I move that the Bill be now read a Second Time.
Deputies will have seen from the explanatory memorandum circulated with the text that this Bill includes the provisions necessary to give legislative effect to the decisions of the Government announced by the Minister for Finance in his Budget Statement of 11th April last in regard to social welfare matters. These were to increase the rates of non-contributory old age, blind and widows' pensions and unemployment assistance, to increase the rates of various social insurance benefits and pensions, to extend the duration of unemployment benefit and to increase the rates of social insurance contributions. In addition the Bill includes a number of provisions aimed at bringing about miscellaneous improvements, extensions and amendments in the existing social insurance and assistance schemes. Some of these changes are consequential on developments and new legislation in related fields, for example, the initiation of training schemes under An Chomhairle Oiliúna and the forthcoming introduction of a redundancy payments scheme; others are the outcome of reexamination of existing provisions such as the amendment of the trade dispute clause in regard to disqualification for unemployment benefit and assistance and the repeal of the special residence or employment test for unemployment assistance in the case of persons moving into certain urban areas.
The Bill is fairly long and, of necessity, it is drafted mainly on the basis of amendments to the existing Acts. This obviously leads to difficulty in understanding and following the amendments which refer to existing provisions of the Acts without giving them in detail. I have had the explanatory memorandum issued with the Bill made as detailed and informative as possible so as to make clear what each amendment really does where the text of the Bill itself is not self-explanatory. I trust that Deputies will find the memorandum of assistance to them in their consideration of the Bill.
The Budget increases on the social assistance side, which it is proposed to bring into operation at the beginning of August next, will provide an extra 5/-a week for all existing non-contributory old age, blind and widow pensioners. It is estimated that some 111,000 persons who are old age or blind pensioners will qualify for the increase and some 21,000 widows. As a result of these increases in the pension rates, it is possible again to extend the scale of means and rates of pension in each case so as to add an additional rate at the minimum of each scale payable to persons previously just outside the means limit for any pension. As a result, the scale for an old age pensioner without a qualified child will be extended to £169 15s Od and a married pensioner with no qualified child could thus have means assessed at £339 10s Od and still qualify for the minimum rate of old age pension. The means limit, of course is raised in respect of each qualified child. The position in regard to widows' pensions is similar.
The rates of unemployment assistance for persons in urban and rural areas are being increased by 5/- a week for the recipient himself. A further 5/-will be payable where there is an adult dependant. These increases in rates of unemployment assistance at the maximum will have the effect of automatically extending the means limits for qualification for unemployment assistance by equivalent amounts, thus making eligible for assistance persons who were previously somewhat outside the limits.
The increases in payments of Social Insurance benefits and pensions will become operative at the beginning of January next and will provide an extra 5/- a week for recipients of disability benefit, unemployment benefit maternity benefit, widows' (contributory) pension and old age (contributory) pension with an additional 5/- a week where an adult dependant's allowance is payable with the pension or benefit. In addition, it is proposed to extend the period over which a person can draw unemployment benefit from the maximum of 156 days at present to 312 days in the case of persons over 18 years, including certain married women. The additional 156 days benefit will be payable at the normal increased unemployment benefit rates for persons who have good records of employment as measured by the yearly average of forty employment contributions paid over the preceding seven years. For those who do not have an average of forty on this basis unemployment benefit will be paid in the additional period at rates equivalent to the increased maximum rate of unemployment assistance payable in urban areas. The cost of the increases in benefit rates in a full year is estimated at £3,016,000, while the cost of the extension of unemployment benefit is estimated at £2,107,000.
In order to meet the cost of these increased rates and extensions of the social insurance scheme, it is necessary to increase the contributions payable by employers and employees. As mentioned by the Minister for Finance in his Budget Statement, the taxpayer in this country is bearing a higher ratio of the cost of social welfare than in other countries, mainly because assistance services, which are financed wholly by the Exchequer, represent a higher proportion of our total outlay. Even in the insurance services the Exchequer bears a higher proportion of the cost than in other European countries and in recent years the proportion borne by the Exchequer has exceeded even the one-third which it was the intention that the taxpayer would contribute to the Social Insurance Fund when the scheme was set up under the Social Welfare Act, 1952. In fact, in recent years the contribution has been nearer to 40 per cent than 33? per cent.
In order to rectify this position the Government have decided that the whole annual cost of the extension of unemployment benefit. £2,107.000, should be borne in full by employers and employees and that employers' and employees' contributions should cover more than two-thirds of the cost of the benefit increases in a full year. The increases in the rates of Social Insurance contributions which it is proposed to make in the Bill will thus be 3/2d a week on the ordinary rate of contribution for men, 1/7d to be paid by the employer and 1/7d by the employee. This will make the rate of contribution in question 18/- a week shared equally by the employer and the employee, to which must be added the 2/1d paid by the employer in respect of occupational injuries insurance. The increases in rates of contributions for other classes of workers will be 3/2d a week, again shared equally by employer and employee where all the insurance benefits are involved with appropriately lesser increases where some only of the benefits of the scheme are covered. A table showing the present and proposed rates of contribution appears in the explanatory memorandum. The increase in the rate of voluntary contribution covering widows' and orphans' pension only will be 4d and will be 9d in the contribution which covers also old age (contributory) pension. It is estimated, on the basis of this year's estimates of expenditure plus the extra annual costs and the expected yield of the increases proposed in contribution rates in a full year, that the Exchequer contribution would still be of the order of 35.8 per cent of the expenditure from the Social Insurance Fund.
