Social Welfare (Amendment) Bill, 1956—Second Stage.

Minister for Social Welfare (Mr. Corish)

I move that the Bill be now read a Second Time. The Minister for Finance in his financial statement on the 8th of last month announced that the Government had decided to increase the rates of the benefits which are paid from the Social Insurance Fund and that legislation to give effect to this decision would shortly be introduced. This Bill represents the legislation referred to. It is a short Bill and one which does not require much explanation.

The benefits payable from the Social Insurance Fund which are paid at weekly intervals and which it is proposed to increase are: disability benefit; unemployment benefit; widows' (contributory) pensions; maternity allowance. In each of these benefits the normal rate of payment is at present 24/- per week with, in the case of disability benefit and unemployment benefit, an increase of 12/- per week for an adult dependent and 7/- per week each for one or two children. A widow in receipt of a contributory pension also receives an additional 7/- per week each for one or two children.

The standard weekly rate of 24/- for each of the benefits I have mentioned is being increased to 30/-. The additional 12/- per week for an adult dependent will become 15/- per week and the additional 7/- per week for each of one or two children will become 8/-. A man with a wife and two children who, at present, if unemployed or ill receives 50/- per week, will, when the new rates come into force on the 3rd September next, receive 61/- per week. A widow with two children who, at present, receives 38/- per week, will, after 7th September next, receive 46/- per week. A woman in receipt of maternity allowance who, at present, receives 24/- per week, will, after 3rd September next, receive 30/- per week.

These increases will do much to alleviate the position of the sick, the unemployed and the widowed. No doubt many Deputies would wish to have the benefits increased by larger amounts, but the increases actually being provided will cost over £1,500,000 per annum of which just over £1,000,000 will be provided by increases in the present rates of contribution. The additional burden on the Exchequer will, in a full year, be just over £500,000 per annum.

In order to provide the amount needed from contributions it will be necessary to increase the man's ordinary contribution from 4/8 per week to 5/6 per week, which means that the employer and the employee will each pay an extra 5d. per week. The contribution for an agricultural worker will go up from 2/6 per week to 3/2 per week so that the employer and the employee will each pay an extra 4d. per week. At its increased rate of 3/2 per week this contribution still represents very good value for money in the way of benefits provided in return for the contribution paid. The woman's ordinary contribution will go up from 3/4 to 4/1, the employer paying an extra 5d. per week and the employee an extra 4d. per week.

The small increases arising under this Bill in the amounts payable as contributions by employers and employees should not, I think, meet with objection when the increase in the benefit rates is remembered. The important part which the social welfare benefits play in providing income for the workers in times of difficulty may be judged by consideration of the amounts which will be paid out annually in the benefits to which this Bill relates after the increased rates come into operation. These amounts are:—

	£
Disability Benefit	3,762,000
Unemployment Benefit	2,359,000
Widows' and Orphans' (Contributory) Pensions	1,827,000
Maternity Allowance	41,000

a total of just under £8,000,000 per annum. Some 92,000 men and women will receive weekly payments of benefit out of this annual sum. A large number of these have wives and children dependent on them. The number of adult dependents is 28,000 and of children 45,800 and the recipients of benefit receive an additional payment in respect of these. The weekly amount which these persons receive from the Social Insurance Fund takes the place of their former earnings in the case of those who are sick or unemployed and of the husband's former earnings in the case of the widows.

It may surprise Deputies to learn that each week 41,500 persons are ill and in receipt of disability benefit. Of these 14,500 at present receive an additional 12/- per week in respect of a wife or other adult dependent and there are 18,200 children of recipients for each of whom 7/- per week is being paid. It is customary to think of sickness as a thing that is over quickly but of the 41,500 persons who are in receipt of disability benefit each week no fewer than 18,000 have been continuously ill for more than a year and a very large proportion of this number will not be able to earn their own living again. I need not say how valuable the weekly sum they receive in benefit is to these unfortunate people and it should be a source of satisfaction to the employers and workers who are contributing to the Social Insurance Fund to know that the money they contribute is put to such good use. They will, I am sure, not grudge the extra few pence per week they are now being asked to pay.

