Social Welfare and Pensions (No. 2) Bill 2009 - Committee Stage (Resumed) and Remaining Stages - 16th December 2009

Social Welfare and Pensions (No. 2) Bill 2009 - Committee Stage (Resumed) and Remaining Stages - 16th December 2009

Senator David Norris: I also have a few questions for the Minister. Will the time limit operate both ways? It will apply to contributions that have been inaccurately taken from a contributor such that the State will be in the debt of the person. If it is the other way around and there has been underpayment as a result of the State’s inefficiency due to an oversight on the part of the payer, will this be subject to the four-year time limit? It seems that what is sauce for the Government should be sauce for the individual citizen also.

Section 8(4) states, “Regulations may provide for the method of calculation in the amount of any contribution due to be repaid”. I would not have thought many calculations would be required. I would have thought also that if an overpayment became clear, the overpayment would be self-evident. What may be concealed behind section 8(4), which would concern me, is that a method of calculation may be arrived at which would not be to the advantage of the citizen in claiming a refund. I would have thought people who made these contributions did so on the basis they were very often deducted automatically from their income and they simply assumed the authorities had it right. I am not convinced of the need for a limitation of this kind. Is this kind of four year limit in operation in any other financial institutions, such as banks? Can the Minister give any precedent for this? I know there is a statute of limitations in criminal cases, for example. There have been a number of situations where the banks have been very cavalier with investors’ or savers’ money. Do similar rules in apply in ordinary financial life?


Minister for Social and Family Affairs (Deputy Mary Hanafin): The idea behind the reclaiming of PRSI contributions for four years is to bring it in line with the tax system. Senator Norris asked if it applied elsewhere; it applies in the tax system. It does not cut both ways.


Senator David Norris: It should do so.


Deputy Mary Hanafin: This is the same as in the tax system. If one owes money to Revenue, it can take it from one no matter how long one owes it. However, if it owes one money, one only has four years within which to get it back. It will be the same with PRSI and it brings it into line with the tax system.

As regards how much money is involved, in 2008, refunds were paid to 14,500 people costing €21.3 million. That was a huge increase on previous years. That includes those people who had made a contribution and were getting a rebate within the four year period about which we are talking but also those who go back much further. One can go back to 1953 but, in effect, people generally only go back to 1988 when insurance for the self-employed was introduced.

There is a disadvantage for the customer in so far as he or she will only have four years to reclaim the money. From a Department point of view, there are savings to be made on the money that will be repaid. There are huge administrative savings because every year an individual assessment must be done when different rates of PRSI applied. If that can be done more speedily not only will we save on administration, it also means the payments can be made more quickly.

Senator Nicky McFadden: This is grossly unfair because it is money owed to people who made a mistake. It is their money. I believe this is illegal. This is not acceptable. The Minister said €21.3 million had been recouped. That money belongs to the people. To put a four year limit on it is outrageous. I have met people who are trying to put stamps and contributions together to make up their pensions, as I am sure the Minister has in her clinics. It is only when they plan to retire that they try to accumulate their stamps. It is grossly unfair to put a four year limit on something that is an entitlement. The money belongs to the person who has paid the stamp.


Senator David Norris: The Minister raised more questions as far as I am concerned. Can she give me an explanation as to why in these circumstances there was such a considerable increase? I cannot think why. It is not as if people who were hard pressed were trying to defraud. It is coming the other way, unless the State was trying to get more money, as the banks did. What was the reason for this statistical spike?

I understand the Minister’s difficulty in terms of the calculations because it changes every year for the tax rate. I appreciate that in terms of personnel, time occupied and so on. Computers can usually do these things fairly quickly if they are programmed correctly.

I am absolutely shocked to discover that this does not work both ways. This seriously disadvantages the citizen and is definitely not fair. I will definitely vote against this section on that basis alone. It is wrong because what is sauce for the goose is sauce for the gander.

When I challenged the Minister to produce precedent, she produced the tax system where similarly the citizen may be held in a difficult situation because of the limitation. The citizen is again disadvantaged by the State. The same agency is doing it, so it is not really a terribly convincing precedent. I would be much more convinced if the Minister had cited a bank or a building society and perhaps she can, although I rather doubt it.

