: I had a letter from you this morning marked "Urgent". A number of amendments in my name were adjudged out of order. While I understand that some could be ruled out of order under Standing Order 118, I fail to understand why amendments 1 to 5, inclusive, have been ruled out of order.
Supplementary Estimates, 1983 . - Social Welfare Bill, 1983: Committee Stage .
Question proposed: "That section 1 stand part of the Bill".
: The amendments were ruled out of order because they imposed a potential charge on the Exchequer. That is well established under Standing Orders.
: I contend that amendments 1 to 5 do not put an increased charge on the Exchequer because, in effect, the Government have increased the social welfare benefits by 12 per cent and 10 per cent respectively. If that amount were reduced to what it really is — 9 per cent and 7½ per cent for the year and paid from the beginning of April — it would not create a charge on the Exchequer.
: I have considered these carefully and have taken expert advice. The effect of the amendments of which the Deputy is speaking is to bring forward the payment date and, in so doing, more money will be drawn out of the fund. If there is a shortfall in the fund as a result there is a statutory duty on the Government or on the Exchequer to make up the balance and that is what is known as a potential charge on the revenue. If there were to be an absolute charge, then before it could be ruled out of order maybe we would have to have evidence that that was so. Obviously there was a potential charge and time and time again amendments have been ruled out. I am sorry, Deputy, there is nothing I can do about it.
: I accept what you say in relation to the increased charge if the 12 per cent or 10 per cent were given from the beginning of April as should have been done in the first place, but if the 9 per cent and 7.5 per cent were given for the year it would not create an increased charge on the Exchequer.
: I am sorry, I must stand on the rulings that I have made because I am satisfied that they are correct, lest there be any doubt about it. The Deputy is making points which he will have plenty of opportunity to make on numerous occasions and I have no doubt he will do so.
: I support the Deputy on the basis that for some reason we were given percentages on budget day that no longer apply. The Minister is well aware that the effect, for example, of devaluation alone has made an amazing impact. The amendment before this House on this occasion differs from similar amendments that could be put down on other occasions (1) from the point of view of the change caused by devaluation and (2) because the percentage claimed by the Minister relates to the imposition of these coming in in the first week of July or so when normally they would come in on 1 April. It is a completely different picture for the recipients and beneficiaries who should be benefitting by certain percentage increases that they have not been receiving.
: The effect of these amendments would be to draw more money out of the fund. There is a statutory duty on the Government to make good any shortfalls in the fund which would arise and it is not necessary that before an amendment is ruled out of order under this or any other order there be proof positive that it will impose a charge on the funds. If there is a potential charge it is properly ruled out. I will not change my ruling.
: I gather that Deputy O'Hanlon is asking that a reduced amount be payable immediately rather than waiting until July to have the 10 per cent and 12 per cent payable.
: No, Deputy.
: If that is so the reduced amount for from April until December cannot be any greater than the amount of 10 per cent and 12 per cent from July onwards. Therefore, you could not argue that there will be any increased demand on the fund. That is the point that Deputy O'Hanlon is seeking to make. It is a perfect mathematical point.
: Deputy O'Hanlon is making an argument based on inflation, based on devaluation ——
: No, I did not mention devaluation.
: ——and saying that it is a smaller sum. I am ruling it out of order.
: On a point of clarification, I did not mention devaluation or inflation. I am merely saying that the amount of money allocated should be spread over the whole year rather than over nine months and if the Government were to agree to give the real increase they have allocated——
: That is not what your amendment says. Your amendment merely says that the date be brought forward.
: In the Bill itself there is no mention of the percentage allocation. It does not appear in the Bill. My amendments can be taken to meet that.
: Deputy O'Hanlon has made a submission, as he is entitled to do, under Standing Orders when an amendment has been ruled out of order. The Chair has listened to Deputy O'Hanlon's submission and the Chair is ruling against it.
: I have been listening with interest to that because almost all of our amendments have been ruled out of order. I want clarification on this question of a charge on the Exchequer. As well as ruling out amendments which would create a charge on the Exchequer are you also ruling out amendments which would have the effect of a loss to the Exchequer?
: A loss to the Exchequer creates a potential charge. If you take money out of the Exchequer or do not put money into it there is then less money there. If there is a shortfall to meet the Bill the Government must pay the Bill. That is a potential charge.
: I am seeking clarification as to what precisely the order is under which these are ruled out of order.
: I will read the relevant Standing Order for the Deputy. It is Standing Order 119:
(3) An amendment to a Bill which could have the effect of imposing or increasing a charge on the revenue may not be moved by any member save a member of the Government, or Minister of State.
: That is not the point I am making. I suggest that that means an amendment which would be putting an additional charge on the Exchequer which would have that effect, whereas an amendment which has the effect of creating a loss of income to the Exchequer is not covered by that order. Under that area quite a number of the amendments which we have put forward should be accepted.
: I beg the Deputy's pardon.
: Loss of income other than an extra charge is not covered by that order.
: It is an amendment to the Bill. If there is a loss of revenue, if an amendment proposes to deprive the Exchequer — in this case the fund — of revenue and as a result of that there is a shortfall in the fund then there is an obligation on the Government to make up that shortfall. That is obviously a charge. That is what is known as a potential charge.
: This is a very important Standing Order and it would have the effect on this Social Welfare Bill of ruling out almost any amendments to the Bill.
: If it would be any help to Deputy Mac Giolla, I think I am right in saying that he can make the arguments he is making on the relevant section of the Bill and if he is not satisfied he can vote against the section of the Bill.
: It is not quite the same as being able to put forward an amendment.
: In theory it is not but in practice it is.
Question put and agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill".
: Of course there is no objection to making relevant arguments but to propose formally an amendment which has been ruled out of order is not in order.
: As you have adjudged our amendments out of order I would oppose section 2 and if I may take section 3 along with it——
: No, Standing Orders say that the Bill shall be gone through section by section.
: We will oppose section 2. We are not opposing the increase, meagre though it is, but we certainly oppose the size of the increase because we believe that 12 per cent and 10 per cent, or rightly 9 per cent and 7.5 per cent, for the year is about half of what the increase in the cost of living and inflation will be this year. We are unhappy about the size of the increase. Particularly we are unhappy about the fact that these payments will not be made until the beginning of July or until the last day of June and the first day of July. That is a precedent and perhaps a dangerous one. In the years to come the Coalition Government might decide not to pay these benefits until six or nine months later. That would leave the recipients in a very serious predicament.
Society is judged on the attitude of the community to its weaker sections, to the poor, the aged, the ill and the handicapped. No self-respecting politician in this House could support this section of the Bill. Successive Governments have committed themselves to looking after the weaker sections of the population and this is first time perhaps since 1929, that a Government have delayed implementation of increases in such a way as to create real hardship for those at the lower end of the income scale. Even since the Second Stage of this Bill commenced, another 2 per cent has been added by devaluation. This will militate against the weaker sections of our community. If one were to use the arithmetic of this Social Welfare Bill, it would mean that recipients of long-term benefits having received a 25 per cent increase over a full year, would gain 31¼ per cent over nine months. Here we have increases of 12 per cent and 10 per cent at a time of rising inflation and rising cost of living, much of it brought about by the actions of this Government in their short time in office.
The VAT increases of 5 per cent across the board will have a very serious effect on social welfare recipients, as will VAT imposed on fuel for the first time. Devaluation will also seriously affect them. The increase in the price of petrol of 36p for those who, because they live in the heart of rural Ireland have no choice but to keep some sort of car, even to sign on for their unemployment assistance, will have a serious effect.
