Social Welfare Bill, 1992: Second Stage.

I move:

That the Bill be now read a Second Time.

This is my first opportunity of introducing a Social Welfare Bill in this House. The Bill gives effect, first, to the increases in social welfare payments and other improvements in social welfare schemes provided for in this year's budget. It provides also for certain changes in social welfare schemes which were announced at the publication of the 1992 Estimates in December last and for a number of other adjustments in the social welfare code.

On publication of the Bill there was an amount of misinformed comment. I will deal later with those comments which refer to matters actually provided for in this Bill. However, some of the comments refer to matters which are not appropriate to this legislation. The arrangements for retrospective application of equal treatment announced in the budget will be made by regulations and the Government have provided £22 million in 1992 for this purpose.

The introduction of new conditions for treatment benefits as announced in December last on the publication of the Estimates will be implemented also by way of regulations. The implementation of the Government decision for the taxation of certain benefit payments is not applicable to this Bill. The necessary provisions are a matter for inclusion in the Finance Bill.

Before discussing the detailed provisions of this Bill, I would like to refer to the overall general context in which this legislation is framed.

Since I became Minister for Social Welfare two things in particular have struck me about the social welfare system. These are, first, the complexity of the system and, secondly, the high and growing level of expenditure which is involved. Total social welfare expenditure in 1992 will be around £3.36 billion, an increase of £265 million over 1991.

It will be a job to bring that down.

Expenditure in 1991 was some £283 million above expenditure in 1990. These levels of increase are due to increasing numbers of recipients of various schemes and the increases in the rates of payments and other improvements which have been provided for. The social welfare improvements in this year's budget will cost £85 million in 1992 and £162 million in a full year.

The vast bulk of the additional resources for social welfare at budget time go towards improving the general level of basic social welfare payments. This means that the scope for any additional improvements in schemes is limited, unless savings can be found within the system to finance such improvements. Whether we like it or not, we are faced with a very severe financial situation and all areas of public expenditure have been and are being constrained by these financial difficulties.

The single greatest constraint on the social welfare system is, of course, the level of unemployment. Rising unemployment increases social welfare expenditure while at the same time reducing the income from PRSI contributions. Expenditure on unemployment payments in 1992 will be around £940 million. Our ability to get to grips with the problem of unemployment is central to our ability to maintain and improve the level of our social welfare services.

The dilemma facing the Government in the type of situation we find ourselves in is whether to maintain the present system, "come hell or high water", unchanged in all respects or to examine the possibilities of redirecting resources within the system to people on the lowest income levels. There is a number of measures in this Bill which attempt on a modest scale to do the latter. They are, as I will outline, specific measures related to specific schemes and the underlying purpose is to target scarce resources in the most effective way towards people in greatest need and to tackle misuse of the system where this occurs.

I see it as my first priority to ensure that people who depend on social welfare, and particularly those at lower income levels, are protected and, where possible, have their living standards improved.

I referred earlier to the complexity of the social welfare system and the multiplicity of schemes and services which now exist. In this regard, I would like to inform the House that work has already commenced in my Department on a new social welfare consolidation Bill which I am keen to bring before the House by the end of this year. A new consolidation Bill is overdue in view of the many amendments and extensions to the social welfare system since the last consolidation took place in 1981.

It is not surprising that the complexity I have referred to exists in a system which has evolved under different Governments in response to a wide range of problems and to provide for very diverse groups of people. Nevertheless, despite the multiplicity of schemes, some people are missed by the system.

Furthermore, there are poverty traps and disincentives within the system. These require to be addressed by specific measures which sometimes add further to the level of complexity. One of my aims will be to try to ensure that the system caters for everybody who needs it and that it actively encourages enterprise and enables people to improve their situation. A more simplified and streamlined system of benefit entitlement and greater integration of the tax and social welfare systems are a prerequisite for this and I will be actively seeking ways of achieving this.

