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Speech by Minister for Social Protection Leo Varadkar in the Dáil debate on Budget 2017

Budget 2017 aims to make sure that everyone benefits from the recovery - employed, self-employed, retired people, people with disabilities, carers, those who cannot work, urban, rural, young and old.

It is a prudent budget. There are no giveaways. Nonetheless, more than 840,000 people will benefit from the first increase in weekly Social Welfare payments since 2009 and 650,000 from the €5 increase in the State pension.

The Social Protection package ensures that the recovery benefits everyone, with no one left behind. It sets out to make work pay through reforms to the PRSI system, including a new deal for the self-employed and it includes a number of targeted measures to assist lone parents, farmers and school children.

From March, there will be a €5 increase in the headline weekly rate of the state pension, with proportionate increases for those on reduced rates and qualified adults.

The Programme for Government commitment is that pensions will increase above the rate of inflation and this measure delivers on this commitment. The FG Manifesto commitment was a €25 increase over five years. That commitment is on track.

Pensioners will also benefit from the reductions in prescription charges being introduced by my colleague, the Minister for Health, Simon Harris and in taxation, pensioners with savings will benefit from reductions in DIRT.

The Christmas Bonus will also be payable to pensioners in December of this year at an increased rate of 85%, up from 75% last year.

Benefits for all under 66
The headline rate of weekly benefits for adults under 66 will also increase by €5 a week. This is the first increase since 2009.

Approximately 840,000 working age people will gain from this increase. “Working-age” is a technical term, most people don’t know what it means, so let me spell it out. It covers people in receipt of over 30 different payments. These include:

i. Invalidity Pension, Disability Allowance and Blind Pension
ii. Illness and Partial Capacity Benefit
iii. Occupational Injury Benefit
iv. Widow’s, Widowers and Surviving Civil Partner’s Pensions
v. One-Parent Family Payment
vi. Back to Education Allowance
vii. Maternity, Paternity and Adoptive Benefit
viii. Farm Assist
ix. Carer’s Benefit & Allowance
x. Pre-Retirement Allowance
xi. Supplementary Welfare Allowance
xii. Back to Work Enterprise Allowance
xiii. Jobseeker’s Benefit, Allowance and Jobseeker’s Transition Payment; and
xiv. Employment Support Payments such as CE, TÚS and Rural Social Scheme.

I note that in many of the proposals made by the opposition parties, including Sinn Fein, they would get less than one euro or even nothing.

There are proportionate increases for those on reduced rates and qualified adults.

This is a permanent increase which will apply from March. Of course it would have been preferable to apply the increase from the start of the year but to afford it I would have had to exclude certain groups, which I could not countenance, or an increase less than €5.

If we are to recover fully and build a more prosperous country it must be on the basis of a united society, not one divided between different groups - young or old, sick or healthy, workers or unemployed, disabled or able-bodied.

I have been encouraged by the understanding reaction of people to the delay in the implementation of the increase in payments to ensure that their neighbours, other family members, friends and colleagues could also benefit.

In total, almost 1.5 million people will benefit from the increases in the weekly rates of payment.

The precise date in March will be announced on the publication of the Social Welfare Bill, which is in two weeks’ time.

Social Impact Assessment of Prospective Welfare Measures
A Social Impact Assessment, using the ESRI SWITCH model on a non-indexed basis, of the Social Welfare Budget package finds that people who are in lower income quintile gain the most from Budget 2017 measures. The ESRI recognises explicitly that this was as a result of the inclusion of the weekly rate increase for working age rates of payment.

This Budget is a progressive one, providing modest gains for all. The ESRI analysis includes the tax package and finds that everyone experiences modest gains as a result of the Budget but as a result of the Social Welfare package and the inclusion of non-pensioners as well as pensioners, those on the lowest income gain the most in percentage terms.

Self- Employed
A diverse group who make a big contribution to our society and economy are the self-employed. Budget 2017 expands the new deal for up to 380,000 self-employed people who pay PRSI at the S class. This includes people like farmers, professionals, taxi drivers and tradesmen who will have new benefits extended to them from next year. They will also benefit from an increase in EITC and the extension of entrepreneurship supports.

From March, Class S contributors will be able to avail of Treatment Benefit, which includes free eye and dental exams, and contributions towards the cost of hearings aids and contact lenses.

In addition, and more significantly, self-employed contributors will be eligible for the Invalidity Pension. For the first time, this will give the self-employed access to the safety-net of State income supports if they have a serious illness or injury that prevents them from working without having to go through a means test. They will no longer be told that there is nothing for them because they have savings, assets or a partner with a job. This will be available from December 2017.

There will be no PRSI rate increase in 2017.

These measures are all part of the Government’s policy of making work pay and encouraging self-employment and entrepreneurship.

Treatment Benefit
A range of Dental and Optical benefits will also be restored. These will benefit all PRSI paying employees and the self-employed, benefitting approximately 2.5 million people.

Subject to successful negotiations with dentists and opticians, the free scale and polish of teeth, and free glasses from opticians, will be restored by the end of next year.

Lone Parents
There is also a package of measures supporting lone parents in the Budget, encouraging them into the workplace and into education, and helping to reduce their childcare costs.

All lone parents on One-Parent Family Payment and Jobseeker’s Transition and Jobseekers Allowance will benefit from the €5 increase in the weekly rates of payment.

A new €500 annual Cost of Education Allowance will be made available to Back to Education Allowance participants with children from the next academic year in September. This will help parents, including lone parents, to return to education.