Before concluding I would like to draw the attention of the House to a motion appearing on to-day's Order Paper which affects our social welfare legislation. It may help Deputies if I explain what we are doing in the draft regulation which the House will later be asked to approve. It is in a sense related to this Bill.

Under the regulation we propose to reduce from 50 to 48 the number of paid or credited contributions in a contribution year required for the full rates of benefit. We have found that the requirement of 50 paid or credited contributions is somewhat stringent and we are easing the condition in favour of the insured persons. This easement means that claimants to unemployment benefit, disability benefit and marriage benefit will get the full rates in many cases where only reduced rates would be payable if the requirement of 50 paid or credited contributions remained.

We also propose to amend the method of application of the qualifying condition in respect of unemployment benefit by providing that the rate of benefit applicable at the beginning of a claim will remain unaltered while the claim is in payment and not be liable to reduction or stoppage if a new benefit year supervenes.

Credited contributions were an entirely new feature of unemployment insurance and their value in relation to future benefits does not yet seem to be realised by many unemployed persons. The same problem has not been experienced in relation to disability benefit.

The change is not proposed for persons aged 65 or over. In view of the special provision made for them in the Act in respect of unemployment benefit the present system would be more advantageous to them.

Dr. Ryan

Everybody will agree that insured workers generally have got more since 1952 by way of increases in wages than 6/- a week or even 11/- a week which it is proposed to give in these benefits to a married man with a wife and two children. In fact, the benefits are being increased by roughly 20 to 25 per cent. and it will be agreed that wages generally and the lower salaries of people who are eligible for insurance have increased by 25 per cent. since 1952. Taking it on that standard, the increases that are now proposed are justified and the only doubt anybody could have in mind is as to whether they are adequate or not.

I shall not criticise the proposals at this stage because my Party are not eager to criticise a measure of this kind and, in fact, it will be found that we have never found fault with any proposals put up by another Government where we were not sure of our ground and where we were not prepared, when the Government changes, to put what we proposed into operation ourselves.

We are not, of course, in a position to understand the position of State finance at the present time. We have a fair idea, as the general public have, that things are bad but we do not know how bad and we, therefore, do not know what the Government could afford to do by way of increasing social benefits at the moment. We have, therefore, to take the proposal of the Minister as the best that the Government, in their view, think possible at the moment and we have to deal with these proposals as they are.

I should think that if the Government had not been so extravagant in other lines in the last two years they would have been able to do better for social services just now but that is over and done with and cannot be helped at the moment.

We all know—I have had experience myself of people whom I know around my own place—that men, especially married men with families, who are trying to exist at the present time on benefits derived from unemployment or sickness are not able to make ends meet. Almost all of them, or, at least, very many of them, have to make an appeal for home assistance. In my own parish quite recently, I heard an appeal being made for increased subscriptions to the St. Vincent de Paul Society. It was pointed out that, in particular, those who were in receipt of social welfare benefits at the moment were sorely in need of something extra from the Society of St. Vincent de Paul. Any of us could realise that, at the moment, it would be very difficult for a man with a wife and children to make ends meet on 50/- per week. The question as to whether he could make ends meet on 61/- a week appears to me to be very doubtful. However, we have to take the Minister's proposal and we have to take it that it is the best that the Government can suggest at the moment and we have to agree, at any rate, that these benefits should be given.

When I was in charge here of the Social Welfare Bill in 1952, I was pressed by the Labour Party, in particular, to do better. I am surprised at the absence of the Labour Party. I was going to suggest to them that, if they are not satisfied with the present Bill, they are in a very much stronger position now to look for more than they were in 1952, because they complained at that time that any suggestions they made were voted down and that, therefore, they got nowhere with suggested improvements. As far as I can make out from studying the figures supplied by the Minister some time ago, the benefits paid over the past three years or so amounted to somewhat under £7,000,000 to the social insurance classes, that is, of course, apart from social assistance. I gathered from the Minister's statement that he anticipates the benefits paid out under this Bill will be about £8,000,000. That would appear to be about in proportion.

