I move: "That the Bill be now read a Second Time."
This Bill provides for the implementation of the increases in rates of payment and of the other changes in the schemes of social insurance and social assistance announced in the recent budget. It provides also for increases in the benefits payable under the occupational injuries scheme and for a number of minor changes in the social welfare code designed to bring about necessary improvements in its operation.
The Bill is further designed to give effect to the Government's decision to extend the maximum period of entitlement to unemployment benefit and pay-related benefit. It contains the consequential provisions for increases in the contributions payable under the social insurance and occupational injuries schemes which are necessary to ensure the proper financing of the extensive services now available.
As Deputies will appreciate, a Social Welfare Bill is necessarily rather technical and can sometimes be difficult to follow. The explanatory memorandum which has been circulated with the Bill is intended to explain the basic purpose of the proposals therein as far as possible and I hope Deputies have been helped by it in their examination of the contents of the Bill.
As indicated in the budget statement, the increases proposed for introduction in April next will amount to 10 per cent in all weekly rates of social welfare payment. This will involve a total expenditure of more than £25 million and will bring the overall outlay on social welfare benefits and allowances in a full year to more than £430 million nearly three times as much as in 1972-73. Social welfare spending will account, this year, for about 10½ per cent of the gross national product.
These increases consolidate the advances made over the past three years. In the period between July, 1973, and April, 1976, very substantial increases in all rates of social welfare payments will have been given. The rise in personal rates under the social insurance scheme will have been between 89 per cent and 110 per cent, with child dependant rates up by between 130 per cent and 160 per cent. The growth in maximum personal assistance rates will have been between 96 per cent and 122 per cent, with child dependant rates up by between 139 per cent and 180 per cent. The increase in the consumer price index between February, 1973, and November, 1975, was approximately 52 per cent so that, even taking account of price rises since last November, very substantial real gains have been enjoyed by all social welfare beneficiaries. These gains will not be permitted to be whittled away by inflation since they represent the minimum response of a community that claims to care for its disadvantaged citizens.
The budget this year was framed by the Government in the context of the very real difficulties arising from what is by far the worst economic crisis faced by the nations of Europe for 40 years. In the present economic circumstances the major objectives of the budget might well have been restricted to tackling economic problems and, at the same time, seeking to achieve a reasonable balance in the finances of the State. Such considerations have, indeed, been fundamental to the budget strategy of the Government. But, from the beginning of the budgetary exercise, the Government have had another priority goal. It was made clear before Christmas that, whatever the difficulties, the interests of the less well-off in the population would be protected in the provisions of the budget.
That pre-budget commitment was of the greatest importance and, by making it, the Government were concerned that it should be understood and accepted in the national community. What was at stake was the maintenance of the basic position of many thousands of men, women and children who are deprived because of age, illness, widowhood or unemployment. It was accepted by the Government that, in a time of recession, there is a special community responsibility to ensure that the poor are not called on to bear burdens which can be, and must be, borne by those in more fortunate circumstances.
The Government have, in the provisions of the budget, which are reflected in the terms of the Bill, honoured their pledge in this matter. Weekly social welfare benefits and allowances have, as I have stated, been increased by 10 per cent, operative from April next. That rate of increase is designed to maintain the real value of the payments made under the various schemes operated by my Department. The Government have also decided that those April rates will be reviewed in the light of the trend of inflation during the year and that appropriate adjustments will be made —as was the case last year—to guarantee the recipients against the erosion of the purchasing power of their benefits and allowances. The important advance made last October when weekly rates were increased has been recognised as crucial in a time of rapidly rising prices.
The budget proposals for social welfare involved increases in all social assistance payments and these are provided for in the Bill now before the House. For example, the maximum weekly personal rate of non-contributory old age pension is being raised from £9.30 to £10.25 for persons under 80 years and from £10.05 to £11.05 for persons aged 80 years and over. The rates of pension payable where the weekly means exceeds £6 are also being increased by 10 per cent up to the point where weekly means exceed £14 and no pension is payable.
