Social Welfare (Insurance Inclusions and Exclusions) Regulations, 1988: Motion.

Minister for Social Welfare (Dr. Woods)

I move:

That Dáil Éireann approves the following Regulations in draft:—

Social Welfare (Insurance Inclusions and Exclusions) Regulations, 1988

a copy of which Regulations was laid before Dáil Éireann on 22nd March, 1988.

The purpose of these regulations is to extend social insurance cover from 6 April 1988 to ministers of religion, members of religious orders, doctors, dentists and certain employees of local and public authorities employed under a contract of service. This is necessary as a consequence of the extension of social insurance to the self-employed. I thank the Deputies on the opposite side for agreeing to take this regulation which is necessary in conjunction with the main Bill which is being considered at present.

The persons concerned are specifically excluded from social insurance cover at present. This means that even if a person in one of these categories is employed under a contract of service, such as, for example, persons in Holy Orders who are teachers, nurses, etc. or doctors and dentists employed by hospitals, they are not covered by the system. There are historical reasons for excluding these various categories but their position has to be reviewed in the context of the new situation where social insurance is being extended to the self-employed. Continuing to exempt these categories from social insurance as employed persons could not be justified when their colleagues who are in self-employment and who pay income tax under Schedule D are being brought into the new extended system.

The reason for the general exception of religious from social insurance cover stems from the fact that it was felt that persons in Holy Orders or in religious life are not regarded as employees in the accepted sense when carrying out the work or duties of their offices, even though some are paid a stipend or salary. There was also the consideration that the majority of such persons were celibate priests, brothers and nuns who do not have dependants and are not exposed to the kinds of risks to which ordinary insured persons are exposed. In the case of medical and dental practitioners it was felt that they would only be in employment for a very short time, as the majority would go into private practice after a few years and, therefore, it was decided that it would be inequitable to impose a social insurance liability on them for a short period for which they would not derive permanent benefit. They would be doctors working in hospitals, prior to going on to some other employment perhaps in the private sector.

Under arrangements made in 1974, certain classes of ministers of religion or other members of religious communities can be brought into the social insurance system where a representative body indicates that their exclusion is unreasonable and the Minister is satisfied that this is the case. On foot of this provision ministers of the Church of Ireland have been brought into social insurance at the Class E rate of PRSI contribution in respect of their pastoral employment and are, accordingly, covered for all social insurance benefits, with the exception of unemployment and occupational injuries benefits. No other group of clergy or religious has made representations since 1974 for inclusion in the social insurance system.

Under the new extended social insurance system for the self-employed, clergy and other religious who are in receipt of reckonable emoluments or income, which are defined in the Social Welfare Bill, 1988, will become compulsorily insured for old age and widows pensions. It would, therefore, be clearly anomalous to continue to exclude from compulsory social insurance those clergy and religious who are employed under contract of service, i.e. religious employed in schools, universities, hospitals, etc. This regulation now provides for their inclusion in the social insurance system as employed contributors. This is in line with the recommendations of the Commission on Social Welfare in the matter.

In addition to ministers of religion, employed persons who are doctors or dentists and certain local and public authority employees are also being brought into the social insurance system for the first time. Such categories have been excluded from compulsory social insurance since 1953 when the unified social welfare system was established. Social insurance cover was extended to doctors and dentists in the Defence Forces in 1985. This was by special request and the extension was provided for them.

It was felt at that time that the question of extending social insurance cover to other doctors and dentists employed, for example, by health boards and other local and public authorities should be considered in the context of extending social insurance cover to all doctors and dentists, including private practitioners. Following the extension of social insurance to the self-employed, doctors and dentists who are in private practice are now being brought into the social insurance system as self-employed contributors. As a consequence it would be anomalous to continue to exclude all medical and dental practitioners who are employed under contract of service from compulsory social insurance cover and these regulations also provide for their inclusion as employed contributors. This also is in line with the recommendations of the Commission on Social Welfare.

It is the first time that doctors and dentists will come into the PRSI scheme. This regulation will ensure that those who are in employment, or under a contract of service, in addition to those who are self-employed, will come in at the same time.

Part I of the First Schedule to the Social Welfare (Consolidation) Act, 1981 specifies the employments which are insurable under the Social Welfare Acts. Part II of that Schedule specifies employments which are excepted from being insurable. The purpose of this regulation is to delete references in Part II to employment where the employed person is a minister of religion or a member of a religious community, employment as a doctor or dentist and certain employees of local and public authorities. The deletion of these categories from the list of excepted employments means that, where they are employed, they will automatically fall into Part I of the First Schedule, thereby becoming covered for social insurance as employees.