The Minister is a fair-minded and decent person and I am sure she must at least sub rosa agree with me that there is unfairness if the citizen, who is after all a vulnerable individual, is treated in a less fair manner than the State treats itself.


Senator Jerry Buttimer: Much of what I want to say has been said by Senator Norris. This is a bit like Big Brother.


Senator David Norris: I never said that.

Senator David Norris: He is into it so we will hear his little Christmas message.

Senator David Norris: He is definitely from Queen’s County as were my ancestors. Enough of this nonsense.

I am not unusually gifted in mathematics or in the computation of tax figures. All I remember is what affects me. I am not sure whether this means I should be ruled out of order for having a vested interest but I can make a point to the Minister. I was employed for quite a number of years by the College of the Sacred and Undivided Trinity near Dublin, normally known as Trinity College or Dublin University. At a particular period a number of years ago the pension system was changed from one where we were on PRSI and paid the stamp. We had eight or ten years under our belt. I asked whether it was possible to make voluntary contributions and I was told firmly “No”. I am not sure whether that was correct and I will not re-open it. I discovered one of my colleagues who retired approximately two years ago successfully made a claim. I pursued this matter with a social welfare office and it emerged that on the strength of my contributions I was entitled to €104 per month. I am not worried about whether I was misinformed on whether I could make a voluntary contribution. However, I wonder whether people such as me are in a position, should they wish, to make this type of claim or is it completely closed off? It was rather an odd situation where the system was changed mid-stream. I am not that bothered about the €104 per month but it is an interesting principle.


Deputy Mary Hanafin: With 53 schemes in the Department I will not even pretend to know all the intricacies of each of them. I will be happy to speak to somebody about the individual cases raised here. All the section does is align a situation. At present, a self-employed person can make a claim and years later pay up the contributions, but the pension is paid from the date of the claim. What this states is that if one makes a claim and pays, one will be paid from then. It does not affect anybody making a claim in future. All it does is stop back payment for somebody trying to get around the system by making a claim now but not making payments for a number of years. It is aligning the date of the claim with the date of the payments and the pension is paid from the date of the payment not the date of the claim.

Senator David Norris: I have been approached by the dental profession from two angles. There has been a very considerable diminution of their income, and they feel that dentists who rely largely on the operation of this scheme will be put out of business. I am a little bit less sympathetic to them on that issue. However, I have had subsequent communication from them which indicates the benefit to society of the dental scheme. It is used very extensively, and it shows there is a clear need for it.

Out of 2 million insured persons in 2008, up to 400,000 availed of the free check up and the total cost to the State was €13.5 million. This is an oral examination and it is a pre-emptive method of assessing whether there will be further problems down the road, which will save on further costs and further pain. A total of 446,000 took advantage of the free scale and polish, but this will also be abolished. Some 500,000 fillings were paid for and the scheme provides for the State to pay the dentist €33.50 per filling and contributes a further 15% discount on patient fees for those earning less than €65,000. The ESRI has established that there is a markedly lower likelihood of people attending dental clinics if they come from lower income groups. This means the abolition of this particular scheme will disadvantage the most vulnerable. That is a pity.

There were 93,000 extractions paid for under the scheme, at cost of €3.3 million, which is not enormous. The scheme provides for the State to pay the dentist €26 and for those patients earning less than €65,000, the amount is capped at €14.15. This is now to be abolished. This will really cut people where it hurts. The provision of 91,000 dentures has largely but not exclusively been for elderly people. These are not cosmetic things, but are appliances which allow elderly people to masticate their food and assist in their digestion, their diet and general well being. Oral disease has a significant impact in terms of pain, suffering, impairment of function and reduced quality of life.

