Dáil Éireann debate -
Thursday, 2 Mar 1961

Vol. 186 No. 8

Committee on Finance. - Vote 56—Social Insurance.

Minister for Social Welfare (Mr. MacEntee)

I move:

That a supplementary sum not exceeding £412,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1961, for payments to the Social Insurance Fund (No. 14 of 1950 and No. 11 of 1952).

This Estimate is concerned with the Exchequer contribution to the Social Insurance Fund. As Deputies are aware, the Exchequer makes good, through Subhead A of the Social Insurance Vote, the amount by which the expenditure of the Fund exceeds its income in any year. The revised estimate of that deficit is now £4,630,000, or an increase of £412,000. The increase in expenditure arises in this way: a sum of £1,040,000 is required to meet the cost of the old age contributory pensions which the House is aware were introduced for the first time under the Social Welfare (Amendment) Act, 1960, with effect as from 1st January last; a sum of £233,000 is required for widows' contributory pensions and orphans' contributory allowances, a sum of £363,000 for disability benefit and a sum of £94,000 for treatment benefit.

This makes a total increase in expenditure of £1,730,000 which has been offset by certain savings and reductions as follows: a saving in unemployment benefit of £237,000; an increase in employment contributions of £950,000 and an increase in investment yeilds of £20,000, an overdraw from the Exchequer made in respect of the Fund for last year amounting to £106,000 which is now available to meet the increased expenditure to which I have referred; and a net decrease under miscellaneous provisions of £5,000. In consequence of these offsetting savings and economies, the net increase in the deficit amounts to the sum which is now being asked for, that is, £412,000.

Mr. Cosgrave

I note from the Minister's speech that the estimated increase in the Social Insurance Fund is a total of £970,000, of which, according to the Minister's statement, £950,000 is attributable to the expected yield from increases in the rates of contribution which became operative in January of this year. I wonder can the Minister say if that is the total sum which will be secured from the increased contributions? As the Minister and the House are aware, the contributions in respect of all categories of employees and employers, industrial, agricultural and domestic, increased very substantially this year. Most of these contributions will be borne by the employers. In some cases, they will be shared by employers and employees and the increase is undoubtedly a very severe burden on many people. I should be glad if the Minister would say what is the total which is expected will become available as a result of the increase in contributions, whether paid by the employee or the employer, which became operative in January.

Mr. Corish

Needless to remark, we have no objection to the Minister's getting this sum of £412,000 for which he asks this morning. I do not know if the Minister has the information with him but I wonder could he relate, for example, the income from increased contributions and the outgoings in respect of new pensions and new benefits to the sums to which the Minister for Finance referred in his Budget speech in April last year when he announced that these new benefits would be introduced. I note here that the additional income to the Social Insurance Fund is estimated at, one could call it, £1,000,000. That, I assume, is for the quarter January, February, March. I forget exactly when the new rates of increased contributions were introduced.

Mr. MacEntee

First of January.

Mr. Corish

I thought it was earlier. There are one or two small matters I wish to mention to the Minister, not so much in connection with these increases or the £412,000 which he now requires, as in connection with the fact that some people are being inconvenienced by the transfer from ordinary old age pensions to contributory old age pensions and especially widows whose husbands died since 1st January. The procedure apparently is this: if a man has been awarded a contributory old age pension, say, from 1st January and he dies in the month of January or February, his widow must then apply for a contributory old age pension. I know that delays have occurred of up to about five weeks. I appreciate very deeply the difficulty which the Minister and his Department have in that regard. It has not been very easy to check up the insurance record of people who were insured 20 or 30 years ago.

An Leas-Cheann Comhairle

Would the Deputy not agree that that is outside the scope of the Supplementary Estimate ?

Mr. Corish

May I respectfully submit that it is something that should be mentioned when the Minister is asking for money ?

An Leas-Cheann Comhairle

It does not arise on this Estimate.

Mr. Corish

The Minister is asking us for money here to pay the cost of contributory old age pensions and I think I am entitled on a Vote such as this to talk about the administration of the scheme.

An Leas-Cheann Comhairle

The Deputy is going outside the scope of the Supplementary Estimate as I have already pointed out. This debate is limited.

Mr. Corish

I do not know what other opportunity I could have of raising it, unless by way of question.

An Leas-Cheann Comhairle

The Deputy would be entitled to raise the point on the main Estimate.

Mr. Corish

I raise it now as a matter of urgency.

An Leas-Cheann Comhairle

Since the matter is not in order, it would not be permissible for the Deputy to enlarge on this point.

Mr. Corish

It is news to me that such a matter would not be in order. The Minister is asking the House to vote £412,000——

Mr. MacEntee

The Deputy may not discuss the whole administration on a Supplementary Estimate.

Mr. Corish

I do not intend to do so. As calmly as possible I merely wanted to draw the Minister's attention to the delays that there are in some cases—I do not say there are very many such cases—where a man dies and where his widow is a beneficiary under the old age pension scheme and she suffers a delay of some weeks in obtaining the 28/6d. That is important to people in the country. I merely bring it to the Minister's notice while appreciating all the difficulties he had in trying to introduce this scheme before the 1st January and I merely ask him to try to devise some different method whereby there will not be these long delays. I do not think that is unreasonable or that I should wait until June or July to bring it to the Minister's attention when people are waiting for their money.

