This Supplementary Estimate provides for increases in expenditure on all three sections of the Social Welfare Vote for 1975— amounting to £38,700,000. These increases bring the total sum required for Exchequer spending on social welfare this year to almost £216 million.
The Supplementary Estimate is required to meet the cost of the improvements in the social welfare schemes announced in the 1975 budget and enacted by the Social Welfare Act, 1975, and by regulations made under the terms of that Act. The total increases under the three main headings are offset by some increase in appropriations-in-aid and other savings. Under the general Estimate heading of administration, an additional sum of £1,232,440 is required to cover pay increases, additional staff, increased overtime, higher charges for Post Office services and the increased cost of medical certification.
The sum of £11,428,000 required for social insurance is the additional amount payable by the Exchequer to the social insurance fund to make good the deficit on the working of the fund. The gross cost of the increases in the rates of benefits and pensions and of the other improvements granted under the 1975 Act and subsequent regulations is estimated at almost £27 million. Cost increases amounting to over £17 million arose from a high level of claims, in particular for unemployment benefit, disability benefit and retirement pensions. Against this total additional requirement of £44 million may be offset the increased income from the contributions payable by employers and employees, including the yield from the special increase in the stamp to meet the anticipated calls on the fund arising from the employment situation.
By far the bulk of the additional expenditure provided for in this Supplementary Estimate is devoted to social assistance services. A sum of £26,527,000 is required to meet the cost of the increases in the rates of assistance payments and of other improvements announced in the January budget, and to provide for additional claims for unemployment assistance.
A quite unique element in this Supplementary Estimate is that part of the additional funds sought is required to meet the payment of the increases in all weekly social welfare benefits and allowances which became operative at the beginning of the present month.
The October review of social welfare payments was the practical fulfilment of the undertaking given by the Government in the White Paper on "A National Partnership" published last November. In that document the Government stated their belief "that those who are dependent on social welfare payments should be cushioned against price rises and should also be assured of at least an adequate maintenance of their position vis-à-vis other sections of the community”. To that end, the Government then decided that social welfare payments should be increased in the budget and revised during the course of the year.
In the budget statement of last January, the Government's decision that rates of weekly payments should be increased again in October was announced. The substantial increases provided for in the budget—which, on average, ranged from 21 to 23 per cent—were, in the words of the Minister for Finance "to be preserved against erosion over the course of the year by the further October adjustment. Thereby, social welfare recipients will be assured of the maintenance of the purchasing power of their payments".
The increases made in October range, on average, from 5 per cent to 6½ per cent. The April and October increases taken together raise the weekly rates of all social welfare payments by between 27 and 30 per cent in the current year. Thus a real improvement in the position of social welfare recipients has been achieved and maintained in 1975, in line with declared Government policy. The reduction in the consumer price index in the August quarter, the first for 12 years, further enhanced the value of the increases.
The effect of the October increases is to raise the level of social welfare payments, by comparison with the rates applicable in the spring of 1973, by between 75 per cent and 87 per cent in the case of personal social insurance benefits; by between 78 per cent and 91 per cent in the case of personal social assistance allowances; and by more than 100 per cent in the case of all payments for child dependents. Children's allowances have been raised by between 93 per cent and 360 per cent since 1973.
The total rise in the consumer price index between the first quarter of 1973 and the third quarter of 1975 is of the order of 48 per cent. Thus, there has been a significant real increase in all social welfare payments and the level of these payments has been maintained in relation to earnings in general.
For the first time, therefore, social welfare payments have been increased twice in a single year. This involves a cost in the current year in the region of £4 million and is, in my view, a most significant element in the Estimate before the House.
I want to avail of the opportunity provided by the introduction of this Supplementary Estimate to review developments in the social welfare area and to put forward some views on future policy and directions. This is only the second occasion since the Government took office on which the House has had time available to it for such a review.
When I spoke here on the 1974 Estimate I indicated that it was my desire to initiate study and discussion of major issues of social policy at all levels, and to encourage open and controversial debate on these matters. The fundamental nature of the problems and situations dealt with by the schemes administered by my Department calls for such an intensity of debate.
I must say that I have been greatly encouraged by much of the response. In this House, and also in the Seanad, there have been a number of prolonged and positive debates on such issues as the causes and possible remedies of poverty, the appropriate balance between income maintenance and social services and the financing of social welfare. In the community at large, a great deal of practical work as well as informed debate has been initiated in key areas of concern. All of this is to be welcomed, and this national debate must go on.
There has been also an element of controversy and of criticism. I detect two main types of criticism and would like to comment briefly on them.
There are those who state openly or imply that there is widespread abuse of the social welfare system. It is, for example, suggested that in a large proportion of cases payment of pay-related benefit to unemployed persons results in recipients having larger incomes than when they are working. Other aspects of the system are similarly called into question. Of such criticisms I want to say that the law in relation to abuse of the system—whether by employers who fail to stamp the cards of their employees or by claimants who seek fraudulently to obtain benefits or allowances—is clear. Such abuse is not tolerated and will not be tolerated. Offenders in either category are subject to penalties and the necessary steps will be taken in all cases where proof is available.
I believe, however, that there is a great deal of unfounded and often irresponsible criticism—some of it from persons who might be expected to have some sense of responsibility. This is most disturbing and should be a cause of concern to everyone who is seeking to build an effective social security system. Some of this criticism may result from the pressures of a difficult economic situation and I am aware, from the experience of other countries, that such reactions to improved policies of social protection are commonplace. I must state my opinion that it is more important to provide adequate protection for those who lose their jobs in a period of recession than to court the approval of those who are luckier than their neighbours.
