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Dáil Éireann debate -
Thursday, 9 Nov 1978

Vol. 309 No. 4

Social Welfare (Amendment) Bill, 1978: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

The Minister to reply.

On a point of order, last evening I was approached by my Whip to know if I would speak this morning on this motion and I agreed to do so. The Whip said that the Minister had given an assurance that I would be able to speak today and on that basis I am here this morning to speak. Although I was not here the last evening I intended to speak on this important legislation. I felt last evening that sufficient people were in the House to keep the debate going and consequently even though perhaps I should have been here I was not here. However, I was assured by the Whip and by our spokesman, Deputy Boland, that I or anybody else who wished could speak. I also got the impression from the Chair this morning that had Deputy Blaney been here he would have been allowed to speak. If Deputy Blaney would be allowed to speak there is no reason why I should not be allowed to speak. Technically, as the Minister stood up and just said "A Leas-Cheann Comhairle" he should be allowed to reply, but in the spirit of the situation I should not be denied the right to say something. I would ask the Chair to call on me to speak and I will not delay the House for any length of time.

It is not the duty of the Chair to curtail any speeches in the House but this matter was unresolved, it was somewhat in mid-air. The argument as to whether Deputy Blaney should speak or not was continuing when the business adjourned. The Minister had got in at the same time, so I have decided that I would call the Minister who had been on his feet.

On a point of order, it has never been the practice in this House for as long as I have been here, to deprive a Deputy of the opportunity to speak on a Bill or an Estimate. The Ceann Comhairle has departed from that practice on this occasion. As far as I know it is customary for the Minister to give way to Members of the House who wish to contribute to a debate and if the Minister for Health and Social Welfare is departing from that tradition it is most unfortunate.

I would emphasise that nobody is being deprived. It is a question of sticking to Standing Orders. We should be rigid in this matter because frequently people will arrive late and will attempt to get into a debate when the Minister has already commenced replying. Deputies will agree that the Minister has been on his feet to reply. He should be allowed to do so.

On a point of order, I appreciate that the Ceann Comhairle was not here at the time, but what really happened was that Deputy Browne concluded at two minutes to seven and Private Members' Business was due to begin at seven o'clock. The people involved in Private Members' Business came in and took up their places on these benches and on the Labour Party benches and I got the impression that Deputy Blaney did not immediately rise because he understood that these people wished to contribute to the Social Welfare Bill. In fact, they had come in for the business which was due to commence two minutes later. As soon as Deputy Blaney realised that they were not offering, he offered and by that time the Minister had risen and claims that he said "A Leas-Cheann Comhairle". I did not hear the Minister say that but surely these words do not disclose the contents of the Minister's reply to the Second Stage of the debate. It is being terribly technical to say that the Minister had commenced when he said "A Leas-Cheann Comhairle".

The important point here is that the Chair had called the Minister. We cannot change that.

The important point here is that the Minister indicated to the Whip yesterday that those who wished to contribute to the debate could do so today.

That is not correct.

While I appreciate the Chair's position that the Chair must adhere to Standing Orders, the Minister having intimated this to the Whip yesterday, and the Whip having gone to the trouble of contacting those who had indicated to him earlier that they wished to contribute to the debate, and telling them that they could contribute to the debate, should not have changed his mind. The Minister told me yesterday evening that if Deputy Blaney was available this morning to speak, he would allow him to speak. While I appreciate that the Chair must adhere to Standing Orders, surely the Minister can give way to those who wish to contribute. I asked the Minister if he intended to conclude if Deputy Blaney was not available and he said no, that if any members of my party wished to contribute they could do so. It now seems that the Minister's attitude has changed overnight.

It is not a question of the attitude of the Minister. The Minister has no right to decide. The Leas-Cheann Comhairle in the absence of anyone presenting himself to speak, called the Minister. I could not nor would not change that decision.

I am not asking the Chair to change the decision, I am asking the Minister to give way to those who want to contribute as he indicated to me he would last night.

And to me.

I suggest that by agreement of the Whips, the Minister could reply at 11.10 a.m. In that event I am sure the Minister would facilitate Deputy O'Brien who wants to make only a ten minutes speech, and there are no other speakers present.

I contacted more than just Deputy O'Brien last night on the Minister's assurance that they could contribute to the debate. The Minister said in the presence of another Deputy that if Deputy Blaney was not available any member of my party who wished to contribute could contribute. I want the Minister to stand by his word because I contacted members of my party on the Minister's assurance and told them they could contribute to the debate today. It now appears that something has changed the Minister's attitude overnight. Is the Minister's position in the Cabinet weakening or what is the reason for this change of attitude?

The Chair has had no contact with anybody in relation to this. I had anticipated that I might have had some problem with Deputy Blaney in relation to resuming today. The record will show that the Minister was called by the Leas-Cheann Comhairle. Irrespective of what the Minister said last night I have given my ruling and I must stick to that.

I want the Chair to ask the Minister if he will allow the debate to open, as he indicated to the Whip last night.

We have spent ten minutes on this matter and that time could have been used to conclude the debate, if the Minister had been permitted.

I appreciate the position of the Chair and I appreciate that the Chair is bound by Standing Orders but a Minister has power to give way and allow others to contribute.

I am calling on the Minister to resume.

That is being very biased. The Minister did not commence to reply. I was not here and I am not going to get involved but——

If the Deputy was not here he should not be talking on this issue.