Mr. Sweetman

I should like a little information about this. I am not quite clear about certain matters. I had some questions already down for next week but if the Minister produces the information now it will save me bothering him then. As I understand the situation, apart from the Supplementary Estimate that is really on the Social Insurance Vote, that must have its counterpart on the Social Assistance Vote in a saving by reason of the fact that people have switched over from non-contributory old age pensions to contributory pensions. I should like the Minister to give us an indication of the amount that is there in consequence as an offset to the additional sum he now requires on the Social Insurance Vote. I am not at all clear about it.

Mr. MacEntee

It does not arise on this Vote. This has nothing to do with social assistance.

Mr. Sweetman

I am perfectly aware that the Minister is deliberately trying to hide the other fact. It does not matter in the slightest to me whether the Minister answers it now or by way of Question next week but it is quite material to this Supplementary Estimate to know exactly why the amount is necessary. The amount is necessary because £X that would otherwise be paid on the Social Assistance Vote now comes to be paid under this Vote——

Mr. MacEntee

It is necessary in order to give effect to the decision of the House when it passed the Social Insurance (Amendment) Bill, 1960. Surely we are not going to discuss again the provisions of that Act ?

Mr. Sweetman

Has the Minister finished ?

Mr. MacEntee

Yes.

Mr. Sweetman

Could the Minister restrain himself for the next two minutes so that I may say what I want to say without interruption from him? The necessity for this Supplementary Estimate arises because as a result of the Bill that was passed recently by the House the expenditure of a certain part of the national income will in future be expenditure under Vote 52 instead of under Vote 53. I think I am perfectly in order on this Vote in inquiring how much of the additional expenditure is truly additional and how much of it arises in the switch from the Social Assistance Vote—a simple question which the Minister understands perfectly but which, for purposes of his own, he does not want to answer even at this hour of the morning in a simple way.

The other thing I should like to know is this, and it is material also in relation to the deficiency that there is in the Vote for the current year. I must pay tribute to the Minister's courtesy in circulating to us the draft of this introductory statement. I was glad to note that it was headed "Draft" because he got considerably tired before he came to the end. So far as I can follow this statement it does not explain how much extra is being taken from the pockets of the employers and how much extra from the pockets of the employees by additional stamps so as to counter balance on either side the increase of £2,103,000 that will be there next year and for the balance of this year which the Supplementary Estimate is covering.

I am not entitled to ask about next year's figure at this stage but for the current year I am entitled to know how much is made up out of four simple figures: (1) how much extra employers are going to have to pay in the current financial year; (2) how much extra employees will have to pay; (3) how much extra the taxpayer will have to pay in the current financial year—it will not be the entire extra sum because the fourth figure comes in there; (4) how much is being saved from the Social Assistance Vote ? These are four simple questions.

Mr. Ryan

I rise to endorse what Deputy Sweetman has pinpointed. The Tánaiste came into the House today dressed in sheep's clothing and he was very vexed when Deputy Sweetman took off the sheep's clothing and revealed him as something less kindly. We know from the Book of Estimates for next year that £2¼ million will be saved as the Minister will no longer have to issue the non-contributory old age pensions and, in considering this Estimate, that point should be brought home notwithstanding the efforts of the Minister to conceal it. In fact it would appear that the State is at no extra cost whatever as a result of the increased pensions that have been paid to some people from the 1st January last.

It would appear that the workers of Ireland are paying for what the Fianna Fáil Party is suggesting is their gift to the Irish people. The workers are paying considerably increased amounts week in, week out, and the State has been relieved of a considerable burden because of increased contributions paid by workers and employers each week. It is necessary that that point should be driven home at this stage so that people will appreciate the simple truth, that the increases being given to some are being paid for by everybody. Every worker from the age of 16 to the age of 70—if still working—is paying for the increased pensions now being paid in the hope of getting the sum of £2 per week in 50 years' time when a person, now 20, might retire. The fact is they will have paid in those 20 years far more than any pension they may subsequently draw. It is vitally necessary this should be known, because, while we are most anxious to see contributory pensions schemes introduced, the one the Minister has introduced is no more than an attempt——

An Leas-Cheann Comhairle

It is not in order to discuss details on this Supplementary Estimate. The debate is confined to what is actually in the Estimate.

Mr. MacEntee

We cannot discuss what is or what is not in the Act, and all these fairy tales or fantasies in which Deputy Ryan is indulging are not relevant on this Supplementary Estimate.

Mr. Ryan

The Minister is not as clear today as he was in Sligo-Leitrim last Sunday. The matter is not sub judice now and the Minister can speak out here. Apparently he does not care to do that. The matter is pertinent in that we are asked to allocate sums from the Exchequer for this purpose. Before we approve, it is very desirable that the Minister should tell us what will be coming into the Exchequer in another way to set off this payment. That is what Deputy Cosgrave and I want to know. It is what the people want to know. If the Minister does not tell us, then it is obvious the Minister is hiding something there.