The amount collected from contributors was somewhat over £5,000,000. According to the Minister's statement, the contributors will now pay in about £1,000,000 so that they will be paying in over £6,000,000 which, I think, is fairly well in proportion to how matters stand at the moment. One interesting thing I gathered from these figures is that the amount paid in by way of stamps has remained almost constant over the past three years. For that reason the Minister is able to make fairly firm calculations with regard to the trend of the amount to be derived from increased contributions and the amount that will probably be paid out in increased benefits. We may take it that the Minister's statement is accurate and that the contributions he now asks for will be necessary in order to pay out the increased benefits.

I have two points to raise by way of criticism or by way of question—perhaps, I should not say criticism because the Minister's explanation may be enough to satisfy my mind on these points. In the first place, I notice the increased contributions come into operation on 3rd September. When the 1952 Bill was coming into operation it was making fairly substantial changes in many ways and I was urged very strongly at that time, I remember, to try to make the changes in contribution coincide with the contribution year.

It may be going too far to ask that because I do not think it would be fair to ask the Exchequer to sacrifice four months' income but at least the Minister might consider whether it would be possible to operate the change as from the 1st October because I am afraid that many people in purchasing their stamps to stamp their cards may make a lot of mistakes when it comes in at a date like that fixed. They may buy the old stamps which will be of no use to them when the new date comes in. I do not know whether it will be possible to recoup them if they make a mistake of that kind and trade in the old stamps, unused, for new stamps by paying the difference when 3rd September comes along.

I should like if the Minister would give me some information as to whether he gave any thought to the matter of the date on which the increased contributions come in. It is not at all necessary to make the date of the increased contributions coincide with the date of the increased benefits. We all know there is no great trouble about giving increased benefits. Everybody will be glad to get them and the sooner they get them the better. If the Minister makes an Order that increased benefits will take place on the 1st September, as far as I can see everything will flow fairly smoothly. If a mistake is made in paying the old benefit instead of the new one, the recipient will see that the mistake is rectified as quickly as possible. It is the contributions that may cause some trouble. I think it would make things run much more smoothly if the increased contributions came in on the 1st October instead of the 1st September.

A second point I want to raise concerns the matter of voluntary contributions. It is proposed in this Bill to raise the voluntary contribution from 1/6 to 2/-. That is the biggest increase in all the contributions. I presume that being out of line with the other increases the Department has advised the Minister it is necessary to make a bigger advance there than in any of the others. I would like, however, to be very satisfied on that.

We know it is a difficult matter to say at this stage what the voluntary contribution would be because the scheme as it was envisaged, when the 1952 Act was being enacted, was that as far as sickness and unemployment were concerned, it would be payable roughly on a year to year basis. In other words, if the contributions were falling off, then after a year or two the contribution would have to be increased and if the contributions were higher or paying a higher proportion of the benefits than had been anticipated, then it might be possible, after a year or two, to reduce the contributions, the aim being to balance the books from year to year.

This matter of the voluntary contribution is quite a different thing because you have people paying in this voluntary contribution who have gone out of insurance, people who have been insured because they were within the income limit of £600 a year. A person who earns less than £600 a year must be insured; if he goes above that amount, he is no longer liable to insurance under the Social Welfare Act, but he may, if he wishes, continue on voluntarily. Up to this if he did decide to continue voluntarily he had to pay 1/6. That is being made 2/-.

He may go down in salary again and then he goes back into insurance again. He has the advantage of coming into full benefit quicker than if he had gone out and come back again as a new insured person. Apart from that, very few men expect their salaries will be reduced at some future date. They always have the hope that rather will they go up or at least remain as they are. They subscribe to voluntary unemployment insurance mainly for the purposes of the widows' pension.

A man may be married or he may be about to be married when he goes outside the insurance limit. He decides to contribute voluntarily so that his wife, if she becomes a widow, will have the contributors widows' pension. It is very good value so far as he is concerned. There is no doubt about that but I should like to know whether there has been any actuarial investigation—it is an actuarial matter, depending a great deal on the future rather than on the present—of this voluntary insurance fund, whether it is actuarially sound or not and whether the Minister thinks he is justified in making a very substantial increase in contribution without some further experience than we have had up to the moment. I must say that a 2/- contribution appears to me to be rather heavy for the benefit of a widow's pension alone, without anything else.