The second line of criticism is of a more philosophical nature. It is said that an attitude of dependence on the welfare system is being created by Government policy. Again, such an attitude may be explained by the effects of current difficulties. But it has a deeper aspect which requires consideration and reply. It must be remembered that the social welfare system exists to provide for the needs of a very large number of citizens of this State who, for one reason or another, cannot provide adequately for themselves. The level of the aid currently provided leaves, in my opinion, no room for complacency on the part of any responsible member of the community. For it is a fact that seems often to be overlooked that social welfare provides for very many more categories of persons than those in receipt of unemployment benefit and assistance—serious though the problems of most of those recipients are.
More than 900,000 persons—adult recipients, adult dependants and child dependants—will benefit from the recently announced rises in rates of benefit and allowance. About 550,000 of these are in categories other than unemployment benefit and assistance. In fact, the largest single category of recipient is that of pensioner—the total benefiting from old age, retirement, invalidity and widows pensions is in the region of 400,000 persons.
Very many of the most important policy developments in the social welfare area have been in relation to pensioners—the easing of the means test and the reduction of the pension age—and to the many groups of persons who are dependent on social assistance because of serious social problems such as desertion, the imprisonment of the breadwinner, unmarried mothers and so on. Improvements in these areas are surely fundamental to any progressive or reasonably humane social policy.
The whole social welfare system, therefore, represents our response, as a nation, to the need and deprivation which exists in our midst. Can anyone seriously deny the responsibility which we have in this matter?
I have referred already to the current economic difficulties which face this country, in common with most of its neighbours and trading partners. These difficulties are obviously deep-seated and their full solution will require the most demanding effort for a considerable period.
The very nature of this Supplementary Estimate, which is providing substantial moneys for payments of unemployment benefit and unemployment assistance, underlines the grave human impact of the economic situation. There are now 32,000 more persons on the live register than at the same time last year. In every one of these cases there is hardship, either in financial terms, or in terms of worry, disillusionment and the loss of self-respect which so often accompanies idleness. The realities of the present situation are very clear to all those engaged in the direction and implementation of policy in the social services area.
It is obvious that the implications of the economic circumstances of the moment for social policy are serious. In a period of worldwide recession, when the stagnation or decline of markets results in at best a standstill in production and national income there are inevitable pressures on public expenditure. When to the effects of recession must be added the impact of severe inflation even greater strains are certain. Quite clearly this is a time for prudence and for restraint and therefore a time for very careful planning of the social services. But it is not—nor will it be —a time for indiscriminate or shortsighted cutbacks.
Resources are limited and, therefore, our room for manoeuvre is restricted. But it is still possible to progress and to develop, especially in relation to the quality of the services we provide. I see the main objectives of policy at this time as
—prudent direction of available resources to ensure the maintenance of the general, progressive momentum of recent years;
—careful assessment of all elements of the services provided to ensure the most effective use of resources and
—systematic planning of the main lines, and of specific detailed areas, of overall policy development for the future.
We cannot act, or think, as if today's economic problems did not exist. Nor can we, whatever may be our analysis of the root causes of the crisis or our prescription for its long term cure, ignore the pressing responsibility to come to the help of those who are now in need because of its impact. The necessary work of catering for the needs of those afflicted by social problems of one kind or another must be carried on, within the framework of the system in which we live and which is the system willed by the majority of the people. The task of identifying the aspects of that system which underlie the present difficulties and which must be dealt with if we are to solve those widespread social problems must also be carried on. A sense of reality, and of balance, is essential.
I intend to return to the general theme of the development of social policy before I conclude these remarks but I now want to deal with the facts and figures which are necessary in order to provide Deputies with a full explanation of the Supplementary Estimate, and also to provide some information about the work of the Department of Social Welfare.
As I have indicated already, the Supplementary Estimate provides for increased expenditure on all three sections of the Social Welfare Vote for 1975. The main details of the increases involved are as follows: the additional £1,232,440 required under the head of administration includes £1,009,000 to meet the cost of pay increases under the 15th- and 16th-round wage agreements, pay revisions to certain grades, additional staff and overtime, due to the heavy workload on my Department, and other items which could not be included in the original estimate. A further sum of £238,000 is required to meet the increased cost of agency services provided by the Department of Posts and Telegraphs and increased telephone charges. There is also an increase of £46,440 in the amount payable to medical certifiers for the issue of free medical certificates to insured persons claiming sickness benefits. These increased costs are offset by a net saving on travelling and incidental expenses.
The sum of £11,428,000 is required for social insurance, of which all but £13,000 represents the additional sum necessary to meet the requirements of the social insurance fund under the terms of section 39 of the Social Welfare Act, 1952. This figure is made up of two main components, namely, variations in expenditure and income of the fund as compared with the original Estimate figures and an adjustment in respect of the State grant as at the end of the last financial year.
The total cost of the increased rates and other improvements which became operative in April and October this year was £26,926,000 while the cost of the increases, due mainly to the high level of claims, amounted to £17,234,000 making the total increased cost £44,160,000. The principal services giving rise to additional expenditure because of increased rates and other improvements are disability benefit, £6,203,000; old age contributory pension, £6,660,000; unemployment benefit, £5,400,000; and widow's and orphan's contributory pensions, £4,842,000.
The main increase in expenditure from the social insurance fund due to the increase in claims was on unemployment benefit. In this respect Deputies will recollect that a special provision of £10,000,000 was made this year to meet the anticipated increase in the cost of this benefit. In the event an additional £1,723,000 has to be provided to meet the continued higher level of claims. Additional amounts are also being provided for disability benefit, £2,516,000; invalidity pension, £858,000; maternity allowance, £521,000; treatment benefit, £672,000; old age contributory pension, £177,000; retirement pension, £1,570,000; deserted wife's benefit, £220,000; and administration costs, £1,036,000.