The Minister for Finance in his Budget Statement said that the improvements this year would cost the Exchequer £88.6 million, whereas the Minister for Social Welfare in his opening statement on this Bill said that the cost would be £80.6 million. How does this difference of £8 million arise?
In relation to the drugs refund scheme, the amount which one has to pay for drugs each month has increased from £12 to £23. The increases in social welfare benefits and unemployment assistance for a single person have gone up by £10.60 per month. The people without medical cards will not receive enough to cover the increase in the drugs refund scheme. A Government which introduced such a measure should be ashamed of themselves. I am surprised that so many Members, particularly of the Labour Party, voted for Second Stage of the Bill last night.
Has the Minister taken account of devaluation? If he knew at the time of the budget that there would be devaluation, did he make provision in these payments for devaluation and is it intended to give a further increase to these social welfare recipients to ensure that they will be able to live under conditions of minimum comfort in the coming year?
: I support the comments of my colleague and while accepting the Chair's decision to rule out of order the amendments tabled, I find it hard to understand why that has happened. The change of date does not necessarily mean a change in the amount of money provided.
Before I was elected to this House I so often heard the then Deputy Barry Desmond, a member of the Labour Party, from the Opposition benches weep, scream and plead for extra assistance for those in the lower income bracket in our society. Very good reading for the once proud Labour Party would be the contribution of the Minister, then Deputy Desmond on the Finance Bill of 1982. They should read his contribution on the amendment tabled by Deputy Gregory — amendment 33 (b) I think — less than a year ago. His present comments should be compared with that.
As Deputy O'Hanlon has said, the 10 and 12 per cent increases are not real. They have gone already for a number of reasons and I am not taking into account the annual CPI increase or any part of it. They have gone simply because of the inflationary effect of the budget, which the Minister for Finance accepted was 3½ per cent. He and every Member of the House knows that the 3½ per cent becomes 5 per cent because of the knock-on impact. We are told that devaluation accounts for about 2 per cent more, which is a conservative estimate. That brings the 5 per cent to 7 per cent. For a Labour Party Minister not to introduce those benefits — meagre though they be — until the first week in July is incredible.
The fact that they are not being introduced until the first week of July means that if one were to compare what happens in normal circumstances, one is talking about a difference of approximately 3 per cent. That brings the 7 per cent I spoke about to 10 per cent, eroding completely the 10 per cent increase and almost completely eroding the 12 per cent, and I have not taken into account the annual CPI increase. That gives some indication of the drop in living standards which these people will have to endure unless the Minister does something about it. The members of his party appear to have surrendered to the arithmetic and financial rectitude they preached about for so long. In the weeks prior to the election these people shed crocodile tears for these people on social welfare. Has the Minister moved so far away from the needs of these people that he has forgotten what he said before he took office?
We will oppose these sections to the Nth degree and expect every Labour Deputy to examine his or her conscience and think back on what they said in this House. Are they going to vote through a section which will not give these people even a 1 per cent increase, but rather a sharp drop in their living standards? The Labour Party Minister, Deputy B. Desmond, when on the Opposition benches cried and pleaded for these people.
I want to ask a number of specific questions. In the budget we were told that the personal and adult dependant rate for those on retirement pension/old age contributory pension in April 1982 was £40.25, and from the beginning of July 1983 there would be an increase of £4.85, giving a new rate of £45.10. The old age contributory pension for 80 years or over, personal rate was £43.05 in April 1982 and from the beginning of July 1983 the increase will be £5.15, giving the new rate of £48.20. The widow's contributory pension and deserted wife's benefit, under 66 years, was £36.25 in April 1982 and from July 1983 the increase will be £4.35, giving a new rate of £40.60.
What assistance is the Minister providing for those people living in rent-restricted accommodation, where difficulties were created because of the 1981 Supreme Court decisions? Listening to the Minister for Finance on budget day I became suspicious that these people were in for a rude awakening because after the Minister had sat down, the famous pink pages we have referred to on a number of occasions were passed around. They gave more detail, more scaring detail, than was given in the Minister's presentation.
On page 14 under the heading Non-Capital Supply Services there were two columns: the first gave the principal policy measures adopted by the previous Government in settling the published Estimate and the second gave the principal policy measures adopted by this Government in settling the revised Estimates. The second column, paragraph B (d), reads:
The provision of £15.5 million for rent allowances for tenants of formerly controlled dwellings under Rents Restrictions Acts is being reduced to £10.5 million in the light of more up-to-date data.
I want the Minister to stop bluffing and tell the Labour Party what is meant by that phrase "in the light of more up-to-date data". He knows as well as I do that it was an arithmetical exercise. But what is happening on the ground?
: That is not relevant.
: I am discussing the increases and their impact on some of the regulations in the Department of Social Welfare. I will continue to speak on this matter because I am entitled to do so. I accept, Sir, that you will rule fairly on that situation.
I can give many instances of what is happening in County Cork because there are a few dozen cases going through the courts every day.
: If I might——
: Just this sentence and I will be finished. I want to explain——
: If the Deputy will bear with me for a minute. There are two schedules here, one dealing entirely with benefits and the other with assistance. Discussion of assistance for people who have been caught in the High Court action about controlled dwellings is not in order on this section, but it will be later.
: I cannot accept that ruling.
: If the Deputy understood what I am saying he would not have any trouble accepting it. Section 2, Schedule A, deals with rates of benefits, what I call contributory payments. Schedule B, which is governed by section 3, deals with rates of assistance. If the Deputy reconsiders the position he will find that what the Chair is saying is reasonable.
: This is new to me. Am I being told that these provisions only relate to people on assistance?
: No. Section 2 deals with contributory benefits and section 3 deals with assistance, something not covered by contributions.
: I am talking about people on benefits, widows and contributory and old age pensioners, and the rent applies to them.
: The rent applies to everybody——
: I am being prevented from discussing this and I insist on discussing it.
: As pensioners have to pay their weekly expenses and rents come under that heading, surely this must apply here?
: I understood Deputy Fitzgerald to raise the point that no provision was made in the Bill for assistance to help hardship cases of tenancies, where people found themselves liable for huge rents. The Chair is not ruling this out; he is trying to the best of his ability to introduce order into the discussion. Deputy O'Hanlon suggested that sections 2 and 3 be taken together and maybe there was something in what he said but when we come to section 3 the Chair could not have any objection to the Deputy raising this matter ad nauseum.
: There seems to be some confusion. This is just as relevant to section 2 as it is to section 3 and for this reason. As the Chair is aware, both Governments know of the difficulties which were caused by the Supreme Court decision and that as a result of that decision, certain subsidisation provisions were made for people in receipt of benefit or assistance ——
: Perhaps the Chair could simplify matters. As the Chair sees it, if Deputy Fitzgerald is complaining that the amount of benefit given is not sufficient to meet the increases in the cost of living, that is in order. But if what Deputy Fitzgerald is saying is that there is not sufficient money being provided to help the people who are caught up in this High Court decision then there is no doubt it is appropriate on section 3 rather than section 2.
: I began by saying that the 10 per cent has already been eroded. I mentioned those in receipt of retirement or old age contributory pensions, widows contributory pensions and deserted wives allowances. Bear with me, Sir, while I make the case as to why the increases will be further eroded for some groups of people.
: That is in order.
: At this stage I am making the case that those groups will suffer.
: I think that is all right.
