This Social Welfare Bill arising out of the budget has a number of factors in it. There are benefits in it which are lower than they ought to be to deal with inflation and there are cutbacks in the existing benefits. The cuts take effect in April and we are rushing this Bill through to make sure that they take place then, but the increases will not take effect until June, three months later. That is an indication of the attitude in the whole Bill.
The Minister's speech has brought it out very clearly that it is a deliberate decision by the Government to attack social welfare as an area of public spending which must be cut, that people were getting too much. There is a whole concept of a big deal developing in black economy and so forth which they had got to cut back.
I will deal with some of the issues in the budget and in the Social Welfare Bill. I intend to make some comments on the Minister's speech and some other comments. The sharpest cutbacks in the Social Welfare Bill are in relation to disability, maternity and unemployment benefits, the ill, the pregnant and the unemployed as well as those on up to £20 a week in April as a result of the changes in the pay-related benefit, although they will get some increases in June. There will be increases of £3 and £4, depending on the number of qualified dependents but they will not get sufficient to cover the cutbacks. I will give an example of a person with reckonable weekly earnings of £132 per week in the 1981-82 tax year. He was getting £40 per week. When this Bill is law the benefit he will get will be only £24 a week, a drop of £16. There will be a small increase in June of £3.15 when the benefit will go up from £31.65 to £34.80. That does not compensate for the £16 he will be losing in April.
At present the benefit is calculated on the person's gross weekly earnings in the 1981-82 tax year. The first £32 is disregarded. The ceiling is £190 per week, that is, £9,500 per annum. After a 12 day waiting period, which under this Bill is going up to 18 days, 40 per cent of this is paid for 147 days, that is 24.5 weeks, which is reduced to 13 per cent for the next 13 weeks, 25 per cent for the following 13 weeks and less than 20 per cent for the last 13 weeks. After 65 weeks of unemployment all benefit, both flat rate and pay-related runs out and the person falls back on to unemployment assistance.
That is becoming an increasing factor for the unemployed, because the latest figures show that 40 per cent of the unemployed were unemployed for over one year. That was some time ago. I would suggest that that figure has now risen to 50 per cent and that it will be a continuing percentage increase of those unemployed over a year who will now go on to unemployment assistance. All this talk about people getting more on social welfare than they earned when at work is total nonsense because it all runs out after 65 weeks. Indeed they knew that from the time they became unemployed, it was a temporary feature due to the amount of money they had already paid in by way of PRSI contributions. It has run out for most people now and is running out for more and more people as unemployment becomes a more permanent feature.
From April 1983 the ceiling for pay-related purposes will rise from £9,500 to £11,000 and the £32 per week floor will be increased to £36 per week. A feature of this is that, for contribution purposes, the ceiling will be higher, that is £13,000. This is the first time this disparity has occurred. The waiting period for pay-related benefit will rise in April from 12 to 18 days. Therefore everyone will lose a week of pay-related benefit completely at the start of their period of unemployment. And the rates of the proportion of the reckonable earnings will be cut to 25 per cent for the first 23.5 weeks, 20 per cent for the remaining 39 weeks of a person's entitlement and will be stopped altogether for people who are on short time. I shall refer to that later.
One of the features of the budget which seems to me to have a particularly anti-working class bias and which has not been noticed by many people is the change in the payment of children's allowances. It is an extraordinary move that previously these were paid to children under 16 but were extended to the age of 18 if the children were apprentices or were pursuing full-time education, apprenticeship being deemed a type of further education for children. This has now been cut. It seems that no allowance will be paid to those under 18 who are pursuing apprenticeships. But of course it will continue for those under 18 who go on to third-level education, who can afford that type of education. But there is no benefit for the children of working class parents who take up an apprenticeship as part of their educational process for jobs for the future. The children's allowance benefit is to be cut in respect of them. This constitutes an obvious swipe at working-class families, and them only, the people who are being hit continuously throughout the whole of the budget and this Bill.
People on short-term working have been picked out for special attack in this budget. From April onwards people on short-time will receive no pay-related unemployment benefit whatever. It should be remembered that people who have been on short time over the past couple of years have done so in order to avoid industries closing down, in an endeavour to keep some kind of employment going; organised workers, through their trade unions, have been entering into agreements with factories to go on short-time; in order to keep them going they have been taking cuts. Now these short timers are being savagely attacked in this Bill. They will receive a flat rate benefit now only on the basis of a five-day week where formerly they received it on the basis of a six-day week. In other words, those who were on a three day week formerly got three days flat rate benefit and now will get two days benefit only. The extraordinary twist in this is that while they will receive only two days benefit, that will be counted as two-sixths rather than two-fifths. In other words, it has changed from a six-day week, three days working, three days benefit, to a five day week, three days working, two days benefit. But the two days benefit is based on two-sixths rather than two-fifths which effects a huge reduction in their benefit in respect of the days on which they are not working.
