I move: "That the Bill be now read a Second Time."
This Bill provides for significant improvements in our social welfare schemes and services. It also introduces two major new schemes and a number of other important developments.
The Bill is a very substantial piece of legislation. It comprises seven parts and a total of 51 sections. This makes it the largest Social Welfare Bill since the Social Welfare (Consolidation) Act, 1981, which I also had the honour to put through this House. In fact, it is the largest piece of new social welfare legislation in almost 40 years since the Social Welfare Act, 1952, which established the social welfare system as we know it.
The Bill continues the Government's policy of sustained improvements in social welfare. We have once again more than maintained all payments against inflation; given special increases to those on the lowest payments; introduced many improvements in existing schemes; introduced a number of major new schemes and services; and improved in many respects the effectiveness of the delivery of our services, including the new appeals system.
Two years ago in 1988 we extended social insurance to the self-employed. This was an historic development in social security coverage. Last year, we introduced a new social assistance scheme for widowers and deserted husbands as well as other measures aimed at modernising and improving our social welfare system.
This year, in a major piece of social welfare legislation we are introducing two important new schemes — a carer's allowance and a lone parents' allowance.
The Bill includes provisions for a number of major and innovative developments in social welfare legislation — I have already mentioned the introduction of a new carer's allowance and a new lone parent's allowance. The Bill also includes the provisions necessary to establish a new social welfare appeals system which will be a major development in the administration of social welfare schemes.
Other innovative measures being introduced this year include a special clothing allowance to help social welfare recipients provide for their children's school and winter clothing which will come into effect in September. There will be a number of improvements in the means tests including, in particular, an exemption of income from the sale of a pensioner's residence in certain circumstances and an exemption of payments to persons who accommodate students of Irish during the summer months. I would also like to mention changes which I am introducing in the free schemes and, in particular, the provision under the free travel scheme for free travel for companions. This will enable a companion to travel free with a recipient of disabled person's maintenance allowance who cannot travel alone. This will be of major benefit to people in this situation and will be of particular benefit to the mentally handicapped.
In last year's Social Welfare Act, I provided that the prescribed relative's allowance could be paid directly to the person who provides the care. Now we are going further to provide for the first time for a separate carer's allowance. Despite the changes we are witnessing in society today, such as greater mobility for young people and increased participation by married women in the workforce, the family continues to be the strongest and most reliable source of care for elderly incapacitated people. The majority of the elderly and the handicapped continue to be cared for at home living with their spouse or children or with another relative, rather than in institutions.
This new allowance, which I am particularly pleased to introduce, represents a milestone in the development of our social welfare services. For the first time in our legislation we are giving official recognition to the role of the carer who provides full time care for elderly people in the community. Many public representatives and voluntary groups have stressed the importance of the work of those who care for the elderly and the need for this work to be recognised. Such was the lack of recognition of these caring people, mainly women, that they have been referred to as the "forgotten army". Their selfless dedication has been of inestimable value to the community over the years. I am delighted to be able to recognise the dedication of carers with the introduction of this new allowance.
Better living standards and improved health care have increased life expectancy for all of us. The number of elderly people is increasing and will continue to increase. Some of these will need full-time care and attention. Where possible, this is best provided in the home. This is where carers have such an important role. I am anxious that this role be recognised and that carers are supported and encouraged. The new allowance represents much-needed reform in this area.
The development is also in line with the recommendations of the Commission on Social Welfare. The commission recommended that the prescribed relative's allowance be abolished and that carers should be entitled to receive a social assistance payment in their own right. The new allowance will be £45 per week and some 8,000 carers are expected to benefit under the new scheme. This compares with the existing prescribed relative's allowance of £28 which only applies to almost 2,000 caring relatives.
For those who already had the prescribed relative's allowance, the new allowance provides an increase of £17 per week. For others, it provides a new payment of £45 per week. The greatest gains go to those cases where the carer was hitherto receiving no payment at all because of the various restrictions attached to the prescribed relative's allowance. Such households can now benefit by the full £45. In addition child dependant increases will be payable where the carer has children.