: All of us are aware of the social welfare document SW 58 which refers to rent allowances for tenants affected by the decontrol of rents. May I ask the Minister to be very specific in regard to those covered by the increases in section 2 who are, as of now, availing of subsidisation? Does their position worsen substantially now? For example, a single person in receipt of £40.25 at April 1982 will be in receipt of £45.10 from July. If such a person has a small private income from some other source that brings his income to £47, it appears to me that five times 50p will be taken away if that person is being subsidised for rented accommodation. Will the Minister amend the Bill to prevent this happening? The recipients of these benefits will be in a much worse position from 1 July onwards. I think my argument is reasonable and I thank you for bearing with me, a Cheann Comhairle.
The cases are going through the court at a remarkable rate. The money provided in the budget appears to be two-thirds of what had been provided prior to that. I do not understand the reason for that. Does the Minister intend at least to restore the position of those people, which indeed is not enough because we should be providing additional benefit. Without taking the cost of living into account, 10 per cent of the 12 per cent is already gone because of devaluation, the pushing forward of the date of payment and the budget proposals. People with subsidised rented accommodation are suffering still more, as far as I can see. I honestly do not understand how the Labour Party can allow this section to pass. I want to support what Deputy O'Hanlon has said. I do not understand why Deputy Barry Desmond is putting through this legislation. In the interests of the lower paid workers in this city and in this country, for goodness sake let us be responsible and reasonable.
: I think I should have called on Deputy Mac Giolla after Deputy O'Hanlon but I did not realise he was offering.
: In his winding-up speech yesterday the Minister for Social Welfare was particularly scathing in his attack on Fianna Fáil who had proposed almost exactly the same ideas on benefits and cuts as the Coalition Government have introduced, and rightly so because quite a lot of the objections of the Fianna Fail Deputies are somewhat tongue-in-cheek. There is evidence in The Way Forward of the type of Bill which they would have brought in.
: We would not have brought this in.
: In regard to this section those scathing remarks should not apply to the Fianna Fáil benches. The most amazing part of the Bill, savage as it is, is the decision to apply the cuts in April and the benefits in June. That is the portion which makes this Bill what Deputy Bell called it — an evil and savage Bill. This is precisely the type of thing which makes the word "evil" relevant. The fact that there are just a small number of benefits and that they are so low and have been put off until June whereas the tremendous cuts are taking place in April is just unbelievable. I am dealing now with section 2. The sharpest cuts have been made in relation to the ill, the pregnant, the unemployed and those on short-time working — people claiming disability benefit, maternity allowance or unemployment benefit with which pay-related benefit may also be payable. People like that will lose anything up to £20 a week in April as a result of the changes in pay-related benefit. They will get increases of something between £3 and £4 a week in June and they will get more if they have qualified dependants. They would need a great number of dependants to make up for the £20 loss in April.
In the case of a person whose reckonable weekly earnings are £132 a week in the 1981-82 tax year the present level of pay-related benefit will be £40 a week. That is 40 per cent of the difference between £32 and £132. After April it will be only £24 a week based on 25 per cent of the difference between £36 and £132. In fact there will be a drop of £16 a week from £40 to £24 a week. The fact that the maximum personal rate of unemployment benefit and disability benefit will increase in June by £3.15 — that is from £31.65 to £34.80 — will not be much compensation for the person who has lost £16 in April. In fact that particular individual is being deprived of a further £40 by cutting off the increase in benefit until the end of June. It is a further tax of £3.15 per week on that person from the month of April to the beginning of July. That is a savage and evil section in this Bill. There is a £40 a week further deprivation of those who will be deprived of £16 a week in any case and a small increase of £3.15 is being deducted from them for that period of three months. That is a further penal tax on a person who has been already savagely dealt with in the remainder of the Bill.
I do not want to spend too long on this because the same arguments will be coming up on section 3 and other sections of the Bill; but postponing for three months will have the further effect, due to inflation, of depriving the beneficiaries of further benefits because a further increase in prices will have taken place between April and July. We are told that prices will increase further as a result of the decision taken the other day to devalue the púnt. That will create further increases in living costs and prices and will therefore deprive beneficiaries of the £3.15 they should be getting in April. But that increase will be of less value in July and beneficiaries will be further deprived. It was estimated in fact that the total cost of living consumer price increase between April of last year and July of this year will be something in the order of 20 per cent. Now the increases which are being given are 10 per cent for the part-time benefits and 12 per cent for pensioners over long-term payments. There will therefore be a difference between 8 per cent and 10 per cent in the benefits and the cost of living increase.
My information from certain Fine Gael circles is that this section is a Labour Party input into the Bill. It was not the original intention of the Coalition Bill at all but for some convoluted reason the Labour Party have in fact decided that this should be postponed from April until June. That is the story that is going around in certain circles and, if that story is true, it makes it even more unbelievable and I will be glad to hear the Minister deny that this is the case.
Whatever about the other sections of the Bill being put through I would appeal to the Minister and the Government to amend this section and give the benefits at the same time as the cutback. I do not know the amount involved. I have heard various figures between £2 million, £30 million or £39 million mentioned. I do not belive it would cost anything in the region of £30 million odd. On the basis of common humanity and justice I would ask the Minister to amend this section to ensure that benefits are paid in April or that the cuts do not take place until June.
: Might I intervene at this stage to reply to a number of points raised so far? The single most important point to be made is that the bringing forward of the increases from the end of June, the last pay week in June, to the first pay week in April would entail an additional cost of £39 million. Now there were no funds, of that magnitude this year to provide that kind of money. This year, taking the unemployment side alone, we will be spending on unemployment related expenditure no less than £475 million, a massive increase over 1982 in which the increase was £93 million. The alternatives facing us were and are startling.
I have not heard Deputy De Rossa come in and suggest we should increase the rates of PRSI by, for example, 1.3 per cent. That would yield this year £39 million. We made no increase in PRSI contributions this year because of the very substantial imposition which such rates have on workers and on employers as well. What we have done is increased the payment level from £9,500 to £13,000 a year. But that only brings in £16 million, which is a very small amount. I do not know the exact number but, speaking from memory, only about one in every ten earns more than £13,000 a year. You may ask why not go right to the top and let everyone pay up to the maximum of earnings? Personally I would have no great objection to that but we have raised the tax rate to 65 per cent and those earning more than £13,500 will be paying substantially more in income tax this year. However, supposing we decided to let everybody pay PRSI right up to the maximum of all earnings, what would be the advantage. We would get about £9 million. That is all.
: What about getting in all the money that is already owed on PRSI?
: To me there appeared to be a profound inherent misunderstanding in the amendment Deputy Mac Giolla tabled on Second Stage. I made the point last night to him. There is the illusion that PAYE employees pay the bulk of PRSI. That is not true. Actually 52 per cent of all pay-related social insurance is paid by employers and this year we will take from employers £537 million and we will take from employees £260 million. The Exchequer will contribute £220 million roughly. Perhaps it is one of the greatest deficiencies of Dáil Éireann that anyone can walk in here and say let us pay social welfare increases as from 5th April. Why not 1 January? Why not 5 June? No difficulty. All one needs to do is insert a one line amendment in the Bill.
Nobody on the Opposition side has told us where the £39 million is to come from. Deputy Haughey, for example has suggested that the increases should be of the order of 15 per cent. Since to grant this higher rate would result in the expenditure of another £40 million to £50 million it appears that the Opposition would like us to spend an addition £60 million to £80 million on social welfare this year. We are faced with a critical situation whereby, to take the unemployment side alone, half of all the current budget deficit of £890 million will be directed to unemployment-related expenditure.
Deputy Fitzgerald raised the question of the rent allowances provision. That legislation was brought in by his administration. It is true that we expect to pay less money this year under this heading than we paid last year but the only reason for this is the courts dispute. There are separate provisions for rent allowances and there is no change in the position in that regard. The question of the date of application of the social welfare increases has been raised. Considerable thought was given to this matter but this is not the first occasion on which the increases did not apply from April. In both 1973 and 1974 the date of application was July. In this instance it is the last week in June. This will mean approximately 27 payments for the year.
