Seanad Éireann - Volume 139 - 23 March, 1994

Social Welfare Bill, 1994: Committee and Final Stages.

Sections 1 and 2 agreed to.


Question proposed: “That section 3 stand part of the Bill.”

Mr. Cregan: This section outlines different dates for payment increases. The dates for the various increases in payments go from 21 July to 29 July. Why is there a difference? I can understand that there could be a difference of six days in the payment of the increase, but I do not understand why there should be a difference of seven or eight days. Would the Minister explain that? If the increases in some of the contributory pensions and allowances are being held back until 29 July, what on average would be the saving to the State?

Minister for Social Welfare (Dr. Woods): The dates are the normal dates when the payments fall to be made. The difference is that some payments are made a week in advance and others a week in arrears.

The Senator asked about advancing all payments to April. The extra cost of [1543] doing that would be £30 million this year. I appreciate that this is desirable but my first objective is to have the rates increased so that those rates are fixed from a given day forward. If the Senator was in my position he would also seek that first, although it would be desirable to bring the increases further forward over time. The implementation dates were later in previous years but they have now been returned to July.

The full year value of the increases for pensioners, widows, widowers, etc., is £168 million. We tend to concentrate on that in the first instance but the cost of bringing the payments forward this year would be £30 million.

Mr. Cregan: I understand most of what the Minister said. I did not ask about the £30 million saving in the year, I was inquiring about the saving in the week. The increases in unemployment benefit will be paid on 21 July 1994. Increases in death benefit, old age contributory pensions, survivor's benefit, widow's contributory and non-contributory pensions and orphan's contributory allowances will be paid on 29 July; a difference of eight days. If a payment is to be made on 29 July there must also be one on 22 July. Why can the increase not be given then? Since people on unemployment benefit receive their increases on 21 July, why can the others not receive an increase in the same week?

Increases in disability benefit, injury benefit, and disablement pension will be made on 25 July. Their increase is obviously in the same week as 21 July but I cannot understand the reason for a difference of eight days between increases. Are we making a saving by denying people who could be in need of an increase at the earlier date of 22 July? Why can they not receive the increase when other people on social welfare are receiving theirs?

I have always said that everyone should receive the same allowance and be paid at the same time. There is no reason these people should not be given the increase on 22 July. There should not be an eight [1544] day difference between dates on which increased payments are made, especially to people on the poverty line.

Dr. Woods: Section 3 (2) (a) relates to the increases in unemployment benefit on 21 July. Section 3 (2) (c) relates to retirement pension, invalidity pension and deserted wife's benefit, increases for which will be paid on 28 July. There seems to be a difference there but the payments are actually the same.

Mr. Cregan: They are within a week.

Dr. Woods: No, the reason they are the same is that the short-term payments are made a week in arrears while the long-term payments are made a week in advance. The payments are in respect of the same week. That is the way the two systems operate.

Mr. Cregan: I see the reason for that because the difference is seven days. However my difficulty is with section 3 (2) (d), under which increases are made on 29 July. If these increases are in advance, unlike the short term payments, the increase should be given on 22 July. Why is it not being given on that date? What is the saving to the State by not paying it on that date? The people affected by paragraph (d) are not being given an increase on 22 July, even though their payments are a week in advance and others are a week in arrears. Could those increases not have been made on 22 July?

I am not questioning the increases on 28 July. The Department is entitled to do that and it is a good tactical and financial move. I appreciate that the Minister wants to obtain the money first and then decide what day payments should be made. However, there is a difference of eight days between the increases given on 21 July and 29 July. Why can that increase not be given on the 22 July? What saving is made by deferring the increase for a week?

Dr. Woods: Senator Cregan mentioned paragraph (d), which refers to widow's [1545] contributory pension and orphan's contributory allowance. Their day of payment is different to that for retirement and other pensions. The reason is that post offices would be cluttered if all the payments were on the same day and the volume would be unmanageable. There is no other reason for the payments being made on different days. Essentially, the increases are being given in the last week in July. If everything was to be put forward by a week, some would still be paid a week before others but the cost this year would be one-fifty second part of the total increases. One would divide the total by the number of weeks — I will get the figure for the Senator.

Mr. Cregan: The Minister says all payments cannot be made on one day from post offices and Garda barracks. I am not asking for that. Increases in unemployment benefit are being made on 21 July; the previous day for payment was 14 July. Paragraph (d) refers to old age contributory pension, survivor's benefit, widow's contributory pensions and orphan's contributory allowance. Such payments will be made on 15 July. Increases to those payments could be made on 22 July if they can be made on 29 July.

The people affected are at a disadvantage compared to those in the other categories. They are losing a week's increase. All the other increases are being made within one week — between 21 and 28 July. Those affected by this paragraph could and should have their increase on 22 July because everyone else will receive an increase in that week — on 21 July, 25 July or 28 July. Those being paid increases on 29 July are losing a week's increase and that is unfair. This matter should be examined.

Dr. Woods: The 29th would be the equivalent day if one takes the 365 days from the last increase the previous year and on the other matter, it is 365 days from that increase. There is no difference in that sense. Section 4 deals with assistance and the same point arises. The short term payments are paid in arrears. [1546] Consequently, given that unemployment assistance and unemployment benefit are two short term payments, they will be paid in arrears——

Mr. Cregan: We will deal with that when we come to it.

Dr. Woods: ——and arise the week ahead. The amount to bring all of those forward by a week would be £2.5 million.

Acting Chairman (Mr. Finneran): Is section 3 agreed?

Mr. Cregan: No.

Acting Chairman: We have had debate back and forth on it.

Mr. Cregan: The point is relevant to section 4 and other sections.

Acting Chairman: I remind the Senator that there is no amendment to section 3.

Mr. Cregan: I appreciate that but we are entitled to speak to the section. If I do that and the clarification is insufficient, I am entitled to question it again and I intend to do that. There is an inherent unfairness here and everybody can see it. This problem arises in section 4 and I intend to speak on that also if I do not get a satisfactory answer.

Is it necessary to be unfair to the people covered by paragraph (d), those on old age contributory pensions, survivor's benefit, widow's contributory pensions and orphan's contributory allowances? We should not be unfair to these people. They should have received consideration before others covered in the same section. The Minister said the date is relevant to the 365 days since the previous increase. How could that be when other payments have been delayed this year, such as child related benefits which will not be paid until September?

There is a difference of eight days or more here and given the postal problems, there could be a difference of ten days or more. People are not being paid in time because of the postal problems. Can the [1547] Minister imagine a situation where a person on unemployment benefit receives an increase on the 21st but his cousin next door, who is due payment on the 22nd, does not? People due to be paid on the 25 and 28 July will receive increases but some may have to wait from 15 July until 29 July, a two week period, to get their increase. This is wrong. There is an inherent unfairness here. Why did the Department not consider paying an increase on 22nd July, having paid an increase to others on 21 July? If I receive a satisfactory answer which is fair to the less well off, I will agree to this section. I am entitled to a satisfactory reply but I am not getting it. There is a nine day difference.

Dr. Woods: There is a limit on the extent to which I can go on explaining this matter. These are the equivalent dates for these payments. I explained that short-term payments are made in arrears while the others are made in advance. Consequently, there is no discrimination. It is the normal procedure each year that increases are paid on the different days of payment. In this instance, it arises in the last week of the month, on the date on which the payment should be made.

