, 1992, included a provision for tax on disability benefit and injury benefit and it is now proposed that unemployment benefit will be reckonable for tax purposes.
I will give the Minister an example of the impact this will have on the unemployed and those on disability benefit. A person receiving a single person's tax allowance of £2,175, plus the PAYE allowance of £800 and the PRSI allowance of £286 has a total tax free allowance of £3,261. The most recent tax free allowance certificate issued to that person showed that because he received disability benefit for a number of weeks in 1993, totalling £852, his tax allowance was reduced by that amount.
That is the most savage assault on a working class person in the history of the State because his tax free allowance has been reduced to £46.33 per week. I found it difficult to persuade that person to remain in employment. How can the Minister speak of equity in the face of such a savage gesture? If that is how this measure will be applied, workers who once received unemployment benefit will not know what has happened when they go back to work. What will happen to people who may be made redundant in the coming year? This provision must be changed and the sooner people are alerted to it the better.
The decision to discontinue pay-related benefit for new claimants has been made despite the fact that PAYE workers pay such a high rate of social insurance. If workers are paying PRSI why should they not be paid pay-related benefit? Soon they will no longer benefit but they will continue to pay the high rate.
Indisputable figures indicate that the tax take from recipients of disability and unemployment benefits for this year will be £50 million. This State gave a tax amnesty to wealthy tax cheats who defrauded the system while taking £50 million from those on social welfare. How can this be justified? Such an injustice  has never been perpetrated in the history of the State.
Any tinkering with the system will not make up for the loss that will be suffered. The taxation of unemployment and disability benefits will hit those on low incomes, reducing their living standards and making it more difficult for them to make ends meet. It is another example of twisting the financial screws on those on the lower end of the scale while more concessions are granted to the well off.
The budget and this Bill represent a nail in the coffin for the insurance based social welfare system. The pay-related benefits were once the outstanding feature of the Irish social welfare system but they have been systematically whittled away and are now being abolished. The introduction of pay-related benefit gave security to those who were unemployed due to illness because they received 80 to 90 per cent of their pay during that time and sustained a reasonable standard of living. However, under this Bill they can no longer do that.
The Minister tried to divert attention from this further cutback by focusing on the 10 per cent increase in disability and unemployment benefits — an increase of £5.40 per week. However, the abolition of pay-related benefit for all new claimants will mean a loss of up to £16.80 per week. Those unfortunate enough to lose their jobs this year will find themselves over £11 per week worse off. It is difficult to understand this worsening of the living standard of those unfortunate enough to be made unemployed.
Workers are expected to continue to make pay related contributions but are no longer to receive pay-related benefits. This represents a unilateral change to the social insurance system.
Another matter of increasing concern to a growing number of women is the refusal of the Government to pay arrears for transitional payments to which the women are entitled under rulings of the European Court. Last week there was a large contingent of people from Cork outside Leinster House. They would not have come all that way to parade outside this establishment if they did not feel they  were justifiably entitled to payments they were not receiving. The claims were in respect of the alleviation payments introduced in 1986 but paid only to men. In March 1991 the European Court ruled in favour of two Irish women who had taken a case to that court. The matter was then referred back to the Irish Supreme Court. Before the court could consider the matter the Department settled the case but the position is not clear. People are having to resort to the legal profession to get their legal entitlements. That is not satisfactory.
Mr. Cregan Mr. Cregan
Mr. Cregan: It is making the rich richer.
Mr. Sherlock Mr. Sherlock
Mr. Sherlock: I do not wish to criticise Senator McGennis but I am delighted to hear the community welfare officers in Dublin are so generous.
Mrs. McGennis Mrs. McGennis
Mrs. McGennis: They are excellent. Are they not so in Cork?
Mr. Sherlock Mr. Sherlock
Mr. Sherlock: It is good to hear that because it does not compare to the experience in Cork. One continually has to make representations on behalf of people in receipt of allowances. Discretion is not being used in many cases but to some extent at least it should be discretionary. The usual answer is that there is no hardship because the person claiming is in receipt of an income above the levels of supplementary welfare.
There must be an increase in death grants because there has been no such increase for a number of years.
Ms O'Sullivan Ms O'Sullivan
Ms O'Sullivan: I will outline overall principles in the context of this Bill which implements the social welfare aspects of the budget. Given the setting up of the National Economic and Social Forum there has been widespread debate on the direction the social welfare system should take. In many ways we have inherited a mixed system. There is a mixture of universal payments, such as child benefit, means tested payments, such as unemployment assistance, and insurance based payments, such as unemployment benefit  and disability benefit. It is important to have a general debate about the direction in which we are proceeding. Obviously, it is necessary to retain a certain amount of the mix, as do other countries, because we must cater for the various different strands in society. It is also important to debate the type of issues and choices we need to make in developing the system, particularly given that there is widespread poverty, a high level of unemployment and a large percentage of the population dependent on the social welfare system.
It is important that what is generally known as the third strand has been included, particularly in the context of the National Economic and Social Forum. This is widening the debate and focusing on issues such as how we prioritise the quite large section of public spending that must inevitably go into the social welfare budget. I welcome the broadening of the debate.
I also welcome the Government initiative on strategic management in the public sector. This was announced recently and will involve all Departments in the production of an action orientated statement of strategy and setting out objectives which will try to achieve priority needs and most effective results. This will ensure that the taxpayer gets value for money. It is important to have this general discussion on how the social welfare budget is spent. In that context, this debate is most welcome.
Perhaps the most important basic aspect is that we should provide an adequate income for everybody dependent on social welfare. We have made quite an amount of progress in that direction in recent years, particularly in relation to the recommendations of the Commission on Social Welfare. We have moved quite considerably in terms of basic income for people on social welfare, particularly given the new changes announced in the budget. For example, the 10 per cent increase in disability and unemployment benefit, the 6 per cent increase in unemployment assistance and supplementary welfare, and the various  other increases are above the level of inflation and also bring people who were previously below the priority rate up to that level.
It is important to note that we are making good progress in relation to adequacy of income in the social welfare system. In that context, the increases in child benefit, both last year and this year, are to be strongly welcomed. Studies have indicated that families, and large families in particular, are in danger of falling below the poverty line. There was a general substantial increase in child benefit last year, which benefited all families, but this year there is an emphasis on bigger families with a larger increase on the third child plus. This is in line with the aim to provide an adequate income for everybody in society. It is the goal towards which we must strive. We must also aim to have more simplicity and transparency in the system so that it is as coherent as possible to the general public. While the debate in the National Economic and Social Forum is under way, it has not reached any conclusions. The interaction between that and the debate in the Department is ongoing and we need to focus on that in the near future.
