I move: "That the Bill be now read a second time."
This Bill is concerned with the extensions and improvements of the existing social insurance and social assistance schemes for which financial provision was made in the budget. It also includes provision for the abolition of the remuneration limit of £1,600 for social insurance.
Bills such as this which consist largely of amendments to existing legislation tend to be difficult to understand in places and a special effort has been made this year to make the text of the Bill easier to follow than in former years. In addition an explanatory memorandum has been circulated with the Bill to clarify those provisions Which might still cause Deputies some difficulty and to illustrate the effects of others. I hope that, as a result of these efforts, Deputies will have been helped in their examination of the Bill.
As Deputies are aware, the budget proposals provide for a very substantial increase in the rates of non-contributory old age and blind pensions, for a considerable alleviation of the means test and for the reduction of the qualifying age for pension from 70 to 69 years. The maximum weekly personal rate of non-contributory pension is being increased by £1 from £5.15 to £6.15 for those under age 80 and from £5.65 to £6.65 for those aged 80 and over. Because, however, of the significant easing of the means test, whereby the first £4 of weekly means will be ignored, all those existing pensioners under the age of 80 whose existing pensions range between £4.90 and £1.90 will now qualify for the maximum pension of £6.15, while those aged 80 and over with pensions ranging from £5.40 to £2.40 will qualify for the new £6.65 pension. In addition increases of pension for qualified children of pentioners are being raised by 50p a week to £1.65 for each of the first two children and to £1.25 for each further Child.
Thus some 108,000 persons will shortly be enjoying the maximum rates of pensions as against some 21,000 at present. The easing of the means test will also improve the position of existing pensions with pensions of less than £1.90 a week and will not only help to encourage thrift and avoid penalising persons who save towards their old age but will also enable an estimated 10,000 persons who are at present debarred from receiving pension by reason of means to qualify for pension. The reduction in qualifying age will bring several thousand new pensioners into the scheme.
Non-contributory widows and orphans pensions are being similarly improved; the weekly maximum personal rate of pension will be increased by £1 and the first £4 of weekly means will also be ignored. The weekly amounts payable for qualified children, however, are being increased by 65p by the inclusion of a special increase of 15p in recognition of the special problems of such one-parent families. The new maximum rate of non-contributory pension for a widow will thus be £6.15 weekly with £2 for each qualified child.
Taken in conjunction with the existing amounts of annual earnings which may be disregarded in assessing a widow's means, the ignoring of the first £4 of weekly income will give a widow much greater scope for supplementing her income by earnings from either full-time or part-time employment without affecting her title to pension. Thus a widow with no other means and with no children could earn up to £4 a week and still draw a full non-contributory pension of £6.15 a week, while if she had two children she could earn £7 a week without affecting her right to a full pension, including increases for children, of £10.15. A widow with four children will be able to earn up to £10 a week without affecting her entitlement to a full pension of £14.15.
It is estimated that the changes now being made in the means test will enable some 15,600 widow pensioners to qualify for increased pensions and some 3,000 widows not already receiving pension will qualify for pension. I might also point out that reduction of the qualifying age for old age pension to 69 will mean that some 1,100 widow pensioners will transfer over to old age pension thus entitling them to the benefits of the free electricity and free television licence schemes, assuming they meet the other conditions necessary.
The new weekly rates, and the easing of the means test in the case of non-contributory widows pension, will apply also to deserted wife's allowance and to the scheme of allowances for unmarried mothers to which I will refer later. The position of deserted wives is also being improved by some amendments which do not involve legislation but which I am having made in the statutory regulations covering the scheme. These changes will, in particular, considerably ease the position in regard to what constitutes desertion.
In the case of unemployment assistance the maximum weekly rates of payment for persons in urban and rural areas are being increased by £1 in the personal rate, with 50p for the adult dependant and for each child dependant. This will raise the maximum rate for a single person to £5.35 in an urban area and to £5.05 elsewhere; while the rate for a married couple will go up to £9.25 in an urban area and to £8.85 elsewhere. The rates for children go up to £1.65 for each of the first two, and to £1.25 for each additional child. These increases in the rates of unemployment assistance have the effect of automatically extending the means limit for qualification.
