I move: "That the Bill be now read a Second Time."
I am particularly pleased that this, the first Bill which it is my privilege to introduce as Minister for Social Welfare, is one which will make significant improvements in our social welfare services and be of particular help to those genuinely in need of them.
Before I go on to speak about the contents of the Bill, perhaps it might be as well if I were to explain to the House why this particular Social Welfare Bill may have an unfamiliar look. It is bigger than usual and it contains some rather complex sections of a very technical nature. The main reason for this is that the Bill has been designed to facilitate the consolidation of all social welfare legislation. As Deputies are aware, the Social Welfare (Consolidation) Bill, 1976, is with the Standing Joint Committee on Consolidation Bills but four further statutes have been enacted since it was introduced in 1976. Arrangements to have these Acts and the present Bill incorporated into the consolidating legislation are well advanced. As soon as the revised text becomes available, I propose to withdraw the present consolidation Bill and to introduce the revised measure. This should help the Standing Joint Committee to complete their work more quickly.
The principal technical changes are concerned with the creation of a new Schedule—the Eighth Schedule—to the Social Welfare Act, 1952. This Schedule will set out the rates of social assistance payments on the same lines as the rates of social insurance payments are set out in the Third Schedule to that Act by section 15 of the Bill. Future changes in rates of assistance will thus be possible by amending the Schedule without making changes in the main text of the Act. Before I leave this point, I should mention that none of the technical or structural changes in itself affects entitlements to payments under the social welfare code.
Now to the new provisions of the Bill, the main purpose of which is to give effect to the increases in the rates of social welfare payments and other changes in the social welfare schemes announced in the budget. The explanatory memorandum which accompanies the Bill sets these out clearly and includes tables which in previous years were incorporated in the text of the Bill itself. I trust Deputies will have found the memorandum a help in their consideration of this legislation.
The increases in rates of payment provided during last year were such that the Government's commitment to keep social welfare payments in line with increases in the cost of living was fulfilled and, in addition, real improvements were brought about in the value of these payments. The increases provided for in this Bill, 25 per cent on the long-term payments and 20 per cent on the short-term payments will continue this process.
People on long-term payments, such as retirement pensioners, old age pensioners and widow pensioners, are generally regarded as requiring special attention in the social welfare context and the desirability of higher increases in their case will be readily conceded by all.
These percentage increases are additional to the temporary increases provided in October of last year. Under the terms of the national understanding, increases of the order of 6 per cent were awarded for the period 1 October 1979 to 31 March 1980. It has been decided to continue these increases so that the annual rate of increase over the rates provided from April 1979 under last year's budget exceeds 31 per cent for long-term and 26 per cent for short-term payments.
I should now like to deal with the effect of the increases on individual payments. The maximum weekly personal rate of non-contributory old age pension is being raised by £4.20 to £21 for persons aged under 80 years. It will go up to £22.50 for persons aged 80 years or over. The reduced rates of pension payable where weekly means exceed £6 are also being increased. Steps are again being taken to ease an anomaly which is due to the application, up to last year, of uniform percentage increases to all reduced rates of pension. This resulted in a scale of means and pensions under which weekly pensions were reduced by £1.40 for every increase of £1 in means. Last year, the amount of the reduction for each £1 increase in means was lowered from £1.40 to £1.30. The present Bill provides that, as a further step towards achieving a scale where pensions will not be reduced by more than £1 a week for each £1 increase in means, the stages between rates will be lowered to £1.20. As a result the scale of means and pensions will be stretched to cover six additional rates of pension and reduced rates of pension will be payable up to a means limit of £23. For a pensioner with qualified children of course, the means limit will be greater than £23.
The maximum rate of payment in respect of an adult dependant under 66 years of age is being increased by £2.10 to £10.55. The overall maximum payment for a pensioner with a dependant spouse will, therefore, go up to £31.55 and, where the pensioner is 80 years of age or over, to £33.05. The allowance payable in respect of a prescribed relative giving full-time care and attention to an incapacitated pensioner is being raised to £11.75 and in the case of a pensioner living alone, the additional allowance is being increased to £1.65.
The additions to pension payable to pensioners with qualified children are being raised to £5.70 a week for each of the first two children and to £4.40 a week for each other child.
I am well aware that statistics and percentages may not be very meaningful to the pensioner who reckons his or her increases in pounds rather than in percentage points. I am confident, however, that pensioners will consider the cash increases to be significant. For example, in the case of a married old age pensioner under 80 years of age, the overall increase in pension will be £6.30 per week or £8.40 if his wife has attained age 66. It will be even greater if the pensioner is over 80 years of age.