The points made by Senator Quinn are well made in the sense that for a long time there were disincentives for people to go to work. However, there have been changes. The PRSI aspects in particular have helped in a major way, as have the removal of the levies on people who earn under £9,000 per year. While we should take account of Senator Quinn's points, we must acknowledge that there has been substantial improvement in that area. The Minister referred to the fact that 3,770 jobs were created last year as a result of the employer's exemption from PRSI for new workers. This trend has been continued in this year's budget. The reduced PRSI for those on incomes of under £170 per week will also have major beneficial effects for people in that poverty trap, those on the borderline who have jobs compared to their income when they were unemployed.
 In relation to the creation of employment, the House recently discussed changes by the Department of Enterprise and Employment regarding small businesses. Many measures were taken in the budget to help small businesses; they addressed the points raised by Senator Quinn regarding the problems of employers taking on workers. It is most important that we protect the employee. Senator Quinn spoke about the protection of employers where they may run into difficulties but it is essential that employees in unstable employment are also protected. There must be a balance.
Fine Gael and the Progressive Democrats have referred to taxing and spending. On the one hand demands are made for increases in social welfare payments while, on the other, we are accused of taxing and spending. The Sunday Tribune published figures some weeks ago of when the Progressive Democrats were last in Government. There was a substantial increase, both in the tax take and Government spending in the 1990-92 period. When Opposition parties accuse the Government of taxing and spending, they should examine their own records and demands.
As regards the Democratic Left Member's contribution, the Democratic Left document of January 1994 contains three specific references to the principle of taxing all income. That party states unequivocally that this includes social welfare benefits. If the party's policy is to tax all income, including social welfare benefits, there is not much point criticising the taxing of unemployment and disability benefit in this House. It should also be noted that the taxation of these benefits will largely be confined in practice to stopping refunds rather than taking taxable income.
Both unemployment and disability benefit are increased by 10 per cent in this budget so there is a direct counteraction of the effect on people in receipt of these benefits. The Minister made it clear that there is a transfer in that situation. Where money is being taken on the one hand, it is being put directly  back into the same benefits on the other. Those points should be taken on board.
I welcome the changes in the family income supplement. The Minister pointed out that there was a 25 per cent increase last year in the take up of this scheme. This is welcome because over the years as a public representative, in common with many other public representatives, I indicated that while many families were entitled to the supplement, the take up was very low. The sizable increase last year is to be welcomed. It should be noted that this year there is an increase of £6 per week in the amount families will receive in family income supplement. There is also an increase in the threshold so that more families will qualify. This relates to the question of the integration of people on social welfare into the workforce. The family income supplement is a way of counteracting the taxes paid and possible benefits lost, for example medical cards, by low income families. The substantial increases in family income supplement in terms of benefit and access is therefore to be welcomed.
Regarding the improvement in the income disregard for part-time working spouses, there are many women who are in part-time work. It is a change in society to which the social welfare system must respond as the security of a permanent full-time job does not exist for many people today, and this process has started in this budget.
The changes regarding construction workers mean that many workers who were formerly employees are now treated as self-employed. Account has been taken of this in the Bill so that they are now included for benefits which were not available to them previously.
Las year 4,600 were employed under the student employment scheme. It has proved effective, despite the many doubts which were expressed when it was announced. It is being improved this year with an increase in the weekly payment and with an extension of the duration of the scheme — to include June 1994 to the later summer months — and in the length of time a student can stay on the scheme.  The scheme will benefit more students this year and should provide a welcome opportunity to many students who have difficulty meeting their financial requirements and surviving their student years.
Many Members of the Opposition cast doubts as to the feasibility of the scheme when it was introduced but it has proved effective and the Minister and Minister of State are to be congratulated for persisting with the implementation of the scheme and improving it this year.
This Bill ensures that people on social welfare have an adequate income which protects them against inflation. In addition, the anomalies in the system will continue to be ironed out. There is still room for progress in this area because any social welfare system is inevitably complicated, especially when there are high levels of unemployment and high dependency levels.
However, the measures taken in the budget and the provisions in this Bill represent a move towards rationalising the system in the context of changes taking place in society, and this is the way matters should proceed.
It is important that child benefits have been maintained and improved upon because they are a central aspect of the social welfare system which helps to keep families out of the poverty trap. It is essential therefore that the improvement in child benefits continues.
The deliberations of the NESC will be central to the ongoing debate in the years ahead regarding the development of the social welfare system. There is already a focus on the need to target the system and to improve it, but the general debate, which I expect will take place in the next year, will concentrate on the need to target. In this respect I expect the social welfare system to continue to provide opportunities and safeguards for those who are not, unfortunately, in employment or for those who are in retirement and on pension and who have contributed over the years to employment in society.
The system is being streamlined, changed and improved in a way that is beneficial and will facilitate people to  move from social welfare to employment. This is a central aspect of what we expect from the social welfare system. We do not want to have people stuck on social welfare without having the facility to move into employment should the opportunity arise.
I welcome the Bill.
Mr. McDonagh Mr. McDonagh
Mr. McDonagh: I welcome the Minister to the House and compliment her on the many measures she is introducing to help those on social welfare.
Regarding the VTOS programme and the Youthreach scheme, I note that the VTOS programme caters for those over the age of 21 years who are long-term unemployed and who wish to participate in programmes, especially those organised by the vocational education committees. Those participating in this programme can retain their allowance and may, in addition, obtain meal and travel allowances. However, there should be an incentive of £10 or £15 per week payable to those who are prepared leave their homes and enter the workplace in order to participate in this programme to better themselves.
The provision of £15,000 in respect of capital costs for these two programmes is marginal and inadequate. It makes it difficult for vocational education committees to organise and implement them. I ask the Minister to liaise with her colleague in the Department of Education to ensure that more capital is provided for these programmes, especially the VTOS programme which is meaningful and worthwhile.
Whether we like it or not, part-time work will become the norm. There are thousands of teachers working part-time at present. I have already taken up their case with the Minister for Education. These teachers have no pension rights. I appeal to the Minister to consider providing pensions for part-time teachers, on a pro rata basis to those available to full-time teachers. This important issue must be addressed.
I welcome any improvement in the carer's allowance. Any working person who is prepared to leave her job should  be given a full carer's allowance regardless of what her husband is earning or the income of the household. A person leaving a job would create a vacancy and they would also take a great burden off the hospitals by providing good care for the person needing care.
There are people who would be prepared to leave their jobs if they were allowed the maximum carer's allowance to take care of relatives or friends. It would be a good measure for the Minister to consider and if she implemented it she would be remembered by many people around the country.
Sitting suspended at 1 p.m. and resumed at 2 p.m.