Deputy O'Hanlon referred to the provision of £88 million for social welfare increases as announced in the Financial Statement and to the figure of £80 million given by me last evening. The difference is accounted for by way of the income supplement of £5 million plus a provision of £3 million for health allowances not provided for in the Bill.
The propaganda that has surrounded this Bill has caused considerable distress to the many thousands of pensioners throughout the country who are under the impression that their rate of pension is being cut. Some Deputies have made irresponsible statements in that regard. I reiterate that the increases are as follows: £8.45 for a person on a retirement or an old age contributory pension and who has an adult dependant of 66 years or older thereby bringing the new rate to £78.75. Likewise, the old age contributory pension which is currently £73.10 is being increased by £8.75 to bring it to £81.85. Instead of causing needless worry to the elderly, to people on disability benefit in particular and to many others who may not be aware fully of their social welfare entitlements, Deputies should exercise a degree of circumspection and responsibility in their explanations of the Bill. The ordinary rates of unemployment benefit, unemployment assistance, disability benefit, widows' contributory pension or deserted wife's benefit are not in any way affected by the ceilings that have been introduced on disability benefit, unemployment benefit and on the maternity pay-related supplement.
It is important to point out there is no cut-back in the area of unemployment related expenditure in 1983. Last year the relevant amount was £381 million while this year it is £475 million. There is a sharp limitation on the amount of money that can be made available in this area in a situation where there are fewer contributors to PRSI and to PAYE, where there are fewer employers than there were two or three years ago and where there is a reduced consumer demand by virtue of the recession with the consequent reduction in tax yields. It is facile for Deputies to demand increases in cash payments when they are not putting forward proposals of any kind in regard to raising the extra revenue that would be involved. I exempt from my strictures the Opposition spokesman who understands the position acutely. I have no doubt that that understanding is shared widely within the community. If we were to bring forward the 10 and 12 per cent increases to 1 April the moneys required would be £39 million and that would involve an increase of 1.3 per cent in the full rate of PRSI contributions with a proportionate increase in the modified rates. If this had been the position I am sure Deputies would have showered criticism on us. There has been no increase in PRSI rates or contributions at all this year. I would stress that the system is not one which is financed on what one might call a social insurance basis. It is financed on a tripartite basis by employees, employers and by the substantial contributions required by the Exchequer.
There is a great deal of unfortunate misunderstanding about our system of social insurance. That system, which is basically similar to that obtaining in other countries, which has a long history, does provide basic social protection against the massive contingencies facing many families with regard to disability, sickness, unemployment, widowhood, old age, for which the ordinary family and individual are quite unable to provide and cope with alone and for which provision is made on a collective basis. We have said consciously that employers should pay the buik of the moneys required — 52 per cent this year — and that workers and the State should share the balance of the cost. Listening to some Deputies here one would imagine one was talking simply about a commercial insurance system, a system under which if one put in a few bob every week one automatically got back a degree of benefit. Our system has been quite different from that in concept from the early 1950s.
There is a great need also for public awareness of the benefits of social insurance because there is a lot of spurious campaigning taking place now in relation to pay-related social insurance — the anti-PRSI syndrome — which is being fostered by certain sections of the community. In fact some trade union sections quite unwittingly and on a very counterproductive basis have fostered an anti-PRSI syndrome in our community, a highly dangerous thing to do. What happens then? It means that employers may well say, why should we be paying PRSI? Let the State pay it, let workers pay it themselves, we will just stop paying. Then I should like to see where some of the trade unions criticism would come from.
As one who has been in this House since 1969 — when we have had up to 1979 contributions which were basically flat-rate contributions — I campaigned for ten years in this House to have those flat-rate contributions abolished because I considered them to be highly regressive and meant that all workers, irrespective of earnings, paid the same amount. When I was in the Irish Congress of Trade Unions, from 1964 to 1969, when I was not a Deputy, I campaigned strenuously against them as well. When I first became a trade union official in 1967, in the Transport Union, I campaigned against them also. I strongly criticised the system of flat-rate contribution as being regressive, as being particularly inequitable in the way they affected lower paid workers. I pointed out that there was real need to provide a system that would be fairer in relation to earnings of those people paying contributions. As we know, after a long, hard battle at many levels, a system of a fully pay-related contribution was introduced only in April 1979. I might point out that in April 1983 the employer will pay 11.6 per cent of his payroll and the employee 5.5 per cent of his earnings for social welfare. To repeat, this year the employers will pay £537 million and employees £260 million. In 1982 employers paid 49 per cent to the fund. This year they will pay about 52 per cent. Last year workers paid 23 per cent into the Social Insurance Fund while the Exchequer paid in 28 per cent. I want to repeat that the system is basically a "pay as we go" one. There are no reserves. It means that the income of the Social Insurance Fund, contributed by employers, employees and the State, for any one year, is paid out to persons entitled to various benefits.
Deputy Mac Giolla may be tempted to fall into the very dangerous trap — one I would urge him not to fall into — of criticising the fact that short-time workers will get no pay-related benefit even though they pay PRSI contributions. I would submit that that is a mistaken belief because the contribution is pay-related. There is a very mistaken belief that because the contribution is pay-related there is an automatic entitlement to pay-related benefit. That is not and cannot be so. Pay-related social insurance contribution from workers, employers and the Exchequer are the means of financing the whole range of benefits from retirement pensions right down to contributory widow's pensions. Therefore it cannot be regarded as an automatic entitlement and the contributions by employers and workers are payable in proportion. To qualify for each benefit, including pay-related benefit, particular conditions must be satisfied.
Now tragically and wrongly our PRSI system is under so much attack, largely by those who have the good fortune to be in employment, to have good health, who are a long way from retirement, who are not faced with immediate exigencies of, for example, maternity, sickness, widowhood, or indeed old age, such persons in our community. We live in a very self-centered community. We live in a community in which, as we long know from years of political activity, everybody particularises about himself or herself, his or her income, his or her benefits and entitlement without having a broader social horizon with regard to the rights and benefits of everybody else. That is a dangerous manifestation in which agitation is very easily fomented in our community, about PRSI in particular. One could see a lot of merit in agitation about PAYE and income taxation. But, as regards pay-related social insurance, a lot of the agitation could prove to be higly counter-productive and could defeat the aims and objectives of the trade union movement. In particular I would urge trade unionists who currently advocate reductions in PRSI contributions to note with great care the extent to which employers are obliged now to contribute to the benefits workers enjoy. Perhaps there is a substantial case to be made that in respect of some aspects of disability benefit in particular employers should be obliged to pay sickness benefit payments for perhaps the first two or three weeks. That requires some examination and I am sure that aspect would provoke a lot of reaction if one advocated it. It is something that could be examined but in the current context I do not have any proposals to make on it.
If I have dealt with this matter at length it is because I am anxious to stress that pay-related benefit is payable as a supplement with unemployment, disability, maternity and occupational injury benefits. It is true that from the beginning of April it will be payable after three weeks on income over £36 per week. Deputy Mac Giolla did not make any reference to the fact that there will be a new ceiling of £220 per week and, in the case of disability, maternity and occupational injury benefits, the amount of the benefit payable will be restricted to 80 per cent. It is not unreasonable that it should be 80 per cent. We are the only country in Western Europe, as far as I can gather, which has such a ceiling. If one examines the Swedish, French or Belgian systems I am sure one will find that our system can stand up to close examination.