I am pleased to tell the House that many of the restrictions which apply to the existing prescribed relatives allowance will be dropped when the new allowance comes into force. These provisions will be made by regulations. For example, at present the allowance is not paid if the carer is a married person dependent on his or her spouse. The new allowance will be paid in such cases, subject to a means test. This represents a significant improvement in the position of a married woman, with a husband on a low income, who cares for an elderly relative at home. The new allowance will also be paid in cases where the carer is not a relative and to people who are currently excluded because others are living in the house.
The position of people at present getting the prescribed relative's allowance will be protected. That is what we call the saver clause. If, due to the means test, a person getting this allowance would get a lower rate on the new carer's allowance, they will be able to retain their existing prescribed relative's allowance. I believe that the introduction of the allowance will lead to a greater awareness of the important part played by carers in the care of the elderly. It will also enable them to carry out this task by providing them with a secure and independent source of income.
I am also introducing a new allowance for lone parents which will mean for the first time that there will be a single means-tested payment for all lone parents with at least one dependent child. The need for this scheme was emphasised strongly by the voluntary groups who participated in our pre-budget forum. I would like to highlight a number of aspects of this scheme.
In the first instance, it formally recognises that all parents bringing up children on their own face similar problems. The ongoing difficulties being experienced by families in this situation are similar whatever the reasons for them becoming one parent families in the first place. The objective of the social welfare system must be to address the income maintenance needs of these families. It must treat all families in a similar manner whether the parent is a man or woman and regardless of the circumstances which originally gave rise to their lone parenthood.
Currently, the needs of lone parents are catered for by six different schemes. The supplementary welfare allowance scheme also caters for a number of persons who cannot qualify for existing schemes. It is a feature of the current arrangements that lone parents are categorised according to the circumstances which gave rise to their situation. This arose partly because of the piecemeal development of the provisions for one parent families. Originally, of course, we only had the schemes for widows. In the seventies separate schemes were introduced for deserted wives, unmarried mothers and prisoner's wives. These were considered innovative and progressive in their time and made a substantial improvement to the lives of many lone parents. Last year I introduced for the first time new schemes for widowers and deserted husbands.
The new scheme which I am now providing for in the Bill will streamline all existing social assistance payments for lone parents. It will incorporate the existing schemes for unmarried mothers, widowers and deserted husbands. Women receiving widow's non-contributory pension, deserted wife's allowance and prisoner's wife's allowance, who have child dependants will also be covered by the new scheme.
In addition, the new allowance will, for the first time, provide a special means-tested social welfare payment for certain lone parents such as separated spouses, unmarried fathers and prisoners' husbands. Up to now the only social welfare payment available to lone parents in these circumstances has been supplementary welfare allowance. I am sure Deputies will agree that the new scheme represents a landmark in the development of a non-discriminatory social welfare allowance for lone parents who are unable to provide for themselves.
The third major initiative for which provision is being made in the Bill is the improved social welfare appeals system. At present appeals are made to me as Minister for Social Welfare and are processed by my Department. The appeals are heard by appeals officers who are independent in the exercise of their functions and have been recognised as such by the courts. Nevertheless the fact that the appeals branch in administering appeals is linked with the Department has been the subject of criticism. I am taking measures to separate clearly the appeals function from the Department by setting it up as a separate executive office. This is in line with the commitments given in the Programme for National Recovery.
Under the new arrangements appeals will be made direct to the chief appeals officer and the appeals office will deal with all aspects of appeals. I will be providing that in future claimants whose appeals are refused will get information about the reasons for refusal and will be encouraged to seek any additional information they require as a basis for their appeal.
Appeals officers and the chief appeals officer will be appointed by the Minister for Social Welfare. Individual appeal officers will retain the discretion to decide whether appeals are dealt with summarily or by oral hearing. However, I am also providing that the Minister for Social Welfare and persons designated by him will in future have the power to direct that an oral hearing be allowed where they consider it warranted in a particular case. The new appeals office will be a self-contained office headed by a director and chief appeals officer. It will have its own manager and secretarial staff. Its headquarters in D'Olier House will include private rooms for the hearing of appeals.