Dr. Henry Dr. Henry
Dr. Henry: I welcome the Minster of State, Deputy Burton, and the Bill to the House. I am always delighted to see the Minister for Social Welfare and the Minister of State in the House because they take a great interest in their Department and they take great pride in improvements introduced. They are also receptive to suggestions about improvements and their officials are helpful.
It is good to see that an industry has been set up in the Department of Social Welfare. The Department and Digital have set up a services section and they are selling their knowledge on how to set up social welfare schemes, etc., to many countries, including Poland, Russia, Slovakia and Albania. Many countries in eastern European will be developing systems and we should send officials there or bring people here on courses.
We should have pride in how schemes are administered. As Senator McGennis said, those working in the Department of Social Welfare — I often come in contact with them because of patients' problems — and agencies dealing with such matters have a good attitude. I welcome this and I hope it will spread to Senator Sherlock's area so that he will not face the problems he is experiencing at present.
We must be realistic and accept that unemployment will remain at a high level. We must look at how the unemployed are treated. It is important to recognise that as well as a lack of money  unemployment causes other problems, including major psychological problems. The Department has become more flexible regarding vocational training schemes, voluntary, part-time work, etc. and this is an important step. While poverty is the main problem when it comes to unemployment, appalling psychological effects begin when a person realises they may become unemployed. Doctors will say that in areas where people are worried about a factory closure, the increase in the number of patients is considerable.
Dr. Christopher Whelan has written a good article on poverty, unemployment and psychological distress in Ireland and I recommend that Senators read it. He gave a general health questionnaire to employed and unemployed people and he weighted them by age, sex, etc. More than one in three unemployed people showed signs of grave psychological stress compared to one in 14 employed people. This affects the family of the unemployed person, particularly the wife if they have less money because women usually manage the family finances.
I urge the Minister and his officials to be flexible. Only a small sum of money would be involved in allowing a person to do some work. Improvements have been made in regard to spouses and the £45 allowance. Some people may work only three days each week. Money is important but the fact that a family member has a job to go to three mornings each week is significant because it affects children and other family members. As a previous speaker said, part-time work may become the norm. Again, I urge flexibility regarding the removal of allowances.
I am delighted to see changes in attitude to education but many more changes are needed. I do not accept that these changes will lead to meaningful jobs. I hope they will but any training is worthwhile. The more skills one has the better. Sadly, because of modern technology, skills go out of date quickly. A few years ago sewing blazers may have been terrific but now donkey jackets are in. Skills have to be continually upgraded. The absence of an immediate job should not weigh  too heavily on people who are training. I praise any efforts to make unemployment agencies into one stop shops, where people can be encouraged to do voluntary work, take part-time jobs or avail of educational opportunities. The philosophy of the Department appears to be changing and this cannot but be welcomed.
The physical effects of unemployment are as bad as the psychological ones. The mortality rate for unemployed men is 36 per cent higher than for employed men of the same age and class; the corresponding figure for women is not as bad — 21 per cent. These are British figures but I have no reason to believe the figures are different here. If one examines the incidence of illness among those in social classes one to five and the unemployed, one can be sure that higher rates of illness exist among the unemployed. There are higher rates of injury, poisoning, diseases of the respiratory system, circulation and the heart, and cancer the further down the socio-economic scale one goes, particularly among the unemployed. As I pointed out in the debate on still-births, the incidence of such births is higher among the unemployed.
Section 20 deals with injury benefit and unemployability supplement. I am not criticising what is being done here but a major effort must be made by the Departments of Social Welfare, Health and Enterprise and Employment to deal with the problem of industrial accidents. If this were done, costs would be reduced enormously. Our rate of industrial accidents and occupational injuries is twice that in Great Britain. This is not because they have better training programmes but because in many areas we are lax about safety. It is interesting that the figures in Northern Ireland are much the same as ours. The problem may be an all Ireland one and may have to be tackled in that context. If the Minister deals with this problem, costs will be reduced. It is extremely important that this be done.
I am glad the working spouse allowance has been increased but I hope there will be flexibility when it is applied, not  just because of the financial benefit it provides but because of the beneficial effect it will have on the whole household when one of its members has a job of some importance. I am glad the lone parent's allowance has been increased. As President of Cherish I am involved with lone parents. It costs much less to keep a toddler than a teenager. Only about 12 per cent of single mothers receive long term social welfare payments. We must keep a close eye on this 12 per cent because the others, due to changes which have been made, their own abilities and family help, have managed to get out of this incredible poverty trap and into jobs and further training. We must look carefully at what is happening to the teenage children of this 12 per cent. People are far too anxious to forget about the children of single mothers once they are in school and think that all the problems are then solved. They are not. Women of teenage children often contact me about school books. Community welfare officers do the best they can but have only a limited amount of money. For women with children who could do well, it is very hard if at that stage their situation becomes difficult.
I welcome the extension of maternity benefit to women who have still-births after 24 weeks of pregnancy. Such births cause great distress. This extension is very worthwhile. Child care is very important. Major tomes on child care are being published but it would make an enormous difference if public child care facilities were provided for people who are trying to go on training courses or take lower paid jobs. It would be impossible for them to take such jobs if most of their earnings went on paying for child care. I urge the Minister — I know she has this interest at heart — to consider this, even though it is not within her area of responsibility. I hope I will not be like Senator Quinn who quoted a Roman senator who said every year that Carthage must fall until it eventually fell, because I may not be here long enough to see progress in this area.
The disabled person's maintenance allowance is the only one still paid by the  Department of Health. I do not agree with Senator McGennis's suggestion that the carer's allowance should be transferred to that Department. The officials in the Department of Social Welfare should be happy that people are pleased they are treated equitably. This is important. The eight health boards are inclined to interpret issues in different ways. When responsibility for paying disabled persons maintenance allowance is transferred to the Department of Social Welfare, a cause for complaint by recipients will be removed. I would not like to see this situation replaced by one in which carers are complaining. I urge the Minister to transfer responsibility for the payment of this allowance to her Department as soon as possible. The forum for people with disabilities constantly contacts me about this problem. Many of these people are very able. They have their wits about them and want to use their money in the best possible way. They resent the way they are sometimes treated.
Any changes in PRSI rates are important. I am speaking as an employer as well as an employee. I am sure there is a good reason for the retention of the upper ceiling but I do not know what it is. The Minister may tell us later. It would be beneficial if we could raise money by removing the ceiling and use it to raise the exemption limits to ensure that fewer people on lower incomes are liable for PRSI.
The philosophy of the Department of Social Welfare has improved greatly. If the Minister wishes I could give her plenty of documentation about the psychological distress caused by unemployment, which leads to physical illness and costs an enormous amount of money. This is never adequately considered when estimating what unemployment costs Departments other than Social Welfare. I hope the change of philosophy within the Department continues so that we can provide more people with part time, contract, temporary and other jobs. While the financial benefits may not be great, the psychological benefits for those people will be enormous.
