asked the Minister for Social Welfare if he accepts that the regulation whereby a reduced rate of unemployment benefit is payable after 156 days to an unemployed person who has less than 280 paid contributions in a seven year period is unfair to persons who have a continuous record of contributions prior to the seven year period; if he will change the regulations; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Unemployment Benefit.
2.
In accordance with the terms of the relevant legislation the rate of unemployment benefit payable to a claimant is reduced after 156 days of benefit where he does not satisfy the contribution condition of having 280 paid contributions in a seven year period.
I regard this provision as reasonable as it ensures that in allocating resources from the Social Insurance Fund some recognition is given to the recent payment record of contributors into that fund.
I do not propose to make any change to the legislation on the lines proposed by the Deputy. However, the general question of the seven year test is a matter which I expect will be addressed by the Commission on Social Welfare.
In putting this question I had a specific case in mind relating to a man who has paid contributions every year since 1952 and it is only in recent years that his contributions have fallen. In fact he has something like 32 contributions short out of a total possible contributions for 34 years of 1,768. Does the Minister not feel that in a case such as this there is a grave injustice being done where a person has paid for 34 years into the Social Insurance Fund and now, because he has had a period of unemployment in the last few years, is being deprived of the full benefit of those contributions?
The legislative provision is that payment at the full unemployment benefit rate for the duration of 312 days would be paid to only persons with an annual average of 40 employment contributions over the seven years preceding their claim, namely, at least 280 contributions. That is the basis of the reduced rate and if everybody were to receive the full rate irrespective of the amount of contributions paid, the cost would be prohibitive. It would also mean that the allocation of available resources from the insurance fund would not be giving recognition to the payment record of the people paying into that fund. I estimate that the cost of additional payments would amount to £8 million or £9 million.
I accept that there are difficulties in applying an across the board deletion of the seven year period but surely the Minister would agree that the record of a contributor prior to that seven year period should be taken into account? In this case the person has been contributing for 34 years and it is only in the last number of years that his contributions have fallen below the full amount and he is only 32 contributions short in that seven year period. Would the Minister not agree that there is a case for reviewing the application of this seven year rule to take account of the previous history of contributions by a contributor?
There is a case for some phasing in this area and for fewer restrictions but it boils down to the availability of money. This was last examined in 1982 and at that time it was estimated that about 13,500 people were involved on that reduced basis. That number would have increased substantially since then. At that time the cost was about £3.46 million. That would be at least doubled if not trebled at this stage in terms of any reduction. Accordingly, since persons are on unemployment benefit, the reduced rate would be the equivalent of the maximum urban rate of UA which is also the equivalent of the short term urban unemployment assistance rate. There is still no means test on it, it is based on insurance record. There is a case but one would have to allocate very substantial additional resources. If one did it here one would have to examine the averages in terms of, for instance, contributory old age pension entitlement, widows' pensions and so on. We would have to progressively change the other averages which would be very expensive.
Question No. 3.
Would the Minister agree to at least undertake a review of the application of this seven year rule with a view to introducing the possibility of phasing the reduction that is being applied at present, especially in cases where there is a long history of contributions in previous years?
Certainly I am prepared to examine it. It is an aspect which will be considered by the Commission on Social Welfare. I will send a copy of the parliamentary question and the background notes to the commission and ask them to review the question of the seven year test. I would expect to have the report from them not later than next March with perhaps an interim report by Christmas, but this is one aspect which I will ask them to examine.