I move: "That the Bill be now read a Second Time".
The purpose of this Bill is to implement improvements in social welfare services which are due to come into effect at the beginning of April. In considering the Bill we are to some extent making history because this must be the first time in which a Social Welfare Bill giving effect to such substantial improvements in social welfare payments has been debated before the budget in which financial provision will be made for them. Deputies, however, will be aware of the circumstances which have given rise to this situation. The time between now and the beginning of April, when increased payments take effect, is very short and I hope that I can rely on the co-operation of all parties in getting this deserving measure through.
A number of the harsher measures provided for in the January budget drawn up by the former Minister for Finance could not be accepted, particularly having regard to the impact of those measures on the less well off sections of the community. I am, however, pleased to make provision for implementing those parts of that budget which contained proposals for increases in social welfare payments. This is the main purpose of the Bill now before the House. It implements the undertakings given by Fianna Fáil in the recent General Election.
The general increase in rates of payment is 25 per cent, apart from children's allowances in which case the increase is substantially greater. Fianna Fáil Governments down through the years have been conscious of the need for providing a satisfactory level of welfare services. We have continually developed those services and provided worthwhile improvements. All of this must be seen in the economic framework within which services are provided. The Government's decision to eliminate the harshest effects of the budget proposed by the former Government by maintaining food subsidies at existing levels and cancelling the proposed new 18 per cent VAT on clothing and footwear will be a substantial relief especially for those who are dependent on social welfare payments. It is equally clear that the increased social welfare payments that are being provided for in this Bill will be of considerably more benefit to those receiving them than the same level of benefits would have been if they had been awarded in the context of increased prices for food, clothing and footwear which would have resulted from the proposals of the previous Government to remove food subsidies and put VAT on clothing and footwear.
I would now like to refer to the effect of the increases on individual payments. The increases in social insurance payments are provided in section 2 of the Bill. The personal rate of contributory old age and retirement pensions for persons under age 80 is being increased by £8.05 to £40.25. It will go up to £43.05 for persons aged 80 years or over. The addition to the pension for an adult dependant is being raised to £25.70 where the adult dependant is under pensionable age and to £30 05 where the adult dependant is aged 66 or over. Accordingly a married couple both over pensionable age will get £70.30 as compared with £56.25 at present and, if the pensioner is aged 80, the new rate will be £73.10 as against £58.50 at present. The new rates for a married couple are therefore well over 50 per cent of average industrial earnings.
The new personal rate of widow's contributory pension and deserted wife's benefit will be £36.25 for a person under pensionable age, £36.95 for a person aged between 66 and 80 and £39.45 for a person aged 80 years or over.
The personal rate of invalidity pension is being increased by £7.10 to £35.50 for a person under pensionable age and by £7.25 to £36.20 for a person aged 66 or over. The addition to pension for an adult dependant is being raised to £23.05 for a pensioner under age 66 and to £23.50 for a pensioner aged 66 or over. The personal rate of disability and unemployment benefit is increased from £25.30 to £31.65 and a married couple will receive £52.15 as against £41.70 at present. Maternity allowance is also being increased to £31.65. The maximum rate of death grant is being increased from £75 to £100.
In line with the general increases in social insurance payments, section 2 of the Bill also provides for increased occupational injuries benefits.
Increases in social assistance payments and in the rates of children's allowances are provided in section 3 of the Bill. The maximum weekly personal rate of non-contributory old age pension is being raised by £6.90 to £34.45 for persons aged under 80 years. It will go up to £36.95 for persons aged 80 or over. The maximum rate of payment in respect of an adult dependant under 66 years of age is being increased by £3.45 to £17.30. The overall maximum payment for a pensioner with a dependent spouse will therefore go up to £51.75 and, where the pensioner is 80 years of age or over, to £54.25. The allowance payable in respect of a prescribed relative giving full-time care and attention to an incapacitated pensioner is being raised to £19.30. In the case of a pensioner living alone, the additional allowance is being increased to £2.70.
The maximum weekly personal rate of widow's (non-contributory) pension is being increased from £27.05 to £33.80 where the widow is under age 66, from £27.55 to £34.45 where the widow is aged between 66 and 80 and from £29.55 to £36.95 where the widow is aged 80 or over. Increases in the prescribed relative allowance and living alone allowance for persons over age 66, in line with those payable with non-contributory old age pensions, are also provided. The improvements in widows' pensions will automatically apply to the social assistance allowances for deserted wives, unmarried mothers and prisoners' wives. The social assistance allowance payable to single women aged between 58 and 66 is being increased by 25 per cent, bringing the maximum rate of the allowance to £29.50.