The existing paragraph 12 of Part I of the First Schedule which refers to ministers of religion is being deleted as it is no longer relevant in the present context. However, it is being replaced by a provision which will designate clergy and other religious as a specific category of employee. This is necessary in order to maintain the current Class E status of those ministers of religion who are already included in the system and it will also enable the provisions of the Social Welfare Acts to be modified in respect of this category of persons should this be necessary in the future. It is estimated that approximately 9,000 employed persons will be brought into the social insurance system as a result of the provisions in these regulations.

Under subsection (6) of section 5 of the Social Welfare (Consolidation) Act, 1981, these regulations may not be made until a resolution approving the draft regulations has been passed by both Houses of the Oireachtas. I am happy to recommend the draft regulations to Dáil Éireann.

Mr. J. Mitchell

I do not propose to oppose the motion by the Minister but I want to raise some questions. First, I would like the Minister to let me know what is the definition of minister of religion. I raise this question very seriously because in my constituency just over a year ago I was involved in protracted discussions with Government Departments and the local authorities in relation to a person who claimed to be a minister of religion in a sect of which he himself was a co-founder, the effect of which was, according to him, to render his income very small and, therefore, to render the differential rent for which he was liable on his local authority house to be reduced. That gives rise to the next question, what is the income of a minister of religion on which to base any social insurance contributions? How do we assess the income? It is clear, obviously, where a minister of religion is employed in a school or a university, but what if he is employed in a private school owned by the religion in question where his remuneration is unclear because he shares the general use of, say, the religious community's facilities, houses or whatever? For instance, the community may provide cars for the general use of that religious community. The Minister did not refer to these issues.

While I do not expect there would be any problems in dealing with the major issues — though in certain cases the issues may not be clear for the main churches — I see a ready loophole here in the case of less well known churches at present in existence or which might come into existence. In this day and age of so many loopholes, anomalies, evasions and avoidance of everything it seems inadequate consideration has been given to the whole question of definition of minister of religion and what constitutes his income from the point of view of a base for his social insurance contributions. Does the weekly church collection for the support of the priests of the parish which anyone who is a regular Mass goer will know is a regular feature in the Catholic Church form part of the base of the income on which social insurance contributions will be based or would a clergyman in the normal course of Church duties continue to be exempt from social insurance? Is it only for clergymen in other employment? I can think of 101 different categories of work done by clergymen which are not normal parish work and which would constitute employment, but the remuneration for which would be more in kind than in cash such as having a free house or use of a house, use of electricity and so on. I would like the Minister to tell what consideration has been given to those points.

I would like the Minister to clarify whether clergymen and members of religious communities who fall to be socially insured under the provisions now before us will be covered for disability benefit. It is clear from the Minister's speech that they will not be covered for unemployment benefit or occupational injuries benefit. Will they be covered for invalidity pension? I presume married clergymen will be covered for widow's pension and deserted wife's benefit. That being the case, will there be a differentiation in the contribution levied as between married ministers of religion and members of a religious community and those who are unmarried? If there is a difference, will the unmarried members be excluded from the provisions of the widow's pension and deserted wife's benefit?

I raise this question to highlight the fact that nothing in the social welfare code is simple. The general principle of what the Minister is doing is something the House can endorse but it gives rise to a great many questions. Anyone who knows anything about our social welfare system will accept it is so riddled with anomalies that every new proposal that comes in to add to the system should be thoroughly vetted so as to avoid further anomalies being created. I am fearful that what the Minister is proposing here will have the effect of introducing a number of new anomalies and loopholes which have not been thought out.

Are doctors who work in the GMS now to be charged social insurance contributions on receipts from the GMS? Is it to be stopped at source or will they be charged social insurance contributions on all their income? Will doctors and dentists in the general medical service be considered self-employed or employed? If they are to be treated merely as self-employed, will the Minister not accept that this itself would give rise to a great deal of anomalies?

There are many questions that could be raised about these proposals. It is a consequence of the extension of social insurance to the self-employed. I repeat that the general proposal put by the Minister, not withstanding anything he says, will cost the taxpayer tens of millions of pounds per annum in the years to come, unless the Minister has at the back of his mind and is not disclosing to the House the intention to introduce further increases in the rates of contribution after the review in the autumn of 1990. If that is the case, the Minister is not being totally honest. If that is what is proposed, the Minister should come clean and tell those who are in the self-employed sector what is to come in the years ahead. If there is not to be an increase in rates then I am absolutely certain that this proposal to extend social insurance to the self-employed will cost the taxpayer millions of pounds and the PAYE sector will be hit again, when the main purpose of the extension should be to give relief to that sector who are now carrying far too big a burden.

Mr. Wyse

This Bill has been introduced on a trial and error basis and could be expensive to the State. I have no objection to the definitions but clarification is of vital importance before we get to a stage where it has to be reviewed.

