I move:—
That a supplementary sum not exceeding £1,577,800 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1954, for payments to the Social Insurance Fund (No. 14 of 1950 and No. 11 of 1952).
When the Estimates for the Department of Social Welfare were being discussed in Dáil Éireann in December last, I stated that it would be necessary to bring in a substantial Supplementary Estimate for Social Insurance before the end of the present financial year. That Supplementary Estimate is now before you.
It provides for an additional payment by the Exchequer of £1,568,000 to the Social Insurance Fund in 1953-54 under Section 39 of the Social Welfare Act, 1952. That section provided that the Exchequer would pay into the Social Insurance Fund the amount by which its expenditure exceeded its income in any year. For the year 1953-54 expenditure on the various benefits provided out of the fund and on administration was originally estimated at £7,250,000, of which just under £2,000,000 had to be provided by the State, the balance coming from the contributions of employers and employed persons and from income from investments.
It is now estimated that expenditure of the Social Insurance Fund in the current financial year will amount to £8,500,000, or £1,250,000 more than the original Estimate. In the original Estimate income from contributions was put at £4,750,000. This amount is now estimated at £4,500,000. There is, therefore, a deficit of £1,500,000 to be made good and this amount is provided by the Supplementary Estimate before you.
The amount may seem large but I should point out that the year 1953-54 is the first full year in which the provisions of the new Act were in operation. Owing to the radical changes in the financial structure of social insurance effected by that Act it was extremely difficult to estimate the amounts of the expenditure and the income of the fund when the Act would be in full operation.
In the provision made for expenditure on unemployment benefit in the original Estimate allowance was made for the probable increase in expenditure due to the more favourable conditions for the receipt of unemployment benefit under the new Act; for example, the longer duration of benefit arising from the modification of the contribution conditions, the fact that agricultural workers, who were not previously insurable under the Unemployment Insurance Acts, would be eligible for unemployment benefit, and the further fact that persons who had exhausted some or all of their title to benefit under the old legislation would be able to qualify for benefit afresh.
It was assumed that the altered conditions referred to would result in approximately 10 per cent. of the persons who were in receipt of unemployment assistance immediately before the appointed day becoming entitled to unemployment benefit. In the event, however, it was found that the actual transfer from assistance to benefit was in the neighbourhood of 30 per cent.
Allowance was also made for an increase in the average rate of benefit as a result of the increased rates provided for claimants and their dependents. The extent of the allowance made has, however, proved inadequate, the rate of unemployment benefit being substantially higher than the figure on which the Estimate was based.
These factors, taken in conjunction with the overall increase in the live register in the early part of the financial year — an increase largely attributable to the legislative changes made by the Social Welfare Act, 1952 — have resulted in a very substantial increase in the amount expended on unemployment benefit.
The more attractive rates of disability benefit have resulted in a greater increase in the number of claims than the increase which had been allowed for this factor in the original Estimate. In addition, the inclusion of payments for adult and child dependents of claimants was a new feature of the Social Welfare Act, 1952. At the time of preparation of the original Estimate the short experience of this new feature indicated that about one-third of the claimants would have dependents, whereas present indications are that in the case of men a figure of 50 per cent. is more correct.
In the course of the December debate on the main Estimate I referred to an increase in disability benefit claims which could not be explained as arising from deterioration in the health of the population. Within recent years there has been a steady growth in the number of medical cerficates received and the figures for 1953 are over 50 per cent. greater than those for 1948, though in the intervening five years the number of persons insured has increased by only 2 per cent. I have since taken the matter up with the medical profession and asked them to ensure as far as possible that only those genuinely ill will receive medical certificates. Doctors may contend that there is always an element of doubt as to whether a person is ill or not. There is, however, a well-established procedure for dealing with such cases in the medical referee scheme. This scheme was instituted for the purpose of making available the impartial advice of independent medical referees on questions of doubt as to incapacity and should be utilised fully by the medical profession for the purpose. Again, where a medical certifier is satisfied that an applicant is not ill he should not hesitate to refuse a certificate. In addition he should, in accordance with the procedure laid down for dealing with such cases, notify my Department of the fact. This is most important, as steps can then be taken to ensure that the applicant cannot obtain benefit by means of a certificate from some other source.
I feel certain that, having called attention to these matters, I will have the full co-operation of medical certifiers in ensuring that the social Insurance Fund is not imposed upon. I am also having an examination made by officers of my Department of other steps which may be taken towards the same end, but I should emphasise that the full co-operation of certifiers is the most vital factor in the situation.
As Deputies are aware, men's insurance contribution cards are now surrendered in January and women's cards in July. The men's cards which were surrendered in January of this year covered a period of 15 months, while the women's cards which were surrendered in July of last year covered a period of only nine months. As the sale of stamps is always heaviest at the termination of the period of currency of the cards, these changes in the date of surrender and the period covered by the cards which have been surrendered in the present financial year rendered estimation of the amount which would be received in respect of contributions difficult and resulted in the overestimation which I have already mentioned. I have now dealt with the principal factors which have resulted in the need to provide a further sum of £1,568,000 for the Social Insurance Fund in the present financial year. There are small variations in other items of income and expenditure which have been taken into account but which I do not think it is necessary to enumerate.