I move:—
That the Bill be now read a Second Time.
It affords me pleasure to recommend for the approval of the House a Bill, the main purpose of which is to distribute £2,500,000 a year by way of increased social welfare benefits. Deputies are aware that on its coming into office the present Government committed itself to a policy of improving the social services. As the Minister who was entrusted with giving effect to this policy it was, to my mind, important that the greatest improvements should be granted at the earliest moment to those whose needs are greatest and most urgent. Few, I think, will cavil at my decision to allot the greatest share—£1,500,000—to the old age pensioners nor indeed to the second allotment—almost £1,000,000—to the necessitous widows and orphans. These sums will be distributed by way of increased pensions and allowances and through an abatement of the means tests. The present Bill does not abolish the means tests but it considerably modifies them. I remain convinced of the desirability of doing away with them altogether and am hopeful that, in the not too distant future, it will be possible to do so. It is proper that in order to secure the best value from our present limited financial resources money should not be spent in directions where the need is not too severe. If we were to go beyond a certain limit of need, the taxpayers' money would be distributed in quarters where it was not needed. It should be remembered, too, that approximately 90 per cent. of old age pensioners are at present in receipt of the maximum rate of pension and so are not affected by further modifications of the means tests. I must say, however, that on principle, I should like, if it were possible, to be able to avoid the necessity for inquiring into a person's means at all, but I must for the moment stand over what I regard as the more important principle that we should distribute what is available to the best advantage—that is, to those in the greatest need.
I need hardly say that it is my earnest wish to grant these improvements at as early a date as possible. Were it not for certain administrative necessities, I should like to give effect to this Bill as soon as it has become an Act. The House, however, will hardly fail to appreciate that changes of this magnitude involve action which in the physical sense cannot be made to conform to one's personal desires. The present Bill, in fact, necessitates the following work: an examination of about 23,000 existing non-contributory widows' and orphans' pensions with a view to awarding new pensions, taking into consideration the increased rates and the modified means tests; an examination of thousands of new claims for widows' pensions; a review and adjustment to new rates of 150,000 existing old age and blind pensions; an investigation of many new claims for old age and blind pensions; the production, preparation and issue of about 23,000 pension order books for existing pensions under the Widows' and Orphans' Pensions Acts and some further thousands for new pensions; the production, preparation and distribution of about 150,000 pension order books for existing pensions under the Old Age Pensions Acts and some additional thousands for new pensioners; the recall and cancellation of about 20,000 cash supplement and widows' and orphans' pension order books and the recall and cancellation of about 150,000 old age pension order books.
A large amount of work has fallen on the Department of Social Welfare since its inception; for example, that arising out of the transfer of functions, the introduction of cash supplements last year, the conducting of reciprocal arrangements and, not least, the action preparatory to the present measure since the new Government took office five months ago. I am satisfied that my Department is well staffed and that it has done and is doing a considerable amount of solid work of lasting benefit to the community. Miracles, however, cannot be achieved and there is a limit to what even the most earnest people can accomplish. I am constrained to wait until January 7th before the new conditions can be made operative. I may say here that even the fixation of that date will impose a very heavy strain on the resources of the Department, and the officers of the Department will be called upon to perform what in ordinary circumstances one would consider to be an exceptionally heavy volume of work.
Before passing briefly over the different parts and aspects of the Bill. I should like to remind Deputies that until the emergency the various insurance schemes, national health insurance, unemployment insurance and contributory widows' and orphans' pensions were based on the sound insurance principle that the cost of the benefits would be borne by the three parties—the State, the employer and the employee. When the emergency situation arose the Exchequer supplemented those benefits by way of cash supplements as a temporary expedient without requiring any increased contributions from the remaining parties— that is, the employer and the employee. Thus, an unsatisfactory feature was introduced into the insurance schemes— a principle whereby benefits were not related, as they had been in the past, to contributions.