Already the chief appeals officer has been appointed. Work on the refurbishing of office accommodation will commence within the next few weeks. Preparatory and architectural work has already been completed by the Office of Public Works. The new office will have its own self-contained accommodation and its own secretarial staff. Consultation and hearing rooms will be provided and particular attention is being paid to the need for privacy for clients. I am confident that the facilities will underscore the independence and separate nature of the new appeals office. Regulations will be made to update the procedures in relation to appeals in line with the new developments and to prescribe the functions of the director and chief appeals officer. I expect the new office to be fully operational by the late summer.
The current system of appeals has many positive features in relation to simplicity, speed and accessibility which I have been careful to retain. One such feature is informality, which provides a significant advantage over a more legalistic system in terms of providing the best possible service. The changes I am now making will maintain the independence of the appeals system and ensure that it is perceived to be fair and independent. They will also fulfil the undertakings contained in the Programme for National Recovery with the social partners and in the Programme for Government.
The total value of the social welfare increases and related measures announced in the budget is £216 million in a full year and £100 million this year. Total social welfare spending this year will, as a result, increase to £2,764 million which is equivalent to £7.5 million for each day of the year. That level of spending on social welfare is the highest ever in the history of the State. It demonstrates once again our continued determination to protect and improve the position of those dependent on our social services.
Among the measures provided for in this Bill are — an increase in general of 5 per cent in social welfare weekly rates of payment with special increases of up to 11 per cent for 16 different groups of welfare recipients, mainly those on the lowest payments; further streamlining of the rates for child dependants, reduced now to six compared with 36 in 1987, with an increase to £11 in the minimum weekly payment; an increase of 5 per cent in the monthly rates of child benefit; replacement of the existing prescribed relative's allowance by a new carer's allowance which will be payable on a means-tested basis to a wider range of persons providing full-time care and attention to pensioners; introduction of a new lone parents allowance for parents bringing up children on their own which will streamline all existing social assistance schemes for lone parents and which will include, for the first time, lone parents such as separated spouses, unmarried fathers and prisoners' husbands; measures to facilitate the establishment of the new social welfare appeals office; a major initiative to relieve those on low earnings of their liability for PRSI contributions while preserving their entitlements to benefits and pensions; improvements in means-testing which will exempt the income from the sale of a pensioner's home in certain circumstances and the income received by Mná Tí living in Gaeltacht areas who accommodate Irish students; and new arrangements involving the integration of the redundancy fund and the occupational injuries fund with the Social Insurance Fund.
The increases in payments are provided for in sections 3 and 4 of the Bill. The increase of 5 per cent generally in social welfare payments will more than maintain the position of all claimants, since the rate of inflation is expected to be around 3 per cent for the year mid-1990 to mid-1991. The special increases for 16 different groups including the unemployed, widows, the elderly and lone parents reaffirm the Government's commitment to improving the position of those on the lower payments. Ranging from 5 per cent in general up to 1 per cent, these increases more than meet our commitments in the Programme for National Recovery.
The main improvements in rates are: an increase of 5 per cent generally in the weekly rates of social insurance, social assistance and occupational injuries benefits; a 10.6 per cent in the personal rates of long-term unemployment assistance and single woman's allowance; special increases of between 7 per cent and 15 per cent in the rates for adult dependants of the unemployed and those on supplementary welfare allowance. The new adult dependant rate for all of these payments will be £31 a week from July; an increase of £4 (8.2 per cent) a week for widows, widowers, deserted wives/ husbands, unmarried mothers and prisoners wives, under age 66, on social assistance (means-tested) pensions or allowances; 6 per cent increase in the personal rate of the old age non-contributory pension; almost 7 per cent, £3.50 per week, for widows and deserted wives, under age 66, receiving contributory payments; an increase of 7 per cent in the personal rate of short-term unemployment assistance and supplementary welfare allowance; and £3 a week increase in the personal rates for those receiving disability and unemployment benefit.
This year the Government have again provided special increases for those on the lower payments who are the least well off. Continuing our commitment to improving the position of the long-term unemployed, an increase of £5 a week has been provided for in the personal rate of unemployment assistance.
The further streamlining of rates of adult dependant allowance together with the increase in the minimum child dependant payment has substantially improved the payment for families depending on long-term unemployment assistance. From July, a couple with three children will receive an increase of £9 bringing their payment to £116 a week. These latest increases will mean that the rate of payment for these families has been increased by almost 30 per cent since July 1986.