Mr. Kelleher Mr. Kelleher
 Mr. Kelleher: Having read the Bill and studied it in depth, I welcome its thrust. The Commission on Social Welfare recommended certain payments across the board. To date we have paid 83 per cent of the rates it recommended. This is an excellent achievement. We have high unemployment and large dependency on social welfare. Most of the Bill's provisions are welcome and further provisions of this nature must be encouraged in the foreseeable future. I refer specifically to the PRSI exemption scheme and reductions in employers PRSI. At last we have realised that high taxes mean fewer jobs. We must encourage greater employment and make it profitable for people to take jobs in the lower paid sector. It must always be profitable for people to work. This scheme is worthwhile. I hope this is the philosophy of this Government. It is percolating down from all Departments, which is why there is provision in the Bill for PRSI exemptions.
For too long in the past pressure was mounted by lobby groups for increased social welfare. However, over the long term this has put more people out of work than into work. At long last we have come to accept the principle that high taxes and levies on work are no longer acceptable. Individuals and lobby groups have now realised the folly of the thinking of the past. It is welcome that this Bill should acknowledge that and bring about change. I hope that this is not short term but is the philosophy which will be continued for the foreseeable future.
A husband or wife who goes to work are taxed to such an extent that it is possibly not profitable for either of them to work. That is the reality of the situation. At times we deny that the social welfare code has encouraged people not to work. Our taxation code has also encouraged people not to work. These points must be emphasised because this is the most positive step in a Social Welfare Bill in a long time. The provisions for widows, widowers, equal treatment and so on are very welcome. They have been made possible by tight fiscal management  over the last number of years without which Exchequer funding would not be available to fund these positive provisions.
The one stop shops have already been mentioned. We should look at the whole area of social welfare, job creation and taxation. I see no reason why a person has to go to a social welfare office to collect their payments, a revenue office to pay tax and a FÁS office to find employment. There should be one stop shops where everybody, whether or not they are unemployed, can seek advice or receive or make their payments. It is disheartening to see people strolling down to the dole office and others to the FÁS office. It would be a positive step to amalgamate all these units. Many people still feel embarrassed about walking into a social welfare office and this would break that psychological barrier and show that they are also contributing to our society.
With regard to the student work scheme, last year many people in this Chamber expressed the view that it was not acceptable for students to have to work for their dole. I come from a city which has a large student population. Therefore I regard this as a positive step which must be encouraged. Once again it is a change in the philosophy and a recognition that people must be encouraged to work on a voluntary basis in the community. Nobody can stand up here and say that the student work scheme is not acceptable to the vast majority of people. It is a welcome provision and must be encouraged and expanded, if possible. Many voluntary bodies have stated that they achieved an enormous amount last year because of the scheme. The extension of the time frame and the fact that it is now more streamlined means that it will be an even greater success this year.
As a member of the Women's Rights Committee I am very concerned about child care. To date we do not have a proper child care system in place. We have ad hoc committees which are grant aided by the Department of Social Welfare  and schemes are set up to look after the children of lone parents and so on. However, this will have to be addressed very soon because lone parents cannot afford to go out to work because they have to pay somebody to mind their children. Addressing the issue means setting up a proper child care system whereby those on social welfare and lone parents would have a facility whereby their children would be taken care of while they contributed in the work place.
Other countries have excellent child care facilities. I was impressed by the Australian model, which I studied, where public child care facilities also cater for children whose parents can afford to pay. They are integrated, which is very important. We must no longer say to people on social welfare that it is not acceptable to be on social welfare. We are going to have an economy where for the foreseeable future a large percentage of our population will be dependent on social welfare. We must educate them for that and encourage them to take whatever active role they can in our community. There are always those who claim that the average person on the dole does not want to work and that that is why they are dependent on social welfare. To a certain extent one can agree with that point of view. However, that situation arises because of the social welfare systems in the past and the taxation on work. I hope that situation will be addressed over the next three or four years.
It is important that we have a flexible system whereby we take away the bureaucracy and the red tape when it comes to employing people. I am involved in business and one might have a large order to produce furniture, build houses or whatever. However, due to the red tape and bureaucracy involved, the employer will be reluctant to take people on. It is too difficult to employ people for a short term who have to be let go when the contract is completed. If we are to seriously address the whole situation people must become more flexible. We have already discussed training people for work under the National Development Plan. We must train people to be  flexible in work and to adapt to whatever work arises.
I feel very strongly about people being encouraged to stay at home. Young people today, again due to our social welfare system, are encouraged to find apartments and move out of the home environment. This is very regrettable. For example, the lone parent situation, which is prevalent in modern society, means that people are forced because of economic necessity to leave the home. Young girls can be very vulnerable after a pregnancy and should be encouraged to stay in the home environment rather than being forced by economic necessity to move out and receive rent allowance. That has been addressed to a certain extent but must be positively looked at again in the near future.
The Bill is quite welcome right across the House. There are other provisions in it such as the addressing of the stillbirth system, maternity leave and so on which are very welcome. This issue affects only a small minority but shows the caring social outlook of this Government. I commend the Bill to the House and look forward to next year's Bill, which I hope will adopt some of the issues I raised here today. I hope that I will be standing here this time next year commending that Bill to the House.
Ms Honan Ms Honan
Ms Honan: I too welcome the Minister to the House and the opportunity to discuss this legislation. This Bill provides for increases from July 1994 in rates of social welfare payments. It introduces a survivor's pension and provides for other miscellaneous changes in the social welfare code. We all agree that social welfare is a major achievement of modern societies. The Government is usually strongly supported in this by public opinion. A recent European study highlighted the almost unanimous support for a high level of social protection. The Progressive Democrats believe that social welfare recipients should be given the best protection society can afford.
Social welfare is a major component of social cohesion and solidarity. However, social welfare and social protection systems  are faced with growing pressures owing to a large number of factors such as the evolution of the labour market and rising unemployment; demographic trends, particularly the ageing population; changes in family structure, particularly increases in single parent families; the growing instances of poverty and social exclusion resulting from these trends and a massive increase in the demand for a range of social services, including a comprehensive welfare service and health care system. At the same time low rates of economic activity, budget deficits and compelling claims on public expenditure have raised the question: can we continue to pay the social welfare bill and if so for how long more?
The future of the social welfare state is at a crossroads. We have already seen major cutbacks in health spending; and very soon in this country the policy makers in both Fianna Fáil and Labour will realise that the current projected expenditure on social welfare cannot go on indefinitely. Up to now we have focused on giving increases across a wide range of social welfare schemes in order to keep pace with or possibly stay ahead of inflation. Recently we have tried to introduce some incentives for people in order to get them back into the work place.
