I move:
That a sum not exceeding £353,685,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December 1980, for the salaries and expenses of the Office of the Minister for Social Welfare, for certain services administered by that Office, for payments to the Social Insurance Fund, and for sundry grants.
The net Estimate for Social Welfare for 1980 as set out in the Estimates Volume is £353,685,000. The amounts shown in the Estimates Volume under the various subheads for 1979 include the additional amounts provided in the two Supplementary Estimates which were taken in that year. The 1979 figures, therefore reflect the effects of the prolonged postal dispute in that year which resulted in increased expenditure under certain subheads and a shortfall in contribution income leading to a higher than normal subvention from the Exchequer to the Social Insurance Fund. For these reasons the 1979 figures are not directly comparable with this year's figures.
The 1980 Estimate was of course prepared before the 1980 budget and accordingly does not include provision for the costs of the rate increases and other improvements announced at that time. Neither does it include provision for the cost of the temporary increases granted as part of the national understanding at October 1979 for any period after the end of March 1980. It will be necessary to provide for the cost of these items in a Supplementary Estimate to be introduced later this year.
Thus, the published figures do not give a complete picture of the annual expenditure on social welfare services or an adequate comparison of the growth in the cost of such services from year to year. Substantial changes were effected by the 1980 budget and I do not think that any useful purpose would be served by comparing the figures for individual subheads of the Vote with the corresponding figures for last year. However, if any Deputy requires information on any specific provision I will be happy to supply it.
The Social Welfare Act, 1980, recently before the House, contains the necessary provision for the improvements in social welfare services announced in the budget. These improvements include significant increases in the rates of social insurance and social assistance payments with effect from April 1980 and in children's allowances with effect from July 1980; removal of an anomaly in means tests; increased disregard from the earnings of blind pensioners and seasonal fishermen; reduction of qualifying age for blind pension from 21 years to 18 years; provision for automatic title to widows' non-contributory pensions in certain cases; extension of the orphans' pensions schemes to certain abandoned children; removal of residence qualification for unemployment assistance; increased grants for multiple births; increased death grants; easing of the contribution conditions for receipt of treatment benefits for young people; granting of additional credited contributions to persons taking up employment for the first time after leaving school and extension of the provisions for payment of adult dependants' allowances in certain cases. It is expected that all these improvements will cost the Exchequer an additional £90.2 million in the current year.
The estimate of £353,685,000 before the House, as Deputies are aware, only represents the amount which the Exchequer is called upon to provide for social welfare services in 1980. In order to arrive at total expenditure on social welfare services, account has to be taken of the expenditure from the Social Insurance Fund, the Occupational Injuries Fund and the Wet-Time Fund which is financed by contributions from employers and employees.
Perhaps the most useful indication which can be given of the cost of the services administered by my Department is the estimate of total expenditure for a full 12 months based on the new rates of payment and other improvements announced in this year's budget. On this basis it is estimated that total expenditure from April 1980 will be running at an annual rate of £889 million. This compares with a figure of around £703 million per annum based on expenditure in the twelve months after April 1979 and represents an increase of approximately 26.5 per cent.
Deputies are sometimes confused when looking at the Exchequer contribution to the Social Insurance Fund under subhead E of the published Estimates. I should mention that this is a residual figure which can alter considerably by the end of the calendar year. As shown in the published Estimate for 1979 the figure was £49.50 million but, as this year's published Estimate indicates, that figure had increased to £80.48 million by the end of 1979. The figure shown in this year's estimate for the income of the Social Insurance Fund is the amount which was calculated to be raised from the existing main pay-related social insurance contribution rate of 11.2 per cent with an income ceiling of £5,500 per annum and also includes estimated amounts to be received in 1980 by way of arrears due from 1979 and from higher average earnings in 1980. As already announced, the main pay-related social insurance contributions rate has been increased to 12 per cent with an income ceiling of £7,000 per annum with effect from April 1980. It is the income from these levels, together with the experience of actual expenditure on the various insurance benefits throughout the year, which will finally determine the Exchequer contribution to the Social Insurance Fund for 1980.
As I mentioned earlier, the new social welfare rates of payment and other improvements have been covered in the debates on the budget and on the Social Welfare Bill, 1980. Accordingly, it is hardly necessary for me to comment in detail on them, save to emphasise that provision for the cost of these items is not included in the Estimate now before the House. Suffice it to say that long-term benefits were increased by 25 per cent with effect from the beginning of April 1980 with the result that a single old age contributory pensioner got an increase of £4.90 a week bringing his pension rate to £24.50 a week. In the case of a married couple there was an increase of £8.55 a week, bringing the rate to £42.80 a week. For a contributory widow with three dependent children the increase was £9 a week, bringing her rate of pension to £45 a week.