This year, in addition to the significant general increases in rates of payment and the adjustments on the scale of means and rates of pension, considerable progress has also been made in removing other anomalies in the social welfare system. Two improvements being made affect the operation of the Old Age Pensions Acts as they relate to blind persons.
Section 4 of the Bill provides for the reduction of the qualifying age from 21 to 18 years. Generally speaking, children's allowances and increases of any basic pension, benefit, assistance or allowance for which the parents of blind children would qualify under the Acts, are payable only for children under the age of 18. The reduction in the qualifying age will enable blind pension to be paid to blind persons between the ages of 18 and 21 thereby bridging the gap of three years during which no payment under the social welfare code was available for these persons. As a corollary, these blind persons will not be treated as qualified children for any of the other schemes.
There is also provision in Section 5 which will increase the amount of blind person's earnings which may be disregarded in assessing his or her means for pension purposes. The concession is given in recognition of the special problems which blind persons face in the employment field.
Section 6 of the Bill provides for the increases in the general rates of unemployment assistance. The increase in the personal weekly rate of assistance will bring the maximum to £17 in urban areas and to £16.45 in rural areas. The rates for adult dependants are being increased to £12.25 and £11.95 respectively and the rates for dependent children to £5.30 for each of the first two and £4.10 for others. Thus the rate of assistance for a married couple with two children is being increased to £39.85 in an urban area and to £39.00 in a rural area.
In the case of smallholders in certain disadvantaged areas, means for unemployment assistance purposes may be assessed notionally by reference to land valuation, where the valuation is £20 or less. In these cases, special rates of unemployment assistance are payable. This is a concession having regard both to the present levels of farm incomes and the means test for unemployment assistance generally.
Under the Bill, the special rates payable to smallholders who continue to avail of notional assessment will be maintained at the level payable from October 1979, pursuant to the national understanding. The additional increase of 20 per cent will apply only to those smallholders on factual assessment. Any smallholder whose means are assessed on a notional basis may have his means assessed on a factual basis if he thinks that this would be to his advantage. There are, in fact, some 3,000 smallholders whose means are assessed on a factual basis and who are receiving unemployment assistance at the rates generally applicable, which from April next will include the 20 per cent increase provided in the Bill.
There is an anomaly as regards entitlement to an increase for an adult dependant which affects beneficiaries under the schemes of unemployment benefit and assistance, disability benefit, invalidity pension, injury benefit and supplementary welfare allowance. This is being removed by sections 6, 14, 19 and 23 of this Bill.
A beneficiary under these schemes who is single or widowed, or receiving deserted wife's benefit or allowance, may be paid an increase—known as a "housekeeper's allowance"—in respect of a woman who is wholly or mainly maintained by the beneficiary to have the care of at least one child. A married man who is separated from his wife cannot receive the allowance, neither can a married woman who is separated from her husband and who, for one reason or another, is not in receipt of deserted wife's benefit or allowance. The amendments provide for the payment of the "housekeeper's allowance" to married persons in such circumstances, under the same conditions as apply to any other person entitled to it.
Two improvements in the unemployment assistance scheme being provided this year are dealt with in sections 7 and 8 of the Bill.
Section 7 increases the amount of yearly earnings from seasonal fishing which may be disregarded in assessing the means of persons for unemployment assistance purposes. At present, one-half of the income which does not exceed £80 plus one-third of the income which exceeds £80 but does not exceed £200 is disregarded. It is now proposed to increase these amounts by 50 per cent, making the maximum disregard £120 as against £80 at present. Persons who are engaged in seasonal fishing earn most of their income in a relatively short period. In the nature of things, this income would largely be spent as it is earned and, accordingly, it is considered unfair to reckon it in full over the year for unemployment assistance purposes.
The six months' continuous residence requirement for unemployment assistance purposes is being removed by section 8. At present, an applicant who does not satisfy this residence test must rely on supplementary welfare allowance which is payable only at the rural rate of unemployment assistance.
Sections 9 and 11 of the Bill provide for increases in all rates of non-contributory widows' and orphans' pensions. The maximum weekly personal rate of widows' (non-contributory) pension is being increased from £16.80 to £21.00 and the amount for each qualified child to £6.90 instead of £5.50. As in the case of non-contributory old age pension, provision is being made for uniform reductions of £1.20 in pension for each £1 increase in means and for additional rates of pension. Increases in the prescribed relative allowance, "living alone" allowance, and "over 80" allowance in line with those payable with non-contributory old age pensions are also provided. The improvements in widows' pensions will automatically apply to the social assistance allowances for deserted wives, unmarried mothers and prisoners' wives.
The social assistance allowance payable to single women aged between 58 and 66 is also being increased by 25 per cent in section 13, bringing the maximum to £18.30.