Two major changes in the general scheme of children's allowances are being made in the Bill. The first is a general increase of £1.50 a month in the amount for each qualified child. This will bring the monthly amounts up to £2 for the first child, £3 for the second and £3.75 for each additional child. The rate for a one child family will thus go from 50p to £2 a month; for a 3 child family from £4.25 to £8.75 a month, and for a 5 child family from £8.75 to £16.25 a month. The new rates compare favourably with the rates payable under the general family allowances scheme in Great Britain and Northern Ireland, where a one-child family receives no allowance, a 3-child family receives £8.23 a month and a 5-child family £16.90 a month. In the Six Counties and in Great Britain, however, a payment of £4.33 a month is made for each qualified child in a family after the fifth.
The number of families already receiving allowances who will benefit from the increase in rates is approximately 359,000, involving just over one million qualified children. This very high proportion of our population which is under the age of 16, some 33 per cent, is, of course, a factor that weighs very heavily when any consideration is given to improving or extending the children's allowances scheme. The second major improvement being made in the children's allowances scheme is the extension of the qualifying age limit for allowances from 16 years to 18 years where the child concerned continues in full-time education, is apprenticed or is physically or mentally incapable of self-support. It is estimated that some 85,000 additional children will qualify for allowances under this extension.
From the extensive publicity it has already received Deputies will be aware of the proposal to offset the increased rates of children's allowances by a reduction in the tax free child allowances in the income tax code in the case of persons whose taxable income exceeds £2,500 a year. The object of this exercise, popularly or unpopularly known as the "claw back" is the introduction of a measure of selectivity into the payment of children's allowances, and the necessary legal provision is being made in the Finance Bill. I merely wish to point out here that everybody concerned will get the increase in children's allowances, that the recoupment will be slightly less than the full amount of the increases and that it will only be affected in the case of families where the taxable income is more than £2,500, which, in fact, means that the actual income will be well in excess of that figure. I may mention too that in Northern Ireland not only does a "claw back" operate in respect of recent increases in family allowances, but the total family allowances themselves are treated as taxable income.
The increases in rates of pensions and short-term benefits under the social insurance system are similar to those I have outlined for the non-contributory schemes, that is to say, there is the £1 a week increase in the personal rates and 50p for adult dependants and qualified children. In the case of widow's contributory pensions, however, the increase for qualified children is 65p, including the extra 15p provision for children in one-parent families. In the case of retirement or old age contributory pensions the increase for an adult dependant who is aged 69 or over will be £1 a week.
The pensionable age under the social insurance system is being reduced to 69 years. This affects not only the qualifying age for contributory old age pension but also the maximum age up to which the short-term benefits, such as disability and unemployment benefit, can be paid. The reduction in the age limit at such short notice may give rise to some transitional problems in the matter of transferring current recipients of these benefits to pension but I am taking steps to ensure that in such cases payment of benefit will continue until such time as the pension comes into payment. Liability for payment of social insurance contributions will, of course, also cease at 69 years instead of 70 as at present.
The new weekly rates of unemployment and disability benefit will be £6.55 for a single person with an increase of £4.25 for an adult dependant and of £1.85 for each of the first two qualified children and of £1.50 for each further child. This will give a married couple with two children £14.50 a week, and a couple with four children £17.50 a week. The personal rate of widow's contributory pension will go up to £6.60, and the amount payable for her qualified children to £2.15 for each child. Thus a widow with two qualified children will get £10.90 a week as against £8.60 at present and one with four such children will get £15.20 as against £11.60 at present.
In the case of retirement pensions and contributory old age pensions the personal rates go up to £7.20 a week where the pensioner is under the age of 80, and to £7.70 a week if he has attained that age. The amount payable for an adult dependant will go up to £4.65 for one who is under the age of 69 and to £5.15 for one who has attained that age. Thus a married couple both of whom are aged over 69 would get £12.35 by way of weekly pension, or £12.85 if, in addition, the pensioner is aged over 80.
