I welcome this debate on the Social Welfare Bill 2015. This is our fifth social welfare Bill in government. The first three of these were particularly difficult, with hard decisions that had to be made and, unfortunately, cuts that had to be implemented. This is the first opportunity we have to reverse those cuts and give back to people. It is not by accident that we are now in a position to do so. It is not an accident that the economy is growing and creating jobs with people leaving jobseeker payments which allows us invest that money in other social welfare benefits. This is due to the work and decisions of the Government and the sacrifices made by the people. There are still sacrifices, however, as long as we are still correcting the books.
This Bill is a welcome improvement. Budget 2016 contains €770 million of new spending measures, of which the Government has allocated €251 million to social protection, almost €1 out of every extra €3 the Government will spend in 2016. The total budget allocation to the Department of Social Protection for 2016 is €19.6 billion, over 38% of all government spending. In effect, €2 out of every €5 that the Government will spend in 2016 will be on social protection schemes and programmes. This figure is in keeping with the budgets of the past several years. It is a colossal sum of money, representing a substantial investment in society.
It is important to keep in mind the purpose of social welfare is to act as a safety net for all. Most of us will, at some stage in our lives, benefit from the social welfare system. It is important that it is in place and is properly funded. The social welfare system supports the most vulnerable in society and enables people to participate in it. The social welfare system does not operate in a vacuum. The system depends on the overall management of the economy to provide the funding necessary for the support schemes and programmes. The country cannot spend indefinitely what it does not have. Borrowing will only last as long it is sustainable. The aim over the past number of budgets, framed in an extraordinarily challenging and difficult time for our country, has been to protect core rates of payments, while ensuring the continuation of supports for the million and more citizens who depend on the Department.
It is a cliché but it costs money just to stand still. Demographic pressures will drive up the allocation needed just to continue with existing supports and schemes. This can be seen from the State pension schemes. In a decade, the number of recipients of the contributory pension has effectively trebled. In 2005, there were 156,000 recipients, while in 2014, there were 417,000 recipients.
These democratic pressures add extra costs not just to the Department of Social Protection but other services such as education. Increases in the population with high birth rates equate to a much increased budget necessary for child benefit payments. Carer’s allowance recipients have almost doubled in the past ten years from 48,000 in 2005 to almost 95,000 in 2014. Carers perform essential work and should be supported by the State. The restoration of the carer’s support grant is one of the most welcome measures in budget 2016.
These figures exemplify the growing demands on the social protection budget. The system, however, cannot stand still. Society changes as do the needs of the people. The best time to reform the social welfare system is when fewer people depend on it. There was an opportunity for reform in the late 1990s and early 2000s when our country had a budget surplus. That opportunity was missed and it has fallen to this Government and the current Minister to focus on reform in the context of fewer resources. Specific issues include the focus on identifying and eliminating welfare traps.
For example, the introduction of the housing assistance payment, unlike the rent supplement scheme, allows recipients to maintain portions of the payment for that crucial time after starting a new job. However, following a meeting with the management of Galway City Council last Friday, I learned delivering the scheme there will cost an additional €300,000. This is a concern for this local authority as it is dealing with budget cutbacks and 83% of the cost of running the council is borne locally rather than by central government.
Providing greater support for the transition to the workplace is another welfare reform. The back to work family dividend, an excellent budget provision from several years ago, enables a person to manage better with the continued payment of the child portions of the social welfare payment. Properly prepared and thought through measures are necessary. Previous Governments introduced increases in existing payments and entirely new payments without putting in place a sustainable funding basis. When the crash came and their economic mismanagement caught up with them, major cuts were put in place. Some schemes were cut not once but twice, while others were scrapped altogether.
The measures in this Social Welfare Bill and the absence of round numbers, namely, the €3 increase in the pension and the €2.50 increase in fuel allowance, demonstrate the responsible, prudent and sensible approach being taken by the Minister and the Government. The restoration of 75% of the Christmas bonus is a measure which will not only benefit the recipients but also local businesses and local economies in every community across the country.
We have the continuation of innovative schemes such as JobsPlus, which is directly helping people get back to work, and the maintenance of and increase in the payment for participants in community employment schemes. The rural social scheme, Gateway, Tús and other schemes are all important and help people to participate in, and contribute to, communities across the country.
There is a need, however, to examine flexibility in these schemes. A graduate might be underemployed and working in the local corner shop and awaiting a job commensurate with his or her qualifications. As this person is not signing on, he or she is not able to join certain training schemes. Those individuals do not want to sign on and want to work and contribute. They do not want to draw from the State but, at the same time, they are being penalised. We need to examine the possibility of introducing greater flexibility to such schemes. I hope the next Government will be able to examine this possibility more closely as the country’s finances improve.
Financial independence through work is the best support that can be given. With an election on the horizon, a raft of promises will be made. We must ask how these promises will be paid for and managed. When we hear people say this is a derisory amount of money, as has been said by others in this House, we have to ask where do these people think the money is going to come from. It is important that all parties, including Fianna Fáil and Sinn Féin, highlight exactly how they intend to fund the extra promises made.
The emphasis of the Government on job creation and support for people in work enables us to invest further in welfare reform and provide targeted, sensible and responsible spending increases for pensioners, working families and vulnerable groups.
I welcome the basis of this budget and that we are in this position. When we debated the Social Welfare Bill at the end of 2011, we were dealing with cuts and the scrapping of schemes. We are in a very different era now to where we were then, and that is not by accident. I commend the Minister for Finance, the Tánaiste and Minister for Social Protection, Deputy Burton, and the Government for their work in this regard. This situation has not arisen by accident. I acknowledge the sacrifices made by the Irish people. There is no shortage of things on which we can spend money. Within social welfare, there is no shortage of worthy recipients. As the economy continues to grow and improve, we will continue to invest in those who are most vulnerable in our society and need the support.
We will also continue to ensure that we do not have situations whereby people are better off on the dole. A start has been made in the preschool allowance from next September. Many individuals must decide if it is worth going back to work given the cost of child care and costs associated with travelling to work. We need to ensure we incentivise work in as many ways as possible. I welcome the back to work divided introduced last year by the Minister and will welcome any other initiatives that will make work pay more than being on the dole. At the same time, social protection is a much needed safety for people. Therefore, the Bill is hugely important. A huge amount of money is being spent. We welcome the increases for this year’s budget and hope that as the economy improves, we will not need to spend as much on social protection for job seekers and will be able to spend the money on other worthy initiatives.