The dental association commissioned Dr. Brenda Gannon from NUIG to conduct a cost benefit analysis of the scheme. She is a reasonably independent minded person, even though the group commissioning the report had a vested interest. Her study shows that the return on the investment is very positive and that the benefits outweigh the cost of the scheme by a multiple of between 2 and 2.6. She presents evidence of improved dental health afforded by this scheme and she establishes the fact that there will be a considerable loss of tax revenue following any decision to abolish the scheme. The inevitable redundancy and ongoing welfare costs which would arise show significant extra costs. I am making, supported by factual data, three related points. A considerable number of citizens find this scheme to be of advantage. As the figures show, approximately 1.5 million people, an enormous number, availed of the various elements of the scheme in the past year. The proposal will result in 1.5 million people being substantially disadvantaged. The three legs of my argument are the large number of people involved, the human toll of the proposal in terms of pain, the prevention of dental decay and more serious conditions, extractions and so forth and the analysis done by a respected academic which shows that far from saving the State money, the measure may cost money. I respectfully ask the Minister to reply to them.

Deputy Mary Hanafin: I was asked the reason people pay PRSI and contribute to the social insurance fund. People largely do so to secure protection by way of the State pension and unemployment assistance, even if most of us do not envisage becoming unemployed. The attitude of most people is that they pay into the social insurance fund to obtain a pension when they retire. One of the side benefits of these contributions is the treatments to which people have had access.

The social insurance fund will be in deficit by the middle of 2010 and the scheme will require subvention to the tune of €1.2 billion. For this reason, we must try to find savings. We announced we would curtail rather than close this scheme for one year and the decision will be reviewed next year.

I accept the advances that have been made in oral hygiene and sight. When I met representatives of dentists and opticians they told me the item they wanted to maintain most was the examination because it indicates if there is a problem or disease. We heard a wonderful story on radio this morning about a lady who had a brain tumour identified during an eye test. This protection will continue to be afforded.

Some of the figures Senator Norris cited were duplicated because a person who had a filling may also have had an extraction. We envisage that approximately 400,000 people will claim for a dental examination and 200,000 will claim for an optical examination in 2010.

As most people are aware, competition in the optical industry has been intense in recent years. One can now have an examination done for as little as €15 and glasses are available at low prices. We have not seen this type of competition in the dental area where there has not been a reduction in prices. Perhaps these measures will prompt moves in the right direction and result in increased competition, which would not be any harm.

The Department envisages achieving savings of approximately €54 million from the scheme next year. By retaining the examinations, people will continue to undergo eye tests and oral examinations which can identify ongoing problems.

On Senator Buttimer’s question, if a treatment commences before the end of the year, the full treatment will be covered. Prior approval for any treatment must be obtained by the dentist from the Department. Once approval has been secured, the dentist may commence the treatment. As such, the measures will not impact on those in the position set out by Senator Buttimer.

Senator Norris referred to preventable diseases. The Department accepts the progress made in this area and as a result of fluoridation. All these measures have had a major impact. However, the social insurance fund is in deficit and we need to make savings, while seeking to protect the basic scheme. These measures protect the examinations and provision of hearing aids. In addition, those on low incomes may obtain optical and dental treatment on the medical card. The measures relate to those who avail of treatment on the basis of their PRSI payments.


Senator Nicky McFadden: These measures are a retrograde step. Good oral health is vital from the point of view of pain and suffering. Some people will no longer be able to afford to have a tooth extracted or filling done. While I accept that the examinations have been retained, this is a paltry measure given that people will no longer be able to avail of treatments, even in emergencies. This is a cruel, cold and callous measure which hits the most vulnerable again. The budget is outrageous.

Senator David Norris: I agree with the general sentiment that it is time we moved on. We have spoken at length about the dental situation but the optical situation is also significant. Three or four years ago I visited an optician seeking a change of prescription. The optician told me to see a specialist, which I did, and I was told that I had macular degeneration of the retina. In my case this is irreversible. When people from Fighting Blindness were briefing me I mentioned that I had the disease. They asked me if they could use me. I agreed and did a few advertisements and interviews for them. This led to much unjustified sentimentality. One of my neighbours said to me that I would do anything for a vote. This was not the case; I was rather embarrassed. I received an enormous number of cures, ranging from the perfectly sensible to the absolutely insane. The type of disease I have may take a long time to develop but it is irreversible at the present state of knowledge. There is a wet and dry version and I cannot remember which I have. The people from Fighting Blindness contacted me because the other type can be reversed but people need to check their eyes every year. If this is done as a result of our campaign, the eyesight of a significant number of people will be saved. We also ought to underline the significance of the eye check in terms of people’s well-being.