Today 1.4 million of our population are being maintained on social welfare payments. This leads to poverty and marginalisation, which is nothing new. Many of our people experience poverty and social exclusion on an ongoing basis. Social exclusion does not mean only insufficient income: it goes beyond participation in working life and manifests itself in areas such as housing, education, health and access to other services such as legal aid. Persistent unemployment, especially long term unemployment, the impact of industrial change on poorly skilled workers, the evolution of new family structures and the decline in traditional forms of solidarity all cause a severe lagging behind in the general progress of society.
Growing resentment at being excluded from sharing the wealth and opportunities  within the country heightens the risk of people being driven to desperation. It causes disruptive behaviour and violence and also leads people to addiction to drugs and alcohol. Insecurity generates fear of the future, often leading to further erratic behaviour. The opposite to despair is hope, which is a belief in oneself and a belief in one's future. There is nothing in this Bill which can send out a ray of hope to those who find themselves excluded from sharing in the wealth and opportunities of this country.
At present in Ireland the unemployment level is critical. Public funds are severely limited. The geographical distribution of social exclusion is extensive and family structure, particularly the increasing number of one parent families, provides less of a safety net than in the past. The consequences of all of this are very clear. If the aim of our social policy is to assist individuals to take care of themselves, to remove people from the dependency culture and, as far as possible, to perform a useful role in society, only new and innovative combinations of work and welfare are likely to achieve that goal for those vulnerable people. There is nothing in this Bill nor in any utterances from the Minister or his Department that tell us what the philosophy is in relation to future social policy in this country.
The central implication of both the rising demand for social services and the need to combat the exclusion of weak groups is that income maintenance can no longer be the only objective of social policy. There is a growing consensus that all citizens should have a guarantee of resources, but social policies now have to take on the more ambitious object of helping people to find their place in society. The main route, but not the only one, is paid work and that is why employment policies and social policies should be more closely linked. Consideration must be given to more generalised mainstream policies aimed at integration and a spread throughout the country.
 We need better adaptation of social programmes to avoid poverty and unemployment traps. Unemployment compensation should be linked to training, job creation and incentives to work. We need more equal opportunity. Further measures are needed to take account of women's skills and needs in the labour market and in society generally. We need more flexible pension arrangements to enable variable retirement ages and the combination of retirement and working income. Further measures are also needed to integrate disabled people into mainstream society. Much more needs to be done at every level, including education, better training and equal opportunities for men and women and social protection in our housing and health services.
The greatest challenge to the welfare state in the short run seems to be the serious financial difficulties it has to face as a result of the demographic changes which are going to occur in this country. It is well known that over the coming decades there will be a considerable shift in the demographic structure of our population and an increasing number of older people will have to rely on the support of a shrinking number of people in the working age group. By the year 2020 the ratio of people aged 65 years or over to those in the working age group will have increased by approximately 50 per cent. This raises the issue of whether we can afford the additional estimated 9 per cent of gross domestic product which will be required in financing old age pensions and in the payment of unemployment benefit to approximately 450,000 people, which is what our unemployment rate is expected to reach by that year.
There will be no easy options in the face of this fundamental change in our society. Available resources will have to be shared between the old and the young and Governments are going to have to make difficult choices. Some of these choices will involve the distributional conflict between the generations and we may have to promote private social security provisions. This will have to be done  to the extent of a reduced public provision, which will be hugely unpopular. It may be even necessary to extend the length of people's working lives rather than having to shorten it. Nobody in the political arena is publicly prepared to face the difficulties ahead of this country in relation to social welfare provision.
When do we as politicians get an opportunity to talk about social welfare provisions, the demographic changes that are going to take place and the choices that we as a people and as taxpayers are going to have to make? Apart from a short debate on the Estimates and this debate on the Social Welfare Bill once a year, there are rarely other opportunities for Deputies or Senators to get together and talk about matters affecting social welfare. The manner in which social welfare issues are dealt with by the Oireachtas is totally unsatisfactory. Given that the Department of Social Welfare spend almost £4 billion a year on social welfare payments, it is disgrace that we afford such little time for debate in this House.
The Select Committee on Social Affairs should spend much more time on matters relating to social welfare and on examining the consequences of our social welfare policy. The committee should have the ESRI working with it, which could act in the first instance as a research group to the committee and, second, as an outside independent group working on a consultative basis with members of the committee. This committee could receive submissions from voluntary organisations and from the many people working with social welfare recipients and other deprived groups in our society. Many of these groups put much time and effort into preparing very detailed and worthwhile submissions but unfortunately feel they do not get very far.
Section 5 of the Bill provides for an increase in the high rate of child benefit. I welcome this increase because child benefit affects families with a large number of children and any improvement in child benefit is to be greatly welcomed. I support the view that the system of child dependent allowances in our social  welfare system creates inequities between those families who are on social welfare and those families supported by low paid employment. The best way of moving forward to eliminate these inequities is to promote the development at the highest possible rate of the child benefit system with a view to eliminating child dependent allowances and eventually incorporating a much improved child benefit system within the overall tax system. This would eventually lead to the elimination of child additions to the income tax exemption limits and the elimination of the family income supplement.
The system of child income support should be integrated in a way that would reduce the potential for unemployment and poverty traps and, added to the maintenance of the real value of social welfare benefits in general, would represent a socially responsible attempt to combine the overriding concern to promote employment growth with an effective strategy to secure the income position of the disadvantaged.
Section 7 of the Bill provides for the restructuring of rates of PRSI contributions by employers. The Progressive Democrats' priority is to increase sustainable employment and reduce unemployment. From studying certain key characteristics of the labour market we believe that reducing the cost of employing lower paid employees relative to the cost of production would make the most direct contribution to reducing unemployment. The structure of the present PRSI system means that it is regressive, increasing the cost of low paid labour more than high paid labour. This follows from a contribution rate of PRSI from a flat rate up to a certain ceiling beyond which no further deductions are made.
Any tax that makes the greatest impact on unskilled labour has two distinct disadvantages in seeking to reduce unemployment. Workers classified as unskilled are over represented on the live register. Such workers are potential employees in cost sensitive areas. Employers in this area have to compete primarily on cost and any reduction in employer's liability  for PRSI is to be welcomed. The reduction envisaged in this section will do very little to promote employment or eliminate unemployment traps. There is nothing in the provision that will make the transition from unemployment to low paid work any easier. Unemployed people still perceive paid employment as a risk because it involves a reassessment of other means tested benefits such as medical card and rent allowance. People are very concerned about this and are afraid to make the transition. They feel that where they are they have a crutch and that they will lose this crutch if they move out of that area.