As was the case in 1979, a higher rate of increase was given to recipients of long-term benefits than to recipients of short-term payments whose need might not be as great and whose payments in any event attracted pay-related supplements in many cases. However, all short-term payments were increased by more than sufficient to compensate for the expected increase in the cost of living index. The increase of 20 per cent for a man out of work, for instance, meant an increase of £3.40 a week in his basic rate of benefit while if he had a wife and two dependent children, the increase was £7.60 a week bringing his basic rate of benefit to £45.60 a week. Under the budget also, the rates of children's allowances are being increased by approximately 28 per cent with effect from the beginning of July 1980. This Government can claim to have more than fulfilled their commitment to maintain the living standards of social welfare recipients.
All of the budget improvements have been fully advertised, so that recipients may be aware of their rights. Advertisements outlining the increased rates of payment and the other improvements have appeared in all the newspapers and this year, for the first time, poster copies of the newspaper advertisement are being circulated to health centres, community information centres, homes for the elderly, voluntary organisations and, of course, to all of my Department's information centres and local offices. As I have said, this is an innovation introduced this year, and I hope it will be a useful one.
It is hoped that these advertisements and posters which have incorporated a new layout to convey a clear picture of the budget changes will assist community workers and others in explaining the budget improvements to pensioners and other Social Welfare recipients.
I have already mentioned in public the difficulty which faced my Department arising out of the short interval between the date of this year's budget and the operative dates of the increased rates of payment announced in the budget. It would not have been possible to have pension order books incorporating the new rates printed and issued to pensioners before their existing books expired at the end of March. For this reason, it was necessary to arrange two issues of books to the 330,000 pensioners in the country. The first issue was in hands prior to the budget and was completed in March. It contained the basic rates of pension payable and enabled pensioners to continue to receive payment from the first week of April. The second issue provides for the increases announced in the Budget and is being made available as fast as the new books are received from the printers. So far approximately two-thirds of all pensioners have received their supplementary pension books and I expect that the balance of the books will be issued within the next three or four weeks. I regret the delay in issuing the supplementary pension books due to the late date of the budget, but I can assure Deputies that every effort is being made by my Department to ensure that the remainder of the pension books will be issued as quickly as possible. As the new books contain orders payable from the first week in April in all cases, no pensioner will suffer loss arising from the delay in their issue. All other social welfare payments which are made by cheque or by cash have been paid at the new increased rates as from the operative dates in each case.
Provision for the cost of all these increases will of course be made in a supplementary estimate for which the approval of the House will be sought later in the year.
I would like at this stage to refer to the position regarding the payment of unemployment assistance to smallholders. As Deputies are aware, smallholders with land valuations of £20 or under in specified western areas who are drawing unemployment assistance have the option of having their means assessed either on a factual basis or on a notional basis related to their land valuations. The bulk of smallholders have opted for a notional basis of assessment which in effect is concessionary, both by reference to present levels of farm income and to the means test applied to other applicants for unemployment assistance. The Government decided accordingly that the 20 per cent rate increases provided in the budget would not apply to smallholders on notional assessments. They will continue to be paid at their pre-budget rates. However, smallholders whose means are factually assessed are receiving the budget increases.
At present there are 18,000 smallholders whose means from land are assessed on a notional basis. On holdings up to £10 rateable valuation the assessment is £30 per £1 valuation; on holdings between £10 and £15 rateable valuation the assessment is £50 per £1 and on holdings between £15 and £20 rateable valuation the assessment is £60 per £1 valuation. All of these small holders have the right to opt for factual assessment of their means if they feel that the notional system is to their disadvantage. In that event their means would be factually assessed and they would be entitled to the appropriate rates of unemployment assistance including the 20 per cent budget increase. The option is entirely at the discretion of the smallholder. If, having opted for factual assessment, the smallholder finds that this method would not be to his advantage he will be allowed to continue on the notional assessment.
The cost of the increased rates of insurance benefits and the other improvements in insurance schemes will amount to approximately £77 million in the current year. Notwithstanding this, the increase in the pay-related social insurance contribution has been kept to a minimum, particularly for employees, who are only being asked to contribute an additional 0.1 per cent on earnings up to £7,000. For the average industrial worker this means an additional charge of less than £5 in a year. Employers pay an additional 0.7 per cent for each employee up to the new limit of £7,000.