In regard to dentists, doctors or priests who volunteer their services in the Third World for two or three years, can they continue to contribute to this insurance fund while they are away? Likewise, there are many who come out of university with certain qualifications and set up their own little business but find that because of the economic climate in the country they have to leave for America or Great Britain. Are such people at liberty to continue their payment into the fund?

I understand the philosophy of bringing everybody into the social insurance net but thousands of young people are emigrating and taking up employment in other countries. Many are not there in a legal or official capacity and are running away from immigration officers. They take up employment until such time as the immigration officers catch up with them. Are we providing anything in this Bill for such people, because sooner or later they will return to Ireland and will become a liability because they are not covered by insurance? This is a very important aspect of the whole Bill. Because of the present emigration we may be creating a very big liability. When these people return to this country it is the State that will have to maintain them, be it on unemployment assistance or retirement pensions.

I will be watching carefully and hoping that in the next review we will broaden the whole thing. We should give people who have emigrated an opportunity to contribute to this fund. It is vital that the Minister and his officials sit down to consider this very important aspect of this Bill. It is new and will have many anomalies that will be detected as we go along. I have been watching this for some time and this is the first opportunity I have had to put this matter to the Minister.

Mr. Bell

I welcome the introduction of this motion. The Minister has set out very clear objectives which are very much in line with the recommendations of the Commission on Social Welfare. Usually I am a bit worried about regulations but in this case I prefer to see it done by regulation because, as Deputy Wyse rightly said, there is a certain amount of trial and error here. It is a new ball game and it will take a while to identify the various pitfalls that will have to be overcome.

I ask the Minister to confirm if other categories not covered in the Minister's designation in this regulation can be included from time to time. This is very important because there are a number of categories all of which I will not go into today. I will highlight one in particular. I have already referred to this at a number of committee meetings and in discussions with colleagues in the Labour Party and other political parties. There is a strong consensus in favour of having the Members of the Oireachtas included and covered in the same way as workers in every other category designated by the regulations. I do not think that Members of the Oireachtas and the European Parliament should be dealt with in any other way. They should be dealt with in the same way as regards A1 contributions and should qualify for the same benefits as anybody else. I would strongly recommend to the Minister that these regulations be extended to include Members of the Oireachtas.

Judges should also be included because they have to work just the same as everybody else and they get old and retire just the same as everybody else. Some of the most insecure people in the public sector generally are Members of the Oireachtas who never know from day to day or week to week whether they will be employed or not. They should have the same safeguards as every other category of worker. I term myself as a worker in the same way as when I worked in the trade union movement or on the factory floor.

There are a number of Members of this House who have worked for 15, 20 or 30 years in industry as PAYE workers and I happen to be one of them. Those Members, because they were elected to Dáil Éireann, have lost their total entitlement to any benefit. We are criticised in many respects but if there was a general election tomorrow and I lost my seat, which can happen to anybody, I would not qualify for unemployment benefit even though I have paid into the system for 30 years, simply because I have been here for over five years. The same applies to Members of the Seanad. There are a number of Members who could be deemed to be self-employed people who have other interests and they should be brought into the self-employed category.

I suggest very strongly, and I want to put on the record of this House, that all Members of the Oireachtas should be brought under these regulations or some other appropriate regulations. They should get some recognition by way of credit for the period of time which has broken their continuity of social welfare contributions, in the same way as people get credit for signing on for disability benefit or any other form of social welfare benefit or service from the State.

I am particularly pleased that ministers of religion, nuns and priests have been brought under these regulations because many of these people work very hard for very long hours in the same way as do social workers. They also work at weekends and they are very badly paid. People think that ministers of religion and nuns are well off people but I know from speaking to them that their allowance is very small indeed. To a large degree they rely on charity and on contributions made at services and on a voluntary basis. They are very vulnerable in this regard. They should get the same benefits that any other worker in industry or service enjoys.

I share some reservations about the definition of ministers of religion. I would like to hear the Minister's definition of what constitutes a minister of religion. We know in the past that people have dressed up in a particular garb and called themselves ministers of religion of one sort or another. I will be very interested to hear what the Minister has to say in relation to that. The proposals are very specific and very clear and are along the lines of the commission's recommendations. I will certainly support them fully.

Dr. Woods

I thank Deputies for their contributions and emphasise that in these regulations we are dealing with ministers of religion, doctors, dentists and so on who are in employment or under contract of service. The Bill deals with the self-employed and the whole area of private practice. These regulations remove anomalies and create a unified system and that is important. I emphasise that they are introduced in the context of what is being done in regard to the extension of social insurance to the self-employed. This is one of the elements which removes anomalies and ensures uniformity in the treatment of people.