I am addressing my remarks to the Chair. I was not here.

The record will show that the Minister was called to reply.

The Minister may have been called but there was also a doubt as to whether Deputy Blaney was on his feet.

There was some discussion as to the right of Deputy Blaney to speak when the debate was adjourned, but the Leas-Cheann Comhairle had called the Minister.

The Chair can quote Standing Orders and we cannot go against them but we are being treated very shabbily in this matter. I believe that had Deputy Blaney been present today he would have contributed and that is what I am concerned about. Had Deputy Blaney been present would he have been allowed to speak? If he was allowed would we then have been given an opportunity of contributing?

I am afraid that no matter who was here I would have had to go by the ruling of the Leas-Cheann Comhairle.

The Minister gave me the same assurance as he gave Deputy McMahon last night.

The Committee Stage of the Bill has yet to come.

Can we have word from the Minister if he is withdrawing what he told me last night? Is the situation that we can no longer place any trust in what we hear from Ministers? How is the House to operate if Whips are to be informed of one thing at 8.30 p.m. but the situation is changed the following morning?

The Opposition hear of what debates are in progress and that is how they look after themselves.

After the Minister had given me his word last night I contacted the members of my party who had indicated a wish to contribute to the debate. That meant that I was detained here for an extra 30 minutes but this morning I have to inform them that they are not allowed to speak.

Those Members are not present. This is only a charade.

It is not a charade. I am being denied my right to speak because of a technicality and it is wrong for the Minister to describe this as a charade. I was anxious to make a contribution and I regret I was not here at that time but other people who offered to speak were denied that right.

They were not here.

It is not a charade. I was here during the course of most of the debate and I listened to the Minister, Deputy Boland and Deputy O'Connell. In my view we are being denied our right to speak.

We have discussed this fully and I am calling on the Minister to reply.

I should like to ask the Minister if he is going to break his word given to me last night.

And to me.

The Minister is in the same position as any other Deputy in that he is subject to the ruling of the Chair. He has no right to decide what form a debate should take or who should contribute.

The Minister can give way and has power to do so if there are Members anxious to contribute.

I cannot give way.

I am surprised at the Minister. Would the Minister not accept that there has always been a liberal tradition in the House?

I do not accept anything of the sort.

I want the Minister to resume.

Last night the Minister indicated to me that he would give way. His word was that the debate would be opened again.

Is the Minister breaking his word now?

I am not breaking any word to anybody. I endeavoured to facilitate Deputies in this matter and this is the thanks I am getting.

Is the Minister saying that Deputy McMahon is telling an untruth?

I am not saying Deputy McMahon is telling any untruth. I am not making an accusation against anybody and I am not breaking my word to anybody.

Did the Minister not give me an assurance that if any of my colleagues wished to speak they would be given that opportunity?

, Dublin South-Central): He most certainly did not and I was present at that time last night waiting to contribute on Private Members' Business.

The Minister of State was not present at the time. Was the Minister of State in the lobby at the time I was having a conversation with the Minister?

(Dublin South-Central): Check the record.

Deputies who know little or nothing about what was going on here last night should stay out of this.

(Dublin South-Central): I was here at the time.

Last night I asked the Minister if, in the event of Deputy Blaney not being present this morning, he would be concluding and his reply was "No". He told me that if any members of my party wanted to contribute they could do so because the debate would be opened again. I am asking the Minister if he is going back on that undertaking. If he is going back on that undertaking the business of the House cannot continue in that way because the Whips will find it impossible to arrange business.

I am not going back on any undertaking.

I wish to point out to the Deputy that the Minister, or any Member, does not have a right to direct the business of the House. The Chair is calling on the Minister to resume.

I have not tried to direct what the Chair should do at any stage.

I am not accusing the Deputy of that but I wish to inform him that the Minister may not direct a ruling in the House.

He can give way.

Without breaking any rules or regulations the Minister can give way and open up the debate again, as he indicated to me he would do last night at 8.30. Is he going back on what he said to me? If he is how are Whips to operate here if they are told a certain thing at 8.30 p.m. but the position is entirely different the following morning?

The Chair is calling on the Minister to resume.

This is absolutely disgraceful. I have heard things about this Minister but I never thought he would go back on his word within a matter of a few hours on such an important matter like this. Can the Whips no longer trust the Minister in what he indicates to them in relation to future debates? It is disgraceful and the Minister ought to be ashamed of himself. He should admit freely what has changed his mind overnight or why the change has been made and, perhaps, that would be acceptable to us.

The Chair has pointed out repeatedly that, irrespective of what the Minister may have said, the Chair's ruling must stand. We have enough of this. The House has spent 15 minutes on this subject and I will not allow it to continue.

We have not had an explanation from the Minister. He should explain the situation. That explanation may be acceptable to us.

The Chair decides who contributes.

The Chair has so decided and I am accepting that, but I am asking the Minister to tell us why he changed his attitude overnight? Can he give us any explanation why he does not wish to let in our members, something he freely and readily agreed to do last night?

I do not care who gets in.

The Minister should give way then.

I am not giving way; I am following instructions. I am not entering into any argument but I resent Deputy McMahon's suggestion and the words he used: "I have heard things about this Minister". I resent that and it should not have been said.

I am calling on the Minister to resume.

Does the Minister agree that he gave me an assurance last night that any member of my party who wished to speak would be given an opportunity to do so?

