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Social Welfare Bill 2012: Second Stage (Continued)

Tuesday, 11 December 2012

Dáil Éireann Debate
Vol. 786 No. 1

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(Speaker Continuing)

[Deputy Joan Burton: Information on Joan Burton Zoom on Joan Burton] Earlier this year I commissioned a technical report to explore the possible options, which I expect to receive presently. This is a complex area and there are no easy options. However, it is clear the current method of distribution of pension funds when a scheme is being wound up is inequitable. I have also been struck by the consensus among certain pension stakeholders on the need for change. As such, once I receive the technical report, I will bring proposals to Cabinet with a view to amending the current order of priority in the social welfare and pensions Bill that I will introduce in the first half of next year.

Cuts have to be made and given the level of expenditure on child benefit, which is over €2 billion or 10% of all expenditure, it has not been possible to avoid some reductions in the benefit in this budget. Despite the budget reductions, our child benefit rates remain high in international comparisons and are still above the rate that prevails in the UK and Northern Ireland. There, the rate for the first child is approximately €110 per month, with a lower rate for second and subsequent children, at approximately €72 per month. Child benefit is a universal payment generally paid to mothers of all income levels. I am determined that any future reform of child benefit will preserve that principle of universality. I have had the opportunity to speak to many women on this issue and I know most favour the retention of a strong universal payment. In particular, it is worth bearing this in mind when one considers that our nearest neighbour, a country that can print its own money and is not in hock to any troika, will remove child benefit in its entirety from families that might be considered middle-income with effect from next year. Is this the system Sinn Féin would like to emulate here?

In line with commitments contained in the programme for Government, I established the advisory group on tax and social welfare last year. The group has presented its report to me and I intend to publish this in the new year. Following publication of the report, I will bring it to the Joint Committee on Jobs, Social Protection and Education so there can a full and informed public debate on the options regarding the future structure of child benefit, specifically with regard to taxing, means-testing or other structural reforms.

The Department will spend €775 million on carers in 2013, €5 million more it is spending on carers this year. There are no changes to the half-rate carer's allowance scheme, which is highly valued by more than 20,000 carers. However, the respite care grant will decrease from €1,700 per annum to €1,375 per annum. This will mean the rate will still be ahead of the €1,200 which applied in 2006 when the Celtic tiger economy was at its peak.

Since I came to office, tackling fraud and improving control have been priorities for me. I am introducing measures to enable the Department to recover overpayments more quickly from those who have incurred them. At present, repayments of overpayments are frequently made at a level of €2 per week. This means in reality that some overpayments take years to repay, if indeed they are ever repaid. As well as providing savings, this measure will send a strong message that there is an obligation to return money owing to the Exchequer. There is an obligation on the citizen, as well as the Department, to ensure only entitlements due are received and what is not due is returned for the benefit of others. The Bill provides that up to 15% of the personal rate can be withheld to repay an overpayment. I am conscious that some overpayments occur because of departmental error. While all overpayments must be repaid, including those that arise because of a departmental error, it is not my intention for people to face hardship as a result of these new arrangements. The particular circumstances of each case will be considered before the repayment amount is determined. However, with regard to those who have been found guilty in court of having deliberately defrauded the taxpayer by abusing the social welfare system, I regard the 15% limit on deduction to be reasonable in those circumstances. This will be deducted from the personal rate, which means it will not affect other payments for dependants, children or child benefit. For example, the personal rate for a jobseeker is €188. If a jobseeker is involved in defrauding the system, up to now we can only recover the amount overpaid at €2 a week, a rate which many regard as a joke. We will now be able to recover a modest amount which will help recover the overpayment and act as a deterrent to fraud.

I will be tabling three amendments to the Bill on Committee Stage: to provide that Sunday be counted as a day of employment for jobseeker's payments, to provide for the postponement of the implementation dates of changes in respect of one-parent family payment, and to provide for changes in the household budgeting scheme for local authority rents. The first change will provide that Sundays will be taken into account for the purposes of determining entitlement to the jobseeker's benefit and jobseeker's allowance schemes. Under the current legislative provisions, a person can, in general, qualify for jobseeker's benefit or jobseeker's allowance where he or she is unemployed for at least three days in any period of six consecutive days. However, Sundays are not counted for this purpose. This means that where a person works on a Sunday, this day is neither treated as a day of employment nor a day of unemployment for qualification purposes. These current legislative provisions are based on the historical notion of a six-day working week in which Sunday is a day of rest. These changes bring the jobseeker's benefit and jobseeker's allowance schemes into greater alignment with the current operation of the labour market by counting Sundays in the determination of entitlement to jobseeker's benefit and jobseeker's allowance. Only people who work on Sundays and claim a jobseeker payment in respect of other days are affected by this measure.

The change in the provisions with regard to the one-parent family payment will defer the dates on which the age reductions from 12 to seven years for entitlement purposes are to apply from the beginning of January in 2013 and 2014 to the beginning of July in each of those years. It will also extend the period over which the transitional arrangements for the continued payment of one-parent family payment are to apply from the end of December 2014 to the beginning of July 2015. This is to provide more time for the creation of additional child care places, as I promised last year when introducing the Social Welfare Bill 2011.

The household budgeting facility, in which a person can opt to have a specified amount of his or her social welfare payment deducted by An Post and paid to certain utilities and to local authorities, will be extended by the introduction of new provisions specific to payment of rents to a housing body. Tenants of local authority accommodation in receipt of a social welfare payment may opt to have a portion of his or her social welfare payment paid to a local authority in respect of rent. Local authorities will require tenants of local authority accommodation in receipt of social welfare payments to sign up to the household budgeting facility before being offered accommodation. Tenants will require the consent of the housing body before being allowed to withdraw from the arrangement and such consent shall not be unreasonably withheld.

Some of the savings achieved by these measures will be redirected to provide additional spending in the key areas of job supports and child care supports. An additional €14 million will be allocated for after-school child care places targeted at primary school children. The places are aimed at low-income families in which the parents are availing of an employment opportunity. This initiative is part of the Government's overall strategy to support parents in low-income families to take up employment and to solve the problem of the extraordinarily high number of jobless households. A child in a jobless household is at major risk at being poor for the rest of his or her life.


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