It was felt desirable to restore the old insurance basis by placing the liability for these cash supplements in future on the employers, the insured contributors and the State in the same proportion as the basic pensions now payable are paid for. In doing this I am ensuring that the general character of the schemes is restored so that there will be a better understanding of the basic principles underlying them when the time comes for the introduction of the comprehensive scheme.
I pass on now to Part II of the Bill relating to old age pensions. This Part of the Bill introduces a new scale of pensions for old age pensioners and for blind persons. It modifies generally the means test applicable to these pensions so that the pensioners may enjoy greater means than at present without the existing reduction of pension. It reduces the minimum age for blind persons' pensions from 30 to 21 years and excludes within certain limits the personal earnings of these pensioners from the computation of means. The general effect of these changes, which will enable persons to claim pensions who are at present excluded and will increase the pensions at present payable, will be that the section of the community concerned will benefit to the extent of about £1,500,000 over and above what they are now receiving in pensions. It is an anomaly that a pension for a blind person of 21 years is granted under the Old Age Pensions Acts, but that is the history of these pensions. I mention the matter because the heading of this Part of the Bill deals with the amendment of the Old Age Pensions Acts and, when I speak of pensions in connection with this Part of the Bill, I mean both old age and blind persons' pensions.
Pensioners in urban areas at present receive 15/- a week, including cash supplements, which is reduced by 1/- a week and down to 1/- in accordance with a scale of means ranging from £15 12s. 6d. to £39 5s. 0d. per annum. No pension is payable where means exceed this latter figure. The Bill now before the House substitutes a pension scale of 17/6, reduced by 2/6 a week to a minimum of 5/-, with a new means scale ranging from £15 12s. 6d. to £52 5s. per annum above which latter figure no pension is payable. As Deputies will have seen from the explanatory memorandum which was circulated there are at present ten classifications of old age pensioners. In the Bill these classifications have been reduced to six. In proposing to reduce the qualifying age for blind persons' pensions to 21 years, instead of the present 30 years, I am proceeding on the basis that it is reasonable that an adult who, but for his affliction, might normally be expected to be self-supporting should be entitled to benefit by these pensions without waiting to reach an age for which I am unable to find any satisfactory justification, and which appears to have been arbitrarily fixed. In order to encourage recipients of blind pensions to undertake gainful occupation, and so improve their general circumstance, this Bill proposes to exclude blind pensioners' personal earnings, within certain limits, in the calculation of means. It seems to me, reasonable that this exclusion should have regard to the pensioner's family responsibility and the Bill accordingly allows a basic £52 of earnings to be excluded in computing means, and allows this to be increased to £39 in respect of a wife or dependent husband, and £26 each in respect of children.
These are the main provisions of this part of the Bill, but it also provides for the necessary review of all existing pensions in view of the new rates and means scale; for certain payments such as allowances under the Health Act to sufferers from certain infectious diseases, and blind welfare allowances, being disregarded as means for pension purposes; and for a reduced fee of 6d. for birth certificates for old age pension purposes.
I pass now to Part III of the Bill. Under the cash supplements Order of last year recipients of benefit under the National Health Insurance Acts are entitled to cash supplements in addition to the basic benefit. All these supplements are of a temporary and provisional nature, and their payment by the Exchequer, apart from the National Health Insurance Fund, was a departure from the insurance principle on which the finance of the National Health Insurance Acts are traditionally based. It is proposed under the Bill that the cash supplements payable under the national health insurance scheme should become permanent and should be merged in the basic benefits. At the same time it is proposed to restore the old insurance basis so that the cash supplements will, in future, be paid for by the employers, the insured contributors and the State in the same proportions as the basic benefits now payable are paid for.
It is considered better on general principles that this amalgamation of benefit and cash supplement should take place now as the present scheme of social insurance will form the foundation of the future comprehensive scheme of social insurance. The increase in contributions will also provide for an increase in the rate of remuneration of doctors who issue medical certificates to insured persons and for the additional expense of administration of the National Health Insurance Society arising out of the increase in wages and salaries granted in recent years to the staff of the society in common with all other employed persons.