I welcome the introduction of a new survivor's pension scheme which provides for equal treatment for widows and widowers. This new scheme has a number of shortcomings which my party has already highlighted and which I propose to continue highlighting here today. Under the new scheme widowers will qualify for a survivor's pension under the same conditions as currently apply in the case of widow's contributory pensions. The existing widow's contributory pension and the survivor's benefit schemes are incorporated into this new scheme.
However, lifelong partners of men and women who are not married to each other but are cohabiting are excluded. The Social Welfare Act, 1991 provided that in calculating the amount of certain social welfare allowances payable to any person, a man and woman who are not married to each other but are cohabiting as husband and wife should have their needs and means aggregated and regarded as the needs and means of the claimant for certain social welfare means tested benefits. I find it disturbing that one piece of social welfare legislation acknowledges the cohabiting situation, yet this piece of legislation which seeks to extend certain provisions to survivors ignores these very same people. I put it to the Minister that he cannot have it both ways. If he recognises men and women who are not married as a couple living together as man and wife, then on the death of one the surviving partner  should have the same rights as any other couple. I ask the Minister to give serious consideration to this anomaly which has developed as a result of provisions brought forward in this Bill.
The Minister spoke in his speech of what he is doing in relation to equality of treatment between men and women in the social welfare code. This is one area where he is not living up to that brief. He is ignoring the fact that thousands of women in Ireland today are owed millions of pounds because of the Government's failure to implement an EU directive adopted by the Council of Ministers in December 1979. The Social Welfare (Amendment) (No. 2) Act, 1985 was to provide for the removal of discrimination in certain areas and I call on the Minister to ensure that all money outstanding to married women as a result of the changes to implement the principle of equality of treatment between men and women in matters of social welfare now be paid.
I know that many women have received payment in this area. Many of them have had to resort to solicitors in order to get the money due to them, but I know that many cases are still being taken against the Department. I cannot understand why when this money is due to these women they have to go to the trouble of taking the Department to court in order to get what is their right. I understand that cases are coming to court very shortly in relation to this matter and that they are very similar to cases which have already been settled. The Minister should not force these people to undertake these proceedings.
Section 18 of the Bill provides for a number of improvements in the provision for the assessment of means for social assistance payments. Many changes have been made in relation to the calculation of means for various schemes but the Minister has ignored the fact that the means test needs to be completely overhauled. At present benefits and privileges are currently assessed as means under the unemployment assistance and the lone parents allowance schemes including supplementary welfare allowance.
 The Commission on Social Welfare recommended that benefits and privileges should apply only in the case of single adults without dependants who are under 25 years of age and living in the parental home. I know that a minimum of £10 will be paid as a result of the provisions of this Bill; however I believe and so does my party that it is the single biggest contributor to the growth in payment of rent supplement to single people. Senator Kelleher has also referred to this. Many young people are leaving home and moving into accommodation so as to claim the full unemployment assistance rate and they are also getting rent allowances up to £40 per week in some cases. This system is totally wrong.
The Minister should make some positive response in regard to this area of means testing. We should not be encouraging young people to move out of their homes if they do not want to. They should be given a choice, but many young people move out into substandard accommodation which the health board is effectively paying for. They are doing this in order to receive their full social welfare assistance payments. This matter should be looked at because if they want to move out, that is fair enough, but the system should not be driving them out.
Another area which has been of contention for many years and which has not been addressed is the area of substitute payments. At present outside of the Eastern Health Board area, claimants for unemployment assistance and other social assistance payments have to go through two means tests, one for the dependant's payment and a second means test for supplementary welfare allowance, which is a substitute payment while they are waiting for the payment from the Department. It is not acceptable that a person should have to make two separate applications in two different offices when eventually the money is going to be paid out from the Department of Social Welfare. At present 40 per cent of all expenditure on supplementary welfare allowance is a direct result of substitute payments and it is causing considerable aggravation, both within  the heath boards and outside by clients looking for social welfare payments.
I will not have time to finish my speech.
Acting Chairman (Mr. R. Kiely) Acting Chairman (Mr. R. Kiely)
Acting Chairman (Mr. R. Kiely): We will give you two minutes.
Ms Honan Ms Honan
Ms Honan: I have been told by people having to attend the Department of Social Welfare for one means test that they are then directed back to the health board for a substitute payment where they have to go through another means test. This causes them much aggravation. I can understand how people get extremely difficult and get extremely annoyed with health board officials because they feel that they are entitled to this payment and they should not have to go through the two means tests.
Because of changes in the contribution conditions for disability benefit and invalidity pension, an increasing number of people now find themselves with no entitlements to social welfare sickness payment. These people initially are becoming long term recipients of supplementary welfare allowance, or where their illness is likely to continue they find themselves on the health board's disabled person's maintenance allowance scheme. Despite the fact that the Commission on Social Welfare recommended that all income maintenance schemes be administered by the Department of Social Welfare, this has not happened and I wish to ask the Minister about this.
In conclusion, vigorous remedial action is needed to help those who feel that they are socially excluded and marginalised. We politicians have a duty to produce a long term strategy to limit poverty and social exclusion and to promote full social integration of all our people. There will have to be major changes in social welfare policies, education and training and regretfully this Bill does not deal in any way with any of these major issues.
Minister of State at the Department of Social Welfare (Ms Burton) Joan Burton
Minister of State at the Department of Social Welfare (Ms Burton): I want to start by making some general comments about this year's Social Welfare Bill  which introduces a number of major reforms. I must say, particularly to Senator Honan, that when the Progressive Democrats were in office, not too long ago, major changes often amounted to major cutbacks. We are entitled to look at the record of her party when recently in office. Nonetheless, some of her comments were very interesting.
As Minister of State in the Department of Social Welfare, one of the areas for which I have responsibility is the integration of tax and social welfare. I set up an expert working group not to produce a long report but a series of implementable changes which could be introduced on a phased basis. At this stage we have lots of reports on different features of Irish social structures many of which, unfortunately, end up gathering dust.
As regards this year's Social Welfare Bill I am pleased with the work of that expert group which comprises people from industry, the trade unions, the academic sector and organisations such as the Combat Poverty Agency and the National Social Services Board. It represents those involved in the practical end of social welfare and those who have to live on a social welfare income. A number of suggestions were made which have been acted upon in the Bill. One of the most important areas is that of lone parents. As a consequence of the recommendations of the working group, section 15 provides for a significant relaxation in the provision of means assessment for a loan parent's allowance. This represents a progressive step and relates to a question raised in different ways by a number of Senators — how do you offer encouragement and support to people to take up opportunities for relatively low paid, part-time work? The Bill replaces the existing child related earnings disregard of £6 per week with a flat rate disregard of £30 per week. When the person's earnings exceed this amount the allowance will be reduced by £1 for each £2 of earnings, compared to the £1 for £1 rate which existed before. That means there is a substantial relaxation of the means  test for lone parents. In other words, lone parents can now take on greater job opportunities without putting at risk their lone parent's benefit which is obviously so important. It is also a practical way of recognising the cost of child care which is an important issue for lone parents. Over the next year it should mean that a substantially greater number of lone parents will be able to avail of work opportunities, full-time or part-time.
