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Dáil Éireann debate -
Wednesday, 18 Mar 1981

Vol. 327 No. 10

Social Welfare (Amendment) Bill, 1981: Second Stage (Resumed).

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

The basic purpose of this Bill is to provide the protection which the Government promised to the weaker sectors of our society in this difficult economic period. As Deputies know, in this Bill we have provided a 25 per cent increase for long term beneficiaries — old age pensioners, widows, the handicapped and so on. We are also providing for short term beneficiaries a 20 per cent increase. In children's allowances we are providing increases of the order of 30 per cent, while smallholders will receive an increase of 20 per cent both on factual and notional assessments. It is important to recognise that these are very substantial increases, especially given the discussions which are taking place in the House today. We are all aware of the difficult international and national economic circumstances and the measures being taken by other Governments at this time.

If we make a comparison with Great Britain and the North of Ireland we find that from 1 April we are giving reasonably substantial increases to old age pensioners. A single contributory old age pensioner will receive from April an increase of £6.15 per week whereas the increase recently announced in the British budget amounts to £2.45 applicable from November. This puts into perspective the increase which this Government are giving. From 1 April the increase for a couple on old age pension will be £10.75 and the comparable increase in the United Kingdom and the North of Ireland will be £3.90. It is quite clear that the order of the increases granted here is quite substantial, especially given our present difficult economic circumstances. A couple in receipt of retirement pension will receive £53.55 and the comparable figure in Britain is £47.35.

We recognise that there are problems for beneficiaries such as widows, old age pensioners and the handicapped, but it must also be recognised that the increases given in this Bill are substantial. On that basis I have been very happy to bring this Bill before the House.

A number of Deputies suggested that in the past two increases were given, one in the spring and one in October. In 1976, for example, long-term beneficiaries received an increase of 10 per cent in the spring and a further 5 per cent in October. In 1977 they received increases of 9 per cent and 5 per cent. It must be quite clear that it is far better to receive an increase of 25 per cent in April than to split the increase between April and October. While a total increase of 15 per cent was given in 1976, the splitting of that increase between April and October meant that the effective increase for the recipient was less than 15 per cent over the whole year. A number of Deputies raised this point but it is important to put it into proper perspective. Last year the Government provided for an increase of 25 per cent from April and the same provision is being made this year. In addition I would remind the House that the Government provided the double week's payment before last Christmas.

A number of points were made regarding the fall in real terms of the benefits in the Bill and it was suggested that increases should be indexed to the consumer price index or to average earnings. The increases would be much less if they were indexed to the CPI and would amount to about 18 per cent. I trust that Deputies would not wish the increases to be tied to that figure. Substantial improvements in excess of the CPI have been made both last year and this year for long-term beneficiaries and, to a lesser extent, for short-term beneficiaries.

The comparison of figures can result in a certain confusion but it is true that earnings increased more rapidly than prices in the periods 1973-77 and 1977-81. The comparison of social welfare payments to earnings shows that social welfare recipients have received advantages from increasing prosperity. Since such payments have increased more than earnings, therefore they have increased substantially more than prices.

For a single old age contributory pensioner during the period 1973-77 the real increase in social welfare payments over earnings was nil, whereas in the period 1977-81 the increase is 22.5 per cent. It is quite clear that the Government are increasing old age contributory pensions and other long-term benefits by more than earnings and thus considerably more than prices. In the period 1973-77 the social welfare payment for a married couple in receipt of old age contributory pension was down 2 per cent compared to average earnings, although it was greater than the increase in prices. In the period 1977-81 the comparable figure shows an increase of 22.6 per cent over earnings.

In 1973-77 the disability benefit payable to a single person showed a nil increase against earnings but in 1977-81 there was an increase of 9.5 per cent. For the married couple in the period 1973-77 there was a decline of 1.4 per cent in disability benefits against earnings whereas in 1977-81 there was an increase of 9.4 per cent.

I could give more detailed examples of these kinds of increases which show very clearly that the Government have maintained and honoured their commitment in increasing social welfare payments not only against prices but also over earnings.

One of the interesting features of the Bill, one that was not dwelt on during the debate, is the new maternity scheme. This is a particularly significant development and it will have wide and important effects. For a woman on maternity leave it increases the number of weeks covered from 12 to 14 and it also provides for easier contribution conditions for women who re-enter the work force. It is important for women generally who may decide to leave the work force for a period to look after their children and then return at a later stage. Later they may have other children, leave the work force for a time and return. Under the present conditions they could be disadvantaged in relation to the maternity scheme but the new scheme will provide easier contribution conditions for them.

It will provide for the basic requirement of 26 contributions in the last 12 months or in the governing contribution year. Previously it was necessary to have 26 contributions in the governing contribution year but in many instances it could happen that the woman in question would not have the necessary contributions in the last governing contribution year, which is effectively the last tax year. Currently that is April 1979 to April 1980 — also the current governing contribution year — but from 1 January of next year the new governing contribution year will be April 1980 to April 1981. It is quite possible that a woman would not have had the 26 contributions in the year April 1979 to April 1980 but she could have been working since that time and in the past 12 months she could have 26 contributions. Previously she would not have benefited from the maternity scheme but following this legislation a woman on maternity leave will be able to benefit by having 26 contributions in the past 12 months. I realise that the technical aspects of the Bill may not be immediately understood but they can be important in their application.

Another aspect that is important but which has not been recognised either in this House or outside is that the legislation will introduce a minimum weekly payment of £45.75 compared with the present minimum of £20.45. I shall give some examples of women working in various industries so that the House will see what is involved. For instance, in the food and drink industry the average weekly earnings of women are £80 office. The effect of the 14-week payment will mean that women in that industry availing of the new scheme will receive £63.94 per week for 14 weeks. In contrast, the existing scheme which is for 12 weeks provides an estimated £46.82. The total estimated additional benefit over 14 weeks is £333.

