MANY people were being trapped in poverty and forced to live immoral, dishonest lives by the social welfare system, a former Fine Gael minister said. Mr Jim Mitchell said he knew of one "happily unmarried mother", who had four children by a responsible and committed father. She declared herself a lone parent because if she revealed the existence of her partner she would lose her entitlements.

The social welfare system was also leading to large areas of cities turning into poor quality flatlands as young people were encouraged to leave home and get welfare and rent allowances. If they stayed they would lose their entitlements.

Mr Seamus Brennan (FF, Dublin South) said the Bill would create an anomaly for telecommunications companies by extending civil service PRSI status to Telecom employees even after an outside company took a 35 per stake. Other companies would have to pay full private PRSI rates.

Mr Dan Wallace (FF, Cork North Central) said the improvements in social welfare this year was not enough at a time of growing national wealth.

Mr Michael Ferris (Lab, Tipperary South) complained about the complexity of the system which, he said, made it difficult for people to know their entitlements.

The Minister for Social Welfare, Mr De Rossa, rejected claims that the new lone parent's allowance would lead to a cut in some people's entitlements. In fact there would be 2,000 more people entitled to it and others would have their entitlements increased.

The Bill passed its second stage.