I was under the impression last night that Deputy Blaney would be resuming and in an endeavour to be co-operative I said to Deputy Boland on a number of occasions that, if Deputy Blaney resumed, I presumed that would open up the debate again. In that event anybody who wished could speak. I was only giving my opinion. I have no responsibility in these matters and I am not the Whip. I said that, if I gave way to Deputy Blaney, I presumed that would open up the whole debate and anybody who wanted to contribute could do so.

The Minister is giving somebody preferential treatment.

The Minister is in possession. I want to make one thing very clear here this morning in view of some of the allegations that have been made. There were four Members in the House last Tuesday night at five minutes to seven who had not spoken on this Bill. I went from one to the other and not one of the four offered. I called the Minister. Then Deputy Blaney got on his feet and insisted he had already offered. I want to repeat emphatically that not one of the four offered. Now the Minister is in possession and he is the only one that can give way and, if he does not give way, he concludes the debate.

But the Minister will not give way.

Am I to understand that what the Minister said is that he is prepared to give way to Deputy Blaney but not to any other Member?

That is a matter for the Minister. He was called to conclude the debate. He is now on his feet concluding this debate.

We accept what the Chair says. It is a matter for the Minister to decide if he will give way, and we are asking him will he give way to Deputy O'Brien.

I am sorry. This puts me in some difficulty because the Ceann Comhairle's ruling is somewhat different from yours.

The Minister was called and the Minister is now concluding the debate. It has happened that Ministers have given way in certain circumstances, but there is no obligation in the world on the Minister to give way.

By agreement, could we settle some time across the floor of the House?

All right.

I want to explain to Opposition Deputies, the Leas-Cheann Comhairle now having taken the Chair, that I was under the impression that the Ceann Comhairle was ruling and I had to conclude.

The position has always been——

I am endeavouring to explain for the benefit of the Opposition.

It is most unusual for a Minister or, indeed, any other Member to give way. There is precedent for it but it has happened only very rarely. If the House can fix a time to finish, well and good.

May I come in at 12 o'clock?

Yes, not later than 12 o'clock.

I will call the Minister, then, at 12 o'clock.

I just want to explain that I was under the impression this morning, when business began, that the Ceann Comhairle had ruled that I had to conclude. If I am wrong about that——

That would not be my approach. I think that if Deputy Neil Blaney were here this morning, the Minister was prepared to give way to him, in view of the difficulty that arose on Tuesday night. I am calling Deputy O'Brien now and the Minister comes in at 12 noon. I want to make something else clear in view of some difficulties that arose. We are dealing only with the social insurance code on this Bill. The Bill has nothing to do with the social assistance code.

I thank the Minister for giving way. I shall be brief. I welcome the new system for collecting contributions. This change has been long overdue. It will save money for employers. It will also cut down robberies of insurance stamps. We hope also that it will yield additional revenue. I welcome the reduction in the contribution for lower paid workers. This is index-linked so it will operate for only a short time because, as time goes on, the contributions will rise. However, it is worth while.

If additional funds become available we should consider the position of the elderly and the raising of their allowances. We must look after the aged. We have been doing that in areas like housing. In local authority accommodation the aged pay very small rents. I would ask the Minister—this is something I raised with his predecessor—to consider the case of the elderly living in private accommodation. Very often they have to pay very high rents, and I would ask the Minister to do something for these by way of supplementary rent allowance. As the Minister knows, they are very vulnerable.

I know the Minister is looking at the free fuel scheme and its operation. The system needs overhaul. I think the Minister is in consultation with the local authorities about the system. It just does not work. The intention is good but the recipients are not able to collect this fuel and so they are not getting it. The system is breaking down.

Another area about which I am not happy—the Minister may not be able to do much about it—is where you have people on assistance getting butter, turf and other perks. I believe this should extend right across the board for everyone. Otherwise it appears to be unjust.

Another area the Minister might look at is where people are unemployed for a fairly lengthy period. I have had a number of people coming to me lately and they have told me that, when they go to sign on, they are asked to produce no fewer than four letters from would-be employers to say they were looking for work. Now four letters is a bit much. What I say is fact. I would ask the Minister to look into this. There is an element of hounding in it. I do not know any who were denied entitlement but they have certainly been asked to produce these letters.

They might not get a letter.

The employer might say he had no time to be writing letters. I think these people should be referred to the Manpower Service. Again, when an individual is unemployed for 18 months or two years, he should be given retraining. It is well known that when people are unemployed for a lengthy period they tend to lose confidence and their will to work. This is a sad situation. We do not want people unemployed for long periods, and I suggest that these should have the benefit of retraining programmes to ensure their confidence is not eroded.

I would ask the Minister also to examine Dublin City labour exchanges. They are very dreary places and people having to go there seem to have a feeling of losing their self-respect. These labour exchanges should be run more on the lines of the manpower services. They should be model offices with their personnel able to sit down and talk to people about various employments. The whole idea of hatches and wire cages in these offices in this day and age is wrong and demoralising for any human being.

The Minister might well consider examining and up-dating these exchanges. Indeed he might consider also the retraining of their personnel who deal with people on unemployment benefit. Their attitudes and so on should be sympathetic because generally speaking they are dealing with people with serious financial problems on account of which they may be emotionally disturbed. A review and up-dating of the system would pay for itself in many ways.