Senator Pearse Doherty: In my initial comments I asked about the cost to the State this section of the Bill will save. The Minister did not outline this or perhaps I missed it.


Senator David Norris: I think the Minister said it was €54 million.

Senator David Norris: If I did not think it might be taken up as a slur, I would say that some of my best friends are dentists. I am not inimical to their making a living. I have also received some very good dental treatment in this country.

In general, I accept the Minister’s point that the tests are still available to the disadvantaged but we then move into a situation where they are disadvantaged if they seek treatment. That is cruel. They are being made aware of an existing problem and then being penalised or even prevented from getting treatment. They will know there is a problem that cannot be resolved without treatment. That is an unfair, perhaps unintended, consequence of this measure.


An Cathaoirleach: Would the Minister like to reply to any of those points?


Deputy Mary Hanafin: I am sure the Seanad would prefer to deal with this year’s budget instead of trying to predict next year’s.


Question put.

The Committee divided: Tá, 29; Níl, 21.


Senator David Norris: I wish to raise a point of order. I was in my office listening to the debate but I have never heard anything like the way in which the Cathaoirleach intervened to tell a Member of this House it was not appropriate for him to ask a specific and clear question germane to the debate. I understand the advice given was that the Attorney General apparently has said we are not entitled in this House to information on whether legal advice has been sought. Whatever about the content, the Attorney General has no right to rule in this House. This is a sovereign House of Parliament. We make the rules and I ask the Leas-Chathaoirleach to refer this ruling and the advice given to the Committee on Procedure and Privileges because this is a further example of the way in which this House is treated with absolute contempt. It was a reasonable question, it was germane and relevant to the debate and it was ruled out of order by a series of interventions from the Chair. I rarely criticise the Chair but I am most definitely criticising what was done here tonight.


An Leas-Chathaoirleach: I was not in the Chair at the time.


Senator David Norris: Will the Leas-Chathaoirleach look at the record and refer it to the Committee on Procedure and Privileges because if the Attorney General has given such advice, he must be confronted?


An Leas-Chathaoirleach: Does the Senator propose to refer the matter to the Committee on Procedure and Privileges?


Senator David Norris: Yes, as a matter of urgency.


An Leas-Chathaoirleach: All right.

Senator David Norris: I strongly support Senator Prendergast and I am very much of the same opinion. Furthermore, the whole democratic process has been undermined by the Government’s behaviour in the other House. This amendment was put on Thursday evening last and was not reached or even discussed in the other House because the Bill was guillotined.


An Leas-Chathaoirleach: We are discussing the section.


Senator David Norris: I am aware of that. I am speaking on the section.


An Leas-Chathaoirleach: The Senator referred to an amendment.


Senator David Norris: I am speaking about the effect of the amendment on the section. It would be ridiculous if Senators could not do so as one would then be required to repeatedly say the words “section 14”. One must be allowed to discuss the——


A Senator: We are discussing section 15.


Senator David Norris: I was giving a hypothetical example. This is a serious issue. As far as I am aware, virtually the entire section is an amendment. Is that not correct? If, as I believe, the section is an amendment to the Bill, I am entitled to refer to it as an amendment.

This is by no means the first time the Department of Social and Family Affairs has acted in this manner. It is disgraceful and undermines completely the democratic process of the State. One of the Minister’s predecessors, the current Tánaiste, Deputy Mary Coughlan, had a decision from the Equality Tribunal which indicated a clear case of discrimination. Instead of acting to amend the legislation to address the discrimination, the former Minister amended the legislation by redefining the word “spouse” to swindle people out of the rights which an agency of the Government determined citizens were entitled to.

