SECOND STAGE SPEECH

DAIL ÉIREANN

BY THE TÁNAISTE AND MINISTER FOR SOCIAL PROTECTION

JOAN BURTON T.D.

4th November 2015

I move that the Social Welfare Bill 2015 be read a second time.
Budget 2016 is a carefully designed, responsible, interlocking Budget, where different pieces come together g to form the overall picture:
A picture of a country moving in the right direction with living standards being gradually raised in every home.
The social welfare package in the Budget is similarly carefully designed to ensure a number of core groups benefit.
These include pensioners, families with children, including lone parents, carers and people with disabilities.
I know some of the TDs on the Opposition benches will – for Opposition’s sake – vote against this Bill.
Let me tell you why, on the basis of the clearest evidence, you should support it instead if you truly want to assist the vulnerable in society.
My Department has carried out a Social Impact Assessment of the main tax and social welfare measures in Budget 2016.
This assessment is based on the tax/welfare micro simulation model SWITCH, developed by the ESRI.
Social impact assessment is an evidence-based methodology which estimates the likely effects of policies on household incomes, families, poverty and incentives to employment.
The assessment found that:
· Average household incomes increase by 1.6 per cent or €14.30 per week as a result of Budget 2016.
· Importantly, there are higher than average gains for the bottom two quintiles – that is, the lowest-income households in society – while the smallest gain is in the top quintile.
· The biggest beneficiaries are lone parents, dual and non-earning couples with children, with an average gain of 2%.
· Non-earning lone parents and single earning couples with children fare above average, gaining around 1.8%.
I should emphasise that Child Benefit expenditure, though universal, favours lower income households.
Therefore, Budget 2016 will deliver considerably bigger gains for the poorest households.
If there’s anyone in this House who votes against this Bill, it will be because they are placing politics before those people.
State pension and Christmas Bonus:
Coming to specific measures, throughout the worst of the crisis we protected the State pension.
I am now particularly pleased to provide an above-inflation increase of €3 a week for pensioners and carers aged 66 and over.
There is also an increase of €2 a week for adult dependants aged under 66 years and an increase of €2.70 for adult dependants aged 66 years or over.
This will benefit 583,000 pensioners and over 93,000 qualified adults and is the first weekly rate increase for pensioners since 2009.
I will also be making regulations in the coming weeks for payment of a 75% Christmas bonus which will benefit older people, carers, people with disabilities, long-term jobseekers and lone parents at a financially stressful time of year.
For a single person on Disability Allowance this will mean a bonus payment of €141.
For a pensioner couple both of whom are in receipt of the State (Non-Contributory) Pension, it will mean a bonus payment of €327.50.
Some 1.23 million people will receive the Christmas Bonus in the first week of December.
And I make absolutely no apologies for paying the Bonus.
As Tánaiste and Labour leader, my focus is on trying to ensure we can improve things for every person, not just a few.
Importantly, the Bonus is spent in the local economy, in local businesses and stores, providing a stimulus to communities across the country.
PRSI and the Social Insurance Fund
When the Government came into office there were grave fears that the numbers unemployed would exceed half a million.
The deficit in the Social Insurance Fund was heading towards €2 billion.
Unemployment would eventually peak at 15.1%.
As of this week, it stands at 9.3% and continues to fall rapidly, thanks to the sustained focus of this Government in restoring the economy to growth and helping people back to work.
As a result of people returning to work in high volumes, and more employers now able to reward employees with pay increases, the Social Insurance Fund has been transformed.
The 2016 Budget Estimate provides for Social Insurance Fund income to increase to almost €8.9 billion in 2016, with expenditure estimated at €8.67 billion.
This means that there will be a projected surplus of €216 million on the Fund which will be the first such surplus since 2007.
The increase in the minimum wage to €9.15 an hour from next January is a hugely important measure for low-paid workers.
I pledged earlier this year that if we increased the minimum wage, we would address any PRSI “step-effects” that would arise from such an increase.
We are doing so in this Bill.
Put simply, the measures will reduce the weekly PRSI bill for over 88,000 employees and ensure that the benefit of a national minimum wage increase will be felt by all those in receipt of it.
This is, of course, in addition to the gains from the USC changes announced on Budget day.

Helping Families
This Bill provides for a €5 increase in the rate of Child Benefit – the second Budget in a row in which Child Benefit has been increased.
This will bring the monthly rate of Child Benefit from €135 to €140 per child, with effect from the 1st of January 2016.
Child Benefit is a crucial support to families through difficult times, in particular to low and middle-income families.
623,000 families and almost 1.2 million children will benefit from this increase.
The introduction of a Paternity Benefit scheme to take effect next September was also announced in the Budget.
The Family Income Supplement income threshold is also being increased by €5 for each of the first two children per week from next January.
This will mean an additional €3 or €6 per week for over 59,000 low-income working families (a total of more than 131,000 children).
Also, I will shortly make regulations to provide for an increase in the earnings disregard for Jobseeker’s Transition Payment from €60 to €90 per week.
This improved disregard will apply to existing and new recipients from next January.
All earnings above €90 will be assessed at 50% from January – they are currently assessed at 60%.
Funding for the School Meals Programme will increase by €3 million next year to €42 million. The school meals programme currently benefits 217,000 children in over 1,700 schools and other organisations. The allocation of an additional €3 million in 2016 will provide for breakfasts to an additional 27,800 pupils or a lunch or light meal to almost 12,000 additional pupils.