Criticism of the social welfare system is directed from time to time at abuses of the system. These abuses included nondisclosure of means by applicants; fraudulent receipt of unemployment benefit or assistance by persons who are working or otherwise not entitled; persons claiming disability benefit when they are capable of work or perhaps actually working, and failure of employers to pay employment contributions or to keep proper records as required. Officers of my Department have to be alert always to detect any instances of such abuses. To this end five additional permanent medical referees were appointed since mid-1979 and two more are due to take up duty shortly. In addition a Special Investigation Unit consisting mainly of social welfare officers was strengthened substantially in 1978. These anti-fraud activities of the Department are not designed to harass. They are a necessary control of the schemes and a reassurance that public money devoted to social welfare is well spent.
While it is difficult to obtain the degree of evidence of fraud which is necessary to sustain court proceedings, due to the reluctance of people generally to give evidence regarding offences because of a mistaken sense of loyalty towards persons who are quilty of such offences, the officers of my Department have nevertheless been able to substantiate abuses in over 1,000 cases in the past year and payment was disallowed. Of those fraudulently claiming unemployment benefit or assistance, 46 have been prosecuted in the courts in the past year and some 300 other cases are being considered for prosecution. These actions are necessary to prevent a drain on funds which should be available for those genuinely entitled to benefits.
Another area of criticism directed at my Department is in relation to delays in payment. In making such criticisms people tend naturally to highlight the cases in which delay may occur but to overlook the fact that payments are made regularly without delay in the case of the vast majority of social welfare claims. My Department make weekly payments to more than 522,000 beneficiaries and monthly payments of children's allowances to some 420,000 families. In relation to this volume of payments the incidence of delays is relatively low. In the past 12 months my Department have had to cope with an exceptional situation arising out of the prolonged postal dispute in 1979. That dispute seriously affected the services administered by my Department who depend largely on the postal system for most of their transactions. It made it difficult to deal with claims or to arrange payment of benefits to which people were entitled, all of which led to a build-up of arrears of work in the Department.
This build-up continued long after the postal dispute had ended and it was clearly impossible to clear this back-log immediately. The inevitable delays caused anxiety for many persons and this in turn led to a heavy increase in the volume of inquiries and representations on behalf of claimants. Coping with these inquiries delayed further the clearing of the back-log of work on hands. However, I am glad to say that due mainly to the devoted efforts of the staff of my Department who worked continuous overtime including Saturdays, Sundays and bank holidays in an effort to clear the massive accumulation of work, the 1979 arrears situation was overcome and conditions returned to normal by the end of that year. This is not to say that delays do not still occur. In an organisation which deals with the volume of work which my Department have to undertake it is only natural that there will be cases involving special difficulties, some created by claimants themselves, which will lead to delay. I can assure Deputies, however, that every effort is made and will continue to be made to ensure that recipients of social welfare benefits get all the payments to which they are entitled with the minimum of delay.
I myself have made personal visits to the various sections in my Department dealing with payments and have had discussions with the staff concerned. I have also asked my Minister of State to make a special investigation into the causes of delays in payment and to make appropriate recommendations for remedying any shortcoming in procedures which he may find. The staff of my Department are concerned to see that all social welfare recipients get their rights. Unfortunately the public do not always realise the service which these public servants provide. While my officials must be vigilant to ensure that those who are receiving social welfare payments continue to satisfy the required conditions, they are equally vigilant to see that any needy person who is not receiving a benefit to which he is entitled is advised as to his rights and assisted in making a claim.
I know from my own experience as a public representative just how difficult it can be to deal with people who are worried, disturbed or agitated. It is sometimes difficult even to get from such people the information which is essential for the determination of their claims. Nevertheless, all of the staff in my Department understand the importance of being helpful, courteous and considerate in dealing with applicants.
Some difficulties were experienced following the break in parity between the British and Irish currencies. As neither the British nor the Irish Post Offices operate a currency conversion service it was necessary to discontinue the payment of pensions through the respective post office systems for pensioners of one country residing in the other. Payment of pensions through the post office system in Britain and Ireland was a unique administrative arrangement which depended upon a common currency or at least on the acceptability of face value encashments. Accordingly, alternative arrangements had to be made for the payment of Irish pensions in Britain and British pensions in Ireland by means of payable orders encashable at banks. Some further difficulties in this regard have arisen from the action of bank officials in refusing to handle cheques drawn on Northern Ireland banks as part of a wage dispute. Although not many complaints of failure to obtain payment of their cheques have been received arrangements have been made for payment of supplementary welfare allowance in this country and of supplementary benefits in Northern Ireland in cases affected by the dispute. I was in touch with the health boards and asked them to treat any applications for supplementary welfare payments from Northern Ireland pensioners as liberally as possible. Very few applications were, in fact, received and I am hopeful that the dispute may be resolved in the near future.