Social insurance benefits and pensions are paid out of the Social Insurance Fund to which employers and insured persons contribute, the Exchequer meeting the annual deficit, which hitherto has varied between 33 and 42 per cent of the total expenditure. To meet the extra cost of the improvements in the social insurance services provided for in this Bill it will, of course, be necessary to increase the rates of social insurance contributions payable by employers and insured persons. Hitherto it has been the practice that employers and insured persons shared their part of the burden almost equally. On this occasion employers are being required to carry a much larger proportion of the extra cost. This is being done partly to bring the basis of financing the social insurance system more into line with the pattern in most other member states of the EEC and partly to take account of the relief in liability for rates which employers in general will enjoy as a result of the budget proposals for transferring part of the cost of the health services from the rates to the Exchequer.
A total increase of 57p in the rates of contribution which cover all benefits of the social insurance system is necessary and I propose in the Bill that this should be apportioned as to 42p on the employer and 15p on the employee. Lesser increases will be imposed Where all the benefits are not covered. However, in the case of female agricultural workers and female domestic workers I have arranged for the making of regulations to remove a restriction on their entitlement to unemployment benefit. This follows a recommendation of the Commission on the Status of Women which I am glad to be able to meet. As a consequence, however, it is necessary to increase somewhat sharply the special reduced rate social insurance contributions hitherto payable in respect of such employees because of their restricted right to unemployment benefit. Thus, while the employees' element in each case is being increased by only 15p. as in the case of other workers, the employers' shares of these contributions are being increased by 45p and 54p respectively.
The new ordinary rates of social insurance contribution will be £2.80 for men. of which the employer will pay £1.62 and the employee £1.18. For women the new ordinary rate will be £2.69 of which the employer will pay £1.57 and the employee £1.12. These rates include the element for occupational injuries benefit but do not include the health contribution of 15p. Neither do they include the present redundancy contributions of 8p for men and 6p for women which I understand the Minister for Labour proposes to increase shortly. I may mention that the 15p health contribution will cease to be payable on the social insurance stamp when the Revenue Commissioners take over the collection of pay-related health contributions from 6th April, 1974.
In line with the improvements in the general social insurance system provided for in the Bill, it is proposed also to increase rates of benefit pavable under the occupational injuries scheme. The increases in weekly rates will be the same as those provided in the general social insurance benefits. It is not proposed on this occasion to increase the weekly contributions to the Occupational Injuries Fund from which the cost of occupational injuries benefits is met.
While it is not in the brief that has been distributed to Deputies, I might point out that, although there will be no increase in weekly contributions under the occupational injuries scheme, the basic rates of injuries benefit and disablement benefit are now being increased from £8.10 to £13.35, and if he has two children from £14.55 to £17.05.
Pensions for widows under the occupational injuries scheme are being increased by £1 a week to £8.60 with an increase of 65p for each child bringing the new payment for children in this case to £2.15 for each child.
The Bill provides two further improvements in the occupational injuries scheme which will be of considerable value to the beneficiaries concerned. These relate to unemployability supplement and constant attendance allowance. In order to qualify for unemployability supplement a disabled person must be permanently incapable of work, but a claimant may be treated as being so incapable if he is unable, due to loss of faculty, to earn more than £104 a year. This figure has not been altered since the scheme commenced in 1967. It has now been decided to increase it to £234.00 a year, thus bringing it into line with the current corresponding limit in the British industrial injuries scheme.
Constant attendance allowance is payable to persons in receipt of 100 per cent disablement pension who require such attendance as a result of loss of faculty. The normal maximum weekly rate of this allowance has been increased from time to time to keep pace with the prescribed relative and old age care allowances under the general social insurance and assistance schemes, and is accordingly now being increased to £3.50. No increase has, however, been made since 1967 in the higher limit of £4 a week which was then provided for cases of exceptionally severe disablement and it is proposed to increase this limit now to £7. This restores the original position whereby the higher limit was double the normal limit.