Mr. Corish

The Deputy will agree that it puts them automatically into the middle income classes for the purpose of the health services.

Dr. Ryan

They get that benefit I admit, but that does not matter in regard to the Social Welfare Fund. The point I was about to make was that the ordinary contribution will now be 5/6. The full contribution now will be 5/6. That will cover unemployment, sickness and contributory widows' pension. Two shillings appears to me to be a very high proportion of the 5/6 to cover the widow alone. That is why I think the Minister should have the matter further investigated before the Bill finally passes to see if it would not be possible to make that contribution somewhat lower.

There are certain occupations where there is no danger of unemployment such as, let us say, the Civil Service. The railways used to have that privilege, that is, that there was no prospect of unemployment and therefore they did not have to pay unemployment contributions. I think they are not in that class now. However, there are classes, such as the Civil Service, where there is no danger of unemployment and where the sickness scheme they have is better than the social welfare scheme. In a case like that, these people are bound only to insure themselves for the widows' pension—that alone and nothing else. It is not voluntary in their case: it is compulsory. The only benefit they can ever hope to get from this payment is a widow's pension.

It is only fair that the young men in the Civil Service should contribute to the widows' pension scheme because most of them get married and some of them will die and leave widows. However, on the woman's side of the Civil Service, they have, as it were, to run two risks. First, they must run the risk of getting married and, secondly, they must run the risk of becoming a widow before they can benefit. They say that the risk is remote in their case. They point out that maybe they will never get married, in which case they cannot become widows, and that, even if they do get married, they may never be widows. They complained very bitterly to me that it was unfair that they had to pay at all and they pointed out that, if they did pay, it should only be a very nominal amount. When I was in office, I gave them an undertaking—I know it is one the Minister would honour—that as soon as possible we would have the finances examined and reviewed and that if the review showed that they were paying too much for the risk, then the contribution should be lowered as far as they were concerned. I should be glad if the Minister would take a note of that point—I do not expect that he will be able to give me an answer now—and see if anything of that kind can be done.

In my view, the Bill is justified. The only doubt one can have about it is whether, in all fairness, we are going far enough to give benefits to people who obviously need them very badly because the amount coming in to them during unemployment or sickness is extremely low in present circumstances.

Seosamh Ó Cinnéide

Tá rud amháin mar gheall ar an mBille seo go mba mhaith liom cur síos a dhéanamh air. The Minister referred to the fact that he was cutting down the number of contributions necessary for benefit from 50 to 48. I should like the Minister to examine the cases of sickness beneficiaries whose benefit was cut down in the immediate past because of a shortage of a couple of stamps. I know of one case where there is a wife and a couple of young children and where there was a shortage of some stamps. Other cases crop up now and again. I should like very much if the Minister would look into these cases and see if there can be some retrospection in the matter or, at least, to give the full benefit from now on.

Mr. Corry

I am concerned with only one aspect of this Bill. I might say that when I read the Order Paper today I came into this House with high hopes, but these hopes sank very quickly by the time I had heard all the Minister had to say.

Some 12 months ago, or longer, I called the attention of the Minister to the position as regards the contributions of share fishermen. He was kind enough on that occasion to promise that he would go into the matter. In reply to a question about three weeks ago, he told me they had finished their investigation—

I think I could help Deputy Corry on this in about one sentence, as I made a promise to him to make a decision on it this last week. I must apologise, because it was not possible to do it by this week; but I can give him a definite guarantee that I will give him a decision in a week or two. I did try to do it, but I found it was impossible.

Mr. Corry

That satisfies me.

Mr. Desmond

I have very little to say on this measure, except that we of the Labour Party are very pleased that the Minister for Social Welfare has moved in this direction, a direction which we believe is the right direction. It is quite true to say that for the past few years many unfortunate widows were disappointed because they came into a certain category, and when widows' pensions were being increased, they thought it meant all widows' pensions. Unfortunately, they were at the wrong end of the stick so far as the financial advantages of these increases were concerned. We are glad that even at this late stage they are benefiting.