In the case of unemployment benefit the restriction is 85 per cent of reckonable earnings in the current year and that is not entirely unreasonable. It means that a married man with children, if he has gross weekly earnings of £145 per week will get 85 per cent replacement. If he does not have any children he will get 71 per cent replacement of earnings. Admittedly, between April and June the replacement will be somewhat less, by 1 or 2 per cent. The percentages I have mentioned do not take any account of the income tax refunds which in practice many workers are entitled to. I am not saying that workers are not entitled to the changes but I stress that if the new arrangements had not been introduced the rates of PRSI contributions would have had to be further increased or we would have had further expenditure cuts.
I may be asked where the money is going to come from for those increases. Deputies may suggest that I should get the money from the £25 million which is owed for 1981-82 for PRSI contributions but I should like to make the point that that represents 4 per cent of all contributions. In fact, the rate of payment of PRSI by employers is very much up to the estimated yields. For 1982 it was within £2 million or £3 million of actual yield and we must bear in mind that we are in the midst of a major recession. Of that £25 million we expect to get in between £19 million and £20 million in the current year. There is no doubt that the moneys due will be demanded from all employers. I can assure the House that the Departments of Finance and Social Welfare and the Revenue Commissioners act with great vigour and rigour in insisting that all moneys due are paid in. I do not regard such payments as a source of major income. Admittedly it appears to be a large amount but in terms of total contributions paid under PRSI by employers it amounts to 4 per cent. We must keep a sense of proportion in that regard.
I should like to stress that we have introduced substantial new measures of prosecution. Not only will an employer be liable but his agent, or any person acting on behalf of an employer, such as a personal managers or company secretaries will be liable. Nobody will be able to dodge the new provisions. We want to ensure that there will not be any fraud or non-payment of contrubutions. The provisions of the Bill will tighten up the legislation and leave little room for fraud. I can assure the House that I would have wished to give greater increases if the money was available. The alternative would have been to borrow another £50 million or £60 million or impose another series of expenditure cuts to that amount. We were not going to do that whether we were to be kept in Government or not. We were not going to cook the books this year but present them properly and make sure that the budget arithmetic — there is nothing monetarist about getting the arithmetic right — was correct. Anybody can cod the people. In 1980 the budget was codded through and in 1981 it had to be brought back on course but in 1982 we had total chaos which became evident in the middle of July that year. We are all aware that that chaos brought down the Fianna Fáil Government.
I am concerned about the system of social insurance and the financing of social welfare. That is why I stressed that it was my intention to establish a commission on social welfare. For the first time since 1949 we will have a commission on social welfare and I would warmly welcome contributions from all parties to that commission. There has not been any examination of the whole structure of social welfare since 1952-53 when the system was introduced. There has not been any clarity in terms of the real impact it has on family income, particularly the income of poor families. The commission will, as far as I am concerned, be composed of persons of the highest expertise on social policy. I am sure it will act on an independent basis in making recommendations of considerable importance to the Government as to the future structure of our social services and social security system. There is an urgent need to broaden the system to take in the self-employed on a more effective basis and ensure that there is parity between the public and private sectors. We must also ensure that we have married in the taxation system. Deputy Woods is aware of the appalling problem of getting a system that will marry the income tax and social welfare codes. We have not succeeded in doing that.
In a small country of 3.3 million people of whom 1.1 million are in receipt of social welfare payments it is inexcusable that we have not yet set up an interlocking system of family income maintenance using the benefits of computerisation. This should have been done long before now but politicians have been too busy playing politics with the system and parading their pet percentage increases every April as though these were the only things that mattered. We, the politicians, have been so busy with public relations, political party relations and ensuring that the electorate returns us to Dáil Éireann that we have not done any really basic work when holding portfolios. For me these reforms come first and political popularity and narrow party political considerations come second. I am convinced that if I and my colleague, Deputy Fergus O'Brien, spend a few years in this Department we will certainly succeed.
: I doubt the value of rising to speak on this section having listened to the Minister. He is a fairly hopeless case because he has been totally brainwashed either by the Minister for Finance, the Government or the Fine Gael Party. He sounds like one of those people who has been taken into a cult and keeps preaching the same story repeatedly as if there could be no other point of view. Perhaps the best thing we could recommend is that the Minister should be taken away and de-programmed and sent back as a proper Labour Minister within a Coalition Government. I do not believe that an extreme right wing person would put forward arguments on this section other than those the Minister has made.
He criticises the Opposition for talking about the delay but the date has been put back by the Minister and we are talking about restoring the date of application to the beginning of April. I appreciate that this would cost £39.3 million. It is the function of Government to find the solution to these problems. People look to receive these benefits at the normal time. The Government's actions in increasing unemployment, which are a deliberate part of Government strategy, have placed a greater burden on this Minister and he has had to provide an extra £31 million to deal with it.
The failure to provide the necessary £39.3 million means that old age pensioners are losing out to the extent of £15.5 million while widows are suffering a clawback of £5.5 million. The disabled are also losing £5.5 million, the unemployed £10.7 million and others £1.1 million, making a total of £39.3 million. The Minister chastises Deputy Mac Giolla and ourselves for daring to suggest that old age pensioners should be paid as normal from the beginning of April. He almost makes us feel that we are letting the country down by making this claim.
I agree that there are anomalies in the system which must be tackled. The Minister will know that a fundamental review of the system was carried out last summer and the benefits of that review are available to him. Let us not cloud the issue. We are talking about genuine contributors who are not receiving their normal entitlements.
This section does not tell us that the Minister is dropping the provision for a double week in September and December. It cost £4 million last year and would probably cost just under £5 million this year. This clawback represents a real cash loss to the people involved.
The Minister also leaves out the fact that these people are not receiving children's allowances. Of course, within their direct social welfare payments they are getting an increase but for a person on unemployment benefit that increase amounts to 75p per week from the end of June this year. For a second child the increase is 85p. Unemployment is difficult enough for people and one does not even have to consider the VAT increases, the devaluation of our currency and the changes in fuel prices and transport costs to realise that an extra 75p will do nothing to help the unemployed. It will not meet the increased charges.
Deputy Bell was quite correct in what he said and the Minister will find that the ability of people in the poverty area to meet the needs of the day is being systematically reduced. There are excessive reductions in their general level of benefit. For instance, there is the reduction from 40 per cent to 25 per cent for pay-related benefit, in addition to what is happening to the basic rate. Following the inter-departmental review last summer a reduction from 40 per cent to 30 per cent was indicated. The Minister should not have capitulated to a further reduction because it goes beyond what is required. It is a measure to take more money out of the system. An increasing number of people are in receipt of unemployment assistance and such people will get an extra £2.65 a week from the end of June. This is in addition to the £26 which they now receive.
We can see how savagely these people are being treated when we consider that the Minister is saving £10.7 million by holding back this increase until the beginning of July. The Minister should say, as he said so often in the House before when he was on this side, that these basic levels are inadequate to sustain people at the present time. They were increased by 25 per cent in each of the last three years. We did not make an apology for doing that in very difficult economic times when we had Ministers for Finance who wanted to get their books and calculations right. The 25 per cent only brought those people up to £26 a week. That is what is worrying Deputies on all sides of the House, even those on the Government side in Fine Gael and Labour, when they look at the reality of the position and the advancing cost of living.
We support the Minister in implementing the measures which are necessary at the moment but we do not support him in going beyond that to take more money out of the system and to cheesepare on the old age pensioners, the widows, the disabled and the unemployed in the way in which the extra benefits are given. That is why we said 15 per cent was the figure we had in mind. We did not get as far as presenting the budget. Our leader has said that is the target we were working on and, as Minister for Social Welfare at that time, I know that that was the position. We had a duty as a Government to find the means of doing that and not do as the Minister is doing: coming into the House and telling us all the reasons why it cannot be done rather than working out how exactly it can be done.