This is exactly what has happened in this case and it is spectacularly mean minded. What it means is that people who have applied for asylum or protection and are still in the process cannot meet the habitual residence condition. They will, therefore, be disbarred from access to even fairly minimal provision of social welfare payments. This measure will penalise children, people of pensionable age and people caring for sick children as well as causing divisions. For example, people who have been here with their families for a number of years and are still stuck in the asylum process — it is a disgrace to this country that these decisions should take so long and justice should be so delayed — will find that they will not be able to afford to allow their children to take part in school trips, outings and so forth. As a person who was involved in education and was a very good Minister for Education and Science, the Minister will not wish this to be the case.

As Senator Prendergast stated, a number of cases were taken. Asylum seekers and their representatives in the free legal aid centres, FLAC, were successful in every single case. The Minister is now reversing the decision of a properly established organ of the State.

The Department claimed that a decision by the Supreme Court in 2003 in the case of Goncescu & Others v. Minister for Justice, Equality and Law Reform, [2003] IEHC, meant that no one in the asylum, protection or leave to remain process could be regarded as resident in the State. As a result, such persons could not satisfy the habitual residence condition. The Department’s argument was not accepted by the court because it represented a hardening of attitude.

Previously, the Department’s deciding officers had relied upon the five factors or criteria set out in the Social Welfare and Pensions Act 2007 and drawn from a decision of the European Court of Justice in the case of Robin Swaddling v. Adjudication Officer, C-90/97. The five criteria are the length and continuity of residence in the State or in any other particular country, the length and purpose of any absence from the State, the nature and pattern of the person’s employment, the person’s main centre of interest and the future intentions of the person concerned as they appear from all the circumstances.

It is clear that the decisions arrived at as a result of the process by FLAC make the Minister’s position undemocratic and unsustainable. I ask her to reverse her decision in this matter on the grounds that it undermines the democratic process, flies in the face of a series of decisions, defies the European Convention on Human Rights, undermines the asylum process, discriminates against children and is a reproach to all those on the Government side. I will conclude on those words while reserving the right to return to the matter.

Senator David Norris: The Minister is completely wrong. The people in question have a perfect entitlement to be in the country. While they may not have an entitlement to citizenship or asylum, they have every entitlement to be here. I ask the Minister to acknowledge that is the case.


An Leas-Chathaoirleach: The Minister has the floor. Senator Norris can make a further contribution afterwards.


Deputy Mary Hanafin: If someone does not have the right to reside in the State, he or she should not have the right to build up social welfare entitlements. They have access to accommodation, basic health and basic education at substantial cost. We must recognise their human rights and that is why people go through an intensive legal process. It is important this legislation sets down the precondition that must be satisfied before other circumstances are taken into consideration.
Senator Phil Prendergast: This undermines the independence of the social welfare appeals office. When the office makes a decision the Department does not like, the Government changes the law. This enshrines discrimination on the basis of nationality in Ireland. It is deeply divisive and only saves a small amount of money. The need to meet the criteria of the HRC means very few people who are not in need of benefits receive them. It undermines the process one goes through in the social welfare appeals office if the Government can make another law because it does not like the decision.


Senator David Norris: It is instructive that in all five cases cited, the chief appeals officer rejected arguments by the Department of Social and Family Affairs that the people in the asylum process could not meet the habitual residence condition, a test introduced in 2004 to prevent a feared influx of so-called welfare tourists. So-called welfare tourism has been dealt with by the habitual residence condition. The chief appeals officer found that this cannot be brushed aside completely. The Minister is trying to redefine matters.