Mr. MacEntee

I am glad to see there is at last a glimmering of economic sense dawning on the other side of the House. Deputy Ryan comes face to face at last with the fact that you cannot go on promising benefits unless you get someone to pay for them. If we are giving increases in all social insurance benefits and introducing a new service of contributory old age pensions, the money has to be found somewhere. How will it be found ? Will it be found at the expense of the general taxpayer ? Deputy Ryan referred to the State. It was a mask to conceal from those to whom his remarks are addressed that in this context they are the State. The taxpayers of this country are the State. The State is only a synonym for the worker on the land, for the small farmer, for the worker in industry, his employer, and eventually the consumer. The real question is whether it is fair and equitable to ask those who are going to secure substantial benefits in the shape of these contributory old age pensions to pay a little more in order to provide the finances required to carry this scheme. Is the man on the land, therefore, who may never get a contributory old age pension, will not get one if he does not become an employed person and so long as he is not in a position to fulfil the insurance contribution conditions, to be made to pay all? Apparently it is the view of Deputy Ryan that a person outside the scheme, a person who does not enter into social insurance at any stage, should be taxed more heavily than he is today in order to pay these benefits. Next time the Deputy is in a rural constituency I hope he will try to defend the proposition he has advanced here today.

Mr. Ryan

The Minister has said all I wanted him to say.

An Leas-Cheann Comhairle

Order!

Mr. MacEntee

With regard to the other questions raised, if Deputies on the other side, Deputies who ought to know better, and particularly a former Minister for Finance, try to initiate a discussion upon another Vote in order to draw red herrings across the trail, I am not prepared to follow their false scent. The House is concerned with one Vote only, Vote 56, dealing with social insurance. The nett position is that while the contribution income will be increased by £4,158,000, the total increase in expenditure on benefits for the year will be £6,637,000. Those are the only figures which are really relevant in this debate.

Mr. Sweetman

There are, of course, other relevant figures, too. The contributions in stamps are relevant.

Mr. MacEntee

That is the contribution in stamps.

Mr. Sweetman

The division between employer and employee.

Mr. MacEntee

No. The Deputy can take it that so far as the broader categories of insured persons are concerned, the employer and employee pay the total contribution in equal shares.

Mr. Sweetman

That will work out even for this broken period ?

Mr. MacEntee

I should hope so. I have not worked out the exact percentage. I could not work out the figures at this stage because I could not possibly determine in relation to the increased total contribution income which has followed since 1st January, how that will be divided as between employer and employee.

Mr. Sweetman

Incompetent as I know the Minister to be, he is not so incompetent that he has not made an estimate.

Mr. MacEntee

What we are concerned with here is not the statistical division as between one category of contributor and another. We are concerned solely with the deficit on the Social Insurance Vote. That is the information I have given to the House. The £412,000 is required to enable the Exchequer to cover that deficit up to 31st March.

Mr. Cosgrave

Did the Minister say the increase in contributions will amount this year to £2,000,000 ?

Mr. MacEntee

I did not say that. I will give the figures again.

Mr. Sweetman

The Minister is dragging in so many red herrings he cannot remember his own figures.

Mr. MacEntee

The increase in employment contributions is £950,000 for the last quarter and the total increase in contribution income is £4,158,000 for a full year. If the Deputy would argue that the £4,158,000 is more than four times the contribution income for the current quarter, I would reply that we expect the present rising trend in the economy to continue and that there will be more people in employment as the year goes on. Therefore, there will be a corresponding upward tendency in contribution income during the coming year.

Mr. Corish

The Minister also gave a figure of £2,000,000. I think he said that is the State's contribution in respect of this particular increase.

Mr. MacEntee

I did not say that.

Mr. Corish

For the year? Would the Minister repeat the figure?

Mr. MacEntee

What I said was that the total increase in contribution income is £4,158,000 for the year. As against that, there is an increase in expenditure on benefits to £6,637,000.

Mr. Corish

Would it be correct to assume that the State's contribution is the difference between £4,158,000 and £6,637,000?

Mr. MacEntee

On this Vote, yes.

Mr. Corish

On the Social Insurance Vote?

Mr. MacEntee

On the Social Insurance Vote, yes.

Mr. Cosgrave

There is a saving on Social Assistance?

Mr. MacEntee

This is the Vote we are discussing.

Mr. Sweetman

I have a Question written out already.

Mr. MacEntee

Put it down. I shall not cloud the issue.

Mr. Sweetman

The Minister is clouding it enough.

Mr. Ryan

The Minister will make a substantial profit out of the increased insurance premiums.

Mr. MacEntee

The net effect of what is being done——

Mr. Ryan

Is a substantial profit.

Mr. MacEntee

——is that under the Social Insurance (Amendment) Act, 1960, 31,000 people will be receiving contributory pensions of £2 per week by 31st March next. In addition, 13,000 of those persons in receipt of contributory pensions will also receive a supplement of 28/6d. in respect of wives or dependent husbands. That is why we have to come here and ask the Dáil to give us this supplementary sum of £412,000.

Mr. Sweetman

If there were not a saving in other directions, the Minister would have to come for a great deal more.

Vote put and agreed to.