As to the income side of the fund, increased contributions payable by employers and employees amounted to £29,940,000 while increased income from investments and from receipts from other countries under reciprocal agreements were greater by £96,000, making a total of £30,036,000. After making allowance for a credit of £2,696,000 carried over from the 31st December, 1974, the end of the previous financial year, the net additional payment to be provided by the Exchequer this year is £11,428,000.
As regards the credit carried over as at the 31st December, 1974, Deputies will appreciate that final payments from the Exchequer must be effected at the end of each financial year on an estimated basis because actual figures of expenditure and income are not available until after the close of the year. The actual outturn on the fund for the financial year ended 31st December, 1974, indicated that the sum withdrawn from the Exchequer as at that date proved to be £2,696,000 greater than required. Accordingly the revised Exchequer contribution for the current year as now estimated under subhead E, is being reduced by that amount.
The extra cost of social assistance arises mainly from the increases in the rates of assistance and other improvements announced in the January budget which cost £23,437,000. In addition extra amounts are required for unemployment assistance, £6,214,000; children's allowances, £680,000; and miscellaneous grants, £81,000. These amounts are however offset by savings of £3,209,000 on old age pensions, £340,000 on widow's and orphan's non-contributory pensions, and £336,000 on social assistance allowances, making a net total increase of £3,090,000 due to causes other than the increased rates and general improvements in the services. Thus the total requirement is £26,527,000.
The special provision of £5,000,000 made in the January budget was not sufficient to meet the cost of the high level of applications for unemployment assistance experienced during the year and as Deputies will have noted that this provision was exceeded by £1,214,000.
The increased appropriations-in-aid of £487,440 under subhead M relate to increased administration costs incurred by my Department on the social insurance and occupational injuries schemes and recovered from the social insurance and occupational injuries funds.
As I stated at the outset, the total net Estimate for this year, after taking into account the provisions of this Supplementary Estimate, amounts to £215,964,000. The net Estimate is, as Deputies will appreciate, only the amount which the Exchequer must provide for the social welfare services. A very considerable sum is provided also by employers and employees through their weekly social insurance contributions—both flat-rate and pay-related.
Perhaps the most useful indication that can be given of the cost of our services is the estimate of the total expenditure on these services in a full 12-month period based on current rates of payment. On this basis it is estimated that total expenditure is now running at an annual rate of almost £400 million. This annual rate of expenditure compares with the figure of £167 million in 1972-73, in which year the Exchequer contribution was £92 million. Thus the current level of total spending is almost 140 per cent above that which obtained three years ago.
By comparison with 1972-73, total expenditure on the social insurance services has risen by about 139 per cent; spending on social assistance by over 150 per cent and the cost of children's allowances by about 166 per cent.
I think that these figures very clearly indicate the priority which is being given, rightly I believe, to those aspects of the Department's services which are directed to the needs of the most deprived groups in our society, and particularly to the needs of families. All the evidence points to the positive impact of these policies on the financial position of poorer families.
Total expenditure on the services administered by the Department of Social Welfare has risen, as a percentage of gross national product, from just over 6½ per cent in 1972-73 to approximately 9½ per cent in the current year. This is a most significant indicator of the importance attached by the Government to the improvement and expansion of these services.
I have read certain adverse comments on the apparent discrepancy between the proportion of national resources devoted to the social services in this country and in the other member states of the European Community and feel that it is necessary to say a few words on this subject. The dangers of international comparisons of this nature are well-known to all students of social policy. In this particular case, there is a very real difficulty in establishing the exact comparability of the basic data.
A recent study of social expenditure and the social accounts of the EEC concluded that "care must be exercised in drawing inferences from the comparisons on account of the incomplete coverage of the accounts which, it is felt, is particularly serious in the case of Ireland." To put it quite simply, the figures given for social spending in other EEC countries contain headings which do not appear in our social accounts—such as certain types of public service pension—and which tend to exaggerate the difference between the national figures.
Whatever may be the problems of comparability, it cannot be denied that there are real gaps between the levels of social provision in the various member states and that Ireland has some considerable distance to go before reaching the standards of coverage and protection afforded in some of the more advanced economies. It is necessary to appreciate the nature of the existing differences and to understand their causes, which relate to such factors as the current levels of economic development, the stage of industrialisation, the demographic structure of the national community, and so on. I welcome the steps which are being taken at European level to bring about a genuine concertation of social protection policies and to provide a basis for progressive improvement of the various national systems. The secretary of my Department has become a member of the high-level expert group recently established by the Commission to prepare and expedite work in this area.
I want to turn now to a brief consideration of some of the main current activities of the Department and, in particular, of the principal schemes of social protection. The total cost of social insurance schemes this year will be about £194 million. Of this total, the Exchequer contribution, through the social insurance fund, will amount to £46.6 million. During the year, the rates of payment under the various insurance schemes have been increased by up to 30 per cent. Thus, the contributory old age pension for a single person has been raised from £8.50 to £11.05 and the rate for a married couple, both over the pensionable age, has been raised from £15 to £19.35 a week. The contributory widow's pension has gone up from £7.80 to £10.00 a week, and the personal rate of unemployment benefit from £7.75 to £9.90 a week. The reduction of pensionable age to 67 years in the Social Welfare Act was the latest step towards the declared goal of a pensionable age of 65 years at the earliest possible date.
The duration of pay-related benefit—for unemployment, disability and maternity—was increased on two separate occasions during the current year. The position now is that a qualified person who is sick or unemployed can receive payment of pay-related benefit continuously for almost 12 months provided he or she has an underlying title to disability benefit or unemployment benefit. In this way, the position of persons out of work for prolonged periods due to sickness or to unemployment is being cushioned as far as possible by retaining for up to 12 months a substantial measure of direct relationship between the rates of benefit paid and earnings in general.
