I move that the Bill be now read a Second Time.
The Minister for Finance, in his Financial Statement on the 4th of last month, announced that the Government had decided to increase old age and blind pensions, and widows' non-contributory pensions; and he indicated that legislation would be introduced with a view to having the increases made operative from Friday, the 29th July, 1955. The object of this Bill, then, is to obtain legislative authority for the proposed increases.
I do not think it is a Bill which requires much explanation. So far as old age and blind pensions are concerned, the effect is that the present weekly rates—21/6, 16/6, 11/6 and 6/6—will each be increased by 2/6. The number of pensioners who will benefit by these increases is about 166,000 of whom some 6,000 are blind pensioners.
A glance at trends in old age, and blind, pension rates in the past seven or eight years may not be out of place. In 1948 the statutory rates were the same as in 1928, ranging from 10s. down to 1s., but, under Emergency Powers Orders, cash supplements to pension were being paid at 5s. a week in the cities and towns, and at 2/6 a week in the rural areas. In the rural areas the public assistance authorities had power to grant additional supplemental allowances, up to a maximum of another 2/6 a week, to pensioners in necessitous circumstances. Seventy-five per cent of this expenditure was recoverable by the local authority from State funds.
Under the Social Welfare Act of 1948 which was one of the first measures introduced by the inter-Party Government all these supplements were discontinued, and new inclusive rates of old age and blind pensions were provided as from the 7th January, 1949, the maximum being increased to 17/6 a week.
In his Second Reading speech on the Social Welfare (Insurance) (No. 2) Bill, 1950, Mr. Norton, the then Minister for Social Welfare, informed the House on the 2nd March, 1951, that he intended on the Committee Stage of the Bill to introduce amendments relating to old age pensions, which would include raising the maximum to 20s. a week. Before this could be done there was a change of Government, but under the Social Welfare Act of 1951, promoted by my predecessor, the increase to 20s. a week was authorised with effect from 5th October, 1951.
Under the Social Welfare Act of 1952 the maximum rate was increased to 21/6 a week as from 4th July, 1952, to compensate pensioners for the increased cost of food due to the reduction of subsidies.
There is, I think, general agreement that the present rates of old age pensions should be increased to the maximum extent permitted by the financial position of the country. Many Deputies will, no doubt, ask for larger increases than those provided in this Bill and the Government would be glad to grant larger amounts were it not for the fact that even small increases in the rates of old age pensions mean that a large additional sum has to be found. The increase of 2/6 per week now being provided will cost £1,085,000 in a full year. The estimated cost of old age and blind pensions in the current financial year before providing for the increases now proposed is £9,420,000. The annual cost, therefore, when the increased rates are in force will be £10,505,000. This sum represents 2.4 per cent. of the total national income for 1953, the latest figure available. It may be noted that the corresponding figure for Great Britain is 2.5 per cent. so that we are devoting almost the same proportion of our national income to the payment of old age pensions as Great Britain does.
The other recipients of pensions for whom provision is made in this Bill are widows who are in receipt of non-contributory pensions. These number approximately 28,000 and they will each receive an additional 2/6 per week as from the 29th July next. If the widow has one dependent child she will receive a further 1/- per week and where she has two or more dependent children a further 2/- per week in addition to the 2/6 per week mentioned earlier. A widow with two or more dependent children will as from 29th July next receive 36/6 per week as a non-contributory pension if her means do not exceed £52 10s. per annum. The increases in the rates of pension will cost the Exchequer £199,000 per annum and will bring the annual cost of non-contributory pensions for widows up to £1,799,000.
As in the case of old age pensions the first inter-Party Government provided in the Social Welfare Act, 1948, for increases in the rates of widows' non-contributory pensions. Prior to the passing of that Act widows residing in county boroughs received 11/6 per week and those in urban districts 10/- per week inclusive of the cash supplement to their pensions. These two rates were each raised to 14/- per week by the Social Welfare Act, 1948 and rates of 7/6 per week and 8/- per week for widows resident in small towns and in rural areas, respectively, were each raised to 10/- per week.
The rates of non-contributory pensions for widows were further increased by the Social Welfare Act, 1952, under the provisions of which the, maximum pension for a widow with two or more dependent children became 32/- per week. Under the present Bill this figure is being raised to 36/6 per week as from 29th July next, so that the increase in such cases is 4/6 a week.
Deputies will note that taking old age and blind pensioners and widows in receipt of non-contributory pensions together the number of beneficiaries under this Bill will be approximately 194,000. These classes are amongst the most deserving in the community and each pensioner will as from the 29th July next receive an additional sum of 2/6 to 4/6 per week.