This year, new categories have been included in the special increases. An old age pension couple, both over age 66, will receive £106 a week, an increase of £6, while a widow under age 66 with two children will receive an increase of £5.20, bringing her new rate to £80 a week.
This year we are continuing to streamline and improve the number of different rates for adult and child dependants. I reduced the number of rates of adult dependant allowance for the unemployed to two last year. This Bill provides that, in future, there will be only one rate for this group. The new rate for an adult dependant allowance payable with all unemployment payments and with disability benefit will be £31 a week from July. This new payment means an increase of £4.10, or 15.2 per cent, for adult dependants of those on short-term unemployment assistance or supplementary welfare allowance and an increase of £2, or 6.9 per cent, for those on disability benefit, unemployment benefit or long-term unemployment assistance.
This year I am again reducing the number of child dependant rates by increasing the lower payments. In 1987 we had 36 rates for children. Last year these were reduced to 12 rates and this year I am further reducing them to six. The minimum payment which I introduced last year is being increased to £11 a week and the range of payments for children will now be between £11 and £15.
The following examples illustrate the effect of the increases which apply from July next: A couple with two children on long term UA will receive £105 per week, an increase of £8, while a couple with four children will receive an increase of £10 bringing their payment to £127; a couple with four children on short term UA or Supplementary Welfare Allowance will receive £120 per week, which is an increase of £11.10, while a couple with six children will get an increase of £13.10, and a total payment of £142; a lone parent under 66 with three children on an assistance payment will receive an additional £5.20, giving a total payment of £93.50; a widow or deserted wife on a contributory payment with four children will receive a payment of £116 which is an increase of £5.10; an old age pensioner with an adult dependant on a non-contributory pension will receive a total increase of £4.40, giving them a payment of £79.50; a couple both over 66, and under 80, on a contributory old age pension will receive a payment of £107.20 which is an increase of £5.00.
The monthly rates of child benefit are also being increased by 5 per cent from October. Section 5 sets out the new rates. £15.80 will be payable in respect of each of the first four children and the new rate for the fifth and subsequent children will be £22.90. A family with four children will receive an increase of £3 a month and their new rate will be £63.20. The increase for a family with six children will be £5.30 a month and their new rate will be £109 a month. About 470,000 families benefit from this scheme in respect of over one million children. With its universal nature and the fact that it is paid direct to mothers, child benefit is one of the most effective instruments available to the State through which the important role of mothers in bringing up children can be recognised.
Section 6 provides that child dependant payments for long-term recipients will be continued up to age 20 where the child remains in full-time education. Deputies will recall that I extended the age limit from 18 to 19 years last year. Next year, the Government plans to continue these payments up to age 21 in line with the provision for widows and other lone parents. The measure will take effect from September.
Sections 7 and 8 provide for the customary increase in the earnings ceiling up to which social insurance contributions are payable. Again this year I am glad to say that the rate of social insurance contribution is not being increased.
Section 7 provides for the increase in the ceiling for employers and employees. The increase in the ceiling for the self-employed is provided for in section 8. From 6 April 1990, employees and the self-employed will pay PRSI contributions in respect of earnings up to £17,300 instead of £16,700 at present. Employers will continue to pay contributions up to a ceiling of £18,600 for workers with these higher earnings.
The contribution rate for the self-employed will be 5 per cent from April 1990. I am pleased to inform the House that the self-employed are now making a substantial contribution to the PRSI pension system. Income from the scheme for the self-employed will be £62 million this year. This is some 30 per cent ahead of the original target. Until the scheme for the self-employed was introduced, up to 70 per cent of self-employed persons relied on means-tested payments in their old age. They now have entitlement to old age (contributory) pension and widows and orphans pension on a similar basis to employees.
The question of the coverage of the scheme to include invalidity pension at my request is being considered by the National Pensions Board. I look forward to their report later this year.