Section 3 is very important because it gives substantial increases. Its total effect will mean that a couple on disability benefit or unemployment benefit, with two children, will now receive £124 a week, representing a 6.6 per cent increase. A couple on disability benefit or unemployment benefit, with four children, will get £150.40 a week, an increase of 5.7 per cent. A couple on invalidity pension, with two children, where the claimant is over the age of 66, will get £142.70 a week, an increase of £12 or 9.18 per cent. These figures illustrate the point, and my remarks also apply to section 4. This is an important section and the cost of the social insurance and the occupational injuries benefit increases is £83 million in a full year.

Mr. Cregan: I do not wish to show disrespect to the Minister but I wish to [1548] clarify the point. He said that everything is paid on the last pay day of July. In that case, the Bill is incorrect because 20 and 21 July are not the last pay days in July. There are a further seven days. If everything is relevant to the last pay week of July, then payments on 20 and 21 July should not be paid; we are being unfair to this group who will be paid on 29 July. There is no reason they cannot be paid. Why did the Minister not save the State a great deal of money by bringing payments due on 21 July forward to 28 July, and payments due on 20 July forward to 27 July? Everybody would then have been treated the same. However, the Minister did not do that. One group will be paid on 29 July and that is most unfair. This cannot go unnoticed and others should also point it out. We are talking about people who are more in need, than those who are receiving payments on 21, 25 and 28 July. Why can these people not be paid on 22 July? The same point arises on section 4. The Minister said the increases are paid in the final days of July but that is not so because 20 or 21 July are not the final days of the month. I cannot understand the situation; it is unfair. Others agree with me and if the Minister examines it once more he will see that it is unfair.

Dr. Woods: As the date in the Bill is 21 July, and because short-term payments are made in arrears, both would be paid on 28 July. They are both equal in that sense; this is basically the point. I accept the Senator's general point in relation to early payments. However, he recognises my point about the annual allocation of moneys. If the Senator was in my position, he would opt for the higher rates of increases, such as the 6.6 per cent and the 10 per cent. Having done that, he might then find there was no money to proceed with the £30 million needed to advance it further. We will keep the situation under review.

Mr. Cregan: I agree with the Minister. I have met cute operators in the Cabinet and I will not take from the Minister. However, I ask him to tell someone who [1549] is receiving the orphan's contributory allowance that he will not receive his increase until a full nine days — and if the post is late, 11 days — after someone else has already received their increase. It is all very well to speak of one being paid in advance and the other in arrears, but how is this to be explained to the people concerned?

Bills such as this do not allow for the way ordinary people think and this measure gives an advantage to the Department of Social Welfare and a disadvantage to those who are less well off. If an increase is provided on the 21st of the month, then it should be effective for the full week within which that date falls and this should apply in respect of similar increases provided under other benefits. As it is presently constituted, the measure is unfair. However, I agree to the section.

Question put and agreed to.


Question proposed: “That section 4 stand part of the Bill.”

Mr. Cregan: Section 4 (2) (b) states that the section will come into operation “in so far as it relates to supplementary allowance, on the 25th day of July, 1994.” The Minister of State discussed on Committee Stage, as the Minister and other Ministers for Health have discussed previously, the possibility of combining supplementary benefit with supplementary welfare allowance.

It is suggested that people have difficulties from time to time with supplementary welfare officers in various parts of the country, such as the part of Cork city where I live. May I ask the Minister if it is now recognised that all allowances, whether it be supplementary benefit, supplementary welfare or rent allowance, should be under the Department of Social Welfare?

I cannot but speak well of the social welfare officers who operate in my part of Cork city, but their task is made difficult [1550] under the present structures. There is a strong argument to be made, referred to by the Minister of State on Committee Stage, for a restructuring to allow for the inclusion of all benefits under the one Department. In this respect is the Department of Social Welfare under its present structures fully in control of the problems in society which apply to its area of responsibility?

The social welfare officers deal directly with the less well off and those who find it difficult to compete, to live and to handle matters generally. In this respect I referred on Committee Stage to the points raised by the Minister of State at the recent conference on debt at the Lough parish centre in Cork. She responded to my remarks on Second Stage, but regrettably I did not have the opportunity to comment. However, the point at issue is relevant to social welfare and supplementary welfare as there is a general impression that there is generally no cohesive approach by the various relevant authorities who contribute to the less well off in society.

The Minister, unfairly, made a strong argument against local authorities. As a former Lord Mayor of Cork city, I investigated my local authority and was aggrieved that the Minister gave the impression that unfair tactics were employed——

Acting Chairman: I must remind the Senator that section 4 deals with dates from which various increases become effective. The Senator is broadening the debate beyond this.

Mr. Cregan: It must be recognised that the person on the ground dealing with welfare allowances is the person who is the most knowledgeable on these matters.

Auditor's reports on local authorities — and I speak to you, Sir, as a member of a local authority yourself — are pressing authorities to recoup moneys owed to them. While one Minister of State has one view on local authorities, others are pressing them to collect moneys owed to them. In view of this confusion it is [1551] important to clarify the facts and to have one policy for dealing with those who cannot deal with themselves. As matters stand, one Minister says one thing, another Minister says another and the impression is therefore given that people are not being looked after, which is not true. The opposite is the case. For example, Cork city alone is owed in the region of £800,000, which is a serious matter.

Dr. Woods: The Senator has raised a number of points which he also addressed on Second Stage. He mentioned the role of the Department of Social Welfare, how broad this role should be and what it should encompass, especially in relation to the disabled person's maintenance allowance and supplementary welfare allowance.

I believe — and my colleague, the Minister for Health, is in agreement — that it would be better to have the disabled person's maintenance allowance within the Department of Social Welfare as it is a payment which is the last line of defence and it covers an area where there must be discretion. In this regard Senator McGennis spoke of the supplementary welfare allowance scheme and the community welfare officers and congratulated the officers on the work they undertake. While there are community welfare officers who are difficult or who have a bad moment, they undertake a difficult job well.

Mr. Cregan: I have no criticism to make of community welfare officers.

Dr. Woods: This favourable view of community welfare officers is prevalent and was reflected in the contributions to this debate.

The most cost effective way to address this issue would be to have it dealt with by one Department and I do not differ from the Senator's views on this point. However, there is a great deal of streamlining and organisation to take place in order to arrive at this point. In this respect we are endeavouring to improve [1552] and streamline the delivery of the supplementary welfare allowances in consultation with the health boards.

This programme is under the auspices of the health boards at present. This presents a difficulty for us, because we pay the final sum but we do not administer it. If questions are raised in the Dáil or the Seanad on this issue, we answer them; yet we do not control the administration of the programme. I find this especially frustrating. I have no objection to answering for measures which we implement; however, the administration of this programme is not within the Department of Social Welfare and consequently we are dealing with it at arm's length.

The supervisors among the community welfare officers have been co-operating with my Department recently to streamline the methods in an attempt to secure as uniform an approach as possible throughout the country and they are making considerable progress in this area. In addition, the computerisation needs must be met and the Senator will find in our Estimates this year that there is a considerable increase in the computerisation allowances, because we are endeavouring to build up a system that will deal with all these short term payments as efficiently as we can deal with the longer term payments. My priority is to have the entire system streamlined to ensure that a better service may be provided and, following on that, we will consider how we can relate with the health boards regarding the disabled person's maintenance allowance and the supplementary welfare allowance.

The Senator has raised an interesting general point regarding this issue, because if the co-ordination which people continually speak of is to be achieved, it would be better to have more of these allowances and benefits within a single Department. This is a matter which can be considered further in the future.