We had a fairly substantial lecture from the Minister on the whole system of insurance. I agree with him that many people do not understand that the employer contributes so much and that the State contributes to the system. We have had that system for a good many years and it is the system people are entitled to benefit from. There is nothing new about the fact that the employer is paying 11.6 per cent. The Minister might point to the fact that employers in Europe pay considerably higher rates. The Minister said that as far as the employee is concerned the rate is 5.5 per cent for social insurance but he did not mention plus 1 per cent, plus 1 per cent plus 1 per cent. He did not mention plus 1 per cent for health, plus 1 per cent for youth employment levy and plus 1 per cent now for a new levy which has been brought in to raise funds.
The Minister was very careful to say that the rate of PRSI, which is 7.5 per cent as far as the working man is concerned, was not being increased. You have to have a lecture like the Minister gave us this morning to understand the breakdown of the 7.5 per cent. Most people do not go into that. They just look at what they pay for PRSI, which includes the youth employment levy, the health charge and the basic social insurance. We gave a firm commitment that we would not increase the PRSI rates because we regarded them as very high already. The Minister did not say that another 1 per cent special levy is being introduced which will be collected at the same time. Will the Minister clarify that the collection of this 1 per cent levy will be made in conjunction with the PRSI figure from the beginning of April? I understand that the Minister for Finance says that is the case. As far as the worker is concerned it means going from 7.8 per cent to 8.5 per cent. I will leave it to the Minister how he will present that and what sort of package he has. His propaganda machine is very extensive and far reaching so I know it will do a very good job in presenting that. The working man will find that, instead of 7.5 per cent, 8.5 per cent will be deducted. The Minister is taking a further 1 per cent for Government purposes and this is not being used to alleviate the situation within the social insurance system.
Is this all that is to be given? Will there be a double week in September and in December? As far as we know there will not be a double week in September and December for those on social welfare benefits generally. As the Minister knows, it was very helpful at the beginning of September last year for the people who are on long term unemployment benefit and unemployment assistance because they go on to the lower levels. All their pay-related benefit is gone and they depend on the lowest levels. At the start of a new school year in September this double week was a very valuable contribution because it meant they got double for each child. They got the same just before Christmas. It was very necessary to give this because of the cost of clothing and preparation for school.
Does the Minister consider the rise adequate in view of the changes in the consumer price index because of the extra costs that will be added by the budget and the devaluation which reduces the position generally for people on fixed incomes? If we take the devaluation at 4 per cent it means a fairly substantial reduction. If you take its impact on the consumer price index, it is at least an extra 2 per cent. That has come subsequent to the preparation of this Bill and the budget. Does the Minister plan to get from the Government an extra 2 per cent or more to cover this change which has taken place since then? The Taoiseach has said that the devaluation is a success for him. If the Government intended this, why did they not give something to compensate within the general level of social welfare increases?
I will not go into any detail in relation to medical cards but I would like to refer to one point. The Minister pointed out that for an old age pensioner and a dependant approximately £78 is the combined rate for both. That would be for an adult dependant of 66 years or more on old age pension. I should have known the Minister would be citing the highest figure. When there are two old age pensioners their income from June next will be £78.75p, according to the Minister. I should like to point out to him that the medical card guideline is £77 for a couple. I trust the Minister will appreciate that this automatically excludes all contributory pensioners unless there are some exceptional circumstances.
I am sure the Minister does not intend to do that, but setting the guideline at £77 for the medical card and quoting this figure of £78 should make the Minister appreciate the fact that contributory pensioners will be excluded. Quite a number of them have come to me to point out that is the situation. I am asking the Minister to have a look at it. When he becomes deprogrammed and gets back to his own self again I am sure he will again show his concern for people in that category.
This section includes the rates in the various areas and the increases. Will the Minister say if the domiciliary care allowance is being increased? There are routine increases but the domiciliary care allowance is not a routine one and it has to be provided for specifically.
: Replying to what Deputy MacGiolla had said and to the amendment he put down on Second Stage, the Minister referred to the employer having to pay 52 per cent of the PRSI contribution and intimated that that excluded the possibility of amending the system to improve the lot of beneficiaries. That kind of argument by the Minister is particularly strange from Deputy Desmond who last night proclaimed himself to be a socialist. It is a well-known tenet of socialism that the wealth created by the worker in his employment is part and parcel of the profits which the employer chooses to use in whichever way he decides and that the State in its wisdom would take portion of that profit which has been created by the worker in his labour. I do not think I need to lecture Deputy Desmond on socialism: I am sure he accepts that as a basic tenet.
The Minister tried to imply that there are no cuts in benefits involved in this Bill because there are marginal increases in benefits. He failed to reply to the argument made that despite the increases the net living standards of those on social welfare benefits effectively will be cut because of devaluation and inflation. It is double talk to claim on the one hand that there are no cuts and at the same time to fail to acknowledge that the living standards of those dependent on social welfare benefits will in fact be less than they were in the previous 12 months.
It is interesting also to compare the increase the Minister is quite pleased to have got from the Government in relation to future unemployment, £31 million, with the cut in real benefits between now and 1 April. There is a very direct relationship between the £31 million and the savings the Minister hopes to make between April and the end of June, £39 million. He has had that saving and the £31 million he said he got from the Government to cover coming unemployment.
I asked the Minister to reflect on the trap he has fallen into. He warned The Workers Party when saying that there is no relationship between the benefits a contributor should get and the contribution he makes out of his wages. The title of this scheme is "pay-related social insurance". If the Minister wants to have simple straightforward tax or have a pay-related tax, which is what we have, and incorporate it into the tax system and then simply provide the type of benefit the Government feel they can afford in any given year to those who must claim social welfare, he should simply abolish the PRSI system and incorporate it into the tax system. I am not advocating that, but if we accept Deputy Desmond's argument that there cannot be any relationship between pay-related benefits and pay-related contributions, the obvious outcome would be to do away with the PRSI system entirely.
I do not accept that argument. I do not accept that, simply because there are some welfare recipients on flat benefits, that is a good thing. I do not accept that because pensioners are on flat rates, the unemployed should also be on flat rates—they should be on pay-related benefits for which they have paid. I argue that the opposite should be the case, that pensioners should be on pay-related benefits for which they have paid during their working lives.
: I have listened attentively to the Minister's response. Nowhere did he admit that the living standards of recipients of social welfare benefits would be reduced as a result of this section. He appears to have moved somewhat from his Second Reading speech when he said that the Government have no intention of allowing the weaker sections who are dependent on social welfare to suffer a drop in their real living standards. This morning he did not admit that their living standards would improve as a result of this Bill.
Fianna Fáil in Opposition have been very responsible in their approach to this Social Welfare Bill. Last night the leader of our party said an increase of 15 per cent should be provided. We all agreed. It is recognised in all civilised countries that, in times of economic recession— and we all admit there are economic problems here as there are in many other western countries—the levels of support for the most needy in the community must be maintained. That was spelled out in Report No. 61 of the National Economic and Social Council.
The Minister spoke about the £39 million extra which it would cost to pay out these benefits from the beginning of April. Having regard to the fact that we are talking about the weaker sections in our community, it is extraordinary that, in the same week in which we received a revised estimate for £5.6 billion, £39 million could not be found to give people benefits to which we believe they are entitled. The Minister said that in 1973 and 1974 these benefits were delayed for three months. The significance of that is that in those three years a Coalition Government were in power. One has to question whether it is the philosophy of Coalition Governments that these benefits should be paid for three-quarters of the year only, and not for the whole year as has been the norm.