Getting People Back to Work
The strong economic recovery that we can see around us is, above all, a jobs-led recovery.
And that’s crucial because secure and fairly paid work remains the best protection against poverty.
The Budget is therefore a pro-work Budget.
The Budget announced increases of €2.50 per week in the top-up payments for jobseekers availing of Community Employment, Rural Social Scheme, Gateway, Job Initiative and other such schemes.
Earlier this year, I introduced a new incentive called the Back to Work Family Dividend which helps jobseekers with families to return to work.
This Dividend provides an incentive of €1,550 per child in the first year of employment or self-employment, and half that amount in the second year.
There are currently over 9,500 families and 15,000 children benefitting from the Dividend.
This measure, when taken together with the employer incentives such as JobsPlus, will ensure that long-term jobseekers also benefit from the strong recovery in the labour market.
Welfare Increases
Apart from the rate increases I have already mentioned, the Fuel Allowance is being increased by €2.50 per week to €22.50 for the duration of the fuel season.
This is another targeted measure and will benefit almost 381,000 households.
The name of the Respite Care Grant scheme is being changed to the Carer’s Support Grant.
In light of the hugely important role carers play in our society, I am particularly pleased to announce that the rate of the grant is to be increased by €325 to €1,700 from 1 June 2016.
It will be payable to around 86,000 carers next year.
In another improvement, Carer’s Allowance will now be paid for 12 weeks after the death of the person being cared for (instead of the current duration of 6 weeks).
Rent Supplement
I want to use this opportunity to refer to the Rent Supplement scheme. My Department is currently providing support to approximately 63,800 people living in private rented accommodation.
The cost of the scheme in 2015 will be over €298 million.
Between Rent Supplement, Housing Assistance Payment and the Rental Accommodation Scheme, the State is currently accommodating almost 100,000 households via the private rented market.
Given the size of the State’s involvement in the private rented sector, any general increase to Rent Supplement would serve only to increase rents overall.
That would particularly affect low-income households who are renting, including students and low-paid workers.
Instead, my Department is operating a framework which ensures that families at risk of losing their rented accommodation can get urgent assistance.
Department officials will, on a case-by-case basis, increase the Rent Supplement limits to ensure people stay in their homes.
To date, more than 4,400 households have had their Rent Supplement increased.
At the same time, Ministers Kelly and Noonan will in the coming days finalise a housing package which will address both the crucial issues of supply and providing greater certainty for tenants.
Fishing Industry
I am very concerned about reports of mistreatment of workers on some, and hopefully few, Irish fishing trawlers. Following a decision at Cabinet yesterday the Government is immediately setting up an inter-departmental taskforce to examine the complex issues arising. The aim is to formulate a co-ordinated and effective cross-Government approach. My Department’s Special Investigation Unit will actively participate and assist in any multi-agency approach that emerges or is required in the context of Government/Interdepartmental decisions or proposed joint initiatives in this sector.
I’d now like to turn to the specific measures in the Bill.

Specific Measures contained in the Bill

Section 1 provides for the short title of the Bill, its construction and collective citation with the Social Welfare Acts.
Section 2 provides for the definition of certain common terms used in Part 2 of the Bill.

Section 3 provides for an increase in the rate of State Pension (Contributory) and, in respect of persons who are 66 years or older, increases in the rates of the following schemes: Widow’s, Widower’s and Surviving Civil Partner’s (Contributory) Pension, Death Benefit and Disablement Pension. It also provides for increases in rates for qualified adults.
Section 4 and Schedule 1 to the Bill provide for an increase in the personal and qualified adult rates of State Pension (Non-Contributory). It also provides for an increase in the rate of Carer’s Allowance for recipients who are 66 years or older.

Section 5 and Schedule 2 to the Bill provide for the renaming of the Respite Care Grant to Carer’s Support Grant.

Section 6 provides for an increase of €325 to the Carer’s Support Grant from €1,375 to €1,700.

Section 7 provides for an increase in the monthly rate of Child Benefit, from €135 to €140.

Section 8 provides for an increase of €5 per week in the Family Income Supplement (FIS) earnings threshold for families with one child and €10 per week in the thresholds for families with two or more children. This measure comes into operation on 7 January 2016.

Section 9 provides for the period in which Carer’s Allowance is payable following the death of the person being cared for, to be extended to a period of twelve weeks.

Section 10 provides for two changes in Pay-Related Social Insurance. A new tapered PRSI Credit is being introduced for employees insured at Class A whose earnings are between €352.01 and €424 per week. The upper threshold at which the lower 7.8% Class A rate of employer PRSI applies is being introduced from €356 to €376 per week. These measures take effect from 1 January 2016.

Committee Stage amendments
I wish to advise the House that I also intend to introduce amendments at Committee Stage on a number of matters.
As we are all aware, earlier this year we saw the historic result of the marriage equality referendum.
The subsequent legislation, the Marriage Bill 2015, was enacted on 29 October.
At Committee Stage I will be bringing forward amendments to the Social Welfare Consolidation Act 2005 in light of the enactment of that Act.
I will also be bringing forward amendments to provide for:
· the inclusion of registered nurses within the definition of medical assessor in the Social Welfare Consolidation Act. These nurses will be employees of the Department;
· the inclusion of credit unions providing personal micro credit loans among the specified bodies for the purposes of the Household Budgeting Scheme, and
the correction in the Bill, as published, of the figure for the Family Income Supplement earnings threshold for a family of seven children.
I also intend to bring forward an amendment of the Pensions Act 1990 to enable the Financial Services Ombudsman to carry out the role, duties and functions of the Pensions Ombudsman in light of the intended merging of those two offices.

Conclusion
Over the recent very difficult and challenging years, our social welfare system has continued to play an essential role safeguarding the most vulnerable in our society.
Having protected that very strong system through the worst of times, we are now strengthening in further in better times.
The social protection measures contained in this Bill and in Budget 2016 are built on the foundations of the recovery.
The clear objectives of these measures are to secure improvements in living standards and to create greater opportunities for every person, every family and every community.
I commend this Bill to the House.