The Senator referred to Cork and the money lending programme which I launched there. One of the aspects I noted on that occasion, which the media did not take up, was that we had had [1553] especially good co-operation from the local authority. The Minister of State said some local authorities are reluctant to become involved in the system. I understand this reluctance because it affects rent collectors and their volume of work in the future. Local authorities must work that out in accordance with their circumstances. We are being asked to provide a better service, but this is a barrier to doing so. Senator Cregan mentioned Cork where the local authority was particularly helpful in regard to those developments. Cork has also set a standard in regard to tackling the money lending problem.

I introduced the household budgeting scheme approximately three years ago. Although the scheme has been in operation for only a few months, the number participating continues to increase. It involves a lot of money, approximately £2 million each year. Although a facility for rent is not available, we want to be helpful in that regard. We took the initiative and introduced legislation to implement this, but it takes time to put it into practice. As regards the situation in Cork outlined by Senator Cregan, the local authority there co-operated with us.

Mr. Cregan: Section 3 (c) states “the 28th day of July”, while section 3 (d) states “the 29th day of July”. Those receiving contributory and non-contributory pensions and allowances will suffer most in regard to the increases and this is unfair. We have been helpful and I know what the Minister of State, Deputy Burton, said that day. Unfortunately, the press gave the impression that local authorities did not care about the less well off. In the Cork region approximately 77 per cent of those in local authority welfare assisted accommodation are on social welfare. It is unfair to give the impression that local authorities do not care.

As regards welfare officers, I cannot speak highly enough of two such people in north and south Cork. I will not name them, but the Minister knows the people to whom I refer. Those in need of assistance speak well of these people. When [1554] considering what should be done about allowances, including rent, welfare, etc., the Minister should set up a system whereby those involved in these areas would be under one structure. These people have experience which is second to none. We have discussed many issues in this House over the years. The Minister introduced the household budgeting scheme relating to the payment of electricity, gas, etc. This is a good scheme, which costs £2 million annually. Rent should be included in this scheme and we must talk to local authorities about this.

Credit unions are extremely important to the less well off. Teachers, mechanics and others involved in them deserve great credit. In Cork credit unions have put the loan sharks in shallow water. When looking at supplementary welfare allowances, I ask the Minister to consider those familiar with them. If we make one payment, we must not aggravate the present unemployment situation. There is no answer to this problem and the Minister must not say there is in this or any other Bill.

Dr. Woods: The Minister of State replied to points made by Senator Cregan. There were, and still are, problems with some local authorities. Senator Cregan also mentioned credit unions. I worked with the credit unions, which are independent, and this was successful. In Cork money lending is on the decline and efforts in that regard are beginning to pay off. Changes cannot be made overnight; they take time to come into effect. It has taken some time to reach this stage and it is about to snowball. We are particularly pleased with the household budgeting scheme.

During the budget debate on 27 January I announced a number of improvements to the free schemes operated by my Department. Improvements affecting the free telephone rental allowance will come into operation next July. A pensioner being cared for by the recipient of a carer's allowance will in future retain entitlement to the free telephone rental allowance. Previously it would have been discontinued because the living alone [1555] condition, which had to be satisfied for receipt of the allowance, would no longer have been satisfied. That is an important development. A pensioner, aged 75 or over, who no longer lives alone will retain entitlement to the free telephone rental allowance.

In circumstances where someone comes to live with the pensioner, the allowance will be retained by the pensioner and it will not be discontinued as in the past because the living alone conditions ceased to be satisfied. In order to avoid creating anomalies between pensioners over 75 years in different family circumstances, the free telephone rental allowance will be available from next July to all pensioners aged 75 or over who reside with one other person, their spouse, a family member or a companion, subject to the normal conditions which apply.

Senator Cregan recognises the difference in this regard. The extra cost is not great because there are different circumstance in the social welfare area. These arrangements will apply across the board. I am pleased to make this announcement introducing these improvements, which will be of benefit to many pensioners. Having looked at the situation, we were in a position to take that further step.

Mr. Cregan: I congratulate the Minister on these measures, but next year he should reduce the age to 70 years.

Dr. Woods: Senator Cregan is never satisfied.

Mr. Cregan: These measures are important. A telephone means a lot to people living alone. We now recognise that it is better for people not to live alone and we are giving assistance to those who are prepared to look after relatives. This assistance does not cost a lot as the telephone line is already connected. We should not forget that they only get the benefit of a free telephone line. In other countries it is only necessary to pay for calls and one does not pay [1556] a fee for one's telephone line. I congratulate the Minister on this but it is only what I expect of him. Free telephone lines should be provided for family units which look after elderly people. This would cost little. A family unit should be defined. It could be defined as consisting of three or more people. Providing free telephones for such people may encourage many people who live on their own at present to live with their sons or daughters. We can learn from other countries how important it is to have our elders living among us.

Question put and agreed to.

Section 5 agreed to.


Question proposed: “That section 6 stand part of the Bill.”

Mr. Cregan: The Minister and the Minister of State spoke about simplifying the family income supplement scheme. I have spoken about this for many years and have always argued that the payment should be made directly to the employee. I do not want the spouse going to a post office or a Garda station to collect it. Family income supplement is paid to families with one child and whose weekly income is less than £185. The gross weekly income of a family with four children must be less than £245 if they are to be entitled to this supplement. I would prefer to see the wife paid the supplement through her husband. All husbands may not give this money to their wives and the little wife may be better off gong to the post office or Garda station to collect it.

Ms O'Sullivan: The little wife?

Mr. Cregan: The big wife, will that satisfy the Senator?

An Cathaoirleach: It may also be the little husband.

[1557] Mr. Cregan: I will rephrase this if the Minister or Senators wish. The spouse, or other person, goes to a post office or Garda station to collect the benefit. Is benefit paid to the family, the wife or husband, or both?

Ms Honan: I welcome this provision and the increase of £10 in the weekly limits below which families qualify for family income supplement. The Commission on the Status of Women recommended that the supplement be paid to the spouse caring for children. This recommendation is fair. Family income supplement is one way by which the State can help people with children. We also have child benefit, child dependent allowances and additions to the taxation exemption limits. The rate of child benefit has been increased for the third and subsequent children. I welcome this improvement. Child dependent allowances can create inequities between families on social welfare and those depending on low paid employment. The Progressive Democrats would like to see substantial increases in child benefit. When this is achieved we could eliminate other support systems, such as child dependent allowances, additions to the tax exemption limits and, eventually, family income supplement. This could not be done until there are substantial increases in child benefit, which could eventually be brought into the tax net. This would maximise the amounts available for redistribution to those most in need. I welcome in the meantime the increases in the income limits for family income supplement. It should continue to be paid to those who care for children.

Dr. Woods: Family income supplement regulations allow a claimant to nominate her or his spouse as an agent for the collection of the weekly payment. Normally it is the wife who collects it, but the option is there for the husband to do so. As Senator Honan said, it is normally paid to the primary care giver. This was recommended by the Commission on the Status of Women. All family income supplement payments are currently made by [1558] post offices. This is a very simple system. The spouse, normally the mother, is used to going to the post office with a child benefit book and there is no stigma attached to this because everyone with children has one. In effect, collecting family income supplement is much the same as collecting child benefit and this is what makes it so acceptable. It is a good system because it is paid for a year and is re-assessed after this period. Once people become used to this system, it is simple to operate.

