Social Welfare and Pensions Bill 2014: Second Stage (Resumed)

I welcome this legislation, which attempts to tidy up, reorganise and improve the method by which we make transfers of payments and thereby look after the people who need to be looked after. The first objective of the Bill is to effect the transposition of certain aspects of EU Directive 2010/41 to ensure that a spouse or civil partner of a self-employed person can benefit from social protection. To achieve this, the spouse or civil partner must be earning in excess of €5,000 and be a participant in the business. This rightly accrues a benefit to the partner that did not previously exist. It is a welcome dimension of the legislation.
I also welcome the changes the Bill makes to the rules regarding habitual residency. All Members of this House will be aware from their clinic or constituency work of the huge difficulties that have arisen around the question of habitual residency. Currently, a person must prove that he or she has been resident in the State for two years to be eligible for a social welfare payment. The requirement now, under these provisions, is that a person must be in residency when he or she makes an application for benefit and remain in residency while in receipt of that benefit. That is perfectly reasonable.
The objective of the habitual residency clause is laudatory to the extent that it is obviously intended to prevent welfare tourism, fraud, etc., which nobody likes to contemplate. We all have a responsibility for public money. It is not our money but the public’s and it must be dispensed with probity, prudence and good sense and to the benefit of those who need it. Consequently, the habitual residency dimension is necessary but I have found it to be unduly difficult in its application. I have found a number of cases where people have proved it by having a child in a local crèche, for example, which would indicate they are resident and yet they failed to pass the habitual residency test. The bar was too high in some respects. Now a person must establish that he or she is resident at the time of the application and that he or she remains resident subsequent to it. That is a reasonable and welcome reform.
There is a shift, not so much legislatively but in policy and approach, to electronic payments. While that has advantages in terms of risks of robbery, for example, it raises a couple of issues. There is a greater risk of fraud with electronic payments. Electronic payments automatically go into somebody’s account and he or she can be absent or can be working in the black economy.
I bring to the Minister’s attention the importance of small post offices. Post offices had a huge role in the administration of social welfare and in dispensing moneys. There were a number of merits to the post office performing that function. The post office was the hub of the community. It provided employment, continues to do so and must be preserved, but in addition it was a disincentive to fraud as someone had to turn up at the post office for payment. While one cannot hold back modernity, the Minister should look at the role of the post office. If the Department is going to farm out the administration of social welfare, it should be parked nowhere other than in the post office network. I would think that would be a very important piece of social engineering for the country in general.
Improvements have been made to the administration of family income supplement in this Bill. A separated spouse or partner can get family income supplement but, quite reasonably, he or she can only get it if there is tangible evidence that he or she is contributing to the upkeep of the home and to the children and to the partner from whom he or she is separated. It would be preposterous at a time of scare resources and when people are experiencing hardship around things like telephone allowances and so forth if we were to give family income supplement to people who were absent from the home and making no real contribution to it. That is worthwhile measure.
What is also worthwhile in the legislation is that a person who is in receipt of family income supplement can remain on it for 52 weeks after a change in circumstances. The merit in that is that it allows people to take up better jobs, gives them opportunities to move up the jobs ladder and provides a sort of transitory phase, which is worthwhile.
There is much in the legislation on the recovery of overpayments, which is very important, in particular where they arise as a result of fraud. It is very important that someone does not get a payment which is denied to somebody with a real need. The Minister brought in a provision a couple of years ago where up to 15% of a social welfare payment could be taken in lieu of an overpayment or a payment arising from fraud. That is reasonable to the extent that 15% is manageable. A person is paying back the money but is not left with insufficient money on which to live. Now overpayments can be recouped through refunds of PRSI, from lump sums and through tax rebates, which is a reasonable and good reform.
The elimination of fraud is central. All of us in a civilised, caring and Christian society, and we have a particularly good social model in Ireland, want people who need payments to get them, but we also want to eliminate fraud. In September 2011, the Minister launched the Department of Social Protection fraud initiative. At the end of 2012, €669 million was saved. The target for 2013 was €710 million. The overview would suggest that up to €1.9 billion will have been saved in the years since this Government came into office, which is particularly useful. I would like to see much more use being made of the personal public service number in the elimination of fraud.
Linking the work of social welfare officers and community welfare officers is welcome. Some people are working in the black economy because they are not accounted for and if we engage in enough job activation and have routine contact with people, their capacity to work outside the social welfare system will be eliminated. It is wonderful if they are working outside the social welfare system but they must forgo the relevant social welfare payment. The Minister’s initiatives around job activation are marvellous and need to be brought fully to fruition. As she said, for every 10,000 people who come off the live register, there is a €95 million dividend to the State, which is huge and welcome. Obviously, there are issues for the person and his or her family and well-being.
The one-stop shop idea and job activation, where people are offered training and opportunities and where jobseekers are seen as such and are not given a paternalistic handout and left in limbo, is a really welcome change in the Government’s thinking. I salute and admire it. I look forward to the proper rolling out of the youth guarantee because it has enormous potential and has proved to be a great success in Finland. That scheme will provide training and work opportunities for young people and it is proved to work. The Minister of State with responsibility for European affairs, Deputy Donohoe, is in the House and it is great that our Government could negotiate the €6 billion from Europe to fund that scheme.
We need to continue to eliminate fraud, to work on job activation and to get the resources to those who need them as it is a pleasure to give them to those people. However, it is equally necessary to deny them to people who should not get them.

Senator Joe O'Reilly representing Cavan & Monaghan 2010. | An ExSite website