The increases in unemployment assistance rates bring the maximum personal rate to £26.25 in urban areas and £25.45 elsewhere. The rates for adult dependants are being increased to £18.95 and £18.50 respectively, so that the rate for a married couple will be £45.20 in an urban area and £43.95 elsewhere. The 25 per cent increase is also applied to the special rates of unemployment assistance payable to smallholders with land under £20 valuation in certain disadvantaged areas whose means for unemployment assistance purposes are assessed notionally by reference to land valuation.
The rates of supplementary welfare allowances are also being increased by 25 per cent. This will bring the maximum rate of supplementary allowance for a married couple to £43.95 per week with additional payments for children.
The increases in rates of benefit payable for dependent children are linked with the substantial overall increases which are being made in the general scheme of children's allowances. The increases for dependent children of social welfare beneficiaries have been calculated in such a way that, taking account also of the increases in the general scheme, an increase of 25 per cent is provided in payments for children.
The increase in children's allowance rates are also provided in section 3 of the Bill. The present rates of allowance of £6 for the first child and £9 for each additional child are increased to £11.25 for each of the first five children and £17.50 for each subsequent child. In the nine-month period from April to December 1982 the new rates of children's allowances will effectively mean an increase of some 45 per cent in payments to beneficiaries. Increases in children's allowances normally take effect from July but on this occasion the increases will have effect from April in the same way as all the other increases. It is not, however, administratively possible to make payment at the new rates in April and the current rates will continue to apply until July when arrears from April will be paid. The reason for this is that children's allowances books are renewed in July each year. The validity of the children's books at present held by beneficiaries accordingly lasts until June next and new books would normally be issued with effect from July. Having regard to other commitments it is not possible to print and distribute a supplementary book issue for the three months April-June equivalent to the increase in rates of children's allowances for that period. Additional orders will be included with the July children's allowances book issue to enable the increases due for the months of April-June to be paid retrospectively. This will be done in conjunction with the July renewal of allowance books.
In line with the increases in social assistance pensions and allowances the reduced rates payable where the weekly means exceed a certain amount are also, of course, being increased.
Steps have been taken on a number of recent occasions to ease an anomaly which arose due to the application, in previous years, of uniform percentage increases to all reduced rates of pension. This resulted in a scale of means and pensions under which weekly pensions were reduced at one stage by £1.40 for every increase of £1 in means. The reduction for each £1 increase in means is now £1.20 and the present Bill provides in section 4 for the removal of this anomaly so as to ensure that reductions in pensions will be made in steps commensurate with increases in means. The abolition of this anomaly together with the increase in the rate of pension would have the effect of greatly stretching the scales of means and pensions to an extent that would render them far too cumbersome and complicated. To avoid such a development, section 4 also provided that the steps of means in the tables will be increased from £1 to £2.
An easement of the means test in its application to single parents is provided for in section 6. A sum of £200,000 has been provided for this purpose and this amount is being allocated in such a way as to enable single parents such as widows, deserted wives or unmarried mothers to increase their earnings without suffering a reduction in social assistance payments as a result. At present the means test includes a provision, in the case of applicants with children, to disregard any earnings of the applicants up to £104 a year for each child. The provision which I am now making is to increase the "disregard" to £312 a year for each child in the case of applicants for widow's non-contributory pension, deserted wife's allowance, social assistance allowance for unmarried mothers and prisoner's wife's allowance.
Section 7 provides for extending the prescribed relative allowance of £19.30 to invalidity pensioners under age 66. This allowance is at present payable as an increase of pension to incapacitated pensioners who need full-time care and attention and who are over 66 years of age. An exception is made in the case of blind persons who may receive the allowance under that age. It is provided in section 7 that the age limitation will also be abolished in the case of invalidity pensioners thus extending the allowance to those pensioners no matter what their age. I think this is a particularly welcome extension of the scheme.
In section 8 I am making a provision to enable married women without child dependants who are separated from and not supported by their husbands to qualify for unemployment assistance. Under present legislation such women cannot qualify. The particular difficulty in the case of married women living apart from their husbands is that they cannot qualify for unemployment assistance unless they have a dependant, even though their position is analogous to that of a single woman who is subject to no such condition. A number of such cases have arisen and section 8 provides for the removal of the anomaly.
I would like to mention briefly two additional measures which I am introducing from April but which do not require to be provided for in legislation. I am extending the free telephone rental scheme, which at present applies mainly to social welfare pensioners aged over 66, to eligible blind pensioners under 66. I am also extending the free travel scheme, which is currently available to all permanent residents in the State aged 66 or over and to invalidity pensioners, blind persons aged 18 or over and persons in receipt of a disabled person's maintenance allowance, to residents in receipt of Northern Ireland or British invalidity pensions who are under 66 years of age.