A recent survey showed the occupational breakdown of FIS recipients; it is interesting: agricultural workers accounted for 3.5 per cent of recipients; skilled workers in manufacturing accounted for 18.8 per cent——

Mr. Cregan: Skilled workers on low pay?

Dr. Woods: Yes, skilled workers in manufacturing industry; labourers and unskilled workers amounted to 43.5 per cent; transport, communications and storage workers accounted for 16.4 per cent; clerical workers accounted for 4.9 per cent; workers in commerce, insurance and finance accounted for 9.4 per cent; service workers and defence workers, that is, members of the Garda, the Defence Forces, etc. accounted for 1.7 per cent and 0.16 per cent respectively; and others accounted for 0.74 per cent of claimants. Sometimes people are confused when they see skilled workers or workers in commerce, insurance and finance claiming FIS. However, such workers may have big families and this scheme provides family support.

I remember a newspaper article about workers in the Army and the Garda——

Mr. Cregan: Well paid.

Dr. Woods: ——and the headline was that it was disgraceful that these people were applying for the family income supplement. However, it only applies to large families. It works out at 0.16 per cent of the total, which puts it in perspective. The system supports families [1559] and it does not matter what kind of job one has.

Senator Cregan spoke about not creating a situation where employers could abuse the scheme and try to keep people on low incomes. There is no evidence of that but I accept the point he made on Second Stage that one must always keep an eye on this. The system is working well and the Minister of State mentioned possible future developments in relation to our ability to pinpoint people. That is increasing all the time as we improve our systems.

Mr. Cregan: It is costing £700,000 to implement this scheme. There has been a 25 per cent increase in the number of people who have availed of this scheme over the last year. Almost 19 per cent of skilled workers in manufacturing areas have availed of it. In other words, because of this entitlement to a supplement there is a basic wage for those who are aware of it and apply for it, but how well are we selling it? Many people are not aware of it or are too proud to avail of it. Only 19 per cent of skilled workers were prepared to apply for it. This is an indication of how serious the problem is, particularly in middle class areas; 46 per cent of unskilled workers applied.

Every person working who has a family is entitled to a basic wage whether they get it from the State or their employer. I have always said that is a good idea but I wonder if we are selling it properly. There is a perceived danger that if we do sell it properly it might cost too much because many people might realise that they have less money than their neighbour who is in the same job but is receiving the FIS. I am not saying it is a danger because this is a right to which people are entitled under the Social Welfare Bill.

A person with three children with a weekly family income of less than £225 is entitled to supplementary benefit. His employer is paying 12.2 per cent in PRSI and he is paying 9 per cent. Why do we not tell the employer that instead of giving the contribution to the State he [1560] should give it directly to the employee because we are giving it to him anyway? These matters should be simplified. Can I get a reply to that or am I talking nonsense?

Ms O'Sullivan: The family income supplement is a significant part of the income of families on those income levels. It is important that people are aware of their entitlements. There was a poster campaign a year or two ago which was effective and helped to bring the extra 25 per cent into the net, plus other measures which were taken by the Department. The Minister probably shares the view that we need to let people know, as far as we can, that family income supplement exists and is available to people on lower incomes.

I do not know the exact percentage of people entitled to it who actually claim it, but some years ago figures were given and about half of the families who were entitled to FIS claimed it. I would be interested to know what the percentages are now since the amount has substantially improved with the 25 per cent increase. I support the view that that message should be got out to the public because it will make a significant difference to people on a lower income.

Ms Honan: I support what Senator O'Sullivan said. All of us agree that people who are entitled to FIS should be getting it. The Minister of State indicated that the Department would be using whatever figures are available — from taxation returns, etc. — and would be writing to people it thinks would be entitled to this family income supplement. This should be done because a number of people are not aware of it and this family income supplement would be of huge benefit to them.

We want to encourage these people to stay at work because sooner or later they might realise they would be better off living on social welfare, a situation we do not want. It is vital that people in low paid jobs and entitled to family income supplement are made aware of it. I would like to see an extensive campaign making [1561] people aware of their rights. However, from what the Minister of State said, that seems to be the intention of the Department.

Dr. Woods: The increase in the takeup in the past year has been because of the extra money provided. It was increased by about £20 last year. This has been well advertised and people have been told about it by their trade unions because we co-operated with ICTU in getting the message across. Everybody who looks for their tax free allowances gets this advice and it is in child benefit books. As Senator O'Sullivan said, there have been advertising programmes each year and we will have another one now to highlight the position when this Bill passes.

Reference was made to studies by economists and sociologists who conduct surveys and estimate how many people might be eligible. However, the Department knows what money people are getting because if somebody is asked in a survey at the door how much they are getting they will not mention the extra cash they get here and there. However, applicants must state what their income is. We found people had higher incomes in practice than was indicated in surveys. Initial figures suggested that about 30,000 people should qualify but only 13,000 to 15,000 qualified. It looks as if we are beginning to catch up on those figures because it is coming close to 10,000 at this stage.

People are not so slow as is suggested from time to time. It is always a great line for the newspapers to say that nobody is availing of the scheme. There are very few of our schemes which people do not know something about. I admit there are complications because one may be due one main benefit but not realise one is also eligible for subsidiary benefits. This scheme has been advertised very widely and we will have another campaign to highlight the position when this Bill is passed. I always claimed that the studies were wrong, but there is no point saying that publicly because people would say that it was only sour grapes and time [1562] would be wasted on a row. I believed the figures were wrong at the time but that what really mattered was putting money into the scheme. When the money was increased the support went to the children and more people came into the scheme. That is what I believe happened last year. That does not take from the fact that one has to advertise and I agree with what has been said.

Senator Cregan asked about the total cost, which is now £21.5 million, so it is not inconsequential money. It is a substantial amount and, in fairness to successive Governments, they have never balked at providing that money as it is almost an incentive to work.

Mr. Cregan: To work. That is right.

Dr. Woods: It is also giving support to families. It is important that people know it is there for families on low and medium incomes. As Senator Cregan pointed out, the rates are quite high and go up to £324 in the case of a large family. It reflects the needs of families and provides direct support for them. In that sense it is very good and this development will again go beyond the rate of wage increases or inflation. It goes a step further, which is certainly very welcome, and I know it is welcomed by Senators generally.

Mr. Cregan: The Minister said that the cost of the scheme is nearly £22 million. I cannot emphasise enough the return on that money. The Minister hit the nail on the head when he mentioned the need to get people to work and to tell them that it is better to go to work. Senator Kelleher spoke about the danger of giving the impression that one is better off not working. We should not create that impression as there is too much of it already.

We are dealing with the family unit where there are children. It is important to the family unit that a partner is going out to work, whether it is the husband or the wife. It is particularly important to men and I say that with sincerity. It is also important to the spouse that her husband is working. It is very important [1563] and I cannot emphasise it enough. A family with three children and an income of £225 a week gross is entitled to a supplementary benefit.

I ask again if we could save the £700,00 and allocate it elsewhere by having the supplement paid directly by the employer? The person would not get almost 22 per cent of his £225 as a supplement. Why not pay it to them directly without giving them the hassle of going somewhere else to get it?

Dr. Woods: Earlier, the Senator was concerned about the possibility of employers abusing the situation. We have to be careful about that The scheme works very simply at the moment and with great dignity for the individual concerned. I do not think they want the employers involved in it too much. The Minister for State talked a little earlier about integration, which will offer all these options. However, one will still have to decide even at that stage which option——

Mr. Cregan: Is best.