The main purpose of the Bill is to provide for an increase of 4 per cent from next July in the weekly rates of social insurance and social assistance payments; to provide for a special increase of 6 per cent from next July in all short term rates of payment; to provide for amendment to and rationalisation of certain schemes arising from Government consideration last year of the 1992 Estimates for Social Welfare; to provide for greater standardisation between schemes and improved administration generally; and to provide for certain amendments to the Pensions Act, 1990, in relation to occupational pensions.

The increase in weekly rates of social welfare payments provided for in this Bill are evidence of the Government's commitment to protect the position of those dependent on social welfare. That commitment is laid down in the Programme for Economic and Social Progress and we are honouring it.

The 4 per cent general increase will ensure that for the fifth successive year since 1987 increases in social welfare payments will keep ahead of inflation.

In addition, we are continuing the policy adopted in recent years of giving extra increases to those on the lowest social welfare payments. From July next, those on weekly short term payments will get an extra 2 per cent on top of the general 4 per cent increase.

This additional increase is a significant step towards achieving another commitment in the Programme for Economic and Social Progress which is to meet by 1993 the priority rates set by the Commission on Social Welfare. Since last July, all long term rates have either reached or exceeded those priority rates. The additional 2 per cent increase for short term rates provided for in this Bill leaves us well placed to achieve our target next year.

Let us look at the impact of these increases for different benefit types and family situations: a married man with three children on short term unemployment assistance will have his weekly payment increased from £119 to £124.80, i.e., £5.80 per week; a married man with five children on long term unemployment assistance will get an increase of £6 per week, from £148 to £154; the personal rate of disability benefit will increase by £3 per week from £50 to £53. A married man with three children will get an increase of £5.80 per week; a married couple, one under 66, in receipt of old age (non-contributory) pension will receive an increase of £8.50, i.e., from £83 to £91.50. This is because the increase of pension for a spouse under 66, which currently is 50 per cent of the personal rate, is being increased to the level of the adult dependant allowance for social assistance schemes generally, i.e. £34.30; and a couple getting a retirement pension or old age (contributory) pension will receive an increase of £4.40 per week.

The increases in weekly rates of payment are provided for in sections 3 and 4 of the Bill.

Section 5 provides for the extension of the over 80 allowance to invalidity pensions from April 1992.

Section 6 provides for an increase in the weekly income limits for family income supplement purposes from July 1992. This means that the limits below which families can qualify for family income supplement will be increased to £215 a week for a four child family and £294 a week for an eight or more child family. These increases are designed to improve the incentive to work for people at levels of earnings covered by the scheme.

Sections 7, 8 and 9 provide for increases in the ceilings for PRSI contributions and in the weekly earnings disregard for pay-related benefit.

Sections 10 and 11 provide for a modification in the contribution conditions for entitlement to retirement and contributory old age pensions through the introduction of an alternative method of satisfying the "yearly average" test. At present a yearly average of 48 contributions must be paid or credited from 1953 or from date of entry into insurance, if later than 1953, in order to qualify for a maximum rate pension. Where the average lies between 20 and 48, reduced rates of pension are payable.

The establishment and verification of a person's insurance record over a 40 year period can be difficult in view of changes in the social insurance system over the period. The PRSI system was introduced in 1979 and since then insured workers have been paying contributions through the income tax system on an earnings related basis. Insurance records over this period can be readily established. It is reasonable that where a person has a full record since 1979 they should be able to qualify for a full pension. The Government have, therefore, proposed that a person should be able to qualify for a maximum rate pension if the average of 48 contributions is satisfied since 6 April 1979.

I would emphasise that the new measure is not an extra hurdle but an alternative which some people will find easier to satisfy and which will result in quicker and simpler adjudication of pensions claims. The appropriate conditions for entitlement to pension is among the issues being addressed by the National Pensions Board. The question of further amendments to the contribution conditions will be considered when the National Pensions Board publish their final report.