This is all about money, as the Minister has more or less accepted. I challenge the Minister on her assertion that these people had no right to be in the country. They may not have had a permanent right but they have every right to be in the country while they are appealing. I note that the Minister is acknowledging this to be correct. It may be that we have been here a long time and the phraseology is inexact even though that is uncharacteristic of this Minister. I do not accuse her of any malice in this matter. The House should know the attitude of the Department. I do not take great pleasure in attacking the Department in a blanket sense but on this issue I feel a responsibility to do so. One can see the attitude in the fact that there was a stay put on payments during this period. The Department refused to pay, which is questionable behaviour. In the four successful appeals, where the Department of Social and Family Affairs asked for a review by the chief appeals officer, it refused to make payments that had been approved by the appeals officer until the reviews were completed. FLAC challenged this on the basis that reviews were not formal appeals and, unlike an appeal court, the chief appeals officer had no power to put a stay on the payments pending his decision and he had not been asked to do so. It was the Department, the unsuccessful party to the appeals, that had unilaterally decided not to pay and the applicants were left with no way of appealing against that decision. FLAC issued judicial review proceedings in one case to try to compel the Department to pay. However, the chief appeals officer gave his decision in favour of the applicant a few days before the hearing date so it was then settled. The attitude of the Department is to do people out of their entitlements. How much will that save? It is bad faith and this is a squalid decision. I warned the Government against the process, which appears to be particularly concentrated in the Department, of establishing public bodies, giving them a statutory remit to make decisions on matters of fairness, justice and equality and then when clear and binding decisions are made, the Government overturns them by further legislation instead of addressing them. That is appalling behaviour whatever the economic circumstances of the case.

This is not welfare tourism. What about the people who have been stuck in the process for four or five years because of our inefficiency?
Senator David Norris: It is an amendment of that Bill as initiated in the Dáil. The two terms are coterminous. I know what I am talking about in terms of language.

11 o’clock
I want to address the Minister’s point because there are a number of technical flaws in it. The case she referred to was the case to which I referred, namely, the Goncescu case. The chief appeals officer stated in all four cases that since the Goncescu case was decided a year before the habitual residence condition was introduced, it was unlikely that the Supreme Court was aware of any intention to introduce legislation to restrict access to social welfare payments on the basis of a habitual residence test. He said: “The facts of the matter are that the Goncescu case did not have a social welfare relevance and that the judgment predated the introduction of the habitual residence legislation.” Whatever qualities the Supreme Court has, it does not possess the divine afflatus, prophetic powers, it is not the oracle of Delphi and it cannot make a decision based on something that happens one year later. That is rudimentary logic, I would have thought.

The chief appeals officer doubted the judgment’s relevance to these cases and went on to say:

I do not believe there was any intention in framing the [HRC] legislation to exclude a particular category (such as asylum/protection seekers) from access to social welfare benefits. If there was any such intention the relevant legislative provisions would have reflected that intention and removed any doubt on the issue [ which they patently did not].

The advice from the Attorney General’s office which was quoted by the Department said that time spent by applicants in the asylum process could not be considered as “residence” and could not count towards satisfying the habitual residence condition. However, the chief appeals officer noted that the Department had not quoted another portion of the advice which said that time spent in the State was only one of five factors. From what the Minister has said, one would almost assume that the only factor was time spent in the State but it is one of five. It is quite possible that, despite the subsequent Supreme Court decision, some at least of the other four might still be in play.


Deputy Mary Hanafin: At no stage did I try to indicate that the right to reside was the only element. The right to reside does not at all mean that one would automatically qualify for habitual residence. It is a precondition that should be satisfied before the other circumstances are taken into account. The fact is the chief appeals officer indicated it was open to introduce legislation, which is exactly what we are doing here, and his findings do not set a precedent.


Senator David Norris: The Minister raised the matter of precedent. The Department rather bizarrely objected to the appeals officer referring to earlier decisions by other appeals officers and the chief appeals officer. Such decisions, as the Minister said, could not set precedents. The chief appeals officer said it was not appropriate for appeals officers to refer to “details” of previous cases in their decisions or reports. However, he agreed with the argument made by FLAC that while previous decisions were not binding in detail — this is the telling phrase — it was important to identify the underlying general principles so decisions would not be arbitrary and applicants could know the case they would have to make.


Question put.

The Committee divided: Tá, 28; Níl, 20.



Senator Phil Prendergast: Hear, hear.


Senator Fidelma Healy Eames: Absolutely.


Senator David Norris: They are on €19 a week. I apologise, I forgot the 10 cent, it is €19.10.