I regard the extension of the application of the pay-related principle under the terms of the Social Welfare (Pay-Related Benefit) Act, 1975, and of the subsequent Regulations as an important and progressive development in the overall social protection system. I am keeping the overall working of the pay-related benefit system under continuing review and I shall ensure that any necessary adjustments are made without delay.
The total cost of social assistance schemes provided for in the current year will be about £124 million, exclusive of children's allowances which will cost approximately £46 million. As in the case of social insurance payments, there have been considerable increases this year in the rates of social assistance allowances. Thus, the personal rate of non-contributory old age pension has been raised from £7.30 to £9.30 a week. The rate of urban unemployment assistance has been raised from £6.35 to £8.10 a week for a single person and from £10.95 to £13.95 a week for a married couple. The social assistance allowance for an unmarried mother and her child has been increased from £9.70 to £12.40 a week.
Improvements in children's allowances provided for in the budget mean an overall increase ranging from 93 per cent in the case of the third and subsequent children to 360 per cent for the first child since the 1973 budget which placed children's allowances in an altogether new and more significant position within the social welfare system.
The qualifying age for non-contributory old age pensions was, of course, reduced to 67 years in line with the position for contributory pensions. Consequently, the qualifying age for the free travel, electricity and television licences schemes was reduced to 67 years as from the same date in April last. A further easement of the means test was also introduced with effect from April. This provided for an increase from £5 to £6 a week of current income in the amount of assessed means which can be disregarded for the purpose of the non-contributory pensions and similar schemes administered by my Department.
I estimate that the effect of the progressive reduction in pensionable age, together with the substantial easement of the means test, over the past two-and-a-half years has led to a 30 per cent increase in the number of pensioners, to the peresent total of about 150,000. In the case of non-contributory pensioners the number now in receipt of the maximum rate of pension is in the region of 90 per cent.
A total of £4.446 million has been provided for social assistance allowances. These allowances include those for deserted wives, unmarried mothers and their children, single women aged over 58 years and prisoners' wives. There are approximately 14,500 personal and child dependent beneficiaries of these allowances.
The estimates this year provide for an expenditure of £7.93 million for the various miscellaneous services administered by my Department. These include such schemes as the provision of free travel facilities for all those over pensionable age; the provision of free electricity and television licences, and the school meals scheme. Changes in pensionable age and in the means test rules have led to an increase in the numbers benefiting from the provisions of these schemes. For example, it is reckoned that 9,000 additional pensioners will become eligible for free electricity and 6,500 more licences will be provided under the free TV licences scheme.
The total expenditure of the social insurance fund in 1975 will amount to £194.27 million. Ten years ago, in 1965, the equivalent expenditure was in the region of £27 million. Contributions from employers and employees have risen from about £16 million ten years ago to £144 million this year, including pay-related contributions. The Exchequer contribution to the fund, at £46.6 million, represents approximately 24 per cent of the total expenditure.
Some 945,000 persons are at present covered by social insurance in this country. Of those just over 800,000— or 72 per cent of the workforce—are covered for all benefits. About 110,000 persons in various parts of the public service are insured only for widows and orphans pensions and for occupational injuries. The number of self-employed persons who, with few exceptions, are not covered at all by the social insurance system remains very high—there are approximately 185,000 engaged in agriculture for example.
Consideration of the role of the Department within the overall social programme of the Government indicates a most significant and progressive trend. Total Exchequer spending on social welfare has risen from £92 million in 1972-73 to £210 million in the January budget estimate and, as a percentage of current Government expenditure, has increased from under 14 per cent to almost 17 per cent of the total. Spending on social welfare and health now amounts to approximately 32 per cent of total Government expenditure. This is clear evidence of the importance of social policy in the on-going plans of the Government.
The cost of administering the services of my Department, including Post Office services, is just over £15 million, or 7 per cent of the total Exchequer cost involved. As a percentage of gross expenditure in 1975 administration costs are no more than 4 per cent.
I want, in this connection, to comment briefly on the day-to-day working of the Department of Social Welfare. The total staff of the Department provided for in the Estimates for 1975 is 3,277, including 2,867 officers and 321 clerks to old age pension committees and 84 branch managers of employment offices. The great volume of work involved in the administration of the various schemes continues to give rise to very real pressures on staff and calls for a high degree of patience and commitment. Accommodation problems were eased somewhat during the past year by the occupation of premises at Oisín House, Pearse Street, and at Townsend Street. These new staff locations helped to relieve the overcrowding of Aras Mhic Dhiarmada and permitted better allocation of space in the Department's main building.
Deputies will readily appreciate that the many changes in the rates of payment of benefits and allowances and the introduction of new and expanded schemes involve a great deal of work for the personnel of the Department. The processing of all of this work, including in particular the implementation of the new October review of rates, has proceeded with a high degree of efficiency. The pressures have been great, with much necessary overtime working. I want to pay a very sincere tribute to the staff of the Department at all levels and in all locations for the manner in which they have dealt with the heavy burden of work which has been placed upon them. They have made a ready and enthusiastic response to the Government's attempts to expand and improve the social welfare system. I am sure that Deputies on all sides of the House will join with me in thanking them for their efforts to provide an efficient and humane service. I must also thank the other Departments which have continued to co-operate fully with my Department in its work and must pay a special tribute to the staffs of the Revenue Commissioners, of the Office of Public Works and of the Department of Posts and Telegraphs.