I do not think most people understand yet what will be the full implications of this Bill on short-term workers. Incidentally the Minister in his speech pointed out that the number of short-time workers was 50 per cent higher already than had been estimated for 1983. He said the figure was estimated at 10,000 whereas it is already 15,000 and of course increasing rapidly.
The budget has perpetuated the distinction which was first made by Fianna Fáil between short-term and long-term social welfare recipients, short-term recipients being on unemployment benefit, unemployment then being something which was very temporary and short-term. Since this distinction was drawn, I think back in 1978 by Fianna Fáil, short-term recipients have been receiving lower increases on the assumption that they would not be dependent on social welfare for very long. That day has gone, the temporary nature of unemployment is just a joke now. The latest figures show that there are 40 per cent, it is probably now 50 per cent, over a year unemployed. Under this budget short-term recipients receive only a 10 per cent increase in benefit whereas long-term recipients receive a 12 per cent increase.
Pensioners particularly have lost out under this Bill. They have been given slightly higher rates of increase by virtue of their being long-term recipients. This has tended to cover up the fact that they still receive no pay-related benefit and are dependent totally on flat rate payments. This is very unfair to people retiring on contributory pension. Since 1977 they had been making insurance contributions on a pay related basis without getting any benefit whatsoever for it.
During the past few years different Governments and parties have been talking about a national income related pension scheme, but it has not happened: people have been paying insurance contributions on a pay related basis but not getting any benefit for it. It is becoming increasingly urgent to have a national income related pension scheme.
Another section in the Bill provides for cuts in disability benefits. They are being hit particularly harshly. A married man with a large number of dependents will find that his decreases in April will be offset to some extent by the increases in June, but single people and married women will suffer very severe losses in April which they will not make up in June. The overall benefit ceiling for disability payments will be reduced from the present 100 per cent to 80 per cent of reckonable earnings.
The most extraordinary feature of the Bill is the cut in maternity benefit. Pay related benefit is payable with maternity benefit. Women entitled to paid maternity leave will suffer reductions in their level of payment. In other words, just two years after the trade union movement fought for and got this paid maternity leave, an important part of these rights is being whittled down in this Bill. This, combined with the removal of maternity grants and the total failure to increase children's allowances, is an indication of a further target for attack on women and larger families, the ill, the old and the unemployed.
Indeed it would seem from this Bill that the process of dismantling the whole PRSI scheme is beginning. One wonders if it is the intention of the Government and Minister to dismantle what had not yet reached maturity. The system of pay related social insurance was there for only a short time and had not been built up to its full concept or properly understood. I wonder do the Government know what the letters PRSI stand for — pay related social insurance. It is an insurance policy related to pay, with the benefits related to pay. People are paying for these benefits. It is an insurance policy.
Is it being seen as a tax? It was never intended to be a tax. It is a pay related social insurance scheme so that people could provide for illness, for unemployment, for other problems in the future. It was intended to be something to protect workers, to give them benefits. Why should they not pay insurance sufficient to give them as much as they would have if they were working when they are unemployed? They will get it for 65 weeks only and are they not entitled to pay for their benefits? If they are not getting that should not their deductions be cut? If their benefits are decreased, any insurance company would have to decrease also their contributions. But not this Government — they cut the benefits but increased the contributions. It is obvious, therefore, that the Government have forgotten the concept of pay related social insurance. They are simply using it as another tax. The thousands who marched will see this simply as a substitute for further increases in PAYE. I can tell you those thousands will notice, or they have noticed, this.
The whole purpose of PRSI is to allow people to insure themselves against illness or unemployment or old age, and the concept is being lost and the very mention of PRSI now is more hateful to the workers than PAYE. They were willing to accept PRSI because they saw it could be beneficial to them, but now they are not. I question the morality and the legality of this Bill and what it is doing. I question the constitutionality of a number of the provisions in the Bill.