In line with the increases in social welfare payments announced in the January budget various allowances payable under the Health Acts are also being increased from April. The maximum personal weekly rate of disabled persons maintenance allowance is being increased from £26.05 to £32.55; the rate for an adult dependant from £14.80 to £18.50 so that the rate for a married couple will be £51.05. Infectious diseases maintenance allowances are being increased from £26.25 to £32.80 in the personal rate and from £21.35 to £26.70 for a dependent spouse, making the new rate for a married couple £59.50. Blind welfare allowances which are payable as a supplement to non-contributory blind pensions are being increased from £8.90 to £11.15 in the personal rate and from £17.70 to £22.30 for a blind married couple.
In addition to what was provided for in the January budget I am pleased to be able to say that the Government have also decided to increase the domiciliary care allowance for handicapped children from £45 to £55 per month. Also the mobility allowance which is payable to disabled persons will be increased from £200 to £250. Finally the capitation allowances which are payable to voluntary organisations for the vocational training of disabled persons will be increased. Apart from recouping those organisations for their increased costs these additional payments will enable them to increase the allowances which they pay to their trainees.
I have now covered the improvements which are coming into effect from April. These measures, when taken together with the Government's decision to maintain food subsidies and remove the proposed 18 per cent VAT on footwear and clothing will significantly improve the situation of social welfare recipients.
In addition to the general increases in rates of payment, it has been the practice in recent years to provide for double payments of long-term social welfare benefits at Christmas. On each occasion, however, on which temporary increases of this nature have been provided, it has been necessary to introduce legislation. Since it is possible by regulation to provide for permanent increases in rates of payment, it is anomalous that temporary increases, such as these double payments, cannot be provided in the same way. I am accordingly providing in section 9 of the Bill that the power to vary rates of payment by regulation will be extended to cover such temporary increases. This provision will facilitate the introduction of temporary increases in the future and will give greater flexibility in relation to the time of year at which such increases can be provided.
The only other provision made in the Bill is to amend a number of minor printing errors in the Social Welfare Consolidation Act, which have come to light since its enactment.
The overall cost in 1982 of the rates increases and other changes being provided for in this Bill is £230 million. This is a considerable sum, even in the context of overall expenditure on social welfare of approximately £1,565 million. The cost to the Exchequer in 1982 of the increased expenditure will be approximately £128 million and some £102 million will be met by increases in social insurance contributions. Increases in contributions and in the ceiling of earnings on which contributions are levied to meet the employers' and employees' share of the cost of the proposals under the social insurance schemes are provided in section 5 of the Bill. The ceiling is being raised from £8,500 to £9,500 to take account of increases in earnings. This will also lead to corresponding increases in the amount of pay-related benefit to employees. Allowing for an Exchequer contribution of 25 per cent to the social insurance fund towards expenditure in 1982, the increase in social insurance contributions is 1.75 per cent for the employer and 1.75 per cent for the employee. This brings the standard contribution for social insurance from 13.3 per cent to 16.8 per cent of which the employer will bear 11.3 per cent and the employee 5.5 per cent. This is the same increase in PRSI rates as was proposed by the previous Government and accepted by the present Government in their modified budget proposals. Proportionate increases are being provided in the rates of voluntary contributions. Reduced rates of contributions are payable under regulations in respect of certain employments — for example, pensionable public service employees and certain share fishermen and outworkers. These are not covered for all the benefits of the social insurance system and increases due in those rates will be made by regulation. The contribution increases will be effective from 6 April 1982. The increases in rates and in the earnings limit are expected to yield about £102 million in 1982.
In my introduction to the Bill, I have dealt with the improvements which the Government are making for social welfare beneficiaries with effect from next week. These measures, particularly when account is taken of the more favourable budgetary strategy to which the Government are committed, will, I am satisfied, improve significantly the situation of social welfare recipients. This is the third year in succession in which I have been privileged to introduce a 25 per cent increase for pensioners and other social welfare beneficiaries. As an example, since April 1980 the old age pension for a married couple has been increased from £34.25 to £70.30 per week. I intend to maintain the process of continuous improvement of the social welfare system which has always been the aim of Fianna Fáil Governments and which has been achieved in practice.
Before I conclude, I would like to take the opportunity to mention briefly some areas which I consider to be in need of attention. The social welfare code is a complex one. In my previous term of office I was responsible for the enactment of the Social Welfare Consolidation Act which was a major contribution to the simplification of the system by bringing many complex legislative provisions together in the one Act. I hope further rationalisation can be achieved without at the same time losing the flexibility that is necessary if we are to respond sensitively to the many differing demands that are made upon the system.
The supplementary welfare allowance scheme has come in for considerable criticism since its introduction and is now in need of major review and improvement. It is the one scheme which deals at the closest quarters with financial need at the most critical level. Of all the social welfare schemes it is the one which must operate most quickly and flexibly to meet needs as they arise. I intend to review this scheme to ensure that everything possible is done to improve its operation and ensure that it fulfils its original objectives.