Section 9 provides for the PRSI exemption for low paid workers announced in the budget. From the beginning of the next tax year workers currently liable for Class A contributions whose gross earnings are £60 or less in a week will be exempt from their share of the PRSI contribution, 5.5 per cent, for that week. The health and employment levies will continue to be payable by workers who do not hold a medical card. The exemption means an increase of up to £3.30 a week in take home pay for workers who do not have any other deductions or levies. Even though they do not have to pay their social insurance contributions, exempted workers will continue to have full entitlement to social insurance benefits and pensions. It is estimated that over 50,000 workers will benefit from the exemption.
The new provision, together with the improved tax exemption limits announced in the budget, will make a significant improvement in the take home pay for low paid workers. Families on low pay will also benefit from the improvements in the family income supplement scheme which I will be announcing soon.
Section 10 provides for the reintroduction of the employer's PRSI exemption scheme. Earlier schemes covered the 1986-87 and 1987-88 tax years. The latest scheme applies to the 1990-91 tax year in respect of each employee taken on during the period from 23 October 1989 to 28 February 1990. The exemption covers the employer's portion of the PRSI contribution only and is confined to workers who were additional to the employers workforce on 27 September 1989.
At earnings of £250 the exemption can be worth up to £1,585 a year to an employer in respect of each employee. Latest figures in my Department indicate that about 700 employers will benefit from the exemption in the 1990-91 tax year for in the region of 1,000 employees.
Section 11 of the Bill provides for an increase from £69 to £72 in the amount of weekly earnings disregarded in calculating the rate of pay-related benefit. The disregarding of a proportion of reckonable earnings in calculating the amount of pay-related benefit payable with flat rate benefits has been an essential feature of the scheme since its introduction in 1974. The purpose of the disregard is to take account, in the calculation of pay-related benefit, of the amount payable by way of flat rate benefit.
Sections 12 to 16 provide for the new allowance for parents bringing up children on their own. Section 12 sets out the persons who are to be regarded as lone parents. It provides that the circumstances in which lone parents will be regarded as separated or unmarried will be set out in regulations. It also sets out the rates of entitlement. The amount of the allowance will depend on the number of dependent children and the claimant's weekly means. The maximum weekly rates that will apply when the scheme is introduced will be £66.50 for a parent with one child, made up of a personal rate of £53 and £13.50 child dependant allowance. An extra £13.50 will be payable in respect of each additional child.
Under the provisions of section 12 the existing widows non-contributory pension and deserted wives allowance scheme will continue to apply to women without children. Sections 13 to 16 provide for various amendments to facilitate the introduction of the scheme and that the scheme will be brought into effect by way of a commencement order.
It is intended that the new allowance will apply to lone parents who are bringing up at least one dependent child on their own — children can be regarded as dependants until they reach the age of 18, or 21 if they are in full-time education; satisfy a means test — the means test will be the same as that used for the widow's non-contributory pension and is designed to allow for a certain amount of part-time work; and are not cohabiting, that is, living with another man or woman as husband and wife.
I am particularly pleased to be able to bring this measure before the House. Apart from the major benefits it will provide to parents bringing up their children in what must be very difficult circumstances, it represents a major step for my Department in rationalising the number of schemes which cater for persons with similar needs. The amalgamation of these schemes will enable me to direct resources to more effective control of these schemes and to the pursuit of deserting spouses.
Sections 17 and 18 provide for the new carer's allowance which I described earlier. Section 17 inserts a new chapter in the principal Act covering these allowances. It provides among other things for the circumstances in which persons will be considered carers, the rules in relation to means and the rates of payment. It also provides for the making of regulations setting up the scheme. The scheme is to come into effect by way of commencement order. Section 18 provides for consequential amendments to the principal Act arising out of the insertion of the provisions for the new scheme.
Sections 19 to 22 provide for a number of legislative changes to facilitate the setting up of the new appeals office in line with our commitment in the Programme for National Recovery. Section 19 provides that appeals will, in future, be made directly to the chief appeals officer who will also be the director of the new office. The section also provides for the transfer of some of the functions which currently reside with the Minister to the chief appeals officer. An important provision here is that where the Minister considers that the circumstances of a particular case warrant an oral hearing, he may direct that the case be dealt with by way of an oral hearing. Section 20 provides that the chief appeals officer may refer questions to the High Court. Section 21 provides that the chief appeals officer shall have such functions as may be prescribed.