The income disregards for the One Parent Family Payment and Jobseeker’s Transition payment will rise by €20, from €90 to €110 per week, reversing in part previous reductions, to encourage one parent families to stay in, and return to, work.

This will benefit lone parents earning more than €90 per week. For those earning €110 per week or more, it will increase the combined social welfare and earnings income by up to €15 per week.

The Single Affordable Childcare Scheme being provided by the Government will also significantly reduce the cost of childcare for lone parents and is a step change in state support for childcare in Ireland.

Budget 2017 Focus on Children
The focus on children in the Budget is on the provision of services rather than on income supports. Ireland already has the third highest child benefit in the western world. Where we fall down is on the cost of education and child care and access to services like health and speech & language therapy . So, this is where resources will be focused in future.

This includes the Childcare package that I just mentioned, the extension of medical cards to all recipients of Domiciliary Care Allowance and measures in Education, like more teachers and SNAs, and better and new school buildings.

For my Department, the main Budget provision for children is increased funding for school breakfasts. This includes extending the School Breakfast programme to the new DEIS schools from next year. Also, we are opening the free breakfast programme to non-DEIS schools. Up to 35,000 children in non-DEIS schools will benefit from free breakfasts. This is in recognition that the majority of disadvantaged children do not attend a DEIS school. School breakfasts have been shown to increase attendance and improve concentration.

There is also a special increase of an additional €10 in payment for guardians who take care of orphans, or those children who cannot be cared for by their parents.

Rural Ireland
As part of the Government’s commitment to rural Ireland, I am announcing the total reversal of cuts to Farm Assist, a programme which helps more than 8,000 farm families.

The introduction of additional income disregards for farmers with children further ensures that farm families will benefit.

At a time of falling farm incomes, it’s essential that we strengthen the safety net for farmers who are on the margin. And even for farmers who do not qualify for Farm Assist, they have the reassurance of a strong safety net should they need it.

Many of the farmers who benefit from Farm Assist live in remote parts of the country with very limited prospects of off farm income.

So, in recognition of the crucial work undertaken in rural communities under the Rural Social Scheme, an additional 500 places will be made available next year.

This will bring the total number of places up from 2,600 to 3,100 in 2017.

Young Jobseekers
Young jobseekers who are under the age of 26 generally receive age-related reduced rates of jobseeker’s payments of €100 or €144 per week. These will increase proportionally with the general rate increases.

However, the focus of Government is to help and encourage young jobseekers into employment and education. We do this by actively engaging with them and by helping them to get additional training and educational qualifications that will assist them to get a job.

From next September, when a young jobseeker participates in my Department’s Back to Education scheme, he or she will be entitled to receive the full maximum rate of jobseeker’s payment which will then be €193 per week, as against the €163 which they are currently on.
This 21% increase represents an extra €33 a week, and demonstrates the State’s support for young jobseekers who seek to enhance their skills. It is the biggest single increase in the Social Welfare package.
Young carers and young people on disability will receive the full €5 increase, as will those on employment activation programmes like CE, Tús, Gateway and those who lost their job they had and are in receipt of Jobseekers Benefit.
There are many educational opportunities and training courses and many more jobs available now than there were five years ago. My Department is actively engaging with young jobseekers and helping them on the path to employment. This approach is working.
The number of young people on the Live Register on jobseekers payments was close to 90,000 in 2010 and is now down to 34,000. There is a continuing strong downward trend this year with the numbers down from 42,000 to 34,000 since the beginning of 2016.
Clearly we are doing something right. Youth unemployment has fallen by 5% in the last year alone and it now below the EU average.
Of course more remains to be done and I am determined that we help more young people in the most effective way possible, by helping them into the workforce or education.
Homeless charities highlighted the financial difficulties facing young people on age-related reduced rates of payment, and who are in receipt of Rent Supplement. Rent Supplement requires that a single person pay a personal minimum contribution of €30 per week towards the cost of their rent.

For a young person on the age related reduced rates of payment, this represents a significant proportion of his or her weekly payment.

To alleviate this, the personal rent contribution for young jobseekers will reduce from €30 per week to €20 per week for those on the €144 or €160 rate, and from €30 per week to €10 per week for those on the €100 rate.

Other Measures
In other measures, an extra €1 million is being provided for the Community Services Programme to support social enterprises that provide local services to their communities.

The payment of Carer’s Allowance is currently paid for an additional 12 weeks where the person being cared for dies. This is being extended to cases where the care recipient moves permanently into a nursing home.

Furthermore, the Back to Work Enterprise Allowance, which supports people who are unemployed and set up to start their own business, will become available more quickly. The qualification period will reduce to nine months, down from 12 months.

Christmas Bonus
An 85% Christmas Bonus will be paid to 1.2 million people in early December at a cost of €221 million. This is an increase from 75% last year.

Concluding remarks
In conclusion, the Social Protection Budget will benefit over 2 million people in Ireland, including the retired, workers, people with disabilities and carers, and the unemployed.

This Budget represents a significant shift in how the social insurance system interacts with self-employed contributors, with the extension of Treatment Benefits and Invalidity Pension to the self-employed next year.

I plan to continue extending cover for the self-employed to other benefits on a phased basis in future Budgets.

The increase in the weekly rates of payment for all social welfare recipients demonstrates that everyone in Irish society can, and will, benefit under this Government from the economic recovery.