Our attitude to social welfare should not be one of feeling that we are handing out something to people; rather that it is their right. In this respect more could be done, through advertising, to inform people of their entitlements. The Department has a very comprehensive and enlightening booklet on this matter but, from time to time, it would be no harm to have television programmes to inform people of their entitlements. Here I am thinking particularly of the elderly who quite often are not aware of them. Therefore there should be positive publicity or advertising to inform them in this respect. The Department must have a humane attitude rather than a bureaucratic one. Indeed the forms which have to be filled in for claiming benefits often are very complex. We might well examine all of these aspects. I do appreciate that the Department must get detailed information but it is important that forms be kept as simple as possible.

In present society I am afraid that pressure will be exerted on the less well-off by those in the better-off brackets, the tendency to maintain that social welfare recipients are getting too much. In an economic pinch I notice that the better-off people tend to become a little selfish and not advocate increases in social welfare allowances. No matter what is the economic climate the Minister must make it quite clear that such increases are necessary in both health and social welfare, ensuring that recipients have sufficient to maintain a reasonable standard of living. I do not think the Minister would yield to that type of pressure. However it is exerted, particularly before elections, when it tends to prevail amongst people who have to make contributions—and let us face it, that is what our income tax code is all about—in the form of additional taxation. We must not yield to that type of pressure. Rather we should ensure that the welfare code is updated and benefits increased at regular intervals. As has been the practice in recent years we should seek to devise ways and means of giving additional fringe benefits, particularly to the elderly. We must continue to examine what can be done in that area. We must all have knowledge of elderly people living alone endeavouring to eke out a living and how difficult they find it. That is the main area of social welfare about which I am most concerned.

On the subject of unemployment the impression is created that there is a move afoot to reduce the unemployment figures, at forcing people, for one reason or another, off the unemployment register. If that is to be the approach to illustrate that unemployment figures are dropping it is a shameful one. I am not accusing the Minister of endeavouring to do that but I fear that could be the motivation of instructions from other Departments to his to see what can be done to cut unemployment benefits. The Minister must resist any such pressure. Rather, at the Cabinet table, he should ensure that he gets the best deal possible for the people and areas he represents. If the Minister does not do so it will be the less well-off people in our society who will be deprived. The Government do not appear to be terribly concerned with the less-well off. If one examines their record since assuming office one rather finds that it is the better-off who have tended to reap the benefits. That is a dangerous attitude and one the Minister must resist at all times. It is vital that our attitude to social welfare be one of right or entitlement rather than one of handling-out or of having special benefits conferred on certain people. That attitude must not be allowed to prevail because, as a nation, we are not very concerned with the less well-off.

I would plead especially for the elderly, that the Minister—particularly at budget time—will remember these people and do something for them. I think there was a question tabled in the House recently about a bonus benefit for them at Christmas. Certainly the Minister might examine this from the point of view of the old age pensioner. Perhaps he could see his way to letting them have an additional week's benefit at Christmas. I know it costs money but we must keep our priorities in order. Indeed the Minister might well consider also the payment of such bonus for the disabled. People, and particularly the elderly and disabled, like to be remembered. This is a way in which they could be remembered in a very positive sense, without over-burdening the Exchequer. I think it was said last year it could not be done. Hopefully it will be done this year.

Basically the Bill is a reasonable one. The idea is good. The Minister will be collecting additional finance which I hope will be spent in the right areas, with additional benefits being made available. The payment of additional benefits should be investigated and paid to as many people as possible ensuring that those who are unfortunate enough for one reason or another to be unable to work—whether it be for reasons of health, unemployment, old age or otherwise—are assured of a reasonable standard of living. The Government should ensure that funds are made available in the next budget to give substantial increases to the people in this bracket so that they can have a better way of life. After the earlier hassle about whether or not we could speak this morning I would like to thank the Chair for sorting the matter out. People are happier that they have made their contributions. I do not believe the Minister will be delayed very long.

This is a very important Bill because obviously legislation which affects almost three quarters of a million of our workers must be important. There are many good points in the Bill such as the abolition of the flat rate. The two basic elements in the changes are the method by which the money is collected and the amount that is paid by the employer and the employee. The flat rate, as the Minister pointed out, was not always fair. Last January, the Minister reduced by £1 a week the amount that those earning under £50 a week paid. Some of those paying the reduced rate got increases during the year; and when this took them up to £50 a week, or over that amount, they found they lost 66p per week.

It is good to see the differential gone between male and female and to see domestic servants coming into pay related benefit. I am glad to see that there will not be tax relief on the employee's contribution. It would obviously have been impossible for the employer to collect it. I am glad to see that the employee is given relief in another way. The ceiling of £5,000 will increase the amount of pay-related benefit. If one takes the difference between £14 and £100 a week, which is the new ceiling, 40 per cent of that would give £34.40 as against £14.40 previously.

The most important element in the change is the method of collection. While it will make it more simple for employers to collect the money along with PAYE, it is vitally important that now there will be proper records. It is fair to say that under the stamp card system a very good job was done by all concerned, but nevertheless there were cases from time to time where insurance cards got mislaid and proper records were not available in the Department. This sometimes led to undue hardship for the employees who were out of work and claimed unemployment benefit or disability benefit and perhaps had to wait a long time for their money. If those people had families they suffered a lot of hardship during the period those people were waiting to receive their benefit. I believe that now the record system will be almost foolproof and that even where a true record is not available the employee who has paid his contribution will not have to suffer too long waiting to receive the benefit he is entitled to.