The parity between the rates of supplementary welfare allowance and the rural rate of unemployment assistance is being maintained by a 20 per cent increase in the rates of supplementary welfare allowance which is dealt with in section 14.
Section 10 will enable a woman qualified for a deserted wife's allowance who becomes widowed to qualify automatically for widow's non-contributory pension at the same rate as the deserted wife's allowance which was in payment to her. Under present procedure, a woman in receipt of a deserted wife's allowance whose husband dies must, if she wishes to obtain a widow's non-contributory pension, apply specifically for it. This means that her application must go to a social welfare officer for an investigation of means. As the means test and the rates of payment are the same in both schemes, I consider that title to widow's non-contributory pension should immediately be conferred on such an applicant at the same rate as the deserted wife's allowance which was in payment to her. While this conveys no monetary advantage, I know that the simplification of procedure will be welcomed. If the widow considers that she is entitled to a higher rate of pension, it will, of course, be open to her to apply for it.
At present, the definition of orphan for social welfare purposes includes a child whose parents are dead and who does not reside with a step-parent. It also includes a child whose mother dies while deserted wife's allowance or deserted wife's benefit was payable to her and whose father does not wholly or mainly maintain him. Cases have arisen where a woman who was deserted by her husband dies but, prior to her death, had not applied for, or had not qualified for, either deserted wife's allowance or deserted wife's benefit, leaving her children, as a result, with no rights to benefit. A similar situation has arisen where it was the husband who was deserted by the wife and, on the husband's death, the children were left without rights to benefits. To relieve hardship in such cases, it is proposed to expand the definition of "orphan" to include the child of a deceased parent, who had been deserted prior to death, where the other parent has abandoned the child. This will enable orphan's non-contributory pension, orphan's contributory allowance or orphan's pension under the occupational injuries scheme to be paid in respect of any such child. The necessary provisions are contained in sections 12 and 22 of the Bill.
I now come to the increases in the rates of contributory benefits and pensions under the social insurance system which are set out in section 15 of the Bill. The personal rate of disability and unemployment benefit is increased from £17.05 to £20.45 and a married couple will now receive £33.70 instead of £28.10. Allowances for children with these benefits are being increased to £5.95 for each of the first two children and to £4.90 for each other child. Maternity allowance is also being increased to £20.45.
The personal rate of invalidity pension, is being increased by 25 per cent to £22.05, with an addition of £14.30 for an adult dependant.
The personal rates of contributory old age and retirement pensions for persons under age 80 go up to £24.50 and, for those over 80, to £26.25. The addition to pension for an adult dependant is being raised to £15.65 where the adult dependant is under pensionable age and to £18.30 where the adult dependant is aged 66 or over. Accordingly, a married couple both over pensionable age will get £42.80 as compared with £34.25 at present and, if the pensioner is aged 80, the new rate will be £44.55, an increase of £8.90 per week.
The new personal rate of widow's contributory pension and deserted wife's benefit, will be £22.50 and for those aged 80 or over £24.05. The additions to widow's contributory pension and deserted wife's benefit for qualified children are being raised to £7.50 for each child. A widow or deserted wife with three qualified children will now get £45.00, an increase of £9.00 per week.
In the case of the other contributory pensions, the increased amounts for child dependants will be £6.40 for each of the first two children and £5.30 for each subsequent child.
All the personal rates I have mentioned in connection with social insurance payments are the maximum rates, payable where the contribution conditions for the benefit concerned are fully satisfied. Most people qualify for the maximum rates, but for those whose insurance records are deficient, reduced personal rates are payable. As is normal, these rates will be increased by regulations. Of course, while the personal rates of benefit are reduced where there is a deficient record, the allowances for a dependant wife and children are not reduced.
Criticisms are frequently directed at abuses of the social welfare system. Any person who receives a social welfare payment to which he is not entitled creates an additional drain on the funds available and makes it that much more difficult for me as Minister for Social Welfare to meet my obligations to the needy. In the control of the system, therefore, it is necessary for me from time to time, to take measures to ensure that the money allocated to social welfare goes only to those entitled to it.
The disability benefit scheme has recently come in for some criticism on the grounds that it acts as an inducement to malingering. In the year 1979 there were some 286,000 claims to disability benefit and the average number of persons paid each week was close to 71,000. These persons received a total of almost £96 million made up of £82 million in disability benefit and £14 million in pay-related benefit. Expenditure of this magnitude must be strictly controlled and all measures taken to eliminate the possibility of abuse.
