asked the Minister for Social Welfare the reason the Exchequer contribution to the social insurance fund has risen from £53 million or 19 per cent in 1977 to £417 million or 30 per cent in 1987; and the cash and proportionate contribution of the Exchequer to the fund he expects in 1988.
Written Answers. - Social Insurance Fund.
50.
The Exchequer contribution to the Social Insurance Fund is the amount by which the income of the fund for any financial year is less than its expenditure. While there has been a considerable increase in the real income of the fund from PRSI contributions between 1977 and 1987, the increase in the fund's expenditure has been more significant. The expenditure increase is accounted for by an upward trend in the numbers of recipients of social insurance benefits and by a substantial increase in the rates of benefit paid over the years. The increase in expenditure, ahead of income increases, is the main factor underlying the growth of the Exchequer contribution.
In the mid-seventies policy was directed towards reducing the Exchequer contribution to the fund vis-à-vis the contribution by employers and employees. The higher expenditure to which I have referred, at a time when it was generally recognised that further taxation burdens could not be imposed on employers or employees, resulted in the Exchequer contribution to the fund increasing subsequently. If the 1977 level of State subvention to the fund was applied in 1987, the combined employer and employee contribution would be 21.8 per cent rather than the present rate of 16.8 per cent.
The deficit on the fund in the current year at post-budget rates is estimated at £388 million which will result in an Exchequer contribution of 28 per cent to income.