I would like to draw the attention of Deputies to the altered situation which has resulted from the change over to a fully pay-related system of social insurance. The stamped insurance card ceased to operate from 6 April 1979. This removed the basic source of information on individual insurance records which was one of the good points of the stamped card system. With the abolition of the card the main source of information available to my Department for the purpose of maintaining insured persons' records will be the data which employers are required to submit to the Revenue Commissioners at the end of the year. Employers are obliged to keep records of their employees' earnings and duration of employment and these records are open to inspection. The collection of the information on these records will be vital for the determination of claims to benefit and will be as important a task for the Revenue Commissioners as the collection of contributions. For these reasons I cannot stress sufficiently how essential it is that employers make the returns of all persons employed by them, with details of their earnings and the length of their employment, at the earliest possible date. The changeover from a weekly stamped card system necessitated changes in relation to contribution conditions for receipt of benefits. In place of numbers of contributions paid the conditions now refer to numbers of weeks of insurable employment and it is in this area that information from employers is most vital. Changes have also been made in relation to benefit years and contribution years. During the interim period from April 1979 to the end of 1980 the distinction between benefit and contribution years for men and women is being phased out and with effect from 4 January 1981 both men and women will have the same benefit year and the same contribution year. The benefit year, that is the year in which benefit is paid, will commence in January each year and the governing contribution year will be altered to coincide with the income tax year ending in the previous April. Fuller details of these changes will be published in due course and both employers and employees will be kept informed of the actions which they must take to ensure that all the requirements of the pay-related social insurance system are met.
The position of the National Committee on Pilot Schemes to Combat Poverty has been raised recently. The programme of pilot schemes and studies to combat poverty in the EEC was originally due to end in 1977 but was extended for three further years. This pilot phase now ends this year. An evaluation of the whole programme will then be carried out and when this is completed consideration will be given to the implementation of further measures to combat poverty in the Community. It is not expected that such measures can be put into effect for at least two years. To bridge this period the EEC Commission have submitted a proposal for an interim programme which will be considered by the Council of Ministers later this year. With regard to the Irish aspect of the programme, the National Committee on Pilot Schemes to Combat Poverty are to submit reports and assessments to me on the various projects which have been carried out here. I would hope that the lessons learned will prove to be useful aids in the consideration of further Government policy to combat poverty. I have already met the committee and hope to meet them again shortly to discuss the future position.
The fuel scheme operated by my Department was revised before coming into operation for the 1979-80 season. Formerly one voucher per week was issued to necessitous families in certain cities and towns. The voucher could only be exchanged for one cwt, of turf. Under the revised arrangements the vouchers are valued at £1.50 and can be used to purchase any type of fuel. The current fuel season is ending and in the light of our experience with the new system consideration will be given over the next few months to the most appropriate form which the scheme will take for next winter.
Before closing I would like to refer to the level of benefits paid here following the recent budget as compared with those at present payable in the United Kingdom and in Northern Ireland. The basic rate of retirement pension payable in the North is £23.30 for a single person and £37.30 for a person with an adult dependant. The corresponding rate for an old age contributory pensioner here is now £24.50 for a single person and £42.80 for a person with an adult dependant. The basic rate of unemployment or sickness benefit payable in Northern Ireland is £18.50 for a single person and £29.95 for a person with an adult dependant. Here the corresponding rates are £20.45 and £33.70. A widow in Northern Ireland gets £23.30 plus £7.10 for each child. Our rate is now £22.50 for the widow and £7.50 for each child. I mention these facts so that Deputies may be aware that our rates of benefit now compare more favourably with those paid elsewhere than was the case in the past.
Finally I would like to mention some other matters. Consideration of the pensions area in the light of the Green Paper "A National Income-Related Pension Scheme" is well advanced. Consultations with interested parties concerning the issues raised in the Green Paper have been completed. The financial implications of changes in the pensions area will be an important factor, and the services of an actuary have been engaged to deal with questions of costings.
As Deputies will be aware, my Department also published a discussion paper on the specific issue of social insurance for the self-employed and the question of providing social insurance pensions for them is being examined within the context of the consideration being given to pensions generally which I have just mentioned.
Deputies will be aware that during the past year a new scheme of dental services for medical card holders was introduced. The fees paid were similar to those applicable to the social welfare dental benefit scheme. The Irish Dental Association have been pressing for two main improvements in the structure of the schemes, namely the introduction of a fee for examination and general consultation and changes in the scale of fees for extractions. I have informed the association that I have obtained Government agreement in principle to these two improvements.
As I said earlier, I will be happy to give Deputies any additional information they require on the provisions in this Estimate and I recommend it for the approval of the House.