There are a number of other changes affecting pension schemes in sections 12 to 18 of the Bill, the details of which are explained in the Explanatory Memorandum.

Section 19 of the Bill concerns maternity allowance. In relation to this let me say, first, that there has been a considerable amount of misunderstanding of this provision in some of the comments which have been made about the Bill.

Essentially what is being provided for is the amalgamation of the two existing maternity allowance schemes into one scheme. The new scheme will cover not only women who are covered by the Maternity Protection of Employees Act, Department of Labour legislation, but others who are covered by the social insurance system but not by that Act.

Since April 1991 employees earning over £25 a week are covered by the social insurance system. This has brought a large number of part-time workers, mainly women, within the scope of the system. They will now be covered for maternity allowance, whether their conditions of employment are such that they come within the scope of the Maternity Protection of Employees Act. Maternity allowance will be payable for 14 weeks as at present at a standard rate of 70 per cent of reckonable weekly earnings subject to a minimum amount to be prescribed in regulations. This minimum will take account of the fact that women on low earnings who were not previously covered by social insurance will now be covered.

Sections 20 to 24 provide for the standardising and streamlining of existing arrangements and powers to pursue liable relatives for the maintenance of their families. Since 1989 provision has been made for imposing a liability on the spouse of a recipient of deserted wives payments or supplementary welfare allowance to contribute towards such payments. Recipients of such payments are liable to transfer certain maintenance payments received to the Minister for Social Welfare or to the health board, as appropriate. The new provisions will also provide for the granting of attachment of earnings orders in appropriate cases.

Sections 25 and 26 of the Bill refer to the deserted wife's benefit scheme. It was announced at the time of publication of the 1992 Estimates that the Government have decided to apply an earnings limit for entitlement to deserted wife's benefit. I would emphasise that this measure will only apply to new claimants for deserted wife's benefit and the deserted wife's allowance scheme is not affected in any way.

The deserted wife's benefit scheme is somewhat unusual and unique in a social insurance context. It is unusual to be able to insure oneself against deserting one's spouse. The scheme applies to women only and further improvements in regard to equal treatment between men and women will undoubtedly require rationalisation of the present arrangements. Also, there are obvious inconsistencies between the benefits available under this scheme and those available under the social assistance lone parent's allowance and the deserted wife's allowance scheme, which are both means tested

Recipients of deserted wife's benefit can have additional income which does not affect their benefit. The measure now proposed is to restrict entitlement to benefit to persons at or above average earnings of around £12,000 a year. I envisage a tapered withdrawal of benefit at around this level. The details will be spelt out in regulations.

Section 27 is largely a consolidation measure in that it replaces the unemployment assistance chapter of the Social Welfare Acts. It also contains a number of amendments, most notably the abolition of the requirement to have a qualification certificate before being able to claim unemployment assistance. The qualification certificate is essentially a statement of a person's means. The requirement to have a qualification certificate makes the procedure for claiming unemployment assistance somewhat cumbersome and the abolition of the certificate will streamline the application process.

Section 27 also provides for the linking of claims which are separated by a period during which the claimant is attending a FÁS course, including a course the duration of which exceeds 52 weeks; and the assessment of earnings from insurable employment in determining entitlement to unemployment assistance.

In relation to this last point, under present arrangements, earnings from employment are exempted in determining means for unemployment assistance purposes. This means that a person can work for a number of days in a week and qualify for unemployment assistance for the remaining days, regardless of the amount of his earnings for the days worked. On the other hand, a person on unemployment assistance who engages in self-employment has his earnings from self-employment assessed. I think we have to have a consistent approach on this. What the amendment will achieve is that broadly the arrangements which apply where a person takes up employment as an employee will be the same as those which already apply where a person engages in self-employment.

I take the point which has been made by some commentators about the need to create incentives for unemployed people to take up employment or self-employment. I am very much in favour of providing incentives and encouragement to people to improve their situation and reduce their dependency on the State welfare system.

