Opening Remarks by Heather Humphreys TD Minister for Social Protection Launch of ESRI Report: COVID-19 and the Welfare System
Introduction
Good morning everyone.
I would like to thank you for the opportunity to open today’s conference. I am delighted to be here with you this morning
Today’s event is a welcome contribution as we begin our considerations for Budget 2022.
Discussions such as these are extremely useful in helping to shape Budget priorities, as well as the wider social policy discussion.
This October, I will deliver my second Budget as Minister for Social Protection.
I can assure you that I will once again aim to construct a Budget package which prioritises resources effectively.
My focus will be on targeting resources towards those at the greatest risk of poverty, as well as helping people get back to work.
A key commitment in the Programme for Government is the building of a new social contract between the State and our citizens.
The Social Protection system is a vital part of this social contract and will play a major role in delivering upon this commitment.
Covid-19
The Covid-19 pandemic has served to demonstrate, more than ever, the importance of the social protection system in providing a strong safety net for our citizens.
From the onset of the pandemic, my Department responded quickly and decisively in order to protect our citizens at a time of crisis.
Our overriding priority was to ensure the worst financial effects were significantly eased for the hundreds of thousands of people who lost their jobs through no fault of their own.
Measures introduced by the Government include the introduction of the Covid-19 Pandemic Unemployment Payment, the Temporary Wage Subsidy Scheme and the Employment Wage Subsidy scheme.
These schemes acted as a cushion to the income shock experienced by workers and their employers.
The positive effect of these schemes in terms of protecting the lowest income households is reiterated in the report being launched today.
The PUP has proven to be a critical support for people who have lost their jobs. The scale of the support required has been unprecedented.
But it was also necessary to protect our citizens at a time when they needed support the most.
To date we have spent €8 billion on the PUP alone.
Over 25 million payments have been issued, with over 868,000 people having received support under the scheme.
The numbers on the payment peaked during the first lockdown, with 602,000 people being supported in May 2020.
In 2021, as we entered level five restrictions once again, the numbers peaked at 481,000 in February.
This week, the numbers will fall below 250,000 – a reduction of over 230,000 since February and the lowest the numbers have been since last October.
This clearly shows the impact the reopening of the economy is having and I am confident as restrictions are eased further in July, we will continue to see thousands of people returning to work.
Recovery plan
The continued ramping up of the vaccination programme along with the reopening of the economy means the requirement for exceptional measures is diminishing.
It is very important however, that in phasing out the PUP over the coming months, we ensure that people are not faced with a “cliff edge” reduction in income support.
As part of the National Economic Recovery Plan, the Government therefore announced the extension of the PUP until February 2022 for those whose employment continues to be impacted by Covid-19.
This will allow as much time as possible for employment to recover.
During the transition period, payments will be reduced on a tapered basis over 6 months from the beginning of September.
While we hope and plan for a strong recovery in the labour market, we know that some people, whose employment was affected by the pandemic, may not return to their old jobs.
As the economy re-opens, my Department is here to help those people – not just through the continued provision of income supports, but through the provision of employment advice and supports and access to retraining.
My Department and I are determined to help people who cannot return to their previous employment to find new jobs and new opportunities as quickly as possible.
I will be shortly publishing the new Pathways to Work Strategy.
Some of the key elements of the Strategy were included in the National Economic Recovery Plan, such as –
- A new work-placement programme, which will provide 10,000 paid work-placement opportunities for unemployed people; and
- Some 50,000 new places are to be made available in further education and training to help people from sectors that are particularly affected to upskill.
- An expansion of the caseload capacity of the Department’s employment support services by 100,000.
The Economic Recovery Plan also sets out how we might learn the lessons of the pandemic in terms of providing income supports that cushion the effect of sudden income shocks.
The Plan commits to bringing forward proposals for a pay-related jobseekers’ benefit. Such an approach is common across many EU Member States and I’m sure there are many lessons we can learn from that experience.
The ESRI report makes some interesting points about how supports like Working Family Payment could be adapted for single people on low incomes.
I think that idea is a helpful contribution to the debate on future reforms of working age payments and is worth discussing further.
Budget 2022
It is against this backdrop that Budget 2022 will be framed.
As I have already mentioned, much of my Department’s focus over the last year and a half has been providing emergency income supports to those adversely affected by the pandemic, as well as protecting those most at risk of poverty.
But I am determined to introduce new measures as part of Budget 2022 which will continue the progress made in recent years in lifting the most vulnerable out of poverty.
The most recent data from the CSO’s Survey on Income and Living Conditions shows that poverty rates are reducing.
In addition, Ireland is one of the very few countries where the overall level of income is increasing, with income inequality falling.
Social transfers contribute very significantly to reducing poverty rates in Ireland.
Without social transfers and pension income, CSO research indicates that the at-risk-of-poverty rate would be 41.4%.
After social transfers, the rate is 12.8%.
This is a poverty reduction effect of nearly 70%, one of the highest in Europe.
In the last number of Budgets, my Department has sought to maximise the impact of available resources by targeting Budget measures at the most vulnerable, such as lone parents, people with disabilities and those living alone.
We have introduced a range of targeted measures which have contributed to this progress, which include:
- Increases in payment rates for qualified children. Over the last four Budgets, the weekly rate has increased by €15.20 for children aged 12 and over, and by €8.20 for children under 12;
- A €5 per week increase to the Living Alone Allowance in Budget 2020 and again in 2021, increasing the weekly payment to the current level of €19;
- The rate and number of weeks of payment for the Fuel Allowance have been increased in the last number of Budgets. The Allowance is now paid at a rate of €28, for 28 weeks each year;
- The income thresholds for the Working Family Payment have been increased over successive Budgets. This payment allows families on low earnings to retain income support while working;
- Increases to the income disregards for Disability Allowance, the One Parent Family Payment and Jobseeker’s Transition Payments;
- An increase in the number of hours that carers can work or study outside of the home while retaining their Carer’s Allowance entitlement. The annual Carer’s Support Grant has also been increased by €150 to its highest ever level of €1,850.
Conclusion
It is my intention that the Social Protection measures, which will form part of Budget 2022, will once again seek to improve living standards for the most vulnerable in society.
The options for the forthcoming Budget will be considered by Government in the coming months.
The research being discussed today will provide valuable insights into the impact of Covid on the Social Protection system and possible issues which the forthcoming Budget may need to consider.
I would like to conclude by thanking you once again for this invitation today and for your valuable input into the annual Budget process and the broader policy agenda.
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