I do not understand the point mentioned by Deputy Dr. Ryan about a young lady who may consider that the premium is too high because she may not marry, and, if she does, she may not become a widow. I imagine in most of those cases that, should it happen that she becomes a widow, she would receive a widow's pension herself, if her husband had been in employment. We in the Labour Party should be most pleased to see these benefits given to people with as little financial liability as possible placed upon them, but we must understand that when it comes to providing benefits for these unfortunate sections—the people concerned in this Bill—whether we like it or not, the finances must be secured. While each and every one of us would agree, I suppose, that the premium should be as low as possible, in this particular instance, the premiums are going to benefit people who may be placed in a very unfortunate position in life, and I believe it is one case in which the question of premium undoubtedly should not be placed above the benefits that will accrue to those people who, of necessity, must depend on these benefits. I sincerely hope that this measure will get a speedy passage and be put into operation at the earliest moment.

Mr. Bartley

There is one matter to which I would like to refer. It is the obligation which falls on certain categories of employers to pay both sides of this contribution. They complain that they should not be asked to pay increased contributions for increased benefits. The suggestion is that if the Minister and the State decide to give certain very deserving classes increased benefits, from now on these should take on the character of assistance rather than insurance benefits. I do not know exactly how the Minister might produce a sort of hybrid scheme with features of benefit and of assistance in it, but I think the Minister knows, in any event, that a very large number of employers of domestic servants pay the entire contribution. I understand that the employers of a considerable number of agricultural employees also pay the full contribution and, of course, there is the well-known objection on the part of very large numbers of workers or classes of workers who never draw any benefit.

I think that side of the question should from now on be given attention by the Minister, and if, for any reason, the purchasing power of money drops, compensation for it might be devised without imposing hardships on those small employers who are very badly able to meet it. I do not know exactly what the value of the pound is now in relation to the 1938 situation; I have heard the figure 6/6 mentioned within recent weeks. Whether it has dropped as low as that or not, I do not know, but if it has, I think the increases will just about restore the purchasing power of the former amounts.

Mr. Corish

Fortunately, there is not very much for me to reply to in this debate and I might say that if other measures introduced in the House were approached in the same constructive way—I might say, affable way—as this was approached by Deputy Dr. Ryan, as far as the Opposition is concerned, and by other members, we would have much happier results and we would get through business much more quickly. I must confess I did have suspicions about Deputy Dr. Ryan when I saw the array of questions he had down last week and I thought we would have a verbal battle here as to who did what and who gave most in respect of social welfare during the terms of office of the various Governments. That fortunately has not been his approach, and I think all of us must agree that, as far as the recipients of welfare benefits are concerned, any form of State assistance that the State can provide should be provided for these people.

Deputy Ryan's only misgiving about this measure is that the increases proposed may not be adequate. In that connection, I should like to say that this is the largest percentage increase that has ever been given in respect of the insurance group of benefits. It is strictly in accordance, I might say, with the increase in the cost of living and, in cases, it is even in excess of that, since the existing rates were introduced. The first time these benefits were mentioned—I will not say implemented for the present—was in the Social Welfare Bill introduced in this House, I think, at the end of March, 1951, when the cost-of-living index figure stood at 109. At the present time, it is 134, a difference of 25 points. Perhaps it does not represent a difference of 25 per cent., but these increases in the main that I have proposed are allowing for an increase in benefit from about 21½ per cent. to 25 per cent., so that I would suggest that the benefits offered are not ungenerous.

I will not say that they are adequate from the recipients' point of view, especially in the case of those who have families to keep. As Deputy Dr. Ryan mentioned that many of these recipients have to have recourse to local authorities, might I mention this? I think he will agree, and that many people will agree that local authorities as regards assistance given to people who deserve assistance, to people who are in receipt of State benefit, are not, to say the least, over generous. The State has a certain obligation towards people who are sick or unemployed, towards widows and orphans. The local authorities, too, should realise that not only have they a moral obligation but a legal one as well where it is necessary and desirable to come to the assistance of people whose incomes are not adequate for themselves and their families.