The Department continue to study ways and means of improving the quality of their service to the public. It should be remembered that the total number of social welfare recipients, including personal, adult dependant and child dependent recipients, is more than 900,000. The Department deal with well over 70,000 items of correspondence each week, including claims, medical certificates, queries and general correspondence. There are of course some delays and errors in dealing with such a volume of work. These are sincerely regretted and I repeat what I said in this House last year—that it is recognised that a delay in relation to any social welfare payment, a pension claim or a disability benefit application, can cause real hardship to a man, to his wife and to his children. It is essential that such delays are cut to the absolute minimum.
During the past year a study of the workload of the outdoor inquiry staff has been completed and the recommendations arising from this study will result in a more efficient service. Computerisation and study of the use of the micro-film techniques have proceeded. The organisation and review section have sought to introduce needed changes in the working methods of many sections. Since moving to Oisín House last autumn the children's allowances section, dealing with over 400,000 families, have been switching to a new automated filing and index system which is having a significant effect on efficiency.
In my statement to this House on last year's Estimate I made the point that problems do arise in connection with the making of claims and that these problems frequently occur due to incorrectly completed application forms. A project is under way within the Department to redesign all forms and explanatory leaflets, using all possible visual aids and utilising the simplest possible text. All unnecessary questions are being removed. This project should help significantly in combating delay and the first of the new forms are now in use. The ending of the requirement that application forms should be certified by certain approved categories of persons should also speed up applications in many cases.
The 21 information offices operated by the Department throughout the country are very much appreciated by the people of the surrounding areas. This fact is amply demonstrated by the volume of inquiries received, about 12,000 a month, roughly 80 per cent of these being from people personally attending at the centres. This form of personal contact has obvious advantages over written communication especially where the subject matter is complex—and social welfare legislation is growing in complexity each year—and the clientele quite often has difficulty in dealing with the details of the various schemes. The information officers were asked for their comments on the effectiveness of their own particular centres. Their comments have included the observations that local newspapers have praised their work in some areas; that the elderly are particularly satisfied with the help they are getting in completing their claims; and that the privacy which personal callers to the information centres enjoy is appreciated. Most of the offices have a private interview room for the public.
The Department have continued to mount major advertising campaigns with the objective of making people aware of their entitlements and obligations whenever changes and extensions were being introduced. From the media point of view the main goal was to achieve the widest possible coverage and a special analysis of the effectiveness of the campaigns showed that 97 per cent of the total adult population had an opportunity of seeing the various advertisements and that the schedule adopted provided an average of almost five opportunities of seeing them. This new approach to advertising on the part of the Department of Social Welfare has been widely welcomed by the public. The annual summary of social insurance and assistance services has been widely distributed in response to a heavy demand. A special supplement is available giving details of the October changes in rates. I have already on more than one occasion made clear my concern that the fullest possible information should be made available to all citizens on the social welfare system. The working and the effectiveness of the present methods in use will be kept under continual review to ensure that any necessary improvements will be speedily introduced.
While speaking of information I wish to refer to a major development during the past year which has given me personally a great deal of satisfaction and encouragement. The establishment and formal registration of the first substantial group of community information centres marks a most important departure in the provision of an up-to-date and efficient information service for the citizen. The work of the National Social Service Council in implementing the Government decision to support this new service has been most efficient. As always, the council have succeeded in basing their work on a practical collaboration between the statutory services and local, voluntary effort. I feel sure that this new service will prove to be of immense value to large numbers of people and I am pleased to learn that the National Council are proceeding with arrangements for extending the initial network throughout the country and for providing a first-class, professional back-up service.
The work of the National Social Service Council in informing those engaged in the social services of developments and changes in the various social welfare schemes and in Government social programmes as a whole—through the pages of the excellent periodical Relate—is proving to be most effective and deserves the appreciation of all who are concerned with the citizen's right to know.
In speaking on last year's Estimate in the House, I referred briefly to the issue of the financing of the social services and of social welfare in parfactio ticular. I spoke then of the need to ensure the best return, in terms of genuine social service, for high and increasing levels of public expenditure and of the existence of regressive tendencies in the system of flat-rate social security contribution.
In the current financial year the proportion of total social welfare expenditure borne directly by the Exchequer will be approximately 59 per cent. This ratio is exceptionally high by international standards—only in Denmark among the EEC states is the state share higher.
Contributions to the social insurance fund are made by the employer, the employee and the Exchequer. In the past three years the full weekly cost of the stamp has risen to £4.67 for a male worker and for a female worker to £4.55. This increase has been so shared between employers and employees that the proportion is now roughly 58 per cent from the employer and 42 per cent from the employee. Indeed, the employee contribution has fallen marginally as a proportion of average earnings.
I am conscious that increases of this size in the level of contributions —which are also for many workers accompanied by pay-related contributions—can give rise to considerable difficulties in certain cases. I am also aware of the fact that a basically flat-rate system does give rise to some anomalies. In particular, the stamp is a heavy burden for lower paid workers and for women whose average earnings are very much lower than those of men. It has also been represented to me that the level of contribution can be a problem for certain categories of employer.
Having regard to these considerations and to the overall issue of the financing of the services of the Departments of Health and Social Welfare, which together have a gross expenditure running at an annual rate approaching £600 million, the Tánaiste as Minister responsible for the two Departments has initiated a study of all aspects of this question of financing. This complex job will take some time, but I am confident that the outcome will be a more efficient and equitable system and one which will ensure the continued development and expansion of our social services on a sound footing. This work must also be viewed in the context of the Government's wish to bring the financing of these services progressively into line with those in other EEC countries as the process of concertation of social systems proceeds.
I want now to turn to a brief review of the progress made in a number of areas which I raised for purposes of debate in my Estimate statement last year. I can report to the House that substantial advances have been made across a broad front and that the foundations are being solidly laid for the achievement of the overall objectives laid down for this part of Government social policy.