I do not want to go into the question of the benefits, which have been changed regularly over the past 25 years since the first Social Welfare Act became law. They will have to be reviewed at some stage because there are obviously gaps in the benefits. The health benefits, which are still under the Social Welfare Acts, such as dental and optical benefits, should be reviewed to include dependants of insured workers. This perhaps is more appropriate to the Department of Health.

This Bill has no impact on the employment situation. Social insurance is an absolute necessity, but it is unfortunate that it constitutes a payroll tax. Every extra person employed means that so much more money has to be paid to the Exchequer. That is my most serious criticism of the Bill. No attempt has been made to reduce the negative effect that social insurance has on employment retention and employment creation. We could have improved our employment prospects if we gave special consideration to labour intensive industries in the social insurance area. This Bill does not provide any concession for labour intensive industries.

That is not correct.

The Minister will have an opportunity to answer. It certainly fails to provide it in any significant way. The Bill, in general, is in the right direction but sufficient attention has not been given to the payroll tax aspect of social insurance. The Minister even at this stage might consider what encouragement he can give to labour intensive industries in this area. If an employer has a fixed overhead per employee of approximately £7 a week, that is a reason to employ machines where that is possible. This is another contributing factor to our serious unemployment situation. This is a case of one aspect of Government policy militating against another, that is, job creation. This was an opportunity to do something really significant about job creation, because social insurance has an impact on it. Surely a simple system could have been devised whereby an industry employing 100 people would pay 5 per cent less than an industry employing 50 people and an industry employing 200 people would pay another 5 per cent less and so forth. This would mean that the more people an industry employed the less the social contribution per head would be. That would help significantly in the area of job creattion.

The whole question of whether we should seek alternative methods of funding social insurance other than by taxing employers is a fundamental one. I know it is not easy because a lot of money is involved but it does not make sense to tax employment in a country like ours where unemployment is so serious. I know it is done elsewhere but we should consider our special situation. We threw away money on items like the wealth tax; perhaps it would have been better to have spent the surplus money in areas like this. The Government would be in less trouble today if they had approached the whole area of finance and taxation in this manner rather than in the way they did. I know this question is too big to be tackled by this Bill but at least a start could have been made in easing the burden for capital-intensive industries. I put it to the Minister that he should seriously consider the question of how to remove payroll tax, how to find substitute finance for the employers' contribution to social insurance. Perhaps he might consider setting up a commission to study the matter. It is an urgent and important task and it is central to the principal problem facing this country—unemployment.

I welcome some of the changes proposed in this legislation; for instance, abolishing the differential between manual and non-manual workers. However, the £5,000 limit is not welcome. I am not sure that there should be any limit although I know costs must be taken into account. What will happen—as the Minister admitted—is that anybody earning more than £80 per week, which is approximately the national average wage, will have to pay more for less. Many people in manual employment who have enjoyed full cover in the matter of social insurance will not do so if they earn more than £5,000 a year. I think it fair to say that this is the first move in taking back from the middle income group what was given in motor tax and the abolition of rates on domestic property. This is the beginning of the clawback for which the Minister, Deputy O'Donoghue, became famous some days ago and which caused such consternation at the Fianna Fáil Parliamentary Party meeting yesterday.

The Deputy must stay on the Bill.

The extra charge being put on people earning more than £5,000 a year is the first clawback on benefits received because of the abolition of rates and motor tax. In the whole area of social welfare, to an extent we have not been discriminating enough. It is frequently said that there are abuses in the social welfare system, that people are getting benefits who do not need them and that some people are better off on social welfare than at work. That is an unfortunate situation and it brings social welfare into disrepute. The fact is that in this country, in particular in this city and notably in my constituency and in the inner Dublin area, there is ghastly poverty. Social welfare is not nearly discriminating enough in favour of people in those areas. I know the Minister is a thoughtful man and I ask him to give consideration to a more discriminating code of social welfare, discriminating positively in favour of the really poor. There are too many people who are well below the poverty line and who are living in absolute misery. However, it is difficult to see how a Government that abolished wealth tax and so on can even know or be concerned about that poverty.

With regard to the taxing of contributory pensions, it is wrong to tax people in receipt of contributory old age pensions and widows' pensions.

The Deputy may make a recommendation to the Minister but the Minister here has no responsibility for taxation.

I accept that but I would point out that that is an irritant to people with contributory old age and widows pensions who are taxed and the Minister might take up the matter with his colleague. It does not make sense that what is a form of savings should be taxed. If a person has a total income in pensions of £7,000 or £8,000 he should pay his share of income tax but it does not make sense that a person in receipt of a contributory old age pension that has been paid for in advance during the years should be taxed. This is happening while other social welfare benefits are not taxed. Why is there discrimination against recipients of contributory old age and widows' pensions? It is unfair. The Minister would do a lot for these people if he removed that anomaly. Perhaps he will get an estimate of the cost involved? I do not think the amount will be considerable and it would remove a great annoyance to many old people and widows.

I welcome the general intent of the Bill. It will remove many of the administrative anomalies that have existed in the social welfare code. It will diminish the amount of fraud or negligence that existed in the past and exists at present.

When this Bill has been passed will the Minister give careful consideration to the effect the social insurance payment has on job creation to see if there is any possibility of finding an alternative source of income to substitute for it?

Deputy Kenny has about eight minutes.