Sections 23 to 31 provide for the amalgamation of the occupational injuries fund and the redundancy and employers' insolvency fund. The amalgamation of these funds was announced in the context of the publication of the 1990 Estimates. The amalgamation will take effect from 1 May 1990. After that date, payments which at present come from the occupational injuries fund and the redundancy and employers' insolvency fund will be made out of the social insurance fund.
The three separate rates of employer contribution to the three funds will be aggregated to form a single contribution rate subject to a single ceiling. I am pleased to say that there will be no change in the contribution rate on account of the amalgamation. For the next tax year commencing on the 6 April 1990 the contribution rate for employers will continue to be 12.2 per cent. The amalgamation will allow for easier administration, more efficient accountability and control, more secure financing and will ensure that social welfare payments in respect of employees will originate from one fund.
Sections 23 to 26 provide for the relevant amendments to the legislative references to the occupational injuries fund and the redundancy and employers insolvency fund. Section 24 provides for the transfer to the Social Insurance Fund of all moneys standing to the credit of these funds on 30 April 1990 as well as any investment income accruing after that date. Section 25 provides that any outstanding contributions due under the Employers' Employment Contribution Scheme Act, 1981, will be paid into the Social Insurance Fund.
Sections 27, 28 and 29 provide for the necessary amendments to references in the Redundancy Payments Acts and the Protection of Employees (Employers Insolvency) Act. Section 30 sets out the definition for this Part and section 31 provides that the new arrangements will commence on 1 May 1990.
Section 32 relaxes a condition for the receipt of disability benefit after one year, which I consider particularly harsh in its application to some persons. Under the present legislation a person who has been in receipt of disability benefit for one year is required to have 260 employment contributions paid and, in addition at least 39 contributions paid or credited in the governing contribution year for the payment of disability benefit to continue. Claimants in future may continue to receive benefit if they remain incapacitated for work without having to satisfy the requirement of having 39 contributions paid or credited in the governing contribution year.
Section 33 provides for another measure which I think will make an appreciable difference to older persons who have to cope with the death of a spouse. It extends the "after death" payments to spouses in respect of whom an adult dependant allowance would have been payable but for the fact that they were receiving an old age non-contributory pension or a blind pension in his or her own right. Under existing provisions, six weeks payment of benefit is made on the death of a social welfare recipient to the spouse for whom the adult dependant allowance was being paid. Payments are subsequently treated as payment on account of any widow's or widower's pension which becomes payable.
Sections 34 and 35 provide for a number of improvements in the operation of the means test. Deputies will be familiar with the circumstances that form the background to section 35. Many elderly persons are living in houses which have been their homes for many years but which are no longer suited to their needs and which they are no longer in a position to maintain. Although they may be able to find something more suited to their needs or have the opportunity to avail of sheltered housing, they face the dilemma that, if they sell their homes, they may lose all or part of their pensions because the capital realised on the sale of the house will fall to be assessed as means under the rules for assessing capital. Faced with this situation it is understandable that an elderly person may hold onto their home, perhaps ending up in hospital or in institutionalised care instead of living out their lives in comfortable circumstances in the community. Representations have been made to me from time to time about such cases.
Section 35 provides for regulatory powers to exempt the income derived from the sale of a pensioner's principal residence from assessment of means in certain circumstances. This is something that Deputies generally will welcome because it is an important improvement.
Section 34 of the Bill provides that payments received by persons living in Gaeltacht areas who accommodate Irish students who wish to improve their fluency in the Irish language will not be assessed as means. This provision will benefit the Mná Tí of the Gaeltacht areas who play such a vital role in fostering an interest among the young in our language.
In regard to widows and PRSI contributions Deputies will be aware of the arrangements which are in operation for a number of years now which exempt widows and other groups from liability for the employee's share of the PRSI contribution. When social insurance cover was extended to the self-employed in April 1988, similar arrangements were made for widows and other groups who were self-employed. The exemption applies to recipients of widow's pensions (contributory or non-contributory), deserted wife's benefit or allowance, unmarried mother's allowance, widow's pension under the occupational injuries scheme and those receiving payments corresponding to a widow's (contributory) pension or to an occupational injuries widow's pension from another member state of the EC.