When Deputy Fitzgerald spoke about rent restrictions his point was that those who are receiving social welfare benefits will find that their rent allowances will be reduced by the Department of Social Welfare as a result of the increases in benefits. As I said, any self-respecting politician in this House has to oppose this section and we are opposing it.
: I should like to make a few brief comments to put this matter in perspective. Taking into account the increases on the health side we have to provide £88 million this year. That includes the £5 million for family income supplement. The effect of the unemployment crisis on the budget has not hit the political conscience of Deputies as yet. It is easy to talk about increases of the magnitude we had in the past. It is easy to talk about them in the context of 1980, 1981 or 1982. In 1980 we were talking about a figure of 92,000 people unemployed. In 1981 the figure was 126,000. In 1982 the figure was 145,000. Now when providing for social welfare on the unemployment side, we have to provide for over 203,000 out of work full-time, or on short-time.
In 1980 we had a 25 per cent increase in social welfare payments, but it was an increase of 25 per cent for 92,000 persons who were unemployed. In 1981 we had a 25 per cent increase for 126,000 persons who were unemployed. In 1982 we had a 25 per cent increase. Today we are faced with making provision for 203,000 persons who are unemployed.
Last evening Deputy Haughey spoke about an increase of 15 per cent and Deputy O'Hanlon repeated that figure. Let us consider the magnitude of an increase of 15 per cent. In nine months of this year it would cost £165 million. If we had the money at Exchequer level the increase would have been given. It would cost £165 million for nine months or £217.5 million in a full year. That would have meant increasing the 35 per cent tax band to 40 per cent and the 65 per cent tax band to 70 per cent and would have involved not taking £300 million from PAYE payers this year but £450 million, or finding the money elsewhere, perhaps by way of cuts. These are the stark realities. Because we have to make provision for £80.6 million for the 27 weeks payments this year, in next year's budget provision will have to be made for £156 million. That pinpoints the critical aspect of this problem.
Deputy Woods criticised the fact that there is no increase in children's allowances. In 1971 and 1972 and in 1976 and 1978 there was no increase in children's allowances. In 1971, 1972 and 1978 we had a Fianna Fáil administration and in 1976 a Coalition Government were in power. It is not true to say that every year there is an automatic increase in children's allowances. The 1 per cent levy is being collected by the Revenue alongside the PRSI contribution. They do not come into the social insurance fund but go straight to the Exchequer. The same applies to the youth employment levy of 1 per cent. It is taken into the social insurance fund and transferred subsequently to the Department of Labour. The same applies to the health contribution. We do not get it in the Department of Social Welfare.
By making a case strenuously for a much larger increase it is apparent that Deputies on all sides of the House wish to see an increased degree of social expenditure. I have been an advocate of increased social expenditure over the years, but in Government and in Opposition I have also been a firm advocate of saying where the money should come from. One does not get much thanks for stating the unpalatable but the fact is that an increase of 12 per cent and 10 per cent in respect of social welfare from 1 April at a cost of £39 million would have meant an increase of 1.3 per cent in PRSI. If we had an increase of 15 per cent we would have had to add 2 per cent to PRSI. One can visualise the reaction of the Opposition in that event.
Deputy Woods raised the matter of health allowances. They have increased proportionately and there is no cause for concern in this area. These are the main points I shall make on this section. I have no doubt that on other sections, particularly that section dealing with short-time working, will be discussed in considerable detail.
Question put.
The Dáil divided: Tá, 77; Níl, 74.
Tá
- Allen, Bernard.
- Barnes, Monica.
- Barrett, Seán.
- Barry, Myra.
- Begley, Michael.
- Bermingham, Joe.
- Birmingham, George Martin.
- Bruton, Richard.
- Burke, Liam.
- Carey, Donal.
- Cluskey, Frank.
- Collins, Edward.
- Conlon, John F.
- Connaughton, Paul.
- Coogan, Fintan.
- Cooney, Patrick Mark.
- Cosgrave, Liam T.
- Cosgrave, Michael Joe.
- Coveney, Hugh.
- Creed, Donal.
- Crotty, Kieran.
- Crowley, Frank.
- D'Arcy, Michael.
- Deasy, Martin Austin.
- Desmond, Barry.
- McGinley, Dinny.
- Manning, Maurice.
- Mitchell, Gay.
- Mitchell, Jim.
- Molony, David.
- Moynihan, Michael.
- Naughten, Liam.
- Nealon, Ted.
- Noonan, Michael.
- (Limerick East).
- O'Brien, Fergus.
- O'Brien, Willie.
- O'Donnell, Tom.
- O'Leary, Michael.
- Desmond, Eileen.
- Donnellan, John.
- Dowling, Dick.
- Doyle, Avril.
- Doyle, Joe.
- Dukes, Alan.
- Durkan, Bernard J.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Oliver J.
- Glenn, Alice.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Hussey, Gemma.
- Kavanagh, Liam.
- Keating, Michael.
- Kelly, John.
- Kenny, Enda.
- L'Estrange, Gerry.
- McCartin, Joe.
- McGahon, Brendan.
- O'Sullivan, Toddy.
- Owen, Nora.
- Pattison, Séamus.
- Quinn, Ruairí.
- Ryan, John.
- Shatter, Alan.
- Sheehan, Patrick Joseph.
- Skelly, Liam.
- Spring, Dick.
- Taylor, Mervyn.
- Taylor-Quinn, Madeline.
- Timmins, Godfrey.
- Treacy, Seán.
- Yates, Ivan.
Níl
- Ahern, Bertie.
- Ahern, Michael.
- Andrews, David.
- Andrews, Niall.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Mattie.
- Brennan, Paudge.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Burke, Raphael P.
- Byrne, Hugh.
- Byrne, Seán.
- Calleary, Seán.
- Colley, George.
- Conaghan, Hugh.
- Connolly, Ger.
- Cowen, Bernard.
- Daly, Brendan.
- De Rossa, Proinsias.
- Doherty, Seán.
- Fahey, Francis.
- Fahey, Jackie.
- Faulkner, Pádraig.
- Fitzgerald, Gene.
- Fitzgerald, Liam Joseph.
- Fitzsimons, Jim.
- Flynn, Pádraig.
- Foley, Denis.
- Gallagher, Denis.
- Gallagher, Pat Cope.
- Gregory-Independent, Tony.
- Harney, Mary.
- Haughey, Charles J.
- Hilliard, Colm.
- Hyland, Liam.
- Kirk, Séamus.
- Kitt, Michael.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- McEllistrim, Tom.
- Mac Giolla, Tomás.
- MacSharry, Ray.
- Molloy, Robert.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J.
- (Limerick West)
- O'Dea, William.
- O'Hanlon, Rory.
- O'Keeffe, Edmond.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond J.
- Ormonde, Donal.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Dan.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael.
- Wyse, Pearse.
Tellers: Tá, Deputies Barrett (Dún Laoghaire) and Taylor; Níl, Deputies B. Ahern and Briscoe.
Question declared carried.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill".
: We are opposing this section. Our amendments have been ruled out of order so we have no choice. We are opposing it because the increases are not adequate to meet the rising cost of living and because they will not be paid until the end of June and the beginning of July.