From reading this Bill and the other legislation dealing with social welfare, I find that it has become extremely complicated over the past few years. The purpose of this legislation is to give effect to the Government's decision to introduce a system of pay-related social insurance contributions. This legislation is beyond the grasp of the average person because he does not have the background knowledge and experience in social welfare legislation necessary to get an overall perspective of the scope, dimension and intentions of the Bill.

The Department of Social Welfare is one of the most important Departments in the country because of the number of social welfare recipients involved. In fairness to the Minister he has received credit from a number of people for the running of his two Departments. Will the Chair allow me to speak on health benefits?

Certain health benefits come under social welfare, such as glasses, teeth and so on and they are allowable.

The proposed ceiling of £50 will benefit the lower income group because it relates to people who are presently excluded from eligibility for medical cover under the medical card system. Where people were just over the limit, this ceiling will help them. On the other hand, it will hit the middle income group to a greater extent than hitherto. The ceiling of £5,000 will no doubt help the higher income group because even if a person earns more than that he will still pay the £50 limit. Therefore this Bill will help the lower income groups and the Minister is to be complimented for that.

As I said, there has been a vast amount of confusion among ordinary people as to what exactly they are entitled to under the different medical regulations. It would be of benefit to the Minister and his Department to continue to expand their present policy of explaining what people are entitled to by virtue of the payments they make under the social welfare regulations.

Deputy Mitchell mentioned the fact that contributory and widows' pensions are taxed. This is causing an increasing amount of worry among older and not so old people who have unfortunately been left on their own. Once their income goes beyond a certain limit they are liable to pay tax. I am sure the Minister is only too well aware of the hardships and complications which are put before these people in their daily lives. With rising prices and increases across the board these people find it much more difficult to maintain a decent standard of living, if this is the only benefit they receive. The Minister would do well to recommend that his colleague, before his deliberations next January when he delivers the 1979 budget, seriously consider increasing the tax free allowance to people in this area.

The Deputy has very little time left and tax allowances are the responsibility of another Minister.

The question of the regulations for the calculation of reckonable earnings is very complicated. There are many people in this country whose income is very difficult to determine. I would like the Minister to spell out in more detail how he intends to implement the regulations for the calculation of varying levels of income.

I appreciate the Minister's gesture in giving us this time and on reflection I am sure there was no need to waste 20 minutes arguing about it. We had another speaker on this side of the House and there was agreement that, until noon, speakers would be from this side of the House. As the Minister's party put in a speaker Deputy Keating——

There was no such indication.

I appreciate that but I think it was assumed that speakers from this party who wished to speak——

Deputy O'Hanlon was anxious to speak all along.

I want the Minister to know that Deputy Keating has given way. We considered raising the points when Deputy O'Hanlon stood up to speak but——

for the second time I am calling on the Minister to conclude.

This legislation has been criticised for not doing a number of things it was never intended to do. It represents a major administrative reform of the social welfare system. It is probably the most important single reform of the system since the system was introduced. It is primarily concerned with the method whereby the contributions to the insurance fund are collected from those who are insured. It is not intended to deal with the other side of the coin, namely, payments out of the fund, the level and nature of benefits, improvements in benefits or anomalies in the payment or the rate of benefit.

While it is primarily an administrative form on the collection side, nevertheless we have availed of this opportunity to achieve some important economic and social effects. Perhaps the most important of these from the social point of view is the fact that it greatly eases the lot and improves the situation of the lower paid worker. The principle of pay-related payments is now fully adopted and enshrined in this legislation and the effect of the operation of that principle is entirely to the benefit of the lower paid worker. The main purpose is to ensure that lower paid workers pay somewhat less in order to achieve the same benefits; but, unfortunately, the corollary is that some sections must pay more. I have already said that 500,000 workers will pay less when these provisions come into operation and approximately 200,000 will pay more. That is the most important side effect of this changeover from the social point of view.

The next point is that it will provide a significant benefit for Labour intensive industries, and I take issue with Deputy Mitchell on this point. By and large, labour intensive industries are those which employ lower paid workers. Not alone will the contributions paid by such workers be less but the corresponding contribution by the employers of lower paid workers will be less. This must considerably improve the situation of labour intensive industries.

There are a number of other economic side benefits on the official administrative side and also for the employer. It will greatly streamline and facilitate our collection procedures and administration generally. For the employer there is the benefit that in future only one deduction from payroll will be necessary and that will be a percentage from each wage or salary paid. The cumbersome system of cards and stamps will be eliminated and the risk of fraud, deceit and robbery inherent in such a system will also go. The benefit on the administrative side will be very great indeed.

There will be a very considerable improvement in pay-related benefit. At the moment it goes up to £2,500 per annum or £50 per week and that will be extended to £5,000 per annum or £100 per week. This is a major improvement in the pay-related benefit system. Female domestic servants, as they are called for want of some better term, will now be brought within the scope of the pay-related scheme. There are some improvements in the form of the elimination of discriminatory aspects of a minor but nevertheless important nature.