The proposals in Part IV of the Bill are to raise the insurability limit for non-manual workers from £250 to £500 per annum, to substitute for cash supplements equivalent increase in the rates of unemployment benefit, and to increase the weekly rates of unemployment insurance contributions so as to ensure that the Unemployment Fund will continue to be in a position to bear the additional liability which the increases in the rates of unemployment benefit will impose on it. Advantage is being taken of the opportunity afforded by the Bill to incorporate in the Unemployment Insurance Acts as permanent features, the increased allowances payable in respect of adult and child dependents, and the rule governing the continuity of unemployment introduced in 1941 by Emergency Powers Orders which are now being revoked. The insurability limit of £250 per year for non-manual workers is out of date in the light of remuneration changes of recent years and many workers who have ceased to be insurable by reason of increased remuneration would, in the course of time, lose the advantage of their contributions, whether paid under the general scheme or the special scheme for the insurance industry. In that case the persons concerned would have no cover whatever and could not participate in our unemployment insurance legislation since they would be outside the scope of the Act if their remuneration in nonmanual employment exceeded £250 per annum.
Provision is also being made in the Bill to ensure that workers who have ceased to be insurable will not, by reason of the lapse of time, lose any of the rights acquired before the cessation of insurance. The temporary increases in unemployment benefit granted by way of cash supplements will, under the Bill, become part of the permanent rates of unemployment benefit. In order to offset the additional liability so imposed on the Unemployment Fund, the weekly rates of unemployment insurance contributions will be increased from the 4th October, 1948, by 4d. in the case of men and women, and 1½d. in the case of boys and girls. This will mean an increase in the employee's contribution of 2d. per week for men and women, 1d. in the case of girls and ½d. in the case of boys.
Part V of the Bill proposes to adjust the position of persons resident in houses owned by the local authority of a city or town but situated outside such area so that such residents will be entitled to the city or town rates of unemployment assistance and will otherwise be treated as if they were resident in the city or the town. This proposal will remedy a long-standing grievance amongst residents in certain areas adjoining Cork City who were removed to houses built by the Cork Corporation outside the city boundary. At present they receive only the lower rates of unemployment assistance applicable to their area of residence. Under the Bill such persons will, for the purpose of unemployment assistance, be treated in all respects as if they were resident in Cork City. This advantage will not, of course, be confined to Cork, but will be extended to all persons similarly circumstanced in other areas.
This part of the Bill also makes provision for enabling the disqualification for unemployment assistance imposed in the case of persons losing employment through misconduct or leaving voluntarily without just cause to be varied from one week to three months, thus giving to the disqualification considerable flexibility which will enable unemployment assistance officers and courts of referees to adjust the period of disqualification to the circumstances of the individual case.
The removal of the disqualifications for unemployment assistance applicable to persons convicted of an offence under the Unemployment Insurance Acts or of any other crime or offence, which is also provided for in the Bill, will have the benefit of securing that persons so convicted will not suffer loss of unemployment assistance in addition to any penalty imposed by the courts.
The opportunity is taken in the Bill of substituting for the temporary cash supplements equivalent increases in the rates of unemployment assistance and of incorporating permanently in the unemployment assistance code, the modified rule governing continuity of unemployment introduced by Emergency Powers Order in 1941. Cash supplements are payable only to persons entitled to receive some unemployment assistance at the existing rates. An effect of the substitution for cash supplements of increases in the rates of unemployment assistance will to be admit to unemployment assistance persons who, by reason of their means, cannot at present quality for unemployment assistance at the existing rates.
Part VI of the Bill deals with widows' and orphans' pensions under two heads, firstly, contributory pensions, and secondly, non-contributory pensions. As regards contributory pensions, the general intention of the Bill is the same as in the case of the other insurance schemes, that is to restore the fundamental insurance principle which was departed from by the payment of cash supplements out of the Exchequer. It is proposed, therefore, to merge the existing cash supplements in the basic pensions and have them paid for on the same insurance basis which governs the finances of the original pension scheme. I am, however, proposing something more in certain case than a mere addition of the cash supplements. I hope on the Committee Stage to introduce an amendment to provide that in the case of certain contributory agricultural pensions, the combined rates will be raised to a somewhat higher level than at present.
