Sinn Féin - On Your Side

Social Welfare and Pensions Bill will not ease burden on poorer in society – Morgan

13 February, 2008


Sinn Féin Social and Family Affairs Spokesperson Arthur Morgan TD said today that Sinn Féin supports the Social Welfare and Pensions Bill 2008 purely on the basis that any increases in areas like Child Benefit and One-Parent Family Payment are sorely needed. However the Louth TD said the Bill, as it now stands, will not ease the burden of the less well off in society. Deputy Morgan will attempt to amend the Bill at Report Stage.

Deputy Morgan said, "Sinn Féin made a number of proposals in our pre-budget 2008 submission in relation to social welfare, very few of which were taken on board. The amendments would have gone some way to bringing about a more efficient, better social welfare system. We support this bill, purely on the basis that any increases in areas like Child Benefit and One-Parent Family Payment are sorely needed, so we will not act as an impediment to their introduction.

"Budget 2008 gave the Government the opportunity to take a decisive step towards meeting the national target of reducing consistent poverty to between 2 and 4 per cent by 2012, and to eliminating it completely by 2016. Brian Cowen may have described it as a responsible budget, but it was not a sensible one.

"Last year, Sinn Féin called for the whole social welfare system to be overhauled. We called for the many anomalies that cause difficulties for people, that prevent people from returning from welfare to work and that prevent people from even applying for welfare, to be ironed out.

"Ultimately, this Bill as it now stands, will not ease the burden of the less well off in society. It makes a number of changes to methods of payments, but it does not go fare enough to make the whole payment system more efficient.

"I am calling on you Minister now to use this year as one in which to review a number of payments and the method by which they are paid.

"Sinn Féin believes that there must be a focus on maintaining an adequate social insurance fund so that the state is in a position to improve social protections, raise social welfare rates, improve maternity benefit (including length of leave), introduce payment in respect of parental leave, increase redundancy entitlements and introduce a reformed state pension." ENDS

Full text of Deputy Morgan's speech follows:

I welcome the opportunity to speak about this Social Welfare and Pensions Bill.

Sinn Féin made a number of proposals in our pre-budget 2008 submission in relation to social welfare, very few of which were taken on board. The amendments would have gone some way to bringing about a more efficient, better social welfare system. We support this bill, purely on the basis that any increases in areas like Child Benefit and One-Parent Family Payment are sorely needed, so we will not act as an impediment to their introduction.

Only last week we saw the publication of a report from the Vincentian Partnership which revealed how low-income families are struggling to make ends meet. These families could not manage in 2007, despite far higher increases in the budget for that year. They haven't a hope for this year.

Budget 2008 gave the Government the opportunity to take a decisive step towards meeting the national target of reducing consistent poverty to between 2 and 4 per cent by 2012, and to eliminating it completely by 2016. Brian Cowen may have described it as a responsible budget, but it was not a sensible one.

Last year, Sinn Féin called for the whole social welfare system to be overhauled. We called for the many anomalies that cause difficulties for people, that prevent people from returning from welfare to work and that prevent people from even applying for welfare, to be ironed out. We argued for the abolition of the qualified adult payment, a payment which is both too low and discriminatory.

We argued against situations like the one which we are now seeing, where the Early Opportunities Childcare Scheme is being replaced with a scheme which will deprive low earning families of a childcare place. This flies in the face of the Minister's proposed reforms of the Lone Parent's Allowance, where parents will be obliged to return to work when their children are eight, regardless of whether the state has enough childcare places to accommodate their children.

We called for a simplification of the social welfare system, with 12 page application forms such as the one for Family Income Supplement done away with. We wanted flagging systems put in place, perhaps through the taxation system, to advise people of their welfare rights.

We wanted steps to ensure a smooth transition from welfare to work by, for example, not raising income thresholds for Rent Allowance Supplement, which allows an individual to earn very little before they lose their rent and potentially their home.