Another recommendation of the working group concerned employers being responsible for levies on employees who have medical cards. This measure has been widely welcomed both by employers and employees, and quite a number of people are affected by it. This measure is in addition to the reduction in PRSI rates for people below the £9,000 level. Statistics show that many people's earnings are below this level. During the next year, these two measures, together with the extension of PRSI exemptions for employers taking on new and additional employees, will give a substantial boost to employment. I am confident that, at the end of the year when the effect of these measures is demonstrated, we will be able to offer similar additional measures in next year's budget.
We must make the social welfare system more friendly towards people attempting to return to the workforce on either a full or part-time basis. Part of the problem with our social welfare system — which is so important as a concept of universal social protection for Irish society — is that the welfare state model we inherited related to a time when full employment was the norm. It was a time when people often took up employment between 16 and 18 years of age, stayed with the same employer for the rest of their lives and then claimed their rightful social welfare pension based on a lifetime's contributions. Unfortunately, the labour market is changing rapidly. The European Union now describes typical employment as those on part-time or contract work, and in casual or on-call employment. That is an increasing feature of the labour market.  The social welfare system will have to be changed in a sensitive way to take account of these changes.
We also have to look at the question of the social insurance system. This Government is rightly committed to the maintenance of the social insurance system. This Bill contains a number of significant extensions of the principle of social insurance without extra cost to either employers or employees. At the same time we must look at the problem of part-time workers. Some years ago, a general social reform relating to part-time employees having social insurance coverage on a pro rata basis, was welcomed by all parties but is now causing problems for on-call employees and other casual workers. The Bill relaxes conditions relating to the substantial loss of employment rule, a point many Senators have raised both in this House and with personally because of problems their constituents were experiencing.
The question of providing income maintenance for certain groups of people needs to be examined. Senator Honan referred to child benefit and I will have to study her remarks because I was not able to catch their full impact. She may have been suggesting the amalgamation of child dependant allowances and child benefit into one payment which, I think she was implying, should then be taxed. I would have to study the full text of her remarks, although I think that is what she was suggesting.
Suggestions like this are made — as in the case of the residential property tax and calls for its reform — and when the reform is introduced the parties, such as Senator Honan's party, which make such suggestions, rapidly run away from the idea. However, I will study in detail the text of her proposals on possible changes in child benefit via the amalgamation of child dependant allowances and child benefit.
In its last two budgets the Government substantially increased child benefit. The recent ERSI report on poverty in Ireland, which is a summary of work done since the 1987 survey, strongly suggests that one of the best ways of assisting poor  families is to increase child benefit. This is precisely what the Government has done in this year's and last year's Social Welfare Bills.
We might look at the same system for people with disabilities. The Combat Poverty Agency carried out detailed research into the cost of living for disabled people. Disabled people face additional living costs to those of able bodied people. We must look at the question of the Department of Social Welfare taking over the payment of disabled person's maintenance allowance. That and other developments in the social welfare system are currently being examined by the Department and a great deal of work has been done on that study. We should also look at the question of the basic income needs of disabled people which are in excess of the ordinary income needs of able bodied people. That examination is under way in the Department at present.
Senator Cregan voiced a query about disability benefit. Over 200,000 claims for disability benefit are made each year. The number of appeals in 1992 was just over 4,000. About 19 per cent of appeals are successful and 13 per cent of appeals are partially successful. Senator Cregan also said that the introduction of the widower's pension or the survivor's pension for men was the result of a European Union requirement. The European Union does not require us to introduce such a pension. The pension was part of the Government's policy on equality of treatment. Over 4,000 widowers will benefit from this measure. It is a progressive social measure which shows that the principle of equality must work both ways and not simply in favour of women.
Mr. Cregan Mr. Cregan
Mr. Cregan: It is about time.
Ms Burton Ms Burton
Ms Burton: Exactly. Senator Cregan also referred to a contribution I made to the recent seminar on debt in the Lough parish centre in Cork. I have a copy of my statement to the conference. I do not know if Senator Cregan was in the audience but the case to which I referred  was in a scientific report carried out by an independent firm of consultants which was presented to the conference.
The report gave the example of an unfortunate lady who had got into trouble with her rent. She had substantial rent arrears and the corporation or council to which the rent was owed would not take a partial payment. I did not refer to either Cork County Council or Cork Corporation. I told the conference that in travelling around the country I have the great privilege of meeting substantial numbers of people who work with community organisations and deal with problems such as debt and money lending. I said that the problem of dealing with local authority rent arrears is very important for those who get into arrears. National statistics show that many local authorities are owed substantial amounts of money in rent. I told the conference that the only local authorities about which I could speak from personal experience were the Dublin local authorities. The policy of collecting the rent the day before the social welfare payment is due — this unfortunately applies in parts of Dublin — can be part of the reason people get into debt. Some local authorities will not accept part payment of arrears. If a person is short in payment of rent the local authority will not accept a short payment. That means that, in some cases, the problem of debt builds up to substantial proportions.
When the local representative intervenes most local authorities are quite accommodating in reaching an agreement with the tenant. However, it should not reach that point. The local authority rent collection system should be sufficiently flexible and responsive to the needs of tenants, particularly those on social welfare income, that it does everything possible to encourage the tenants to pay all or part of their rent. My Department is introducing a system of household budgeting — which is meeting with substantial public popularity — which will allow people to nominate part or full payment of their rent and or other bills from their social welfare payments. In an  age of computerisation local authority rent collection procedures must be made as modern and as sensitive as possible to the needs of the local authority customers.
I repeat, the case I quoted to the conference is from a consultant's report which was before the conference and which was not queried. I made no specific reference to Cork Corporation. I referred to the general problem of rent collection in local authorities.
Senator Cregan also asked about the cost of administering the family income supplement. I have taken a very detailed interest in family income supplement since I came into office. Since September of last year, due to administrative work in the Department of Social Welfare with employers, we have increased the take up of family income supplement by 25 per cent. In addition, we have included further improvements in this year's Social Welfare Bill which make it an attractive payment for families on low income, particularly those with more than two or three children. It is an area that could see substantial additional improvements. The current cost of administration is about £700,000. The scheme could be substantially improved and the expert working group, to which I referred, is currently working on that aspect.