The maximum weekly payment for dependent spouses who are not themselves entitled to pension is being increased from £4.65 to £5.10, so that the overall weekly payment for a non-contributory pensioner with a dependent spouse will, at the maximum rate, be increased from £13.95 to £15.35 and, if the pensioner is aged 80 years or over, from £14.70 to £16.15. The allowance paid in respect of a prescribed relative giving full-time care and attention to an incapacitated pensioner is to be raised by 50p a week to £5.70 a week. In addition, increases of pension for the qualified children of pensioners are being raised by 25p a week to £2.75 for each of the first two children and by 20p a week to £2.10 a week for each further child.
The details of these changes and of the new table of weekly means and rates are set out in section 2. I should explain that, for a pensioner with qualified children the means limit is greater than £14 which is the figure shown in the table, and this section enables the table to be extended to cases where the means are not actually shown within the limits of what is contained in the text.
Section 3 provides for 10 per cent increases in the personal weekly rates of unemployment assistance bringing them up to £8.90 in urban areas and to £8.55 in rural areas. There are corresponding 10 per cent rises in the rates for adult dependants and for qualified child dependants. Thus, the rate of unemployment assistance payable to a man, wife and child in an urban area will be increased by £1.65 a week—from £16.45 to £18.10.
Subsection (2) of this section makes provision for a change announced in the budget in respect of smallholders in receipt of unemployment assistance. It is now proposed that the existing rates of unemployment assistance—that is the rates established in October last—will continue to apply in the case of landholders with valuations in excess of £15 whose means are notionally assessed by reference to land valuation for purposes of determining eligibility for unemployment assistance.
Section 4 of the Bill is designed to give effect to a major change in the special scheme of unemployment assistance for smallholders which Deputies will agree is long overdue.
The budget statement contained the announcement of changes in the notional basis of means assessment under the terms of the unemployment assistance scheme for smallholders in specified areas of the country. In a situation where farm income has risen by 250 per cent since the introduction of the scheme in 1966 there has been widespread and increasing criticism of the maintenance, unchanged, of means guidelines established ten years ago. Many objections have been made to the whole basis of assessment which is related to poor law valuation levels.
This special scheme, as Deputies are aware, was introduced in 1966 and under it the means of landholder applicants for unemployment assistance are calculated on the basis of the poor law valuation of their holdings. The scheme applies to smallholders resident in specified areas—the whole of Connacht, the counties of Cavan, Clare, Donegal, Kerry, Longford and Monaghan plus the congested parts of west Cork and west Limerick.
Under this scheme the yearly means deriving from the use of land in specified areas are calculated on the basis of £20 per £1 of the applicant's net rateable land-valuation, excluding buildings. Thus, the means of a person with a valuation of £10 would be taken as £200 a year, or £3.85 weekly, for unemployment assistance purposes and his entitlement to unemployment assistance, if he had no other means, would be the maximum weekly rate applicable to his family size reduced by £3.85. This "multiplier" of £20 has remained unchanged since the introduction of the scheme.
The amendments to the scheme now proposed will leave the position unchanged for all smallholders assessed in this way whose valuations do not exceed £15—that is, some 18,000 of the present total of approximately 23,500 smallholders in receipt of unemployment assistance under the scheme.
For smallholders whose valuations exceed £15 but do not exceed £20, a new notional "multiplier" of £30 will replace the present £20, that is, the notional income will be increased by 50 per cent affecting some 2,500 recipients.
For those whose valuations are over £20 the new multiplier will be £40, thus doubling the notional income of some 3,000 recipients. I intend to give very detailed consideration to the long-term future of the smallholders unemployment assistance scheme in the context of the planning of the reform of all assistance schemes which is included in my Department's development programme.
Under the terms of sections 5 and 6 non-contributory widow's and orphan's pensions are being improved in line with other allowances. The maximum weekly personal rate of widow's pension will be increased from £9.30 to £10.25 a week and the payment for qualified children will be raised to £3.40 a week for each child. Orphan's non-contributory pension will be increased from £6.05 to £6.65 a week. The details of these increases are given in the tables which form part of this section and, as in the case of old age pensions, provision is made to cover cases where means are not shown in the text.
The new rates of widow's non-contributory pension will automatically apply to deserted wife's allowance, to the social assistance allowance for unmarried mothers and to the allowance for prisoners' wives.
Section 7 raises the maximum weekly rate of payment to qualified single women over 58 years from £8.10 to £8.90 a week.