We saw a number of small increases and some of them are being implemented in this bill. Yes Minister, we welcome them, no matter how small, but as I have outlined, they do not go far enough. Last December, in these very chambers, I got into an argument with you Minister about the nature of these increases and said that I accepted that not everything could be delivered with the economy slowing down. Minister Cullen, in your wisdom and despite all the evidence to the contrary, retorted that the economy was not slowing down and had a go at me about how successful the economy actually is. Well, I ask you Minister, if the economy is that successful, can you please explain why this Bill only provides for a mere €6 extra in Child Benefit?

Why, this year, are we not increasing fuel allowance or introducing paid paternity leave?

I recognise that there are some improvements in this Bill as to how payments are made. The transfer of the Domiciliary Care Allowance from the Department of Health to Social and Family Affairs may indeed, as other speakers have pointed out, streamline the system and improve it.

I welcome the Government's commitment to the national carers' strategy. Along with every other public representative, I have met many carers and the work that they do is absolutely essential to the running of our society and to date has been hugely undervalued and underpaid.

There are other omissions in this Bill however. For example, what is the Minister doing to address the plight of elderly returned emigrants who are experiencing difficulties accessing pension and other welfare payments based on the habitual residence requirement? The difficulties caused by the application of this requirement has been highlighted by the Crosscare Migrant Project who have said that the restrictions are often applied inconsistently and are a deterrent for Irish emigrants thinking of returning home.

Ultimately, this Bill as it now stands, will not ease the burden of the less well off in society. It makes a number of changes to methods of payments, but it does not go fare enough to make the whole payment system more efficient.

I am calling on you Minister now to use this year as one in which to review a number of payments and the method by which they are paid.

On the issue of pensions it is clear that present policy is neither equitable nor progressive. It is failing low paid workers and women. Little attention is paid to the escalating costs of inequitable tax reliefs that are not succeeding in extending pension coverage amongst the lower paid. A wealthy minority have been able to take advantage of excessively generous tax incentives paid for by all workers (including low paid workers) through the general taxation system.

Sinn Féin believes that the provision of a basic non-means tested universal pension for all people of retirement age funded out of the general taxation system is the only option where the objective is ensuring independent pensions for all men and women. This would also be the most progressive and re-distributive option and the amount of the pension would be based on what is necessary for a pensioner to achieve a certain specified decent standard of living. A second tier of pensions related to social insurance contribution (under which 'home makers disregards' would be replaced with gender neutral 'Carers' Credits' for years spent on caring duties) should augment this basic pension. In conjunction with this there needs to be a significant immediate curtailment of the tax incentives for occupational pensions, PRSAs and approved retirement funds. The objective should be the elimination of these incentives and the redirection of this funding into the basic non-means tested pensions.

I would also like to touch on another issue which has not received sufficient attention: that is the state of the social insurance fund.

The main conclusion of the Actuarial review of the Social Insurance Fund which was published last autumn but available to the Government prior to that, was that while total income to the Fund is projected to equal or exceed benefit outgo up to 2010 thereafter the Fund's net cash flow position is projected to decline rapidly. The Fund's surplus is projected to be exhausted by 2016 on the basis of the central economic assumptions and benefits indexed in line with earnings.

In advance of the election Fianna Fail put forward proposals to cut employee PRSI from 4 to 2 per cent and to cut PRSI for the self-employed from 3 to 2 per cent. Sinn Féin attempted to highlight the devastating impact the implementation of such proposals would have for the delivery of social protections.

We highlighted the fact that there were already serious concerns about the adequacy of the Social Insurance Fund based on the findings of the first actuarial review. The latest review has reinforced these concerns and has found that in fact contribution rates would have to increase substantially if the Fund's income is to be adequate to support the benefits being paid from the fund going forward. How much worse would this scenario be if the Fianna Fail proposals to cut PRSI contributions were implemented?

Sinn Féin believes that there must be a focus on maintaining an adequate social insurance fund so that the state is in a position to improve social protections, raise social welfare rates, improve maternity benefit (including length of leave), introduce payment in respect of parental leave, increase redundancy entitlements and introduce a reformed state pension.

Connect with Sinn Féin