The immediate priority now, for those who depend on social welfare, is to have this Bill put through as quickly as possible, so as to allow for the implementation of the improvements which it contains. These are summarised, for convenience, in the tables which I have circulated with my speech. The first of these improvements in payments takes effect from 31 March. I, therefore, commend the Bill to the House for urgent and favourable consideration.
Following are the tables referred to:
Social Insurance Increases.
Present rate |
Proposed rat |
|
£ |
£ |
|
Personal and Adult Dependant Rates |
||
Retirement Pension/Old Age Contributory Pension under 80: |
||
Personal rate |
32.20 |
40.25 |
Person with adult dependant under 66 |
52.75 |
65.95 |
Person with adult dependant 66 or over |
56.25 |
70.30 |
Retirement Pension/Old Age Contributory Pension 80 or over: |
||
Personal rate |
34.45 |
43.05 |
Person with adult dependant under 66 |
55.00 |
68.75 |
Person with adult dependant 66 or over |
58.50 |
73.10 |
Widow's Contributory Pension/Deserted Wife's Benefit |
||
Under 66 |
29.00 |
36.25 |
66 to 79 |
29.55 |
36.95 |
80 or over |
31.55 |
39.45 |
Invalidity Pension: |
||
Personal rate |
||
Under 66 |
28.40 |
35.50 |
66 or over |
28.95 |
36.20 |
Person under 66 with adult dependant |
46.85 |
58.55 |
Person over 66 with adult dependant |
47.75 |
59.70 |
Disability/Unemployment Benefit* |
||
Personal rate |
25.30 |
31.65 |
Person with adult dependant |
41.70 |
52.15 |
Maternity Allowance* |
25.30 |
31.65 |
Orphan's Contributory Allowance |
18.30 |
22.90 |
Death Grant (maximum rate) |
75.00 |
100.00 |
*Pay-related benefit may also be payable in addition to disability benefit, unemployment benefit or maternity allowance. The ceiling on the earnings on which pay-related benefit is calculated is increased from £8,500 to £9,500.
Social Assistance Increases.
(including health allowances)
Present rate |
Proposed rate |
|
£ |
£ |
|
Personal and Adult Dependant Rates |
||
Old Age Non-Contributory Pension and Blind Pension: |
||
(i) Under 80: |
||
Personal rate |
27.55 |
34.45 |
Person with adult dependant under 66 |
41.40 |
51.75 |
(ii) 80 or over: Personal rate |
29.55 |
36.95 |
Person with adult dependant under 66 |
43.40 |
54.25 |
Widows, Deserted Wives, Prisoners' Wives |
||
Under 66 |
27.05 |
33.80 |
66 to 79 |
27.55 |
34.45 |
80 or over |
29.55 |
36.95 |
Unmarried Mother's Allowance (including one child) |
34.80 |
42.60 |
Prescribed Relatives' Allowance |
15.45 |
19.30 |
Unemployment Assistance: |
||
Urban: |
||
Personal rate |
21.00 |
26.25 |
Person with adult dependant |
36.15 |
45.20 |
Rural: |
||
Personal rate |
20.35 |
25.45 |
Person with adult dependant |
35.15 |
43.95 |
Single Woman's Allowance |
23.60 |
29.50 |
Orphan's Non-Contributory Pension |
15.35 |
19.20 |
Supplementary Welfare Allowance |
||
Personal rate |
20.35 |
25.45 |
Person with adult dependant |
35.15 |
43.95 |
Disabled person's Maintenance Allowance |
||
Personal rate |
26.05 |
32.55 |
Person with adult dependant |
40.85 |
51.05 |
Infectious Disease Maintenance Allowance |
||
Personal rate |
26.25 |
32.80 |
Person with dependant spouse |
47.60 |
59.50 |
Domiciliary Care Allowance (per month) |
45.00 |
55.00 |
Mobility Allowance (per annum) |
200.00 |
250.00 |
Children's Allowances
1981/82 |
1982/83 |
Increase |
% |
|
£ |
£ |
£ |
||
1 child |
6 |
11.25 |
5.25 |
87.5 |
2 children |
15 (+9) |
22.50 (+11.25) |
7.50 |
50.0 |
3 children |
24 (+9) |
33.75 (+11.25) |
9.75 |
40.6 |
4 children |
33 (+9) |
45.00 (+11.25) |
12.00 |
36.4 |
5 children |
42 (+9) |
56.25 (+11.25) |
14.25 |
33.9 |
6 children |
51 (+9) |
73.75 (+17.50) |
22.75 |
44.6 |
7 children |
60 (+9) |
91.25 (+17.50) |
31.25 |
52.1 |
8 children |
69 (+9) |
108.75 (+17.50) |
39.75 |
57.6 |
9 children |
78 (+9) |
126.25 (+17.50) |
48.25 |
61.9 |