The various social welfare schemes are constantly under review and where shortcomings, anomalies or other defects are or become evident, it has been the policy to make whatever amendments and modifications are necessary and feasible each year to improve matters. As in the case of Social Welfare Bills introduced over the past few years, this Bill includes a number of provisions involving miscellaneous changes, some big and some of lesser importance in the various schemes.
One of the more important of these changes is that in relation to the disqualification of persons disemployed by reason of a stoppage of work arising from a trade dispute at their place of employment. At present these people are disqualified for receiving unemployment benefit or assistance irrespective of whether or not they are involved in the dispute. It is proposed in the Bill, at sections 8 and 15, to modify this disqualification which has been the subject of considerable criticism for a number of years. The amendment proposed in the Bill has been agreed with the Irish Congress of Trade Unions on the understanding that the matter will be subject to review. The modification does not, of course, affect the position of the persons who involve themselves in a trade dispute by refusing to pass pickets.
Again, in regard to unemployment, there has been since 1933 a restriction on the payment of unemployment assistance to persons moving from rural areas into certain urban areas unless they can satisfy a special residence or employment test. This test was first introduced to discourage persons from moving from rural areas into any of the urban centres where the rates of unemployment assistance were at that time considerably more attractive. This argument is no longer of significance and the restriction of the free movement of workers is regarded as undesirable in the context of modern thought on the mobility and availability of labour. Apart from this aspect, the Government have accepted a number of recommendations contained in the Report of the Commission on Itinerancy including one that any difficulties in the way of payment of social welfare allowances should as far as possible be eliminated. The special test is one such difficulty in the case of itinerants settling in urban areas and it is now being removed by section 14 of the Bill.
There are, at present, provisions in the Social Welfare Acts which disqualify for unemployment benefit for a period not exceeding six weeks, a person who loses his employment through misconduct or who voluntarily leaves his employment without just cause or refuses an offer of suitable employment or who fails or neglects to avail himself of any reasonable opportunity of obtaining suitable employment. The unemployment assistance code has a similar type of disqualification for up to three months. It is proposed—also in sections 8 and 15 of the Bill—that corresponding disqualifications should apply in the case of a person who refuses or fails without good cause to avail himself of any reasonable opportunity of receiving training courses provided by An Chomhairle Oiliúna as suitable in his case.
Again, on this question of the training courses provided by An Chomhairle Oiliúna, it has been accepted that a person could be injured in the course of such training. These persons at present could not be regarded as being in insurable employment for the purposes of occupational injuries benefit. It is proposed in section 16 of the Bill to provide that unemployed persons attending a course of training provided or approved by An Chomhairle Oiliúna will be deemed while so attending to be in insurable employment for occupational injuries purposes and to be so employed by An Chomhairle Oiliúna, who will pay the insurance contributions required by such insurance.
Two other provisions of the Bill relate to the effect which payments under the proposed redundancy payments scheme, which is at present the subject of legislation before the House, would have on those social welfare payments where there is a means test. In sections 12 and 13 it is proposed to disregard payments under the proposed redundancy payments scheme in the assessment of means for the purposes of non-contributory old age, blind and widows' pensions and unemployment assistance. The purpose of this is to ensure that payments under the redundancy payments scheme will not adversely affect persons entitled to benefit under the various social welfare schemes.
The existing provisions of the Social Welfare Acts in relation to social insurance have been modified by regulations in the case of teachers in national schools, vocational schools and secondary schools who are employed in a permanent and pensionable capacity so that they are insured only for the purposes of widows' and orphans' pensions. Teachers employed in new comprehensive schools established by the Minister for Education are not covered by these modifications and there is no power in the Acts to enable them to be thus excepted from full insurance. It is proposed in section 7 of the Bill to remedy the position and to enable these teachers to be treated for social insurance purposes in the same way as national teachers, vocational teachers and secondary teachers.
The last of the miscellaneous provisions is to remove an undesirable effect which an entry into insurance for the purpose of occupational injuries insurance only could have on a person's title to old age or widows' (contributory) pension. The contribution conditions for these pensions are related to insurance from the date of entry into insurance. Contributions payable during a period when a person is insured for occupational injuries purposes only do not count towards satisfying the conditions for pension and, consequently, if the entry into insurance for occupational injuries purposes were to be taken into account for pension purposes, it could adversely affect title to pension by diluting the effective insurance over a period during which the person could not pay contributions for pension purposes. Section 11 of the Bill, therefore, provides that the entry into insurance for occupational injuries cases only will be ignored for pension purposes and a person shall be regarded as entering insurance for pension purposes on the day on which he first becomes an employed contributor paying contributions which count for those purposes. This, in effect, will restore the position to what it was before occupational injuries insurance was introduced.
I do not think that I need go into any greater detail at this stage as I feel sure that the explanatory memorandum will have given Deputies a very good picture of the proposals in the Bill and of their effects. It might, however, be helpful to Deputies if I were to summarise the cost of the various proposals in the Bill. On the social assistance side, the total cost will be £1,980,000 in a full year. The extension of the duration of unemployment benefit will result in savings on unemployment assistance estimated at some £1,500,000 in a full year but much of this saving will be required to meet the extra expenditure on unemployment assistance arising from the abolition of Employment Period Orders. The gross cost of the improvements in the Social Insurance Scheme will be £5,123,000. Allowing for an increased annual income to the Social Insurance Fund of £4,380,000 to be raised from the increases in rates of contributions, the cost to be met by the Exchequer will be £743,000 in a full year.
I have much pleasure in recommending this Bill to Dáil Éireann and I would ask for a speedy and favourable consideration of it.