I have already referred to the extension of the pay-related benefit scheme, and to the initiation of the community information centres project. I want now to report on matters which I consider to be of special importance: the work of the National Committee on Pilot Schemes to Combat Poverty; the reform of home assistance; policy work in relation to pensions and consideration of the special position of the self-employed in relation to the social insurance scheme.
Before the end of next month, it is anticipated that contracts will be signed by the National Committee on Pilot Schemes to Combat Poverty and the EEC Commission for the implementation of three pilot schemes in Ireland as part of the overall Community programme which was approved by the council in July. This will mark the end of the vital period of planning and preparation and the beginning of action on the ground in this series of significant projects of action research.
The period since the establishment of the national committee has been one of very careful development and planning. When I spoke at the first meeting of the committee last year I said that it would "have the immediate responsibility of advising on the organisation of the project, on the appointment of staff and on the location and working objectives of individual projects." The committee has been working hard on these vital aspects of its overall task and I have no doubt, from my contacts with the committee and its staff and from the views of experts here and abroad, that their systematic approach has been correct and that it will pay dividends in the future.
The committee now has a permanent headquarters and a highly qualified professional staff under a director who has set about what is a most demanding job with skill and commitment. The staff, apart from its work in developing project plans, has already established a wide range of contacts at home and abroad which will enable it to work in close collaboration with local and national bodies, and to draw on relevant international experience.
Four projects have been chosen for implementation—three of which will be funded partly by the Commission within the EEC programme and one which will be undertaken by the national committee independently, with its results being fed into the EEC system for purposes of comparison. Deputies have already received details of the individual projects in the committees introductory booklet Combat Poverty which was circulated some time ago. They are both relevant in terms of impact on the ground and significant in terms of research. They offer the hope of early and important contributions to policy on service delivery and uptake; on community development and local community action; on social provision through coordinated effort and on the introduction of new policies. These projects will involve real positive action and will be characterised by a quite radical approach to the identification and tackling of deprivation. Participation will be stressed at every stage.
The committee's statement of basic working principles, quoted in the booklet to which I have just referred, is of great importance. It recognises the deep-seated nature of poverty and its structural implications, reflected in inequality, which will be solved only by long-term reforms. Closely related to this basic concept is the acceptance of the fact that, once started, a meaningful project will become a social process that will not be easily ended or reversed.
In initiating the work of the committee, I said that, perhaps, the major contribution of the project can be in the creation of greater awareness of the problem in the national community. As the various pilot schemes are brought to the point of implementation it is to be hoped that the national committee will give its attention to the possibilities of educational activity at a number of levels. Success will depend on public support, based on realistic understanding. For, as Tawney said "a society which is convinced that inequality is an evil, need not be alarmed because the evil is one which cannot wholly be subdued. In recognising the poison it will have armed itself with an antidote. It will have deprived inequality of its sting by stripping it of its esteem".
I wish to thank Sister Stanislaus and the members of the committee and its staff for their sound and professional approach to what is a most difficult and important task.
The Social Welfare (Supplementary Welfare Allowances) Bill, 1975 now making its way through its various Stages in the House, represents the fulfilment of the undertaking given last year to pursue actively the reform of the outdated and arbitrary system of home assistance which has been the subject of so much adverse comment in this House, and outside, over the years. I hope that this measure will very soon become law.
My Department has carried out a major review of the implications of introducing a national scheme of income-related pensions. A Green Paper, or discussion document on this matter is now at an advanced stage of preparation and I hope to see it published in the near future.
The evolution of a comprehensive pensions policy is of the utmost importance for the overall development of social welfare in this country. However, the many factors—economic, social and administrative—which arise in this connection dictate that the most appropriate approach is to consult all the interests involved through the publication of the Green Paper and a follow-up debate to which the widest possible contribution from the population will be invited.
It was my original intention that the Green Paper on pensions would deal also with the situation of the large self-employed group within the work force who are not, at present, covered by the social insurance scheme. A great deal of work has been done within the Department on this matter but it has proved to be too complex an issue to be easily fitted into the structure of an already substantial document on the pensions question.
Accordingly, it is my intention to publish a separate document which will cover the various aspects of the inclusion in social insurance of the self-employed and which will, I hope, provide the basis for a debate at national level leading to an acceptable and effective scheme to cater for this group which represents almost one-third of the national work force.
I turn now to a consideration of developments in relation to the social policy of the EEC. The consistent and positive evolution of European social policy must be regarded as crucial for the future well-being and credibility of the Community as a whole. Perhaps understandably, the past year has seen the social policy area within the Community almost totally dominated by the effects and by the implications of the general economic situation. The re-convening under the Irish Presidency, of the Standing Committee on Employment gave a special focus to this topical concern.
Nevertheless there have been certain advances in the area of broader social policy. From the point of view of this country the adoption by the Council of the decision on the programme of pilot schemes and studies to combat poverty marked the culmination of almost two years of effort to give reality to an Irish initiative and, at the same time, the beginning of practical work on the project in all the member states of the Community.
This decision of the Council is in line with the consistent view of the Irish Government that Community social policy should be broadened in scope to deal with problems and issues of concern to the population as a whole. In particular, it has been argued that social policy should be designed to face up to the real problems of deprived individuals and groups. The Commission have recognised that, even in the most advanced modern societies, there still remain problems of chronic poverty which are unacceptable. The programme of pilot schemes marks the beginning of the necessary search for policies to deal effectively with these problems.
It has been most encouraging to see the degree of support and commitment of the governments of the member states at the various stages of development of this project. The hard work and skill of the Commission officials has also contributed to the successful launching of this initiative. What is now to be anticipated is a concerted and effective approach to the implementation of the programme of pilot schemes. Given such an approach, this initial Community action in a vital area of social concern can give real hope of advance towards a truly social policy of benefit to all the people of the member states.