On broad aspects of the legislation I will deal with two points which were raised. The first was in regard to insurance of the self-employed and the other was concerned with pensions generally. These are the next two major areas to be tackled in the field of social welfare. Work in regard to them is very well advanced. In both cases we published Green Papers outlining different aspects of the situation, the problems and possibilities, and asked for comment. In regard to the self-employed we asked that all comments should be submitted by 31 May last. At least two very important organisations asked for a postponement of that closure date because they were not ready to submit their views by then and we extended the time for the submission of these views. We have now informed everybody that we cannot wait any longer and unless we get their views almost immediately we must proceed without them. We have gone through the same process in the matter of a national pensions scheme. We are accepting views from all the various bodies and organisations who have a legitimate interest, as well as from individuals. These two major gaps in our social welfare structure are next on the list for attention. As soon as we get this changeover effectively in operation, we will be able to get down to dealing with these other areas and put forward proposals in regard to them.

While the level of benefits, abuse and such matters are not related to this legislation, they were mentioned in the debate and I will speak briefly about them. It is part of our duty and responsibility as a Department of Social Welfare to ensure on a continuing basis that the social welfare code is not abused and is not availed of fraudulently by anybody. Everybody realises that in a modern community no Government scheme can be entirely free from abuse and fraudulent misuse. Right through the whole spectrum of public administration there is abuse to a greater or lesser degree. To use the modern phrase, people are beating the system. In regard to social welfare, I do not think the level of abuse is greater than in any other area of public administration. Whether it is or not, it is our responsibility to ensure that it is combated and dealt with as effectively as possible. It can never be completely eliminated, but we must deal with it constantly and on a continuing basis.

We do that. It is necessary we should do so from a number of points of view. It is demoralising and distressing for the genuine person who works hard and does his best to earn an income to maintain himself and his family to see someone else fraudulently, if you like, availing of benefits and services to which he is not entitled. That is probably the most important aspect of any abuse in social welfare. It gives rise to feelings of frustration, annoyance and anger among genuine conscientious people doing an honest day's work when they see being rewarded someone else who is not.

As one Member said, the more we can eliminate abuse the more we will have available ultimately for those genuinely in need—and, God knows, there are enough of them to demand that we do not fritter away any of our scarce resources on people who are not entitled to them. Certainly there will be no witch hunts, no harassment, nothing of that nature as far as I am concerned. There will be a simple, straightforward discharge of our duty and obligation to ensure, as far as we can possibly do so, that all those entitled to benefit get benefit, and that those who are not so entitled do not.

I accept, as has been pointed out here in this debate, that I have a special ministerial responsibility to ensure that the needs and requirements and welfare of the poor and needier sections are brought constantly to the attention of the Government in any changes being made, in any policies being adopted, and in all the Government's activities. The Government have, of course, a social policy. Fianna Fáil have always had a social policy. A progressive social policy has always been an integral part of Fianna Fáil's philosophy right from the days of their foundation. We have pioneered major improvements in the area of welfare generally—social welfare, health and education. We are as firmly committed today to a policy of social justice as we ever were at any time in the history of our party.

Especially for the wealthy.

That is the outlook and philosophy and policy of this Government and, as far as I am concerned, as Minister for Social Welfare, I have the special duty of ensuring that that philosophy is translated into practical effect, and that the intention of the Government is constantly directed to any areas where action needs to be taken, or can be taken, to ensure that that social philosophy of ours is given full effect. I intend to discharge that duty and I have the understanding, the sympathy and the co-operation of all my colleagues in that regard.

There was some confusion about the rates of contribution that will come into operation under the new legislation. Section 5 provides for a standard rate of social insurance contribution of 11.2 per cent. That will be made up of 3.4 per cent from the employee and 7.8 per cent from the employer. That contribution will cover benefits other than occupational injury. That is paid exclusively by the employer and, from now on, it will be at the rate of .45 per cent. Now the 3.4 per cent employee contribution is, in fact, 3.9 per cent. That 3.9 per cent is reduced by .5 of 1 per cent to compensate for the fact that the pension element of the contribution will no longer be deductible for income tax purposes. That .5 of 1 per cent concession in the employee's rate is related directly to what will be lost to employees and gained by the Exchequer because of the fact that we will no longer be able, for administrative reasons, to make the deduction in income tax to allow for the pension element in the contribution rate. I trust I have made that clear.

There will be three rates for the voluntary contributor—4.4 per cent, 2.7 per cent and 1.7 per cent—payable in full by the contributor and the rate will depend on the benefits for which the contributor is covered. All those rates will either be confirmed or varied before 6 April next. The reason for that is that we have put into the Bill the various figures, levels, qualifications and rates appropriate to the latest overall industrial earnings figure as we know it. The average industrial earnings figure is related to March. It is available around September and it will be the base on which the following year's ceiling will be fixed. We take the average industrial earnings figure and multiply by roughly 1½ to ensure that the great bulk of workers is covered. We will fix the final figure then to come into operation on 6 April next related to the average industrial earnings as at March of this year.

Is that in relation to the upper ceiling for pay-related benefits?

Is there any likelihood that the rates may be changed before the Act comes into operation?

If there should be a change in the ceiling there might be a change in the rates.

I would prefer if the Deputy would wait until the Minister finishes to ask any question he may wish to ask.

It is rather complicated. A great many figures are involved.

Deputy Boland referred to social insurance benefit for public servants, soldiers, out-workers, share fishermen, and so on. Under the regulations to be made, the rate payable will be related to the benefits covered by the contribution. In the case of civil servants who are on the restricted system of benefits the rate would be about 1.7 per cent. The Deputies could work on that figure for the time being.

That is for male and female?