Dr. Woods: ——is better for the individual. Senators Cregan, Kelleher, O'Sullivan and Honan would be the first people to say that integration is all very well, but if that is what it means to the individual they are not keen on certain aspects of it. That issue will arise once full integration becomes a real possibility. In the meantime we are progressing with the integration of the systems and we are doing it reasonably carefully. Senators will certainly have an opportunity to talk about these issues before they go too far.

Question put and agreed to.


Question proposed: “That section 7 stand part of the Bill.”

Mr. Cregan: Subparagraph (i) of paragraph (d) states:

[1564] the rate of 9 per cent, of the amount of the reckonable earnings in that week to which such payment related where those reckonable earnings do not exceed £173 [gross], (or the equivalent thereof in the case of an employed contributor remunerated otherwise than on a weekly basis)

The Junior Minister spoke earlier about the number of jobs created through the PRSI exemption scheme over the last two years. Some 3,370 jobs were created over the last two years under the new scheme. Employers under the new scheme can take additional employees from the live register at a reduction in PRSI payments from 12.2 per cent to 9 per cent. Employers in particular are saying that taking on people is not worth the cost, which is far too high.

I do not think the new employer's PRSI exemption scheme created many jobs. I thought it would create more over a two year period. Some 2,000 jobs a year is not a great number, given the exemption scheme. We may be better off extending it to all employees who earn less than £173. I appreciate what that would cost. We are now saying that if an employer will taken on two more people we will only charge that employer 9 per cent PRSI on their earnings if they are earning less than £173. If they are earning more than that they will have to pay 12.2 per cent. Does this not say something about the manner in which PRSI is being paid?

We should examine the possibility of having one form of tax collection, because PRSI is now a tax. It is no longer a pay-related social insurance because one does not get pay-related social insurance if one is on social welfare or sick. The amount is constantly being reduced and that was introduced by the Government. I am not happy about that. We are eroding the entitlements of the PAYE sector. Questions have to be asked about where we are going to get the money that is to be paid to those on the unemployment register. Would the Minister consider allowing a 9 per cent payment for employees earning less than [1565] £200, a week which is £10,000 a year, and 12.2 per cent thereafter?

Dr. Woods: There are two separate issues here. The first is the question of the PRSI exemption scheme. I felt it was worth extending that for another two years. Initially, few employers took advantage of it. Normally one would be inclined to let it go at that but in the last year the take up increased and that is where the 3,770——

Mr. Cregan: It says two years here.

Dr. Woods: I know, but there was very little take up in the first year. It mainly happened in the second year. That was probably related to the pick up in the economy in the second year. However, it is an encouragement and an incentive; it is two year's ahead for an employer who takes somebody on. I therefore thought it was worth going ahead with the scheme this time and the Government agreed. That was not in the budget either and was actually brought in since.

Mr. Cregan: I know. The Minister always works that way.

Dr. Woods: It was one of the things the Government agreed since the budget. I listened to what Senator Cregan said. I am conscious of the employer's side and consequently that is one direct specific aid for employers. It has been retained for another two years. Separately from that, changes are taking place in the PRSI exemption scheme. This is a special PRSI package which is designed to maintain jobs, generate new jobs, help labour intensive sectors to compete and boost the take home pay for lower paid workers.

I had to spend a lot of time thinking about all of this because my first responsibility is to ensure that the social insurance fund is solid and that it is there to meet the obligations. It is there and it is running well at the moment. Having said that, employers are seeking reductions in PRSI and there is a question of what can be done and how much can be done.

[1566] Senator Quinn, in his contribution on Second Stage, said that these changes were too little and too timid and he talked about the amount being just crumbs. I am sorry he is not here at this stage, but the amount is £46 million. As far as I am concerned, it is a question of a transfer of £46 million. It is a very substantial amount of money and it is a very substantial change for our system.

People are forever saying that PRSI is effectively a tax. As far as I am concerned it is not a tax, it is a social security contribution. It is specifically designated for social security purposes. It is collected for the social insurance fund and that is what it is spent on. Before this consolidated fund was put in place, employers had to provide by one contribution or another for occupational injuries and pensions, so it is specifically for those situations. Other levies, such as the levy which was removed this year, were added on and for that reason it has looked more like a tax.

I know a good deal about the social security system and I know it is important for workers that social insurance be there as a benefit rather than an assistance. Many people claim that it should be an assistance, that it should be means tested. I do not agree with that. The tax should level incomes out eventually. Employees get benefit and then, if there is a lot of extra income, the tax system operates to level out the total income. It is important that we maintain the security and soundness of the social insurance fund, so this step was a very big one for me, but the fund is healthy. There has been a good deal of discussion about this, but we said we would do it, monitor the effects and see how we go.

Senator Cregan suggests that we might go further. Depending on how things go, if there is a response in the economy, if employers respond by taking some more people, the whole fund will stay stable and we can go somewhat further. That is what I have said I will do. I will monitor it during this coming year. Next year we can see what effect it has had and how we can adjust the system further going into next year. Senator Cregan talked [1567] about putting in another layer, and that is one of the possibilities. We will examine that possibility, but it depends on the money and the response.

There has been a very good response from the clothing and footwear sectors. At the same time we must recognise that PRSI is not the only cause of the difficulties there. My difficulty is that we are really a very small contributor to the whole situation and those in the industry will readily admit that there are other factors which have a much bigger impact on their position. They do not have a problem vis-a-vis Europe, but the fact that the UK operates this system and one in which there is no ceiling for employers creates a difficulty for them. They want us to at least begin to address it and we have done so.

The total full year cost of this concession is £46 million. This year the net cost of the concession is £28 million and the higher ceiling on the employers' side during this year will provide £3 million. That gives a total of £31 million in 1994, but the full year cost of this concession is £46 million.

Senator Quinn mentioned the need to help the service sector among others; but that is the very sector it applies to and that is where a large part of that money will go. I do not disagree at all with what Senator Quinn said about creating incentives for people to work in those areas but I do not agree that PRSI is a tax; it is a social security payment. That is where it came from, that is where it is and that is where I intend to keep it.

If an employee is paid £170 per week the gain to the employer from the PRSI measure alone is £5.54 per week, or £283 per annum. Similarly for £160 it is £5.12 per week, or £266 per annum. There is a real and substantial gain. We will monitor the situation and decide where to go for the future. Senators must appreciate that it is a very big change and one that allows for development along the lines suggested by Senator Cregan.

If Senators take into account the other provisions being made in this Bill, the total cost in a full year is £89 million. [1568] That is what is being given to ease the burden at the lower end of the scale. If the Minister for Social Welfare said a few years ago that £5 million, £8 million or £10 million was to be put into the system, people would be delighted. The figure is £89 million and that is why I found it hard to contain myself when Senator Quinn referred to it as crumbs.

I think what the Senator meant was that he would like to see this going much further. I would like to make it clear that this is a substantial amount of money. The only reason we can do it is because we have done so much work on the black economy. I agree that there is a lot more to be done, but we have done so much work that we had savings of £236 million over a two year period. We have done so much saving in this area and bringing more people on board — the contributors generally are coming out of the woodwork and paying up — that the fund is in a strong position.

This is the best time to begin to look at these issues. The Government was very anxious to do anything it could in relation to that issue to support, strengthen and maintain jobs that are under pressure and also to help create new jobs. This provision should be celebrated.

