asked the Minister for Social Welfare the percentage increase in social welfare payments that would now be necessary to bring the purchasing value of these benefits to par with their value a year ago; and the percentage increase necessary to keep up with the expected increase in the cost of living in the year ahead.
Ceisteanna—Questions. Oral Answers. - Social Welfare Payments.
74.
An increase of approximately 2 per cent would be required to restore the purchasing power of these payments to the level of a year ago. I wish to point out, however, that by reason of the large increases in payments made under the two previous budgets of the present Government beneficiaries are much better off than they were before the Government took office. Moreover, the increases of from 21 to 23 per cent to apply from April next—nine months after the previous increases were granted— will not only compensate for increases in living costs since July last but will further improve the position of beneficiaries in real terms. Furthermore beneficiaries will have their payments increased from October next, this step representing an innovation towards overcoming the problem of erosion of the purchasing power of social welfare payments.
For reasons that will appear from the reply given by the Minister for Finance to the Deputy's question about the expected increase in the cost of living in the year ahead I cannot give any figure in response to the second part of the question.
Seeing that the cost of living increased by 20 per cent last year and that the Parliamentary Secretary last week would not hazard a guess as to what it is likely to be this year, could we presume the increase will not be less than the increase last year? Would he not, therefore, agree that a 45 per cent compound increase would be necessary at the end of this year to compensate for the increase in the cost of living?
I would not accept the figure, and I am sure the Deputy has no reason to believe that inflation would be to the extent of 45 per cent. Social welfare services have been vastly improved in the last three budgets, and perhaps the Chair will allow me to give one example. The combined increases granted in the 1973 and 1974 budgets represented rises for contributory and non-contributory old age pensioners of 37 per cent and 42 per cent, respectively. In the 18 months since the Government granted the first of these increases the cost of living, as measured by the consumer price index, has increased by 26 per cent. Therefore, I do not think anybody can say but that the Government have, since they came into office, more than compensated not alone the old age pensioners but the other categories, for the cost of living. Furthermore, the innovation of a review and, I suppose, an increase next October is something that will keep these people in line with, if not ahead of, any increase in the cost of living.