The impact of these substantial increases can be more clearly understood by reference to the numbers of recipients involved. Some 153,000 persons will benefit from the increases in the rates of non-contributory old age pension; over 200,000 persons from the rise in unemployment assistance rates; 20,000 from the increases in non-contributory widow's and orphan's pensions; and about 16,000 from the new rates of social assistance allowances. This total of about 390,000 includes both adult and child dependants.
I now come to the increases provided for in the rates of pensions and short-term benefits under the social insurance system. In the case of retirement pension and old age contributory pension, the personal rates will go up by £1.10 a week to £12.15 where the pensioner is under the age of 80 years and to £12.85 where the pensioner is aged 80 or over. The allowances for adult dependants are being increased by 70p for those under 67 years and by 85p for those who are 67 years or over. The allowance payable in respect of a prescribed relative giving full-time care and attention to a pensioner is to be increased from £5.20 to £5.70 a week.
Thus, the pension for a couple, both over 67 years of age and not yet 80 years of age is being raised to a weekly rate of £21.30—106 per cent greater than the rate being paid three years ago.
The personal rates of widow's contributory pension and deserted wife's benefit are being increased by £1 to £11.00 a week, with the special rate for a widow over 80 years being raised to £11.85 a week. Orphan's contributory allowance will be increased by 75p to £8.00 a week.
Provision is made for a rise of £1 a week in the personal rates of disability and unemployment benefit and invalidity pension—the new flat rate will be £10.90 a week. Maternity allowance will be increased to the same weekly figure.
All adult and child dependant allowances will rise in line with the general 10 per cent increase. Some examples of the effects of these changes may illustrate what the budget provisions mean to families who depend on social insurance payments.
The contributory widow's pension for a widow, aged under 80 years, with three qualified children will rise by £2.05 a week to £22.10 while a deserted wife with two qualified children will receive an additional £1.70 a week, bringing her benefit to £18.40. Flat-rate unemployment benefit in the case of a man, his wife and three children will be increased by £2.50 a week, from £24.30 to £26.80.
In line with the improvements in the general social insurance system, the Bill also provides for increases in the rates of the various benefits payable under the occuptional injuries scheme. The increase in weekly rates will be broadly in line with those provided for in the various social insurance categories.
Provision is being made for increases in the special rates of unemployment benefit payable in certain circumstances where unemployment continues beyond 156 days. These rates are related to the urban levels of unemployment assistance increases which are dealt with in section 3. The increases which will come into effect in April are intended to retain the parity between the two rates. The basic rate goes up by 80p, that for an adult dependant by 60p, with corresponding increases for qualified child dependants.
The present pattern of the Department's expenditure, as indicated in the Estimates, includes very substantial moneys for the payment of unemployment benefit, pay-related benefit and unemployment assistance, and underlines the grave human impact of the present economic recession. The Estimate provides for an outlay of £97 million on payment related to the unemployment problem—24 per cent of the Department's total outlay on benefits and allowances. There are now 15,000 more persons on the live register than at the same time last year. Each and every one of these cases can result in hardship, either in financial terms or because of stress and worry.
I have kept the operation of the unemployment benefit and pay-related benefit schemes under very careful review and, having regard to the overall unemployment situation, I made certain proposals to the Government which were approved. The proposals which the Government approved were that the maximum period for which unemployment benefit may be paid to persons who are at present entitled to a maximum of 312 days benefit will be extended by a further 78 days to 390 days. The rate of benefit payable during this extra three months is to be the same as that which applied for the 156 days prior to the exhaustion of the 312 days benefit. Under the transitional provisions contained in section 11 of the Bill, this significant extension of the unemployment benefit scheme will apply to persons who had exhausted their 312 days unemployment benefit entitlement within 78 days of the operative date of the extension and who are still unemployed when the extension enters into force. For instance, a person who exhausted 312 days benefit 30 days before the operative date, will get an extension of 48 days unemployment benefit. This extension of flat-rate unemployment benefit will provide badly-needed financial support for many families who continue to be affected by the prolonged economic difficulties.
The Bill also makes provision for an extension—by a further 78 days to 381 days—of the maximum period for which pay-related benefit may be paid. The proposed weekly rate of pay-related benefit during this further extension of the system is 20 per cent of reckonable weekly earnings between £14 and £50. Pay-related benefit is payable in respect of unemployment, disability and maternity benefit under the present social insurance code.