Mr. Cregan: It is not a social insurance fund by my reckoning, it is a pay-related social insurance fund. Do not change the playing pitch. The Minister says the social insurance fund will always be a social insurance fund. Section 21 of the Bill does not say that. That section says that pay-related social insurance will be eliminated by November 1995. I want that to be quite clear.

The Minister is contradicting himself in his own Bill and I cannot let that go. I would like to see the Department of Social Welfare creating a situation where more people will go to work and the Bill should be relevant to that objective. While I do not always agree with Senator Quinn, he asked if enough was being done in this area. Enough is never being done, despite the amount of money spent every day on social welfare. The [1569] Minister knows that more people would be working if the problem was approached in other ways; yet the problem is how to get outside the existing structure. I recognise that it is not easy to get this point across to a Cabinet that seeks to do everything possible with money to bring about a situation where more people would be at work.

If the Minister's initiative created 4,000 jobs over the last 12 months by eliminating 2.2 per cent of pay-related social insurance then he would have done exceptionally well. The proof of the pudding is in the eating, and what Senator Quinn says is not too far wrong. If you are spending so much money every day on social welfare there is nothing wrong with having novel ideas like the one on page six of the Minister's statement saying that 3,770 jobs were created over a 14 month period.

We can see there is a turnaround in the economy. If that is the situation, the Minister should not be afraid to use more incentives to create 10,000 jobs. The State should not be afraid to take less from employers and employees, because it will cost £50 less per week overall. The State can only gain from doing that, because someone with a wife and two children is getting £120 in unemployment assistance. People in the private sector would ask themselves if they could save on the one hand while distributing or gambling on the other. The Minister's gamble is paying off by creating employment initiatives. We must not create a situation where there is no incentive to employ people. How many times have Senators said that from all sides of the House? No matter what the Minister says about the 9 per cent and the £173 level, it should be put up to £10,000 a year, or £198 to £210 per week. Why not? If the Minister motivates people to help themselves, they will do it.

Why is no case being made to increase the £173 per week benefit payment? I would like to give an example, and I promise not to hold up the House on simple issues. I will speed up the Bill after this point. Local authorities are a hobbyhorse of mine. In 1987 we eliminated [1570] thousands and thousands of workers from these areas. General operatives and skilled workers are entitled to a supplement at the moment because of their low pay levels. Why is it that people with two children earning £130 per week would earn on average £162 per week if they were working for Cork Corporation, Cork County Council, Limerick City Council or other local authorities? It may be costing us £32 per week more, but let us look at the benefits. Most importantly, however, people would be working at real jobs.

I do not blame the European Commission for questioning what we are doing spending money on job training because we are really creating nothing. Top trade union officials in the ICTU have asked whether any real jobs are being created. I am talking about real jobs, where a man goes out on a Monday morning and comes back on Friday with his wages. That is why I think the £173 benefit level is very low. It is just below the pay rates of local authorities, which are about £176 per week. Is that a tactic? Are we so small minded that we are not prepared to increase it? Could the Minister look at every possible incentive to create jobs? If someone is coming off the dole and will cost the State £20 per week instead of £120, is there not some logic in that?

Dr. Woods: In relation to the PRSI, it is a pay-related——

Mr. Cregan: Social insurance.

Dr. Woods: No contribution.

Mr. Cregan: Everything is a contribution, Minister.

Dr. Woods: Not payment. It is a pay-related social insurance contribution.

Mr. Cregan: If you are paying into the Revenue Commissioners that is a contribution from you to the State.

[1571] Mr. Kelleher: A voluntary contribution?

Mr. Cregan: Nothing is voluntary.

Dr. Woods: The Senator stressed the need to create initiatives for employment. I appreciate that and have been trying to do everything I can about it. One initiative mentioned by the Senator is the PRSI exemption scheme, which created 4,000 jobs. We will have to see how much we can discover about its effects in due course. Another initiative I have undertaken, and which relates to the points made by the Senator, is the back to work allowance. This is something we have discussed over the years, but it is hard to achieve the right climate in which the Government would support such ideas. I am prepared to try many things, most of which have worked out, and I do not mind a bit of criticism when some do not work out as well as expected. You have to pitch if you are to get anywhere.

The back to work allowance is starting to move now and the Government has agreed to a pilot figure of £3,000. There was some delay in getting it off the ground because arguments were made in the Dáil that the scheme should be left with FÁS. My reply to that was that these people are my customers and since I am giving them certain moneys why can I not apportion the money for a period while they try to get employment? There are no complications and, apart from a handful of staff in the Department, no one else is involved. We are giving people the opportunity of finding work.

The scheme entails a 75 per cent rate for the first year, followed by 50 per cent in the second year. For the week ending 18 March, the number of jobs created by employers and the self-employed amounted to 1,554 and more than half were people who wanted to start up on their own. I suspect that that initiative will begin to move much faster and I do not think there will be much difficulty for the Government to proceed further with it if they see it going well. On the total social welfare expenditure of £3.8 billion, I [1572] want to make it clear that expendture on unemployment payments — high as it is — is only just over £1 billion. Of that, a considerable part is covered by the social insurance fund and the rest is assistance. £1.07 billion is the estimate for 1994, so you are left with roughly £2.8 billion, which is for pensions and other parts of the social security system. Those are the main points.

The Senator also mentioned European criticism of our training and educational supports. Perhaps the confusion arises from the fact that a large proportion of our population is young. About 50 per cent of our population is under the age of 28 years. A study of the long term unemployed carried out by the planning and research unit in my Department some years ago found that 80 per cent of the long term unemployed did not have the leaving certificate; about 57 per cent had not continued schooling after the primary certificate.

We must stop talking about theories and deal with the facts. My Department looked at the facts and repeatedly found that the long term unemployed had not had the benefit of education in the first instance. That is why we introduced the second chance education scheme. It is growing rapidly and is availed of by large numbers. There are about 5,000 participants in the second chance education opportunities scheme and many secure employment when they finish. There are also 900 long term unemployed in third level education. In many cases they progressed to third level from the VTOS, which is the main scheme. That has improved their potential and their prospects. The policy invests in the development of the people of Ireland and Europe. Our colleagues in Europe should realise that. They should realise that the world is rapidly changing and that education is fundamental to those changes.

If we want to ensure that the workforce, particularly the unemployed, can compete and avail of and create new opportunities, we must ensure that they have the training and education to do so. That is the best advantage we can give [1573] our people. It will combat poverty. A study of this issue was launched last week and it found that second chance education was one of the best choices available to the long term unemployed. We are the practitioners because we have been implementing that policy during the past number of years. We want to extend it as quickly as possible. I welcome that report because it supports the Department's strategy.

Question put and agreed to.

Sections 8 to 10, inclusive, agreed to.


Question proposed: “That section 11 stand part of the Bill.”

Mr. Cregan: The word “interpretation” is the first word in section 11. Would somebody explain where the word “survivor” in survivor's pension came from? A survivor, as far as I am concerned, is a person who was saved in an accident while another person was lost. I do not know why that word is used. It is not an appropriate word to use about the people being discussed in this section. We are talking about the loss of a partner. One is not a survivor unless one is talking about an accident.

I welcome the recognition in this section of the widower's work, or should I say the “survivor's” work. What is the definition of a widower now? Can that be clarified?

