asked the Minister for Social Welfare the reason many of those in receipt of unemployment benefit who have paid RSI contributions are in receipt of lower payments and benefits than those in receipt of unemployment assistance.
Ceisteanna—Questions. Oral Answers. - Social Welfare Payments.
2.
With the exception of claimants aged under 18 years, unemployment benefit is payable on any claim for a maximum duration of 390 days. This means that, on becoming unemployed, a person may draw unemployment benefit for a total duration of 15 months.
When the maximum duration of unemployment benefit was first extended from six months it was decided that payment at the full rate after the first six months would be subject to the additional condition that the claimant had an annual average of 40 contributions paid over the preceding seven years.
If a yearly average of 40 contributions has been paid over the seven year period, there is no change in the rate of payment; that is to say that the claimant continues to receive the same rate of payment for the remaining nine months of duration as he or she received in the first six months of claim.
If, however, the claimant does not satisfy this contribution average test, a special rate of unemployment benefit is payable for the remainder of the claim. This special rate is equivalent to the maximum rate of unemployment assistance payable to a person with no means who is living in an urban area and who has been unemployed for less than 15 months. I am abolishing the lower rural rate of unemployment assistance in the current Social Welfare Bill.
Persons who have been unemployed for over 15 months are categorised as long-term unemployed and receive a rate of unemployment assistance that is higher than the special rate which is payable to persons who fail to safisfy the yearly average contribution test. Accordingly, the rate of benefit payable to persons in receipt of the special rate would, unless pay-related benefit is payble, be less than the amount payable to persons who are receiving the long-term rate of unemployment assistance.
It has been represented to me previously that there is something wrong with this position but this is to fail to understand the rationale behind the higher payment payable to people who are long-term unemployed. A higher rate of payment for people who had been unemployed for over 15 months was introduced over five year ago in recognition of the special needs which arise for people as unemployment continues for a lengthy period. Since then, the long-term unemployed have received special increases. In 1988, for instance, an increase of 11 per cent was given to long-term unemployment assistance recipients and I am delighted to be bringing in legislation at present which will further increase these rates by 12 per cent from July next.
I see nothing wrong in the fact that people who are short-term unemployed, whether on unemployment benefit or unemployment assistance, should get less than those who have been unemployed for a long period. The position would be different, of course, if the rate of unemployment assistance payable for the first 15 months of unemployment were higher than the rate of unemployment benefit during this period. However, this is not the case. The position is now, and the same will apply after July next, that the rate of flat-rate benefit is always higher than the short-term rate of unemployment assistance.
Will the Minister accept that as a consequence of the changes he made last year, and which have been operative since July, there is no incentive for many people in receipt of long-term unemployment assistance to take up temporary employment because on becoming unemployed again they would be far worse off?
In the Bill which is before the House I am making some arrangements to at least in part get over that disincentive.
Could we make some progress please? Otherwise we shall not be able to deal with the remaining questions.
I agree with you Sir. That is why I am asking a very short question in response to a very lengthy reply. Do I take it from the Minister that he intends to close entirely the gap created as a consequence of his decision last year to widen the differential between long-term unemployment assistance and unemployment benefit?
It is generally accepted that people who have been on long-term unemployment assistance are in the lowest income group and have become deprived by virtue of the fact that their resources are used up. There are situations, the ones to which the Deputy refers, in which people on short-term unemployment can be lower than the long-term unemployed, but they are not lower than those on short-term assistance. The Deputy is, therefore, comparing two different things. He is comparing long-term unemployment assistance with short-term unemployment benefit. Certainly those on long-term unemployment assistance are getting ahead of those people on short-term unemployment benefit. For that reason I am bringing in the measure that is in the Bill at present.