Let us take those on short time. I referred to the person on a three day week. His three-day benefit is being cut to two days and in addition he will not be entitled to any pay related benefit whatsoever, although such a person still pays PRSI. It is a big if, but if there is any justice in the courts of the land and if the same attitude to the Constitution is taken to protect the rights of workers as has been taken in regard to protecting the rights of property owners, if that justice exists and if a worker on a three-day week from whom PRSI is being deducted although he will not get any benefit took that to court do you not think he would win his case hands down? I do not think there is any doubt about it if such justice exists. I suggest that the Minister for Social Welfare should consider that very carefully, because when the full impact of this is felt in a few weeks — people will not realise it fully until it hits their pockets or the palms of their hands — there will be many angry people who will take varied types of action, and court action could be one of those actions. I will quote from page 3 of the Minister's speech:
It is relatively easy to give generous increases to social welfare recipients during periods of economic growth with low rates of inflation, but the real test of a caring society lies in its response when our economy is in recession. This Government has no intention of allowing the weaker sections of our community who are dependent on social welfare incomes to suffer a drop in their real living standards.
This is precisely what this Bill is about. This Bill is intended to ensure that they do suffer a drop in their living standards. The Minister continued:
We will take whatever steps are necessary to achieve an equitable distribution of the national resources. Neither will we permit these scarce resources to be misused by a minority at the expense of people in genuine need and of the working population who support the benefits through their PRSI contributions and general taxation.
It is a lovely piece of verbiage. He then proceeded to do the direct opposite of what he said a caring Government should be doing. He said:
Sections 5, 6 and 7 provide for reductions in the benefits available to persons engaged in short-time employment.
He made the point that there was quite a controversy about people in short-time employment getting more than when they were working full-time. He said:
The most common arrangement for short-time working is where workers, normally engaged on a five day week, work for three days and are laid off for two. In general these workers receive three-fifths of their basic pay and, after the statutory waiting period, three days flat-rate unemployment benefit and pay-related benefit, representing half the appropriate weekly rate of these benefits which are payable on the basis of a six day week. To illustrate the extent to which short-time workers are better off than when working full-time, I would cite the following examples. As a percentage of his normal take-home pay when working full-time, a worker on a three day week with gross earnings of £100 a week would receive by way of pay and benefit amounts ranging from 104 per cent if he is single to 113 per cent if he is married with two children.... In addition, many short-time workers also qualify for income tax refunds because of their reduced earnings.
If somebody gets 104 per cent or 113 per cent it means he has paid in PRSI for these benefits. For the Minister to come in and say:
In addition, many short-time workers also qualify for income tax refunds because of their reduced earnings
is simply outrageous. Why are they getting a tax refund? They are getting a tax refund because too much money was deducted from them. It is deducted week by week. They are not allowed to wait until the following year to pay their taxes as other people are. They never even get it. When a tax refund comes eventually it means that while they are getting it back they are not getting the interest. This is an outrageous attitude for the Minister to adopt. The worker should have got this money into his hand six, eight or 12 months earlier but it was assumed he would be working for a full year.
The Minister referred to the PRSI not paid in by various companies. According to the Minister in 1981-82 £25 million of PRSI which was deducted from workers' pay packets was taken by 11,000 employers and put into their own businesses. It was admitted here by Deputy Skelly that he knows an employer in the Dublin West constituency who took £200,000 in that way and used it to pay for an order. That £25 million and that £200,000 belonged to the Exchequer and to take that money out of workers' pockets and not pay it over to the Exchequer was fraud and robbery, a crime against the State and they should be charged with criminal activity. There is still £14 million outstanding from 1980-81 and £6 million from 1979-80. That makes a total of £45 million outstanding for the past three years that has not been paid over.
The Minister makes clear that the PRSI cuts will bring in £16.5 million. Taking that in the context of the £45 million not paid over by the employers, what is the Minister doing? He is forcing people on social welfare to pay extra taxes, to take extra cuts or to go hungry to make up for the fact that employers did not pay in £45 million. That is outrageous and every worker will consider it outrageous. I believe workers will think it is so outrageous that come April this House will be startled out of its lethargy. I have been here for the past couple of months and think there is a lethargy and a lack of appreciation of what is happening out there, of how people are going to react to this. Do they think people will take this sitting down? How much do they think people will take or can take? People will go hungry as a result of this Social Welfare Bill. Anyone who votes for this Bill will be answerable to the people's wrath. It is unbelievable that a Deputy should actually make excuses, as Deputy Skelly did this morning, for employers who do not pay over the PAYE and PRSI they have already deducted from their workers. To make excuses for that type of criminal robbery arouses the wrath of people even further.
I urge every Member of the House before voting on this Bill to think seriously about the actual effects it will have, and to think seriously about the attitude which the workers, who are the vast majority of the people of this country, will adopt to this Bill if it is passed. Its effects will not be really apparent to the vast majority of the people until April when it begins to bite. At that stage we can expect a reaction against this Bill which I believe will be totally justified. Therefore I urge Deputies not to pass it.