Dr. Woods: “Survivor's pension” is the title. I did not have time to consider the title because I was more anxious to introduce the widower's pension. There was much discussion and negotiation about the pension. Survivor's pension is already referred to in certain other categories in legislation. It is also used in international jargon. “Survivor's pensions” are referred to in the United States and the phrase is used in a number of other countries.

I considered the word “spouse's”——

[1574] Mr. Cregan: The Minister has to be careful now.

Dr. Woods: Yes, it is quite difficult. We settled for “survivor's pension” and the meaning of the phrase is generally well understood.

I accept the Senator's point about widowers. The pension is long overdue. Somebody said earlier that nothing had ever been done for widowers. However, some time ago I introduced a lone parent's allowance scheme which applied to widowers on the same basis as widows. The survivor's pension scheme gives equal treatment to the widower. It is the most advanced survivor's benefit scheme in Europe. Europe is currently trying to figure out how it will deal with the directive. The directive has been there since 1979 and has been actively considered since 1989. It is hoped to apply the equal treatment directive to widowers' pensions. That has not been achieved yet because of the difficulties and costs in various countries.

We are providing a full widower's pension similar to a widow's pension where one person benefits from the other, depending on who had the contributions. It is a major step in the development of the social security system. I am particularly happy for the families of widowers in this year of the family. About 9,000 widowers will benefit immediately as the provision applies to existing widowers. The number of widowers is lower than the number of widows because——

Mr. Cregan: More men die.

Dr. Woods: ——men die earlier.

Ms Honan: I welcome the introduction of the survivor's pension scheme which provides equal treatment for widows and widowers. Widowers will qualify for survivor's pension under the same conditions that apply to widow's contributory pension.

My difficulty with this provision is that lifelong partners who are not married but who are cohabitating as husband and wife are excluded. The Social Welfare Act, [1575] 1991, provided that in calculating the amount of certain social welfare benefits payable to any person, a man and woman who are not married to each other but who are cohabitating as man and wife and members of the same household, had their needs and means aggregated as the needs and means of a claimant for certain social welfare payments. I cannot understand why one social welfare Bill acknowledges cohabitating people while this Bill, which seeks to extend certain provisions to survivors, ignores them. The Minister cannot have it both ways. If he recognises men and women who are not married but live together as man and wife, on the death of one partner the surviving partner should have the same rights as a partner in any other couple.

The Minister should give serious consideration to the anomaly he has created. My party put down an amendment to this section in the other House. I would have done so today but it would have been disallowed because it would have involved a cost to the Exchequer. It is widely accepted that a substantial number of people live in these situations. If we are to develop our social welfare system we should not miss the opportunity to extend this provision to such people.

Mr. Kelleher: I welcome this section. Senator Cregan sought an explanation of the word “survivor”. If a person stood for election to the Dáil, lost the election, was elected to the Seanad and finally won election to the Dáil, would he be known as a political survivor? Where would he qualify under this provision?

Mr. Cregan: I wish to broaden the point Senator Honan raised with regard to cohabiting couples. No more than 12 months ago, it was found that such people were entitled to benefits under common law and they were divided accordingly. Which provision under subsection (4) gives a higher entitlement, the deserted wife's benefit or the survivor's allowance?

[1576] I am also worried by the subsections dealing with the disregard of self-employment contributions in certain cases. When a certain amount is paid by the self-employed person, the entitlement to the widow or survivor may not be as high as that of other people, especially if money is bequeathed to the survivor. Are all being recognised equally in that case? Certain people are getting benefits while others, despite the fact that they may be contributing at a lower rate because they are self-employed, would not even have the basic cover if they died.

Ms O'Sullivan: I welcome the fact that men are now included in the category receiving survivors pensions. “Survivor” is an appropriate term to use. The term “survived by”, followed by the name of the family, is widely used in death notices on the radio and in the newspapers. I do not have any problem with being a political survivor either.

The women's liberation movement has been active for a long time and has achieved many objectives. I welcomed the inclusion of men for the deserted and lone parent benefits. At the time, I knew some men who were struggling to bring up their families on their own. Similarly, many widowers have been trying to manage a family as well as a job and their other responsibilities without the benefit of such a pension. The fact there is now equality in this area should be welcomed.

Dr. Woods: Senator Honan asked why co-habitees had not been included under this provision. The widow's pension is naturally based on the death of the partner in marriage. Including co-habitees would be a further extension and development of the pension, on top of this development which is costing £27 million per year. Other issues, such as what would happen to divorced widows if the forthcoming divorce referendum is passed, for example, will have to be considered and addressed in the future. This provision is a major step forward. As Senator O'Sullivan said, it puts widowers and widows on an equal basis.

[1577] Senator Cregan asked if both the deserted wife's benefit and the survivor's pension would be taken at the same rate. They would be at the same level because they are covered under insurance funds and therefore, at the same rates. The rates within that scheme for dependent children will also be the same.

It only takes three years to qualify for these benefits. However, there may be circumstances where five years may be required. This applies to many people — public servants, for example. They are set at the modified rate because they are covered for the widows pension, which will now automatically include the widower's pension. This provision will have a great impact on the system and I am glad the value of this section has been recognised by this House.

Question put and agreed to.

Sections 12 to 15, inclusive, agreed to.


Question proposed: “That section 16 stand part of the Bill.”

Mr. Cregan: I welcome the increases in the carer's allowance and the recognition of the carer. Is the Minister trying to broaden the allowance, otherwise the health boards especially will have to bear the costs. One of the biggest developments in this regard is in the provision of caring in the homes of the elderly. I recognise the importance of our elderly people. The carer's allowance has been of benefit to those helping the elderly. Is every opportunity being taken under this provision to keep the elderly in their own homes? Every possible benefit should be given to facilitate these people.

Dr. Woods: This scheme will cover approximately 5,000 carers, in that sense, it has been extended. It is estimated that an extra 500 claimants whose spouses are working will come under this benefit. Some 1,750 existing recipients, of whom approximately 300 would gain significantly, are expected to benefit.

[1578] The scheme is being extended and more people will be brought into it by virtue of the increase in the general levels. The estimated spending this year will be £14.5 million, which is a considerable amount when one remembers that only £6 million was spent on the scheme in 1991. The other aspects are currently being considered.

Mr. Cregan: They should be.

Dr. Woods: I introduced the respite care fund which is going well at present. I was in County Waterford a few weeks ago where the Soroptimists organised a weekend break for carers. There were 200 people there from all over the country involved in workshops and all forms of entertainment. Similar measures are being carried out with the £1 million allocated to my Department before Christmas; we got an extra £500,000 on a once-off basis before Christmas from savings and another £500,000 will be made available this year. That is a further extension of our involvement through the voluntary organisations. However, I accept that the other matters will have to be considered further.

Question put and agreed to.

Sections 17 to 19, inclusive, agreed to.


Question proposed: “That section 20 stand part of the Bill.”

Mr. Cregan: Graduated disability benefit is unfair. This matter should be considered. The Minister is catching people who are recognised by the State as being entitled to disability benefit but are not receiving the full benefit. They receive the remainder from the supplementary welfare officer. This is embarrassing. It also costs the State more and there is no need for it. While I agree that graduated disability benefit should exist in theory, it is not logical in practice.

[1579] Dr. Woods: There are certain misunderstandings about this benefit. Part-time workers who earn £25 or £30 a week——

Mr. Cregan: The Minister is catching full-time workers.

Dr. Woods: ——are brought into graduated schemes for pensions and short term benefits, such as disability benefit. The Senator is suggesting they should get the full amount.