In addition to the employee's share of the social insurance contribution, the exemption also covers the health contribution and the employment and training levy.
In line with a Government decision taken last year in the context of expenditure reviews, I am proposing, in section 36 of the Bill, that those arrangements be phased out over the next three years.
From 6 April next, widows and other persons affected who are employees will pay a PRSI contribution of 3 per cent increasing to 4 per cent in the year commencing 6 April 1991. The full employee's social insurance contribution of 5.5 per cent will be payable in the year commencing 6 April 1992. The health contribution and the employment and training levy will continue to be exempted. I should also mention that widows and other persons affected who are on low pay and who benefit under the PRSI exemption scheme I referred to earlier, of course, will continue to be exempt from their share of the PRSI contribution.
I am proposing similar arrangements for those in this category who are self-employed. A contribution of 3 per cent, 4 per cent and 5 per cent will be payable for the next three years respectively subject to the minimum annual contribution of £208 applicable to self-employed contributors generally.
As a consequence of their renewed liability for PRSI contributions, I am also arranging from 6 April next for widows and other groups to be entitled once again to disability benefit at half-rate for up to 15 months duration in addition to their existing pension or allowance entitlement. Deputies will recall that the half-rate disability benefit entitlement was discontinued for widows and others in January 1988. Widows and others on low pay who benefit under the PRSI exemption scheme will also be entitled to the half-rate disability benefit for 15 months. I am happy that the new arrangements for widows and others represent a reasonable approach to this question and that they will be welcomed by widows in employment generally who are willing to pay PRSI again in return for the extra benefits.
Section 37 exempts certain persons from the scope of the social insurance scheme for the self-employed. I am proposing to exempt persons who are receiving occupational pensions on account of their late spouse and whose only other income is unearned income. This is in line with an existing provision which applies to occupational pensioners whose only other income is unearned income. These pensioners have been exempted from the scheme all along. Persons who live abroad and who are liable for PRSI solely because they have investment income in this country are also being exempted under section 37.
Section 38 provides that any moneys paid by way of supplementary welfare allowance in respect of a period during which the claimant is awaiting payment of disabled persons maintenance or infectious diseases maintenance allowance, shall be treated as payment on account of the allowance in question. Similar provisions already exist in respect of supplementary welfare allowance claimants who are awaiting payment of a social welfare payment whereby the health board may recoup the amount of supplementary welfare allowance from the arrears of the social welfare payment.
A person, who as a result of an occupational injury or prescribed disease, suffers loss of physical or mental faculty, is paid disablement benefit by way of pension if the assessment of disablement is greater than 19 per cent. In cases where the assessment is between 1 per cent and 19 per cent a gratuity is normally payable. However, if the period of assessment is for life or exceeds seven years the claimant may opt for either a gratuity or a pension. In some cases the weekly amount of such pensions can be quite small and, therefore, I am providing in section 39 of the Bill for a gratuity to be paid in respect of all new assessments between 1 per cent and 9 per cent.
In sections 40 and 41 I am providing for amendments to the pre-retirement allowance, the single woman's allowance and the orphan's, non-contributory, pension, to allow that the maximum rates of these payments will be payable to persons with means of up to £2.
In regard to the family income supplement sections 42 and 43 provide for technical amendments to facilitate the adjustment of minimum payments and payments of uneven amounts. At present family income supplement is payable in units of £1 and, where the amount payable is less than £1 a supplement of £1 is paid. Section 42 provides that where the weekly supplement as calculated falls below a prescribed amount the supplement shall be payable at a rate equivalent to the prescribed amount. Section 43 provides for a technical amendment to the rates payable under the various social assistance schemes to enable the rounding up of payments. These are technical improvements to the family income supplement which are necessary if we are to make some of the improvements in the very near future.
Section 45 provides that any sum deducted from an employee in respect of social insurance contributions but still unpaid at the time of a winding-up under the Companies Acts will not be regarded as part of the assets of a limited company but instead will be paid to the Social Insurance Fund. I regard this measure as a positive one as it will help to safeguard the entitlements of insured persons who become unemployed due to the winding-up of a limited company. The section also confirms the preferential debt status of unpaid PRSI contributions in certain cases.