Provision is also made in this Bill for the abolition of the remuneration limit of £1,600 for social insurance which applies only in the case of non-manual workers. This distinction between manual workers and non-manual workers is a survival from the days when the levels of pay and working conditions of "white collar" workers were greatly superior to those of manual workers. These differences have now largely been eroded and, indeed, the borderline between what constitutes manual work and non-manual work is now very blurred in many areas because of technological advances and developments in skills, as for example, in the field of electronics and computers.
Furthermore, the limit is inflexible and does not have regard to marital condition or family size. Thus a married man with a family earning £1,601 from non-manual employment is not insurable, but a single man in the same employment earning £1,599 is insurable. There is no similar limit in the national insurance scheme in Britain or Northern Ireland or, indeed, in any of the member states of the EEC. Finally, the forthcoming introduction of the pay-related benefit scheme for which the legislation has been enacted and in respect of which the detailed arrangements for benefit payment and contribution collection are now being finalised, is a further strong reason for removing the limit and leaving manual and non-manual workers to be treated equally under the social insurance system.
I am convinced that the proposal to abolish the limit for social insurance purposes will meet with general approval and, if it were not for other considerations, I would seek to have it abolished immediately. However, a person who is insured under the Social Welfare Acts is ipso facto eligible for the limited health services available to members of the middle-income group. Thus, any extension of the coverage of the social insurance system has implications for the health services and just what the full effect of these would be is a matter which is at present under active consideration. The Minister hopes to be in a position shortly to reach a decision in this matter but, in the meantime, it is necessary to secure the legislative authority to abolish the limit for social insurance purposes. The provision in the Bill will do this and will also enable him to bring the provision into operation on a date to be fixed by ministerial order. I am sorry that at this stage I cannot be precise at to when that will be.
The position of deserted wives in this country has been the subject of considerable public interest in recent years. The deserted wife's allowance scheme introduced in 1970 was somewhat of a step into the unknown but experience of its administration since then has brought the problems associated with it into sharper focus. The scheme has helped many families and there are at present some 2,150 allowances in payment. Many difficulties have, of course, been encountered, particularly in regard to the question of what constitutes desertion, but the bulk of these have now been resolved and I am making amending regulations to clarify the position in these respects.
One criticism of the scheme has been that while it equates the deserted wife with the widow, it only does so in relation to the non-contributory scheme which is subject to a means test, and no regard is had for the fact that in very many cases the deserting husband had been insured and, if he had died, his wife would have qualified for contributory widows' pension. It has been decided to remedy this situation by providing a specific benefit in the social insurance system for deserted wives on broadly the same lines as the widows' contributory pension scheme. This benefit will be payable without a means test on satisfaction of contribution conditions by either the husband's or the wife's insurance as at the date of desertion, the fact of desertion being established on the same basis as for deserted wife's allowance under the revised regulations. Any special additional conditions which may be necessary to safeguard the scheme from abuse or fraud will be prescribed by regulations.
I am glad to be able in this Bill to provide for four developments, which are designed to meet recommendations made by the Commission on the Status of Women. The first of these is the introduction of a scheme of allowances for unmarried mothers who keep their children. This will be a non-contributory social assistance scheme and will broadly be on the same lines as the scheme of deserted wife's allowance, particularly as to rates of payment and means levels. We are, however, entering into rather unexplored territory in this matter in so far as my Department are concerned and, accordingly, while the basic conditions are being laid down statutorily there will be power to prescribe detailed conditions by regulation. I propose to use this provision flexibly to ensure that the scheme operates effectively to help the genuine cases and is safeguarded against abuse.
The second development relates to the special condition which requires that in order to be eligible for unemployment assistance widows and spinsters with no dependants must have paid 52 social insurance contributions at the ordinary rate in the four preceding contribution years. It is most difficult for a woman whose main occupation is in agriculture or domestic service to satisfy this condition because she pays special rates of contribution in either of these employments. The Bill will ease the condition by allowing any paid contribution other than voluntary contribution to be reckoned. This will help those widows and spinsters who work in agriculture and domestic service without weakening the control necessary to ensure that persons seeking unemployment assistance are genuinely in the labour force.
