I move that the Bill be now read a Second Time.
As Deputies will have seen from the explanatory memorandum, the Bill includes the provisions necessary to implement the decision announced by the Minister for Finance in his Budget speech to increase the rates of non-contributory old age, blind and widows' pensions and the personal and adult dependant rates of unemployment assistance for persons with no means. In addition, I have found it possible to include two important changes in the Social Insurance Scheme—the modification of the contribution conditions for widows' (contributory) pension and the extension of unemployment insurance to cover women employed in private domestic service and in agriculture. There are also a number of provisions dealing with miscellaneous improvements in the social insurance and social assistance schemes.
Although the Bill is not very long, the explanatory memorandum circulated with it is necessary to elucidate the effects of its provisions, which must of necessity be largely drafted by way of reference to existing legislation, a method which unfortunately can lead to a considerable amount of obscurity in the text. I trust that Deputies will have found the memorandum useful and sufficiently informative.
The Budget increases are all on the social assistance side this year and I think it only proper that, where resources for improving the social services are limited, the bulk of these resources should be devoted to the most deserving groups in the community. This is in line with the views I expressed here in July last in replying to the debate on the Second Stage of last year's Social Welfare Bill. I intimated then that I hoped, as further moneys became available, to introduce new categories in the means scale, including one for persons with no means and apply a higher rate of pension to them. I feel sure that Deputies will agree that this is the way to get the best advantage from the amount available.
For that reason, the money made available to me in the Budget this year has been devoted mainly to increasing non-contributory old age, blind and widows' pensions and unemployment assistance for persons who have no means, that is, persons whose means on investigation have already been assessed as nil. It is estimated that some 21,000 old age or blind pensioners out of a total of over 112,000 such pensioners will benefit from the increase of 5/- in the maximum rate of pension and that some 6,500 widows out of a total of 22,000 widows will similarly benefit.
The position in regard to unemployment assistance is somewhat different in that the manner of applying the means test to recipients differs from that applying in the case of pensioners and it would not have been possible to apply the Budget increases only to persons with no means without causing a number of anomalies. For unemployment assistance purposes, the existing Acts lay down maximum rates of assistance for the various categories of person and these rates are payable where the weekly means do not exceed 2/- in the case of a person with no dependants or 5/- in the case of a person with a dependant, in other words, the first 2/- or 5/- of assessable means as appropriate are disregarded. The rates of assistance are reduced by 1/- for each further 1/- or part of 1/-of means which the person may have over and above the amount disregarded.
The Government have agreed, therefore, to extend the Budget proposals in relation to unemployment assistance slightly, so that, in effect, every recipient will get some increase. This is being done by increasing the maximum rates of unemployment assistance, both urban and rural, for the various categories by 5/- in the case of persons with no dependants, 10/- in the case of persons with adult dependants and 8/- in the case of persons with child dependants and at the same time, withdrawing the disregard of the first 2/- or 5/- of any means. Thus, the new maximum rates will be paid to persons with no means and these rates will be reduced by 1/- for each 1/- or part of 1/- of weekly assessed means.
The result will be that all recipients of unemployment assistance will receive increases ranging from 10/- in the case of a married couple with no assessable means down to 3/- in the case of a person with no dependants who has means. The increases in rates will also have the usual effect of automatically extending the means limits for qualification for unemployment assistance.
The question of modifying the contribution conditions for widows' (contributory) pension is a matter I have had in mind for some time. The present conditions are quite satisfactory in cases where the husband dies while still insurably employed, even where he may be fairly young, as the requirement of having 156 contributions paid, that is to say, the equivalent of three years paid insurance, and a yearly average of 39 contributions paid or credited over the last three or five years immediately prior to his death, are comparatively easy conditions to satisfy. If they are satisfied—as they are in the majority of cases—the widow gets full contributory pension for life without any test of means. However, they are not satisfactory in cases where the number of contributions during the years immediately prior to the husband's death is low, due, say, to a break in insurable employment for any reason. Similarly, they are difficult to satisfy where a man has a regular but limited amount of insurable employment each year, and is, say, self-employed during the remainder of the year but for one reason or another fails, or is unable to pay voluntary contributions.
A number of cases have come to my notice where there had been a considerable amount of insurance over the husband's working life but not sufficient contributions in the vital three or five years before his death to qualify the widow for pension. It could be argued that the man must have failed, for one reason or another, to exercise his right to become a voluntary contributor and thus to preserve his pension rights but to learn this after her husband's death is of little consolation to the widow, particularly where she knows that her husband had a large amount of insurance in earlier life which in the event is useless to her for pension purposes. I propose to remedy this position in the Bill by continuing the existing requirement of 156 contributions paid but, where a widow fails to satisfy the existing average test, to provide an alternative test under which the average will be calculated over the full insurance life-time, full pension being paid if the yearly average so calculated is 48 or more and reduced pensions being paid where the average is less than 48. This will enable more widows to qualify for contributory pensions either at the full rate or at reduced rates and the extra cost will be met by an increase of 2d in the rates of employment and voluntary contributions.
Some of the widows who benefit by the modification of the conditions may also be entitled to widows' (non-contributory) pension and these will not be paid where the contributory pension is better. Regulations will, however, be made to permit widows to draw the non-contributory pension in lieu of the contributory pension if the rate of non-contributory pension for which they could qualify would be higher, the contributory pension in any such case being paid from the Social Insurance Fund into the Exchequer to offset in part the cost of the non-contributory pension.