Later in the year, through work on the Department of Social Welfare's administrative and computer systems, we hope to be able to identify those families which may be entitled to benefit from family income supplement. We will write to those families to notify them that the benefit exists and suggest that they avail of it. The take-up rate for the benefit is below what it ought to be. I am confident that this time next year we will be able to report that the 25 per cent increase of last September to December, which was based on the first trawl of the administrative records of the Department of Social Welfare, will have been surpassed this year.
Senator McGennis mentioned the black economy and the question of fraud in the social welfare system. This year the Department of Social Welfare anticipates  about 10,000 visits to and investigations of employers to ensure that all employees are complying with social welfare requirements. This will have two effects: it will identify those people who are working and claiming and, if one employer in a town or village can operate through the black economy and another employer is operating legitimately and the employees are contributing their share of tax and social insurance, the legitimate employer is at a considerable commercial disadvantage. In terms of competition alone, we must address this problem. The Department of Social Welfare is devoting considerable additional resources to this matter. I am an accountant by profession. Since my appointment the Department has employed four professional accountants. The Department is also in the process of creating a professional audit structure on employers.
Mr. Cregan Mr. Cregan
Mr. Cregan: More professional people.
Ms Burton Ms Burton
Ms Burton: There is a great deal that can be done practically to identify those employers and employees who may be escaping their obligations. If an employee is avoiding the social welfare system, the day will come when they may no longer be employed and will have no entitlements. Everybody in this House would be aware of sad cases like this where people who may have worked in the black economy may end up with no entitlements, particularly as they grow older.
The Department of Social Welfare has been sponsoring the VTOS and the return to education initiatives in conjunction with the Department of Education. There are now 4,500 people in both full time second and third level educational courses. The possibilities for participation and numbers are substantially higher. Indeed, the Department anticipates the numbers will increase by several thousand over the next couple of years. The one aspect that the ERSI study on poverty, which was published last week, constantly shows is that those who have both second and further educational  qualifications have a better chance of getting employment over their lifetime than somebody who leaves school early. Giving people as much access as possible to education and training, in terms of access to the labour market, is critical to improving their chances of getting employment. There are currently 4,500 people so employed.
Senator McDonagh referred to the costs of VTOS courses to the vocational education committee and I will take his points up with the Minister for Education. Another item raised by a number of Senators, most specifically by Senator Sherlock, was the operation of the community welfare officer system. The Department of Social Welfare is anticipating a number of developments in this area. Substantial investment is taking place in expanded computer facilities which should enable most interim payments to be dealt with directly by the Department of Social Welfare over the next couple of years.
Senator Kelleher referred to the one-stop shop.
Mr. Cregan Mr. Cregan
Mr. Cregan: There is no reason why it should not be done.
Ms Burton Ms Burton
Ms Burton: Every Member would agree that a system which makes a person go from their local social welfare office to the community welfare officer and then to the FÁS office should be ended; there should be a one-stop shop. I would hope that most interim payments would be brought directly within the ambit of the Department of Social Welfare on a countrywide basis within the next couple of years.
Special needs payments were also mentioned by Senator Sherlock and Senator Henry. There is currently sitting under the chairmanship of the Department of Social Welfare a committee consisting of members of both this Department and the health boards on improving the community welfare officer structure for special needs payments. The amount of detailed information which until now has been available to the Department on this area has been limited. In the past year  we have been in receipt of increasing amounts of information which will enable us to identify the recipients of special needs payments, the amounts of money they are getting and what types of payments they are receiving. That sort of detailed information has not, unfortunately, been available to the Department until recently. It is now becoming available.
Many Senators made the point that many young people were leaving home to take advantage of a rent allowance and a full social welfare payment. The results of a national survey of the incidence and extent of this practice should be available later in the year, which will enable us to make some decisions. It is not universally accepted that this is the principal reason young people are leaving home, although most public representatives are aware of it as causing a problem. Public representatives from County Cork have mentioned it as a feature of life among young people there. Some proposals for change or amendment which will substantially improve the situation could then be put forward.
This year we have also, as promised, published guidelines on special needs payments. Previously, these guidelines were not published. They are now available in a leaflet from the Department of Social Welfare. The new system of referring those with fuel, ESB and gas company debts has been in operation for four months. We are awaiting detailed information on the workings of the new system. Senator Sherlock highlighted the fact that the outcome after going to a community welfare officer is often not the same for any two people. How the community welfare officer exercises his discretion is not always understood by the person seeking assistance from them. I hope substantial improvements will be made to that system within the next year.
Senator Henry referred to the staff in the Department of Social Welfare having improved substantially over the years. I accept that compliment on behalf of the staff. The aim of the Department is to provide information to people about  their rights and, where people have an established right to something, to deliver that right with all the dignity that person deserves, whether in receipt of a pension, an allowance or a benefit. Many of these improvements were made possible by the extra resources made available to the Department, not only in terms of computerisation but also in the training programme which the Department has given to its staff. This year the Department is sponsoring a training course for community welfare officers which we hope will be the beginning of a systematic improvement in the delivery of their system.
I refer again to the recently published ERSI report, which was based on the 1987 household survey. This survey has been important in informing policy as far as poverty, social welfare and other issues are concerned. One of the commitments we made was to revamp that survey this year. While the general principles of the 1987 data are relevant, we need to review the current position.
Mr. Cregan Mr. Cregan
Mr. Cregan: You will have to. There are 300,000 unemployed.
Ms Burton Ms Burton
Ms Burton: Secondary benefits, which would not have been an important feature of the 1987 survey, would now seem to have a greater prominence. For example, there is the question of losing one's medical card if one takes up employment. I am pleased to say that we have set aside £150,000 in the budget this year to redo that survey, which will be carried out by the Department of Social Welfare in conjunction with the Combat Poverty Agency and the ESRI. The final detailed negotiations are now underway. In addition, Ireland will be participating in a European panel survey about income issues which will question a substantial number of the population. This will take place on an annual basis. In future we will have more detailed information on which to base policy, rather than basing it on hearsay and mythology, which tends to happen in regard to social welfare issues. For example, one hears about a  particular instance which is often exaggerated out of all proportion.
The ESRI publication referred to the importance of child benefit and access to education in relation to improving the life chances of poor people. The survey also questioned an area based approach to poverty. The large areas of unemployment in the centre of Dublin city and in the suburbs, in parts of Cork city and  Limerick, and the problems which exist in some poverty stricken urban areas require special targeted attention. A new factor which may emerge from redoing the survey this year is that in some areas, particularly in our large cities, there is a danger that generations of families risk unemployment. The Government must tackle this problem as a priority.
The Seanad divided: Tá, 21; Níl, 14.
Tellers: Tá, Senators Mullooly and Magner; Níl, Senators Cosgrave and Burke.
Question declared carried.
Agreed to take remaining Stages today.
Seanad Éireann 139 Social Welfare Bill, 1994: Second Stage.