I think, however, that this is a broader issue and needs to be tackled in a more comprehensive way. Attempts have been made over the years through various special schemes to encourage the long term unemployed in this way with very limited success. For example, the part-time job incentive scheme provides a weekly payment to long term unemployed people who cease claiming unemployment assistance and take up part-time employment. The take up of the scheme since 1986 has been extremely disappointing. I will be looking at further ways in which the system can be made more responsive to the needs in this area.

Section 28 provides for certain amendments to the unemployment benefit arrangements which arise from the inclusion of part-time workers in the social insurance system from 6 April 1991. Any employee earning over £25 a week is now covered by the social insurance system and from January 1993 will be entitled to short-time benefits on foot of their contributions after April 1991.

The unemployment benefit scheme is intended to compensate for unemployment lost. A person who habitually works on a part-time basis and who suffers unemployment will, under the arrangements I am proposing, be eligible for unemployment benefit at a level related to the employment which he has lost. A person whose habitual pattern of work over a lengthy period is, say, three days a week and who loses his job should qualify for benefit for those three days and not for days which are not normally working days for him.

The introduction of an additional condition for unemployment benefit where a person must have suffered a substantial loss of employment in order to qualify for benefit, is designed to address this issue. Clearly there is great variety in the patterns of part-time working and I am taking power in regulations to specify what a substantial loss of employment will involve in particular types of situations.

Sections 29 and 31 of the Bill provide for taking account of redundancy payments in determining entitlement to unemployment assistance. The social insurance fund, which is financed by PRSI contributions and an Exchequer subvention, is there for people who, through no fault of their own, become unemployed and are in need of income support. That is essentially the purpose of the social insurance system — to provide for contingencies such as involuntary unemployment.

It is not uncommon for redundancy packages to be negotiated on the basis of an automatic right to unemployment benefit for 15 months. As Deputies are aware, severance packages can involve substantial sums of money. The question is whether the social insurance fund, which is there to provide income support in certain circumstances, should in effect be part of such packages.

I have no doubt that in some instances the social insurance fund is being used to top-up redundancy packages whether of a voluntary nature or otherwise. My Department are aware of situations where severance packages, which did not even qualify as redundancy, were openly advertised within companies on the basis of an automatic right to a weekly top-up payment in the form of unemployment benefit.

I am concerned about these trends. The approach provided for in the Bill is, in my view, a reasonable one, namely, that in determining entitlement to income support in post-redundancy or voluntary severance situations, some account should be taken of the amount of redundancy payment received. It is proposed that in the case of persons under the age of 55 years who receive a severence payment in excess of a fixed level, a disqualification from the receipt of unemployment benefit will apply for up to a maximum of nine weeks. The level of severance payment will be specified in regulations. I am satisfied, however, the the principle underlying this provision is reasonable.

Also, under present arrangements, people who leave employment voluntarily can also be entitled to unemployment payments but are subject to a disqualification period of up to six weeks. This Bill proposes to extend that period up to nine weeks and, as I have said, to apply it to severance situations in certain circumstances.

To summarise, the proposals provided for in these sections of the Bill are as follows: the period of disqualification from receiving unemployment benefit for up to six weeks in certain circumstances is being extended to nine weeks in order to bring it into line with the disqualification period applicable in the case of disability benefit. In addition, the claimant's overall entitlement to unemployment benefit is being reduced by the period of the disqualification; as I have already indicated, the circumstances giving rise to a period of disqualification from receiving unemployment benefit is being extended to include the situation where a person receives a payment under the Redundancy Payments Acts or by way of a separate agreement with his employer which is in excess of an amount to be prescribed in regulations, and the new arrangements will not apply in the case of those 55 years of age or over.

The purpose of section 30 is to apply the same conditions to week on/week off working as apply to short-time working within a week. The effect will be that pay-related benefit will not be payable in the week on/week off situation.