The fact that women employed in private domestic service were not insured against unemployment has been the subject of some comment and criticism over the years. I have not been satisfied that a good case exists for such a total exclusion or for the similar exclusion applying to women employed in agriculture. I propose therefore in the Bill to extend the unemployment benefit scheme to include these women by increasing the rates of social insurance contribution payable in respect of them to include some element in respect of unemployment benefit and by permitting the new increased contributions to count for unemployment benefit purposes. Additional conditions for the receipt of unemployment benefit by these women will, however, be prescribed by regulations under existing powers and will have regard to the peculiar conditions of their employment and other relevant factors.
The terms of these additional conditions have yet to be settled but the general intention is to restrict entitlement to unemployment benefit to women with a good employment record over a minimum period of, probably, ten years—possibly with some scaling down of the requirements beyond that point in step with advancing age. The restriction of entitlement to the proved domestic and agricultural worker of maturer years enables the consequential increase in contributions to be put at the low figure of 1/- a week, of which the employer will pay 7d.
The proposals in relation to widows' contributory pension and unemployment benefit for female domestics and agricultural workers both involve increasing the rates of social insurance contributions while other increases in these contributions rates are proposed in the Social Welfare (Occupational Injuries) Bill at present before the Oireachtas. It is necessary for obvious reasons that all three increases in contributions should be synchronised and accordingly the proposals for increased contributions in this Bill, together with the related provisions, will be brought into operation on a date to be appointed by order by the Minister. It will then be possible to ensure that the increases under this Bill and the increases in connection with the occupational injuries scheme will be brought into operation on the same day.
One of the miscellaneous provisions in the Bill is consequential on the increase in the maximum rate of non-contributory old age pension. This is section 13 which provides that a person who is disqualified for receipt of non-contributory old age pension because he is benefiting under the old age contributory pensions scheme may have the option of drawing the non-contributory pension if he can qualify for it and it would be better for him than the payment to him or in respect of him under the contributory scheme. This, of course, can only happen in the combination of circumstances of the person being eligible for the new maximum rate of non-contributory old age pension, having no means, and being entitled to a lesser payment under the old age contributory pension scheme. Where a person opts to receive the non-contributory pension, the amount he would otherwise receive under the contributory scheme will be paid out of the Social Insurance Fund to the Exchequer to help meet the cost of the non-contributory pension. A similar position will arise under the widow's contributory pension scheme in relation to widows aged 70 years or more when the new conditions provided in the Bill become operative. Section 13 is drafted to provide for widows in such circumstances.
The remaining provisions of the Bill involve mainly the tidying up of existing provisions. One of them will enable regulations to be made for the payment of increases of old age (contributory) pension in respect of qualified children to persons other than the pensioners where the circumstances so warrant. This power already exists in regard to the increase of pension in respect of an adult dependant and it is used, for example, to allow payment of the adult dependant's allowance to be made directly to the wife where it is clear that the husband is neglecting her. It is considered desirable that similar powers should exist in regard to the increases of pension payable for children.
Another provision relating to children involves qualified children for the purposes of increases of pension under the Old Age Pensions Acts. These increases are payable at present in respect of children for whom the pensioner is receiving a children's allowance under the general children's allowances scheme and a blind mother is thus precluded from receiving an increase of her blind pension in respect of her children where her husband as head of the household is the person entitled to the children's allowances. It is proposed to permit the blind mother in such a case to receive an increase of her pension for her children. Steps will be taken by regulations to be made under existing powers to prevent the payment of double increases in respect of the same children to both the husband and the wife.
A few cases have arisen recently where widows have lost contributory pension by reason of the default of their late husband's employers in the payment of contributions and I have been advised, in connection with the recovery of lost benefit for the widows that I could not recover more than the net amount of the benefit lost, due allowance being made for the fact that the widow had been paid non-contributory pension. This could apply also in connection with other benefits of the social insurance scheme. I am not happy about this position nor am I satisfied to leave the position such that the employer in such circumstances can evade his liabilities at the expense of the Exchequer. The Bill, will, therefore, make it clear that the amount repayable by the employer in such a case is the gross amount of benefit lost and that, if assistance has been paid to the beneficiary, it will be repayable to the Exchequer either as part of the gross amount repayable by the employer or, if he has repaid the full amount of the benefit lost to the insured person or other person affected, by that person.
Finally, the powers in relation to the making of Orders in connection with reciprocal agreements with other countries on social security matters are being consolidated and expanded to cover all the main social security schemes administered by my Department. This was in part prompted by our ratification of Convention No. 118 of the International Labour Conference which made it necessary to obtain such powers in relation to children's allowances. In addition, the recent agreement with the United Kingdom on social security matters showed the desirability of having clearly defined powers covering the widest possible range of our schemes.
I hope I have been able to add sufficient to the explanatory memorandum to give Deputies a comprehensive picture of the proposals in the Bill and of their effects. It may help Deputies if I summarise the cost of the various proposals in the Bill. On the social assistance side, the total cost will be £694,500 of which the Budget proposals as amplified will account for £674,500. There will, however, be savings to the Exchequer consequent on the modification of the widow's (contributory) pension scheme amounting to some £144,000 a year and this will leave the nett cost to the Exchequer of the proposals in the Bill as £550,500. The gross annual cost of the improvements on the social insurance scheme will be £310,000 in a full year of which £288,000 will be met by the increase in contributions leaving the nett cost to the Exchequer, £22,000 in a full year.
The improvements in the social welfare schemes being provided in this Bill are not as substantial or extensive as those provided last year but they are worthwhile improvements within the limits of the resources available. The Bill is moreover an earnest of the Government's continued interest in developing social welfare services and a continuation of the process of effecting each year such improvements in them as are found possible. I have pleasure therefore in recommending the Bill to Dáil Éireann.