On the social security front, the Commission have sought to give shape to the search for a realistic response to the declared aim of bringing the social protection policies of the member states into line and to commence the long and difficult task of achieving, if not harmonisation, at least an adequate comparability of scope and coverage. This task will take a considerable time but the effort is worthwhile in itself.
I agree with the British commentator who has recently made the point that "if mutual learning about comparative social policy is to be made systematic, the Common Market would be a good place to start. If all countries had built up social services of exactly the same kind in the past, there would be much less reason to expect stimulus from co-operation. As it is, their systems of social aid are as various as their history, and comparing them can hardly fail to be of benefit to those in each country who need help most."
In line with the consistent aim of the Irish delegation to the series of social councils two significant initiatives were launched within the past year.
A proposal was made that special consideration should be given to the future role of the social fund in relation to the general development of social policy. It was felt that the time had come at which a detailed examination should be made of the overall financing requirements of the wide range of actions provided for in the social action programme. Such an examination would reveal the gap between the possibilities of application of the social fund, under its existing rules, and the total needs arising from the implementation of the programme.
The Irish viewpoint on the relationship of the social fund to the social action programme has been expressed consistently. While criticising the size and scope of the existing fund in relation to needs the point has been made that even the reformed social fund is not a social fund in the true meaning of the word. It is a fund which aids different types of training in the member states, and should be recognised as such.
However, discussion of this whole matter has been delayed by the concentration of attention on the employment situation. It will be pursued as appropriate because it is essential, in the long run that a balanced and progressive set of actions can be planned, put into operation and adequately financed.
A further important proposal was made, by the Irish Presidency, at the Committee of Permanent Representatives last March when the member states were asked to agree to the convening of a council of Ministers responsible for social welfare. What was sought was a meeting to initiate discussion on the broader long-term aspects of social policy stressed by the Irish government at various times. In particular, stress was laid on the need for study of the possibility of social action in the non-employment areas with a view to their inclusion in the new social action programme to succeed the present programme when it is concluded at the end of 1976.
The view of COREPER was that the time was not right for such a meeting, especially due to the problems of preparing a suitable agenda in the near future. The matter has been pursued subsequently with Vice President Hillery and with the Italian Presidency and there is reason to hope for a positive response in due course. No member state has expressed any opposition in principle to the idea and a considerable degree of support has already been forthcoming.
In concluding these remarks about the EEC I want to express my appreciation of the work done by officials of my Department in playing to the full their part in the successful outcome of the first period of Irish Presidency of the Council. A major contribution was then made to the strengthening of the Community and a foundation laid for much valuable work in the future.
I have described the wide ranging work programme of my Department which clearly illustrates the complexity of the issues involved in the improvement and extension of the social welfare system. Yet, this may be seen as but the fulfilment of the initial stage in the pursuit of the stated aims of Government policy in this area.
I want now to make some remarks about a number of matters which require study and decision in the near future in order to provide the basis for the ultimate creation of the comprehensive social security system, catering for all of our citizens which is the legitimate aim of policy.
To interpret this policy goal in practical terms it is necessary to concentrate attention on a number of key considerations: the overall purposes of social policy; the establishment of a workable and up-to-date legislative base for the development of the whole service; planned development of the social insurance system with a complimentary, support provision of social assistance and personal social services; coherent provision for a research input; a clear view of the special place of policies against poverty and in favour of redistribution in the overall context.
These are, to my mind, the major ingredients in the policy mix which must be given reality in the period which lies ahead.
There are increasing, and welcome, signs of a beginning of debate on the appropriate directions of general social policy, and of its relationship to economic strategy. In this connection, I welcome the publication of the National Economic and Social Council's study entitled An Approach to Social Policy which incorporated a most stimulating paper by Professor David Donnison, who has been recently appointed as chairman of the supplementary benefits commission in the United Kingdom. I believe that this paper, with its concentration on the central issues of equality and distribution, provides a most useful basis for social policy discussion by all interested parties.
Pointing to the need for community will and backing for policy changes if they are to be effective and successful, the council make the important statement that:
... the difference in attitudes towards changes in distribution should not be overstated. The Council believes that any change is desirable which brings nearer a situation in which the disadvantaged are brought nearer to the level that assumes their self-respect and the respect of others...in which opportunities for improving their living standards are as nearly as possible equalised.
This is surely a realistic and attainable goal for a society which is in any way sincere in its protestations of caring and concern. Inherent in the NESC view just quoted is a recognition that progress in the social area is a gradual process involving the evolution and statement of objectives and the establishment of programmes for their achievement. This approach demands that we understand the nature of the process itself and that we can distinguish between what we want, or think we want, at any given time and how we get there. We can only understand these things if we see them in the context of our particular set of circumstances. We must be realistic.
It is equally necessary to be clear about the importance of defining our purpose in social policy and giving this purpose its rightful place as a guide to the inevitable choices which must be made. Choices have continually to be made and these in the last analysis involve the whole community. The debate on social policy must relate to the manner in which we define our purposes and to the system by which we make our choices.
It is essential that the legislative basis of the total social welfare system should be conducive both to efficient and fair administration and to continuous improvement. At present neither of these desirable ends is served by the maze of legal enactments and statutory instruments with which Deputies, the Department's staff and those who have to deal with the social welfare system as claimants must struggle at present.
A major job of consolidation is being undertaken in the Department with the aim of producing streamlined, understandable and wellstructured social welfare legislation in the near future. I am satisfied with the progress made to date and anticipate rapid advance towards the introduction of a consolidation measure in this House. No doubt Deputies will welcome such a development as a substantial contribution to the future improvement of the social welfare system.