This section deals with the lowest paid workers in the State who are dependent on social welfare assistance. One group of people who must give rise for concern are the unemployed. The are unemployed mostly through no fault of their own. It is important that we should show our concern by giving them a realistic increase in their assistance and by paying it from the beginning of April, because the unemployed have paid into the social insurance fund and if any are working after April they will have to pay into the fund for three months before they derive any benefits. Those on assistance are on a lower level than those on benefit and it is important that we should give them a realistic increase.
I cannot understand how the Government, especially the Labour Party, can accept a sum of £37.85 per week as a realistic amount to be paid to widows living on their own. If the recipients of these benefits were asked how they spent their money, it would soon be clear that it is not possible to have the ordinary comfort that one would expect in a civilised society on this small amount.
: We also oppose this section. The Minister in his speech yesterday referred to the need to do something for the long-term unemployed. He shed tears for them but did nothing for them in the Bill. We have heard all the arguments, from the Taoiseach down, against this dreadful occurrence where people on pay-related benefits are getting more on short time than those who are working. We have heard about the benefits people get when they go on pay-related. The Minister spoke again today about tax refunds and so on which they get. Anyone who gets a tax refund receives it because he has overpaid his taxes and it is something that should not have been taken off him in the first instance. To think that this is being used as an argument for reducing pay-related benefits is outrageous when so many hundreds of thousands of people do not pay any tax at all. Indeed, anyone who gets a refund of tax should also demand a refund of interest on the tax he should not have paid. Of course that is not being counted and the Minister, in a very lengthy speech on section 1, said that we had given no indication of where this money was to be found. He told the Government that if they postponed the payment date from 1 April to 1 July they would get £39 million. That seems to be advocating taxing those on social welfare benefits, which has been the argument of Fine Gael all along. That did not sound too good and I suppose they decided not to use the words "tax them" but to take the money off them in a different way. This specific method of postponing the date of payment for over three months after the date of the cutbacks is to get £39 million from one section of the community. It is particularly vicious that those on assistance are included in this tax net.
There has been much talk about the great advantage of pay-related benefits but no one has said these benefits vanish after 65 weeks. After 65 weeks one is back on assistance, which is £59 per week for a single person, and that is below the poverty line. The Minister said something special should be done for the long-term unemployed because they will be longer term unemployed next year and still longer the year after. Many of these people will never again get a job. If they are unemployed at 40 years of age there is little hope of them getting another job in the next 25 years. What is to be done about the long-term unemployed? This section says that we will also tax the long-term unemployed by deferring the benefits for a period of three months or 13 weeks. In relation to unemployment assistance the supplementary welfare allowance will be deferred until 29 June 1983.
The Minister spoke at great length on the previous section and said that nobody told him where to get the £39 million. If he was not to take it from the long-term unemployed, pregnant women, pensioners etc. where else was he to get it? He admitted that £25 million is due in PRSI payments by employers. He tried to give the impression that this was not very much because it was only 4 per cent of the total. A percentage of the total means nothing. The fact is that £25 million is owed to the Exchequer which these people have not paid to the Exchequer. It means that they owe funds which belong to the State, to the unemployed, to pensioners and all of these people on welfare. That £25 million is for them, for the Exchequer. It is no use saying this is nothing because it is only 4 per cent of the total. It is £25 million and the Minister is looking for £39 million.
That is only one aspect. A sum of £345 million PAYE is due from the self-employed which has been proved to be due, in other words it is no longer under query. Another £600 million is under query, but £340 million is actually due. There is no question about it. It should be paid, it is owed and by holding it back they are stealing from the State, from the people, the unemployed, pensioners and so on, and the Minister says that we have not told him where he can get £39 million. If he got that he would have ten times the £39 million. Even after all the avoidance and evasion, which would probably account for £1 billion, the amount owed and known to be owed is not being collected or paid in.
Certainly the last three Ministers for Finance including the current Minister have got a submission from The Workers' Party on taxation in which we outlined where we felt the money could be got. There is no question but that there are wide areas in which the money can be got. Capital taxes in 1974 were 11.2 per cent of all taxation in this State. In 1981 this had dropped to 4.7 per cent of taxation from capital. The Minister could take a look at that area. He would then have a very good idea of where the money can be got. There is no shortage of areas to go for the money. The effort to provide for short-term and long-term recipients of social welfare by giving only 10 per cent increase to short-term and 12 per cent to long-term can have no basis whatsoever in statistics, in economics, in humanity and in justice. What is it about? Did their cost of living not increase just as much as in the case of those on long-term benefit? Why did they get only 10 per cent? Why did both groups get less than the actual cost of living increase which by June will be 20 per cent? Even the long-term recipients will lose 8 per cent and those on short-term will lose 10 per cent of the cost of living increase. This postponement to June is further taxation on both long-term and short-term benefits and in this case the section is a tax on the unemployed. deserted wives, old age and blind pensioners, widows, etc. We must object to it again.
(Dún Laoghaire): I would like to make a point, Sir, and look to your assistance. It is utterly disgraceful that every time there is a vote in this House bells do not go off in certain areas.
: Have you a specific complaint?
(Dún Laoghaire): Yes, I have, there are two Deputies here and in the room they were in the bells did not sound for the last division.
(Interruptions.)
(Dún Laoghaire): I will look after my job and Members opposite can look after theirs. It is disgraceful that we must keep sending ushers out to check that bells are ringing. It is not good enough and I am looking to the Chair to see that no further votes will take place in this House until every bell is checked in every vicinity. Something must be done once and for all to have this matter clarified. A Government could change simply because three or four bells do not work in this House. That is not satisfactory and it is not democracy.
: I did not know that a vote took place in this House this morning until the Chief Whip came into my office, room 122. This is no laughing matter. Deputy Predergast was in the room with me and we are lucky that a nonpolitical man was in that room with us. We heard no bell. If the vote is to be taken again I will vote for the Government on that section of the Bill. I am not hedging. I am furious over this. As far as Deputy Prendergast and I are concerned, if the Opposition want the vote taken again we will vote with the Government.
: I want to reinforce the comment made by the Government Chief Whip on this matter. I called into the room and quite definitely none of the people in it, Deputy Prendergast, Deputy McLoughlin or the third person there, had heard the division bell. It is a totally unacceptable situation and I ask you, Sir, to ensure through the Superintendent of the House that a check is carried out so that that will not recur and the bells will operate properly. It is a key matter for the Government of the country and the least we can do is ensure that the electronics in this House work satisfactorily.
: As Opposition Chief Whip for quite some time and having been Government Whip I am quite aware of what can happen in voting. I do not ever recall having to stand up and protest about it. I have always taken these things as part of the life of a Whip. On one occasion one of my Deputies was locked up in one of the rooms and he could not get out and another person lost the key. Bells did not go off, fellows maybe had a jar too many and did not hear bells and so on. I have suffered all these things as a Whip. However, I can understand that it is very infuriating. All I can say from my fair amount of experience as Government Whip and Opposition Whip is that on major Bills where the eyes of the nation are watching us, Deputies must be very vigilant themselves in these matters. It is very helpful to take that type of advice. I have had this with my own Deputies and I am sure that Deputies on the Government side will appreciate that they must do that also.
: I confirm what Deputy McLoughlin has said is the truth. Some of the counterfeit glee from the Fianna Fáil benches does their credibility very little good in this regard.
: It is amusing in the extreme to hear Deputy Prendergast talking about credibility after his performance on television last night. However, you, Sir, representing the Ceann Comhairle, have a serious obligation on you to make sure that every right-wing Deputy in this House gets an opportunity to cast his vote in favour of this legislation.
: You have been very helpful. I am sorry for what has happened and Deputies can be assured that I will have the matter investigated.
: Very hard to believe.
: Without interruption, please. I assure the Chief Whip that the matter will be investigated fully.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.