Mr. Cregan: No, I am not. People who were investigated for disability benefit and put back on unemployment assistance were only entitled to graduated disability benefit after the State recognised they were disabled and were unable to work because they were outside the credit system for the last year. While investigating if a person was entitled to full benefit, the State created this problem, although it will not recognise it. This problem can be solved by changing the wording and by recognising that anyone who is on long term disability benefit should always be entitled to it.

Dr. Woods: If Senator Cregan could give me some examples, I——

Mr. Cregan: I did and I got no answer.

Dr. Woods: ——will consider them. People who were under investigation were caught during the transfer period.

Mr. Cregan: The “dirty dozen” scheme.

Dr. Woods: I will consider it.

Question put and agreed to.


Question proposed: “That section 21 stand part of the Bill.”

Mr. Cregan: I object to this section and I will call a vote on it. Section 21 reads:

[1580] ....(2) Section 80 of the Principal Act is hereby amended by the substitution of “£97.50” for “£80” in each place where it occurs. (3) Subsection (2) shall come into operation on the 20th day of July, 1994.” (4) The Principal Act is hereby amended by the insertion after section 81 of the following section:

81A.——Notwithstanding the provisions of this Chapter, pay-related benefit shall not be payable to a person in respect of any day of unemployment or of incapacity for work on or after the 1st day of November, 1995, unless he is in receipt of the said benefit on that day in which case benefit shall continue to be payable for the duration of his continuous entitlement up to the 393rd day of unemployment or of incapacity for work.”.

I object to this section because the Minister has removed a benefit which the PAYE sector paid for over the years. People in this sector were under the impression that pay-related benefit would be paid if they got sick. Trade unionists were proud of the fact that if a person was sick they would receive pay-related benefit. However, from 1995 people's circumstances could change because they will only be entitled to social welfare. This is the thin edge of the wedge because the benefits to which the PAYE sector are entitled are being eroded. Unemployment and social welfare are taxed and pay-related benefit will now be taxed and taken from the person. People will not get their entitlements now because the Government does not have the money to provide for the less well off in our society. I do not agree with this section.

Dr. Woods: I will be brief because the Senator has already decided to vote against the section.

Mr. Cregan: I will because the Minister will not change the section.

An Leas-Chathaoirleach: The Minister may change his mind.

[1581] Dr. Woods: I hope the Senator is clear about what is happening. Previously, pay-related benefit came off disability benefit. While pay-related benefit is coming off unemployment benefit in this legislation, I am putting the total amount of money, £21 million, in addition to a further £2.7 million back into the basic rates of payment. This also applies to disability benefit. The average payment is approximately £10 in pay-related benefit, but it only applies to fewer than half the workers who are covered. It does not apply to them generally.

Mr. Cregan: That is from 1995?

Dr. Woods: This applies across the board because everyone gets the £5.40 increase. The money goes back into the basic rates of payment. That is consistent with what I and the Commission on Social [1582] Welfare said. Perhaps the Senator will accept my bona fides in this regard.

Mr. Cregan: Part of section 21 (4) states that: “Notwithstanding the provisions of this Chapter, pay-related benefit shall not be payable to a person....” but the Minister is including it as a basic social welfare payment. In theory I understand what the Minister is doing. He is taking money from pay-related benefit and including it in social welfare payments.

Dr. Woods: Only insurance.

Mr. Cregan: Yes, but that is a social welfare payment when a person is sick. The PAYE sector and the trade unions fought for pay-related benefit but the joint partners in Government have agreed that the PAYE sector will not get this benefit. I object to that.

Question put.

The Committee divided: Tá, 20; Níl, 15.

Cashin, Bill.

Cassidy, Donie.

Daly, Brendan.

Farrell, Willie.

Fitzgerald, Tom.

Hillery, Brian.

Kelleher, Billy.

Kelly, Mary.

Kiely, Dan.

Kiely, Rory.

Lanigan, Mick.

McGowan, Paddy.

Magner, Pat.

Mooney, Paschal.

Mullooly, Brian.

O'Brien, Francis.

O'Sullivan, Jan.

Ormonde, Ann.

Roche, Dick.

Wright, G.V.


Belton, Louis J.

Burke, Paddy.

Cosgrave, Liam.

Cregan, Denis (Dino).

Dardis, John.

Farrelly, John V.

Henry, Mary.

Honan, Cathy.

Howard, Michael.

McDonagh Jarlath.

Manning, Maurice.

Naughten, Liam.

Neville, Daniel.

Reynolds, Gerry.

Sherlock, Joe.

Tellers: Tá, Senators Mullooly and Magner; Níl, Senators Cosgrave and Burke.

Question declared carried.

Sections 22 to 35, inclusive, agreed to.

Schedule A agreed to.

Schedule B agreed to.

Schedule C agreed to.

Schedule D agreed to.

[1583] Schedule E agreed to.

Schedule F agreed to.

Title agreed to.

Bill reported without amendment and received for final consideration.

Question proposed: “That the Bill do now pass.”

Minister for Social Welfare (Dr. Woods): I thank Senators for their searching consideration of this Bill, which is highly important legislation. As I said at the outset, it affects 40 per cent of the population. Some worthwhile innovations and developments are made in the Bill. I have noted the constructive points made today and I thank Senators for their support.

Mr. Cregan: I thank the Minister for his deep and serious consideration of the Bill. I have great admiration for the Minister. He has done a fine job in ensuring more and more people are protected by the social welfare system. Over £11 million is given in social welfare payments every day; the public would probably not believe that if they were told. The Minister can be quite subtle at Cabinet in obtaining an allocation of money, even in the period 1987 to 1989 when the then Minister for Finance was rather strict on expenditure. He was probably right to be cautious at that time, but this Minister did exceptionally well for the less well off in our society. I thank him for his commitment.

Ms Honan: I also congratulate the Minister on getting the Bill through the House. As he said, 1.4 million of our people are being maintained on social welfare payments, which represents a huge percentage of our people. There is great support for a high level of protection for these people. While we never have enough to give to them, the Minister is earnest in his endeavours, both in ensuring those who need social welfare payments receive as much as possible and [1584] in ensuring there is no disincentive to taking up jobs. The Progressive Democrats believe we must maintain employment and encourage people to take jobs, but where people fall out of this net they need the highest level of social protection society can afford.

Mr. Kelleher: I also thank the Minister and the Minister of State for the comprehensive way they dealt with the Bill. It is an important Bill — over 40 per cent of the population are directly affected by it. It was well supported throughout the House and it is a tribute to the Minister and his Department and to their new initiatives to curb current difficulties and protect the less well off.

Mr. Magner: I join with my colleagues in congratulating the Minister, Deputy Woods, on getting the Bill through the House. It is accepted wisdom both here and in the other House that he has an unparalleled knowledge of the social welfare code and one has to know one's facts when making a point to him. It is proper to have someone with such skills at Cabinet who also has the interest in and the commitment to the most defenceless section of our society.

Dr. Woods: I thank the Senators. The points made have been noted and we will certainly examine other considerations in the future. This Bill has made a major advance and maintains the progress over the years. To a large extent that progress has been made by Deputies and Senators in their proposals, suggestions and their experience of how the system works. In international terms we are in the forefront in the provision of sound and sensible social security. As a nation we can be proud of that.

Question put and agreed to.

Sitting suspended at 5.55 p.m. and resumed at 6 p.m.