The third development, this time in the field of social insurance, is the removal from widows, deserted wives and unmarried mothers who are receiving pensions or allowances as such under one or other of the Department's schemes and who take up insurable employment, of the liability to pay the employed contributor's share of the social insurance contribution. This concession will be worth up to £1.12 a week to the widow, deserted wife or unmarried mother involved as a result of the consequent reduction in the social insurance contribution, and should they become ill or unemployed they will, as widows do at present, be paid the half rate of benefit in addition to their pension or allowance. The employer will, of course, be liable to pay his share of the contribution and these special contributions will count in full for all other benefit purposes.
Finally, also on the social insurance side, I propose to remove a further long-standing source of grievance among insured women workers who marry. At present such women are paid marriage benefit on marriage regardless of how much insurance they may have had before marriage, but are disqualified for disability benefit, maternity allowance or unemployment benefit until they have worked in insurable employment for at least 26 weeks after marriage. The Bill will abolish this disquailification, and also marriage benefit, thus allowing married women to invoke their pre-marriage insurance for benefit purposes immediately after marriage subject, of course, to the normal conditions governing entitlement.
All except three of the proposals in the Bill will come into operation from the beginning of July next. Apart from the proposal to abolish the remuneration limit for social insurance which, as I have already indicated, will be brought in by Ministerial Order, the exceptions are the proposal to ease the conditions for unemployment assistance in the case of certain widows and spinsters, and the proposal to abolish the condition which requires married women to have 26 contributions after marriage, both of which will come into operation at the beginning of October, 1973. Thus the main budget increases will be brought into operation much earlier than in previous years.
This will put a very heavy strain on the resources not only of my Department but also of the other Departments involved, particularly the Stamping Branch of the Office of the Revenue Commissioners, in regard to staff, accommodation, equipment and in getting the essential printing done. I would like to thank the staff there and also in the post offices throughout the country, who will be inundated with work as a result of these provisions, for their efforts to ensure that these payments will be made in time and efficiently. This extra work must be done while the normal day to day work of all the Departments concerned, which cannot be held up, continues. The magnitude of the task will, perhaps, be appreciated from the following figures. We must get a total of 23 million new social insurance stamps at 22 different rates, printed and into stock in post offices before 1st July next. At the same time, it is necessary to get new or revised pension order books into the hands of some 260,000 existing pensioners apart from dealing with the claims of the thousands of new pensioners who will be brought in by the new conditions. In addition, provision must be made for the payment of increased rates of children's allowances to some 359,000 existing families, again apart from the many thousands of new cases which the extension of coverage of the scheme will bring in. Then there are, of course, the new schemes and other changes in the existing schemes to be implemented. I must, therefore, sound a note of warning— while those payments which are made by cheque from head office or in cash at local offices of the Department will be increased immediately the new rates are due, as will also all payments made by way of pension order books or allowance books, there may be some little delay—a matter of a week or two—in getting the new increased rates of children's allowances into payment. In addition, of course, due to the exceptionally heavy pressure of work some isolated individual cases of delays may, not unreasonably I suggest, be expected.
It will, I think, help Deputies to appreciate what this Bill involves in money terms if I summarise the costs involved. On the social assistance side. in which for convenience I include children's allowances, it is estimated that the increased cost to the Exchequer of the proposals in the Bill will be £41.1 million in a full year and £30.68 million in the current year. On the social insurance side, the gross increase in expenditure is estimated at £21.14 million in a full year of which £16.45 million will be met by increased contribution income, leaving £4.69 million to be borne by the Exchequer in a full year and £3.52 million in the current year. These figures are a measure of the impressive achievements in the field of social welfare which this Bill will bring about.
I am proud therefore to sponsor this Bill and I have great pleasure in recommending it to Dáil Éireann for speedy and favourable consideration.