With regard to the non-contributory pensions, I felt that it would not be sufficient merely to merge the existing cash supplements in the basic pensions and allowances and I have, therefore, decided that reasonably generous increases should be granted on this side. It will be seen from the explanatory memorandum how generous the proposed increases are. The new maximum pension for a widow without dependent children will be 14/- per week in an urban area where as at present it is as low as 7/6 and cannot exceed 11/6, and 10/- a week in the rural area where at present the rate of pension is 8/- a week. For a widow with ten children the maximum weekly pension will be 58/- in an urban area where now it is as low as 43/6 and cannot exceed 52/-. In the rural areas the maximum pension for a widow with ten children will be 54/- in future where now it is 32/6.
To make the scheme more readily intelligible to the general public, there will be only two areas as against four areas at present for the purpose of relating the pension to the pensioners area of residence. All the county boroughs, boroughs, urban districts and towns will constitute the urban area and the remainder of the country will be the rural area. This increase together with the modification of the means test, to which I will refer later, will have the effect of bringing into the scheme large numbers of widows at present excluded owing to the combined effect of the means test and the existing low rate of non-contributory pensions.
The cost of these new proposals will be in the neighbourhood of £650,000 per annum. It is also proposed to modify the means test for non-contributory pensions by disregarding the first 10/- of a widow's weekly earnings and any sums up to a maximum of 10/- per week received by a widow as voluntary contributions. These represent a considerable improvement in the present position under which no special exemption applies to earned income. The exemption for gratuitous payments, as for instance, remittances in cash from members of the family, at present limited to 2s. 6d. per week, is now raised to 10/- per week. The main purpose of these amendments is, on the one hand, to encourage the widow to work and to provide for herself and her family by disregarding any income up to a maximum of 10/- per week. That is something that does not exist at the moment and it is a new concession to non-contributory widows. It is proposed also to allow a widow to receive up to 10/- a week from a son, a daughter or any other relative or any organisation, without taking that sum of money into consideration for the purpose of ascertaining the means of an applicant for a non-contributory widow's pension.
The limit of age, 55 years, for a childless widow has in the past caused considerable dissatisfaction. Widows have had their pensions terminated when the only dependent child left school or attained the age of 16 years and have had to wait to the age of 55 for the restoration of the pension. This is now remedied by reducing the qualifying age for all non-contributory pensions from 55 years to 48 years. The annual cost of that concession is £210,000. I might here say that it is anticipated that the effect of that amendment in the existing Acts will be to permit 7,000 widows, who at present are ineligible because of the structure of the Acts to obtain a non-contributory pension, to qualify for a non-contributory pension when this Bill has been passed into law. The annual cost to the Exchequer of the proposals regarding non-contributory pensions will be in the neighbourhood of £860,000.
This Bill is not in my view an end in itself but it has one important end. It carries our social services and our social legislation a very substantial step forward. It provides more security for the weak and the helpless and it is calculated to brighten their lot by the distribution of a sum of £2,500,000 per annum additional to whatever income they have from our present social services. The fact that it does that, that it will help to brighten the lives of the weak and helpless members of the community will, I am sure, commend the Bill to all Parties in the House.
Much, however, remains to be done before we can regard our social services as adequate to the requirements of our people and no time must be lost in bringing before the House measures designed to lift our social services to a plane of which we can feel proud. When this Bill has been passed by the Oireachtas I hope to concentrate upon the production of a comprehensive scheme of social services. With this Bill out of the way and in operation, the comprehensive scheme will be tackled with earnestness and expedition, and I hope the House will have the opportunity in the course of a few months of seeing the White Paper in connection with that scheme. I would take this opportunity of bespeaking the support of the House, not merely for the purposes that have been brought before it, but for a warm endorsement of the long overdue provisions of this Bill.