There are many women working in the textile industry and I shall give some figures in respect of this industry. The average current earnings are £55 per week. The effect of the new payment over 14 weeks will provide a minimum of £45.75 — the floor figure in the new scheme. The existing scheme provides for payment of £36.59 for 12 weeks. The effect of this increase over 14 weeks will mean an additional £201.

I shall take the clothing and footwear industry as a third example because there are many women working in this sector. Average current earnings are £53 per week. The new scheme will provide for payment of £45.75 for 14 weeks while the existing scheme provides for a period of 12 weeks at an estimated rate of £35.74. The additional benefit a woman will receive over 14 weeks will be £212.

In addition, a woman will receive a tax refund, the amount depending on tax-free allowances. One of the features of the scheme is that the aggregate payment will be equal to net current earnings. One of the aims of the Bill is to provide that the woman who goes on maternity leave will receive under the provisions of this scheme payment for each of the weeks that will be equal to her net current earnings. That is net of tax and other deductions. The purpose is to maintain her at a level of her net current earnings. I appreciate that there may be exceptions, say, in the case of a woman who has had a recent substantial increase in earnings, that it may be slightly different. But, other than such exceptions, the basic principle on which we were working in this Bill was to provide aggregate payments equal to the net current earnings over the course of 14 weeks in the case of this maternity leave. I hope that this will help to clarify the position in relation to the detailed application of the new maternity scheme. Needless to say, I am particularly glad that the Minister for Labour has introduced legislation to cover such a scheme. It is then my privilege, as Minister for Social Welfare, to devise, draw up and introduce in the House a scheme that will meet this new legislation. We believe that this is a very good scheme and constitutes a most important development and improvement in this area.

Some Deputies also asked questions about the national pension plan. I want to clarify the position in this respect. A draft White Paper has been circulated to the various Departments for their views. The replies incorporating the views of all of the Departments have not yet been received — quite a few have been — but in the meantime there is a new costing process going ahead because of the proposals being revised as a result of the increases being granted under the Bill with which we are now dealing. The Bill provides for increases for social insurance pensions and the new earning ceiling on contribution liability. We must provide a new set of figures in relation to this new position and that is currently being done. It is intended that the White Paper on the National Pension Plan will issue in the very near future. Some Deputies asked questions about the self-employed. The question of social insurance for the self-employed is being catered for within the White Paper on the National Pension Plan.

Some other Deputies raised the question of the referral of decisions to head office. I should make it quite clear that, in the first instance, it is only in cases where disallowance is contemplated that the claim is referred to headquarters at all. In effect this means that a second opinion is received before there is any question of disallowance. If we look at an analysis done of the submissions to head office, say, in the case of fraud — fraud like working and signing, or concealing means — we find that approximately 70 cases per week arose in that area for reference back to headquarters which, if taken as a percentage of the total weekly payments, is .06 per cent. Therefore, Deputies will recognise that it is not something that is done willy-nilly. There must be some control exercised. Of course these cases would then be investigated by headquarters, if considered necessary, by the special investigation group. That is the kind of order in that respect. I have given that figure in order to keep it in some perspective because sometimes it can be thought that it has grown to proportions which are far greater in relation to the total number of weekly payments.

The second point with which I want to deal was one raised by a number of Deputies in relation to married women. In this respect the survey showed that there were 120 cases per week referred for determination and that these represented .1 per cent of the total weekly payments. It is important that I make this point so that Deputies can keep it in proper perspective. I suppose it would be hard to understand how there could not be some order of percentage of referrals. If there were no referrals whatsoever then I suppose one would be posing the question: are no questions asked whatsoever in this area? I mentioned this also because Deputies seemed to be of the opinion that there was some different treatment of married women from other categories. In the case of married women, the success rate on appeal is no different from any of the other categories. In fact the success rate is of the order of 40 per cent of a similar overall order in relation to other kinds of appeals. It would be wrong to assume that any special measure was taken in that regard. However, the officers must ask questions as to whether or not people are available for work, of both men and women, and I might reiterate that the number of cases referred to headquarters in relation to married women is .1 per cent of the total weekly payments.

Would the Minister take a question on that?

When the Minister has finished.

In the case of the self-employed and farmers there were approximately 25 cases per week shown in this study, which represent .02 per cent being referred. One further category is the "left work of own accord", where people are alleged to have left work of their own accord. There the survey showed that approximately 230 per week came into that category, representing .19 per cent of the total weekly payments. I should mention that one of the administrative changes I made in relation to that was to devolve to local offices more of the decisions in relation to those who are alleged to have left work of their own accord. As the House will understand, these would be more difficult to determine and to agree to because there can be a dispute of one kind or another between the beneficiary and the employer. In any event, I have recently devolved on local offices more of the control in that area and have made the appropriate arrangements. Some further changes are planned in that area. Here the problem is that it requires retraining of staff, and some managers are more capable of dealing with that type of situation than others.

This is a very important Bill, bringing some very important measures before the House and which I have pleasure in commending.

Does Deputy Harte wish to ask a question?

Did the Minister say that 1 per cent only of referrals by females are turned down?

—are referred to headquarters for decision. There may be debate locally about a case but of the number shown in this survey — a survey done of the whole country and of all referrals — that was the order of the percentage referred to headquarters.

Would the Minister not accept that there is blatant discrimination against female applicants?

That was the latest survey done in that area. Because the question was raised by Deputies I quoted the figures to show that both the order and the number of successful appeals were similar to those in the case of men.

Question put and agreed to.
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