One of the abuses alleged in relation to disability benefit is that some workers claim benefit in respect of unnecessarily frequent short absences from work. At present, a person is disqualified for payment of benefit for the first three days of illness unless those days fall within 13 weeks of a previous period of illness or unemployment. A person can thus receive disability benefit from the first day of a sick absence occurring within three months of the end of the previous claim even though the second absence may be as short as three days. In order to tighten control in this area, section 17 of the Bill will apply the three waiting days to every claim to disability benefit except in the case of a person who becomes ill while unemployed or who suffers a relapse within three days of returning to work. The position in regard to waiting days for the purpose of unemployment benefit and injury benefit under the occupational injuries benefit scheme is not being changed.
Under section 20, all rates of periodic benefit under the Social Welfare (Occupational Injuries) Act, 1966, including increases of benefit in respect of adult and child dependants, are being increased in line with the increases being applied under the general social insurance scheme. Preferential rates of personal benefit under the occupational injuries scheme are thus being maintained. Moreover, this year for the first time disablement benefit is being treated as a long-term benefit and the 25 per cent increase is being applied to it.
Section 21 provides for an increase of 25 per cent in the living alone allowance payable with death benefit pensions under the occupational injuries benefit scheme in line with the living alone increase under the general social insurance scheme.
This year again the rates of children's allowances are being substantially increased. Section 24 provides that the monthly allowance for the first child will be increased by £1 to £4.50 and by £1.50 to £7.00 for each subsequent child. This will bring the monthly payment for families of three children up by £4 to £18.50 and up by £5.50 to £25.50 for families of four children.
Children's allowances are an important source of income not only to lower income but also to middle income families and are paid directly to the mother. The adjustment in the child income tax allowance announced in the budget statement will ensure that the full value of the increase in children's allowance is directed mainly towards families in the lower and middle income groups. The increased rates will be effective from 1 of July 1980.
Section 25 provides for increases in the grants paid in respect of multiple births. At present, these grants are of £100 in respect of triplets and £150 on the birth of quadruplets or any higher number. It is proposed to increase these amounts to £300 and £400 respectively. The operative date will be 1 April 1980.
Section 26 raises the earnings ceiling from £5,500 to £7,000 and the rates of pay-related social insurance contributions which will be required to meet the employer's and employee's share of the cost of the proposals under the social insurance schemes. The overall increase in the current rate of contributions, 11.2 per cent, applicable to persons eligible for all benefits, will be 0.8 per cent of which the employer will bear 0.7 per cent and the employee 0.1 per cent. Consequently, the new standard rate of contributions will be 12 per cent of which employers will pay 8.5 per cent and employees will pay 3.5 per cent. Proportionate increases are being provided in the rates of voluntary contributions. The increases will be effective from 6 April 1980. The new rates and the increased earnings limit are expected to yield about £380 million in the current year, which includes £44 million additional contribution income.
Deputies will see that the section provides for the new rates of contribution by the substitution of "3.5 per cent" for "3.2 per cent" and "8.5 per cent" for "7.5 per cent" in section 6 (1) of the Social Welfare Act, 1952. This would seem to indicate that the present rates of contributions are 3.2 per cent for employees and 7.5 per cent for employers which is not so. These rates were, in fact, temporarily increased to 3.4 per cent and 7.8 per cent respectively by virtue of section 5 (2) of the Social Welfare (Amendment) Act, 1978, for the 12 months ending 5 April 1980. This provision will then lapse leaving the original rates in section 6 (1) to be increased from 6 April 1980, by this Bill. Various special or `modified' rates of contributions are payable in respect of certain employments, for example civil service, certain share fishermen and so on, which are not covered for all benefits of the social insurance system. Any necessary increases to those modified rates will be made by regulation.
The overall cost in 1980 of the rates increases and other changes being provided for in this Bill is £90.2 million. Of this amount, social assistance accounts for £57.3 million, all of which is borne by the Exchequer. On the social insurance side, the total increase in cost is expected to be £77 million and this must be met out of the social insurance fund which is financed by contributions from employers and employees with an annual subvention from the Exchequer. The pay-related contributions for employers and employees will meet an estimated £44 million of this extra cost leaving £33 million to be borne by the Exchequer.
The changes in the Bill which I have outlined can be summarised as the increase of long-term payments such as pensions, both contributory and non-contributory, by 25 per cent; the increase of short-term payments such as disability and unemployment benefit, unemployment assistance and supplementary welfare allowance by 20 per cent; the increase of children's allowances by an average of about 28 per cent; provisions to improve entitlements for various categories, for example blind persons, widows, orphans, seasonal fisherman and measures to prevent abuse of the disability benefit scheme. I am satisfied that the provisions of the Bill will bring about a real improvement in the social welfare system, and I, therefore, recommend it to Dáil Éireann for speedy and favourable consideration.