Short-time working as generally understood usually takes the form of a short working week, i.e. a two or three day working week, on a systematic basis for a certain period of time. Workers in that situation are entitled to sign on and receive unemployment benefit for the days of the week on which they are not working. Entitlement to unemployment benefit is, however, subject to certain restrictions. Since 1983, the amount of unemployment benefit payable for each day of unemployment is calculated at one-fifth of the weekly rate, instead of one-sixth, and pay-related benefit is not payable.

In recent years some industries faced with reduced demand have operated a week on/week off or similar pattern of work. Indeed, there have been instances of firms switching from a short working week to a week on/week off situation. The restrictions on the amount of unemployment benefit and pay-related benefit payable in the case of short-time workers do not at present apply to those working week on/week off. As the two patterns of working are for practical purposes identical, there is an obvious anomaly here which needs to be addressed.

Section 32 of the Bill provides for a change in the contribution conditions for disability benefit. At present to qualify for disability benefit a person must have a minimum number of paid contributions at any time since entry into insurance — 39 for short term disability benefit or 260 for long term disability benefit — and a minimum of 39 contributions paid or credited in the governing contribution year. It is now proposed that, with certain exceptions to be specified in regulations, at least 13 of the 39 contributions in the governing contribution year will have to be paid rather than credited.

The basis for this proposal is that the disability benefit scheme is essentially for people who have recently been at work and paying PRSI contributions and who then fall sick. The requirement to have a minimum number of paid contributions in the governing contribution year is designed to establish a recent attachment to the workforce for people applying for disability benefit. Under present arrangements, it is possible for a person to qualify for disability benefit on the basis of credited contributions even though he has not been in employment for a very long time, has effectively lost any attachment to the workforce and perhaps has no intention to seek paid employment. The revised condition will have the effect of directing the scheme more effectively at those for whom it was intended.

The section provides that the new condition will not apply to certain circumstances to be specified in regulations. The new condition will apply at the initial stage of qualification for disability benefit. Once a person qualifies and continues to be sick they will remain on disability benefit as they do at present. Similarly, persons on unemployment benefit will have a recent record of paid contributions and will be able to qualify for disability benefit should they fall ill.

After a certain point, however, it should not be possible to qualify for what is a short term insurance payment on the basis essentially of a record of credited contributions. The regulations to be made under this section will ensure that any person with a genuine recent record of paid contributions, who is still effectively within the social insurance system, will not be affected by the new condition.

Section 34 provides for the discontinuance of pay-related benefit payable with disability benefit for new claimants from a date to be appointed. Pay-related benefit under present arrangements is paid in addition to flat-rate disability benefit after the third week of illness. The value of pay-related benefit has been greatly reduced over the recent years. Furthermore, as announced at the publication of the 1992 Estimates in December last, the Government have decided that responsibility for short term sickness payments should be transferred to employers through a scheme of statutory sick pay. In order for employers to participate in this type of arrangement, the rates of benefit require to be simplified and streamlined.

Are they stupid?

The continuation of pay-related benefit would not be possible in the context of a statutory sick pay scheme.

Section 35 provides that the personal rate of injury benefit under the occupational injury benefit scheme, currently £65 a week, will be aligned to the personal rate of disability benefit, that is £50 rising to £53 in July. This will apply to new claimants only.


Injury benefit is paid for the first six months of illness following an accident at work. The person, if still incapable of work, then goes on to disability benefit. There is little justification for having a higher rate of short term benefit for incapacity for work simply because the incapacity arises from an accident or occupational disease. This measure is also part of the overall streamlining of short term sickness payments in the context of statutory sick pay.

Part IX of the Bill provides for a number of miscellaneous amendments to existing legislation, some of which I will now mention briefly. Section 36 provides for the extension of carer's allowance to cover persons caring for recipients of retirement pension who are aged between 65 and 66 years and who have transferred from invalidity pension at 65.