Deputy Mitchell asked about the definition of a person in religion and various other questions in relation to those people. They are defined in the Bill as people ordained in Holy Orders. I know the Deputies could have some arguments about that but in future if any maharishis come along they will have to pay their self-employed contributions. If they have any people working under them who have a contract of service or a stipend they will have to pay their contributions. I do not think I would like to go any further into the definition but I can tell Deputies what it is in the Bill. I know in some instances there can be argument about who is ordaining people in Holy Orders but that is basically the situation. The income base is the income from the job, whatever that might be, secular employment, teachers or whatever. Normally there is a stipend of some sort payable. If that is assessable to income tax under Schedule E, that is the income base that will be used. The same arrangements that apply to other people will apply in those cases.

Deputy Mitchell also mentioned the question of priests and parish duties and asked what would be the position in relation to benefits in kind. They are exempt so there is no problem in that regard. One might say that members of the clergy might not be very anxious to contribute towards widows pensions because there would not be much likelihood of benefiting from them but the same can be said for anyone who remains unmarried, They, too, contribute to the scheme in the normal way and would not benefit in that way although they would benefit in other ways from the schemes. In that sense the position would be the same as that for any other people.

The question of what is covered was also raised. The extent of the social insurance coverage for persons affected by the regulations will depend on the nature of their employment. In general, however, most of those affected will be liable to pay either PRSI Class B contributions, as in the case of doctors and dentists employed in the Civil Service or PRSI Class D contributions, as in the case of doctors, dentists and religious employed in the health services and also religious employed in schools, universities and so on. These different classes cover different things. Class B covers widows and orphans contributory allowances, deserted wife's allowance and limited occupational injuries benefits. Class D covers the same categories, plus full occupational injuries benefits. That is the question Deputy Mitchell asked. Doctors will either come into this category or into the self-employed category. If they come into the self-employed category their contributions will be deducted by Revenue. Only doctors and dentists who are employed under contract of service will be covered by these contributions.

Deputy Wyse said there was a certain amount of trial and error in the scheme and Deputy Bell referred to the fact that some matters could be adjusted by regulation. That is the value of having regulations. I emphasise that this is designed to remove anomalies and unify the system.

Deputy Wyse referred to doctors or priests who work for a few years in the Third World and he asked what their position would be. There is also the question of people who are working in other countries such as America or Australia or in the EC. The Deputy is aware that if such people come back here they can have a means-tested pension if they qualify. Under the amendment which the Deputy tabled yesterday all these benefits would be means-tested. These people in such cases would never contribute anything and would come into the system on a means-tested basis. That is not in reality what would happen. In EC countries rights are transferable.

Mr. Wyse

EC countries only?

Dr. Woods

It is an important start and some of the officials here put a lot of work into it. There are special regulations dealing with volunteers who work in the Third World that are designed to protect their social insurance position. The regulations we are now talking about will apply to these people as well.

I have said that EC regulations cover transfers within the Community. We are negotiating bilateral agreements with some other countries outside the EC such as Austria, Canada, Switzerland, the Channel Islands and Australia to protect the acquired rights of citizens who may go to work in these areas. We will also be having discussions with the United States. The Progressive Democrats might feel at home in the United States because there is not too much by way of benefit under their system. They have a different approach and the means test would be an important factor.

(Interruptions.)

Dr. Woods

The Deputy will be aware that in America they do not have the same kind of approach that is adopted in the EC generally. Obviously it is not possible to transfer a means-tested system to an insurance system. That is the kind of problem that arises. In America great emphasis is laid on occupational schemes. There are also variations between the different states. It is not as easy to achieve agreement as it is within Europe. We will be entering into discussions with the Americans.

Deputy Bell raised the question of other categories which might not come within these regulations. He mentioned Members of the Oireachtas and judges. I know he is aware of the voluntary contributory arrangements which provide limited benefits. The question of Oireachtas office-holders and judges is being considered by the National Pensions Board and will be the subject of their next report. Their position will be considered in the context of the public service as a whole. We will examine the position when that report is received.

Mr. Bell

Will they be taken in under these regulations?

Dr. Woods

I doubt it. Most of the people are already in some sort of occupational scheme. It will be a matter of coming back to the House with the proposals and considering what might be the best arrangement.

Mr. Wyse

Dr. Woods

We would be directly concerned with any contract of service and payments made here and the people in the North would be concerned with any contracts of service on that side. There is interchangeability but we would be only concerned with collection if they come within our terms.

Mr. Wyse

I will be very brief. I mentioned the extension of social welfare to other countries outside the EC and I am glad the Minister is at least talking about this. I can well appreciate the problems involved but is there a possibility that after eight months or 12 months we could have a progress report on the negotiations that are going on with other Ministers? I am very interested in this matter. We have a tremendous opportunity to offer something to our emigrants when they return home. They will contribute themselves and we should give them an opportunity to do so.

Dáil Éireann debate - Thursday, 24 Mar 1988

Social Welfare (Insurance Inclusions and Exclusions) Regulations, 1988: Motion.

Dáil Éireann debate -
Thursday, 24 Mar 1988