Deputy Dr. Ryan asked me a number of questions. He suggests that while the benefits might be increased from the 3rd September, it might be desirable not to increase the contributions until, say, the 1st October or some date after that. He puts forward some reasons as to why that course should be adopted. For example, he says that some employers might have some stamps on hands on which they would not be able to get a refund. I think I am safe in saying that all such employers would get a refund for such stamps. He also suggested that some employers might not have had sufficient notice of the proposed changes. I could not agree with that because on the 9th May, the terms of this Bill were announced practically in detail so that employers will have had four months' notice by September 3rd.

It was also mentioned by Deputy Dr. Ryan that there are several cases of voluntary contributors affected. He wonders why the increase should be from 1/6 to 2/- per week. As I have already said, though it is not entirely related to the fund into which that contribution went or to the Social Welfare Act, I think the contributors get good value for the 1/6, and that they will still get good value for the 2/-. A factor that should be mentioned is that there is no legal compulsion on voluntary contributors to contribute the 2/-. Under certain conditions they may decide to opt in or out. They are entitled to become members of the middle group for the purposes of the health services.

I know that Deputy Dr. Ryan and other members of the House have been concerned about female contributors— that is, female employees who are compelled to contribute for the purposes of widows' and orphans' pensions. It has seemed to me also that possibly the contributions expected of those people are a bit heavy in view of the limited benefits they may obtain. In fact, I think it is unlikely many of them would get any benefit at all. However, if Deputies look at either Section 3 or 4 of the Bill, they will see it gives me power to make the regulations which might rectify the situation about which Deputy Dr. Ryan complains. I might say that the Bill does not commit me to waive the contributions entirely, but it does permit me to make the necessary changes providing for the reduction of the contributions or for the waiving of them in certain circumstances.

Deputy Kennedy mentioned those who are in receipt of disability pensions or, to be more precise, those in receipt of reduced amounts because of the fact that they have not a sufficient number of contributions in one contribution year. If he looks at the motion to be introduced he will see it gives me power by regulation to effect certain changes. He will see that those people who are now in receipt of reduced benefits, if they get the necessary number of credits—48 credits—can, in the next qualifying year, receive the full benefits if they show they had 48 credits in the previous year. That provides that they now need only 48 credits, whereas, under the 1952 Social Welfare Act, they needed 50.

I think I made a suitable apology to Deputy Corry for the promise I made him the week before last that I would give a decision last week in respect of share fishermen. Unfortunately, it was not possible for me to do so, but I can assure the Deputy that I am concerned about them and that I propose to make a decision. I would not like to give a definite undertaking now, but I hope to be in a position to deal with the matter next week.

Mr. Corry

I am grateful to the Minister for the speed he has shown in this matter.

Mr. Corish

Deputy Bartley raised the question—I am not very clear about his point—of those who draw no benefits at all. I think the point he made was that contributions made in respect of them should be at the reduced rate. All of us should realise that the benefits being paid out, and the increases which will be given from September 3rd next, come from a fund into which roughly 750,000 workers contribute. I cannot say the number of employers who contribute. The State's contribution is roughly one-third. I do not think it is a good argument, in respect of any class of worker, to say their position is fairly secure and that when they are ill their employer pays for them. I think the best argument that can be made against the case put up by Deputy Bartley is in respect of motor-car insurance. I have owned a car for ten or 11 years. I have paid my premium each year and I have not drawn a penny.

Mr. Bartley

That is the principle which is accepted. Surely there must be a limit to continual increases in contributions? There is a large volume of opinion which suggests that there must be a limit to continual increases in premiums. The principle cited by the Minister is in all insurance, but there are various categories of employers who, as the Minister knows, pay both contributions.

Mr. Corish

I think if we accept the principle that there should be a limit to premiums, we should accordingly accept the principle that there should be no increase in benefits. We would upset the whole principle of the scheme of social welfare if we attempted to make changes like those Deputy Bartley suggested.

Question put and agreed to.

Dáil Éireann debate - Tuesday, 12 Jun 1956

Social Welfare (Amendment) Bill, 1956—Second Stage.

Dáil Éireann debate -
Tuesday, 12 Jun 1956