Section 37 provides for the integration of single woman's allowance with pre-retirement allowance. This scheme was introduced in 1974 to cater for elderly single women who had never been in wage-earning employment and who could not qualify for unemployment assistance under the conditions which then applied. The need for the separate scheme has effectively disappeared in the light of changes in the conditions for unemployment assistance in the meantime. This section proposed to discontinue the scheme for new claimants after a day to be appointed. Existing recipients of single woman's allowance will be transferred to pre-retirement allowance at the same rate of payment.

Section 41 gives power to make regulations delegating certain administrative functions of the Department of Social Welfare to other organisations. At present certain functions are carried out by other organisations such as the encashment of pension orders by post offices. The relationships between my Department and An Post is being placed on a more formal footing in the context of current plans for the development of Post Office services. While there are no immediate plans to devolve further functions, developments in technology and otherwise will open up considerable possibilities in this area in the future and the provision in section 41 is designed to enable me to take advantage of any such possibilities for the benefit of social welfare clients.

Section 47 relates to the payment of weekly supplements under the supplementary welfare allowance scheme. These supplements are paid under section 209 of the Consolidation Act and the bulk of them are to assist people in meeting rent or mortage costs. The purpose of this section is to enable payments under this heading to be directed more specifically towards people in need of such assistance and to achieve greater standardisation in the provision of supplementary payments in the different health board areas.

Part X of the Bill contains a number of amendments to the Pensions Act, 1990, which are proposed following consultation with the Pensions Board and the details of which are outlined in the Explanatory Memorandum.

I have outlined the main features of the Bill. It is substantial legislation.

It is bad legislation.

The increase in payments provided for in the Bill will maintain the position of social welfare recipients and move a step nearer the achievement of the priority rates of the Commission on Social Welfare for all payments.


The Bill also provides for a number of other significant improvements in schemes. As far as the restrictive measures included in the Bill are concerned, I have outlined the rationale behind these measures and why they are necessary at this time.

I look forward to a constructive debate and I commend the Bill to the House.

It is a vicious attack on the poor and particularly on women. The Minister ought to be ashamed of himself. It is an outrageous Bill.

I am lodging a formal objection because we have been given much too short a time for Second Stage. This is ridiculous——

It is running away from the issue. They are afraid of it.

——when one thinks that one and a half hours will be taken out for Private Members' Business. In all my years here in the Dáil I have not seen anything quite like it. I cannot do anything about it, but I want to put my complaint on the record.

This Bill sets a very dangerous precedent. The Bill shows no imagination. Without doubt it is anti-work and anti-woman. The new and dangerous trend towards undermining PRSI entitlements is to be deplored. Of course, there are huge problems besetting the country. The real cancer of unemployment relates very much to social welfare. The question that must be asked is how long the working population can sustain a social welfare bill of the size we have, and how long can people on the normal rate of social welfare benefit bring up their families on very low incomes. There is no fun in living on the dole. Benefit of £136 per week for a man, his wife and four children is deplorable. I know people who would spent it in an evening.

I fully accept that we owe international bankers £27 billion and that we have 280,000 out of work. There is no point in hiding from those constraints but I would reiterate that it is no fun for anyone living on the dole. Some people think that people on the dole are spongers who do not want to work. There are some, but the vast majority of social welfare recipients would take a job if they got it in the morning. This Bill, for whatever reason, will ensure that their position will get worse.

It appears that this Government and the preceding one were at sixes and sevens as to the economic route that should be taken to tackle unemployment. This Bill clearly illustrates the lack of real thought into what should be done. It is unfortunate that unemployment levels will probably reach 300,000 before this year is out. This will mean that the social welfare budget for the year is not big enough and we will have to have another supplementary estimate such as that last Christmas, when we had to look for a further £100 million. I assume that the supplementary estimate will not be on that scale but it will be a huge sum.