I dwelt at some length last year on the desirable shape of a comprehensive social security system, embracing not alone coverage for purposes of income maintenance but also for more general social services.
It is necessary to stress the central place of social insurance in any comprehensive scheme. Already the numbers covered by social insurance have been significantly increased by the removal of the income limit. I see the forthcoming pensions discussion paper, the work at present under way on the position of the self-employed and the study of financing initiated by the Tánaiste as the principal inputs into the preparation of the insurance side of the desirable future system.
Such a system of social insurance would have to be underpinned by an appropriate scheme of social assistance to provide adequately for those in real need or for persons who for one reason or another fall outside the qualification limits for the general insurancebased scheme.
At present the social assistance services, taken together, represent a major part of the total welfare system as may be appreciated from study of the details of this Estimate. However the development of these services has been piecemeal so that there are now no less than ten separate schemes in operation, several of which have been introduced within the past three years to meet specific and pressing needs. All of these schemes are means-tested and the Department of Social Welfare are responsible for the administration of a number of means tests and for the operation of the appeals procedure related to them.
I believe that the time has come to give detailed consideration to the future role, scope and structure of the social assistance services in the light of known social need and of the overall progress in the reform of the social insurance scheme. I am initiating work within my Department to this end. What appears to be required is a radical overhaul of the system so as to bring about a single national scheme capable of covering all contingencies and needs and appropriately linked to the personal social services.
In this connection consideration must be given to the adequacy of the social assistance provision made. I agree with the view that, in the last analysis, arbitrary ideas as to the appropriate levels of social aid or indeed of incomes in general are less relevant than a scientific approach to finding out whether the possible expenditure by a family or an individual in each of the various categories relevant to the area of social policy under consideration is less than what would secure a standard of living equivalent to the normal standards of their neighbours. The concept of belonging and participating should apply in this matter.
During the past year a permanent research and development section has been established within the Department of Social Welfare. To date the section has been fully occupied with development work, and in particular, with the reform of the home assistance service and the work connected with pensions policy and the position of the self-employed. The project on home assistance goes beyond the preparation of the draft legislation and involves detailed work on implementing regulations and necessary consultation with those who will have the task of giving reality to the new scheme of supplementary social welfare allowances on the ground. The section has a very busy work programme for the foreseeable future on the development side.
Research will play an increasing role in relation to policy development in the period ahead. I am encouraged by the level of commitment of those involved in the various social research agencies to the necessary task of achieving a proper balance between academic and applied research or, rather, research capable of being applied.
In this year's Estimate a small allocation has, for the first time, been made to enable the Department to commission research in relevant areas. Already one pilot study—in the area of unemployment—has been commissioned from the Economic and Social Research Institute. Other possible areas of direct involvement in the research field are at present under consideration.
The work of the research staff of the National Committee on Pilot Schemes to Combat Poverty will be of major significance in this whole area over the next few years—each of the action projects is matched by a scientific study of practical importance. For example, the welfare rights project will include a study of the adequacy of social benefits to meet the needs of certain groups and individuals and will thus provide a most useful input to policy review within the Department of Social Welfare.
Social welfare provision can always, and too easily, be reduced to merely coping with the effects of need and deprivation. It must be recognised that, in so far as poverty in our society is self-perpetuating—and it does appear to be so—then proportionately more national resources will have to be made available if society wills to end this situation. Social policies will have to be more rather than less redistributive in their impact, and they will have to take effect at a rate which will ensure a proper sharing-out of the increased resources of the nation. That is the challenge which faces us if we are serious about combating poverty.
I believe that a most fundamental debate must take place in this country about the appropriate balance between policies for economic development and policies for effective redistribution. There are, I feel, many and serious misconceptions about this matter and a danger that the real need for approaches geared to ending the inequality which breeds poverty will be seen as a threat to necessary economic advance. This cannot be the case as true progress will only come in a healthy society and an unequal society is, by definition, an unhealthy and threatened society. I am reminded of a statement in a popular newspaper column some months ago. It was said then that "the poor will always be poor because those who are less poor want to keep it that way." We all need to ask ourselves whether that is not an accurate observation about our present day Irish society.
Presenting an Estimate or Supplementary Estimate for social welfare can be a most frustrating experience in so far as the great bulk of what is being done cannot be more than a response to existing need and to the very obvious social problems of the community. It is essential, therefore, to seek to find the positive elements in the situation. These do exist, to an encouraging extent.
There is a greater realisation today of the existence of poverty and deprivation, even if this in many cases is no more than an uncomfortable feeling. There is a consequent willingness to listen when possible remedies are discussed or proposed. There is a beginning of understanding that social problems cannot be solved by the traditional unco-ordinated means. A number of completely separate, often competing, organisations— whether they be statutory or voluntary agencies—will not solve the great social problems of this, or any, community. The causes of deprivation are complex and inter-related. They call for a correspondingly integrated response to cure them and this response must be based on the fullest understanding and knowledge.
Yet, in the last analysis, everything depends on the existence of the will to solve these problems. That will must be shown by Government, by administration and by the community as a whole. It will be made evident by the acceptance of inevitable change and by the acceptance of real involvement and participation by local communities in the work of solving their problems.
The long-term aim of social welfare policy must, therefore, be to go beyond the administration of income maintenance to create a flexible and sensitive system capable of providing those in need with adequate support and with the assistance they need to play a full part in our society.
I have spoken of the need to debate these issues so that we may better understand them. It is my belief that this debate is already well launched and that it will gain momentum. I agree with the conclusion reached by Professor Donnison in his NESC study that "information and patient education are essential prerequisites for constructive innovation in social policy. The message need not be shrill: once it is understood, the truth about inequality is explosive enough."
I hope that this statement has provided Deputies with all the information which they require and I recommend this Supplementary Estimate to the House.