Section 46 extends to public sector drivers and vehicles the provision that the amount of disability benefit, pay-related benefit or invalidity pension, payable for up to five years and arising out of a traffic accident, shall be taken into account in assessing damages for personal injuries.
Deputies will be familiar with the vocational training opportunities scheme. The scheme affords the long-term unemployed an opportunity to attend education and training courses at their local VEC and at the same time receive an allowance equivalent to their unemployment payments. This scheme is now administered by the Department of Education but was originally piloted by my Department as the educational opportunities scheme. The scheme is going well. It is up and running in 13 centres with about 200 participants and is planned to progressively expand the number of centres throughout the country. Section 47 is designed to ensure that persons who embark on a course under the scheme and later find out that it does not work out for them may resume claiming their unemployment payments at the long-term rate without serving waiting days when they return to the Live Register.
The vocational training opportunities scheme complements the other initiatives in relation to education which I have introduced for the unemployed. The part-time education initiative allows unemployed persons to attend education courses without infringing the conditions for receipt of their unemployment payments. Last December I made regulations facilitating long-term unemployed persons to participate in second level certificate courses while receiving their unemployment payments. I expect to announce details of a pilot scheme allowing the long-term unemployed to pursue third-level education courses shortly.
A person convicted of fraudulently obtaining a social insurance payment is disqualified for receiving benefit for three months. In section 48 I propose to bring the corresponding provision in relation to social assistance payments into line by reducing the disqualification period for these payments from six to three months.
Section 44 provides for certain amendments to the provision relating to prosecutions. These amendments are necessary in the context of proposed alternative methods for making unemployment payments which I am sure Deputies will welcome. Sections 49, 50 and 51 provide for technical amendments to the basic legislation. Sections 49 and 50 are designed to simplify the First Schedule to the Social Welfare (Consolidation) Act which sets out the rates of social insurance payments. This is in keeping with my policy of simplifying the system so that it may be more easily understood by clients. Section 51 provides that certain regulations will require the consent of the Minister for Finance.
In addition to the measures provided for in the Bill I am making a number of other improvements to which I would like to refer briefly.
In line with the improvements introduced last year into the footwear scheme, I am pleased that we are able to go a step further this year and provide a clothing allowance to help social welfare recipients to provide for their children's school and winter clothing. The sum of £3 million is being allocated for this purpose. This scheme will come into operation in September and I will be announcing the details in due course.
I am continuing to improve the free travel, free electricity, TV licence and telephone rental schemes and to remove anomalies that come to our notice. Improvements being implemented this year are as follows: the free travel scheme will be altered so as to allow recipients of disabled person's maintenance allowance who cannot travel alone to bring along a companion when availing of the free travel concession. This will help physically and mentally handicapped people to utilise the free travel concession more. fully. The detailed arrangements under which this measure will operate are being considered at present and the concession will be brought into operation as soon as possible this year; elderly pensioners over 80 years of age will be allowed to retain their entitlement to free electricity allowance when people come to live with them; invalidity pensioners who transfer to retirement pension on reaching 65 years of age will no longer lose their entitlement to the free schemes and free scheme entitlements will be extended to all social security pensioners of States with whom Ireland has signed bilateral social security agreements. We have signed some already and others are in the pipeline and will be coming up over the next year or so.
In addition, we are extending the national fuel scheme to households where a long-term social welfare recipient lives with someone on short-term unemployment assistance or supplementary welfare allowance, and to smallholders receiving long-term unemployment assistance who are living alone.
As I indicated at the start of my speech, this Bill is a very important and in some respects an historic piece of legislation in those dependent on the State's support progress we have made in the past three years in improving and modernising the social welfare system. In that short period we have introduced some of the most farreaching improvements ever seen. We are conscious that social welfare recipients are among the most vulnerable sections of society and that legislative change can have a major impact on them. Our overriding objective at all times is to safeguard and improve the position of those dependent on the State's support systems. I am satisfied that we are achieving that objective through our policy of progressively raising and improving the standard of living of social welfare recipients and introducing new provisions to meet the changing needs of society.
I commend this Bill to the House.