Yes. I have adverted to most of the points raised by Deputies. The question of the consolidation of the legislation was raised. There is no great point of principle involved in postponing the activities of the standing joint committee. Since the Bill, the consolidation measure, was presented to that committee the Social Welfare Acts of 1977 and 1978 were passed. This Bill represents further major changes and it is just common sense to bring forward a new updated Consolidation Bill. Whether we do that or not it certainly would not be sensible to go ahead with the work of the consolidation committee while this legislation is on the stocks.

The Minister is aware that the committee have not even been appointed since July, 1977?

I was not aware that they had not been appointed. The committee are simply appointed whenever we are ready to go ahead with the work.

Some political play was made of the question of the Exchequer contribution. Deputy Noel Browne conveyed, with some sleight of hand, the impression that this Government had reduced or were embarking on a programme to reduce the Exchequer rate of contribution. That is not so. When we assumed office the rate of Exchequer contribution was around 20 per cent. We maintained it at that rate for 1978 and all these calculations are based on a continuation of that level of Exchequer subvention to the insurance fund. There is a great deal of misapprehension about the reality of the situation. Deputies are prone to throwing out statements that we are the worst in Europe or the worst in the world, but in fact the level of contribution by the Exchequer to welfare as a percentage of the funds payable into insurance funds is very high compared with that prevailing in Europe. It is much higher than in most countries.

However, all that is hardly relevant because we must try to manage our affairs in relation to our situation and our resources. The situation is that these figures, the calculations in this legislation, are based entirely on making this changeover on a totally neutral basis so far as income is concerned. We are seeking to devise rates and percentages which will bring in exactly the same amount as the existing flat rate contributions are bringing in. At no level, either in income tax concessions or in any other area, are we using this changeover to effect any substantial change in the contribution from either the employee or the employer.

What about female civil servants?

Female civil servants to whom this applies will again be asked to contribute on a pay-related basis, about 1.7 per cent. As Deputies know, in 1956 a change was made which took them out of the system. That was fairly relevant at that time because female civil servants had to resign on marriage and most of them would never benefit from the contributions made. That does not apply now. Employees, including women, in the public sector are insured for a limited number of benefits. A special flat rate contribution is applicable to them at present. That will be converted into a pay-related contribution at the same reduced rates appropriate to the cost of the limited benefits for which they are insured. In 1956 female pensionable public servants were relieved of the obligation to pay a proportion on the grounds that the majority of them would never benefit from the system. However, the marriage ban was removed in 1973 and women now qualify for widow's pension either on their own or on their husband's insurance. It is appropriate now that women in the civil service should come back into the situation. Their contributions will have exactly the same value as male contributions.

I hope I have dealt with the main points raised. This is a very long, complicated piece of legislation. I suggest that anybody who has not had an opportunity of giving expression to his views on the Second Reading, either through his own dilatoriness or through the workings of the system, will have plenty of opportunity on the sections on Committee Stage to make any point he wishes.

I commend the Bill to the House for a Second Reading. This Bill represents a major administrative improvement in the social welfare structure and will give rise to a number of important economic and social side benefits. It is an important step forward in the evolution of our social welfare system generally.

There are three points which the Minister might clarify. The Minister enunciated the contributions from an employer as 8.25 per cent plus .4 per cent——

What is the 8.2 per cent?

——and the employee at 4.4 per cent. Can the Minister give any indication of the extra percentage amount over and above 4.4 per cent which the employee will have to pay so as to cover the contribution for the redundancy benefit? It would be helpful if the Minister could say what the total percentage contribution from an employee is.

The 4.4 per cent is a voluntary contribution. The payment by a normal employee is 3.4 per cent.

An employee will contribute 3.4 per cent plus 1 per cent in relation to his health contributions? It would be helpful from the point of view of employers and employees if they knew the total percentage in relation to social insurance, health and redundancy contributions that an employee will have to make from April next.

The Minister for Labour will be bringing in that legislation any day now. That will be known well in advance.

It could be up to 5 per cent?

I do not think so and I do not think the Deputy should say that.

It will be between 4.4 and 5 per cent?

The Bill provides for a social welfare contribution of 3.4 per cent from the employee.

What will the total contribution be?

The Deputy should not be speculating because he may be proved wrong in these matters.

I hope so. During the course of the debate I spoke extensively about making all pensions and benefits pay-related or income-related if contributions are to be income-related but the Minister did not deal with that matter in the course of his reply. Does he wish to comment?

That is a policy matter and does not arise on the Bill.

The Minister explained to some extent the contribution which might be expected now from a female public servant and I would be obliged if he would tell the House what benefits she will be covered for in return for 1.7 per cent.

The same benefits as a man.

Which are?

Namely, widows' and orphans' pension.

Widows' and orphans' and deserted wife's benefit. In that event the single female civil servant will pay 1.7 per cent of her income to cover herself for widows' and orphans' pension and deserted wife's benefit. She can only qualify if she gets married.

The Deputy should not be endeavouring to discriminate between men and women, for or against either. The position is that the new pay-related contribution will be paid by all civil servants, men and women, and will be directly related to the limited level of benefits to which they will be entitled.

Is it a fact that some public servants who will have to contribute at the 1.7 level will not be covered for any benefit?

These are matters which can be raised on Committee Stage.

I was talking off the top of my head about the rate. The rate had not been fixed for public servants and 1.7 per cent is, in fact, what I am suggesting it might be for employer and employee.

That is more like it, because it would be too high for employee alone.

Question put and agreed to.
Committee Stage ordered for Tuesday, 21 November 1978.
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