A social welfare Bill gives the Government a unique opportunity to streamline the system. However, the Government are introducing a new potentially dangerous trend into social welfare legislation by undermining the benefits of the PRSI scheme. The decision to deny dental benefit to certain categories of workers is strange, to say the least. There has been an ongoing row between the Department and the dentists for years. According to the Minister last week in the Dáil, new negotiations are taking place and the Minister seemed to believe it was possible that a deal could be made. Could it be that the Minister has traded off one section of the community in those negotiations? Is there a hidden agenda whereby any such agreement would mean that the Exchequer would benefit from the PRSI from workers' earnings over £25,000 while at the same time such workers would prove to be financially rewarding clients for dental practitioners? A great number of people are very worried about this matter and I should like the Minister to clarify it when replying.

For the family with only one spouse working, the proposals are even more draconian. The Bill fails to group family income. For instance, both spouses could earn less than £25,000, perhaps £24,000 each, and still be eligible for dental treatment.

Workers have no option but to become involved in the scheme at great cost to themselves. For many the withdrawal of entitlements to dental and optical benefits means that a new tax has now been introduced on people who earn more than £25,000.

Equally, for workers who lose their jobs unemployment benefit is being severely curtailed. The Minister for Social Welfare now proposes to penalise the new unemployed by denying them nine weeks' unemployment benefit where a certain level of redundancy payment has been made.

The precedent set in today's Bill is frightening. All workers who paid PRSI up to now considered their entitlements to be rock solid. They expected the same treatment to apply to all PRSI contributors. Clearly this Government see the PRSI scheme as a new form of taxation. For example, people who earn over £25,000 will not have any refund of PRSI, despite losing dental benefits.

The Minister stated that last week that only 18,000 persons will be debarred from the dental schemes as a result of the new legislation. There may be only 18,000 on the present waiting list, however, due to the impasse with the Dental Association over several years, many workers just did not bother to apply as they felt it was futile. To expect that there are only 18,000 people in Ireland earning over £25,000 in need of dental care is ridiculous and I would ask the Minister to recheck that.

If there is one major fault or complaint with this Bill, it is that there is no attempt made whatever to eliminate the poverty trap. The poverty trap means very simply the gradual realisation by a man or woman who is working full time in a very low income job that he or she would be better off on the dole. Unfortunately, there is a certain section of our community who think that way and when the sums are calculated they are probably right.

This is extremely bad for a nation. It proves conclusively that there is no real scientific work being done by anybody at this level. The CIF carried out a project on this some years ago and they proved that a point was reached for many workers in low paid jobs where they would be better off on the dole.

I would have thought that this was an ideal opportunity for the Government to introduce an imaginative family income supplement scheme. This was, and should be, a vehicle by which the work that was being done by the individual was deemed to be important enough to place its cost above that of social welfare. I want to make it clear, of course, that there is no fun in being in receipt of social welfare payments.

Only two weeks ago in the Dáil the Minister for Social Welfare informed me that it now costs almost £23 a week to rear a child from one to five years and £32 a week to rear a child between five and 14 years. After that, need I say more.

I said at the beginning that this Bill is badly planned. If one looks at some of the aspects of the Bill it is clear that there was no overall strategy used when framing this Bill. Indeed, there are glaring omissions from the Bill, one of which the Minister mentioned. I do not see any reference to the £22 million that was allocated in the budget to women under the EC Directive on equality in matters of social welfare between men and women.

This is a scandal that has gone on too long. There are thousands of women around the country who do not know whether they are eligible. Thousands of women have tried to get answers from the Department. To whom will they apply? Is there a standard form for application? Do they have to prove their case legally? Do they have to get a solicitor to have the case noted in court? Who are to get the £22 million? How will this be distributed? Is it for a certain category of people or does it mean that the one woman might get four different payments over as many years for four different types of social welfare? There are no answers to a whole range of questions.

It is incumbent on the Government not to keep people, women in particular, in the dark about their entitlements and it is something that has been put under the carpet. Indeed, were it not for the fantastic efforts of FLAC, the free legal aid people, it is quite possible that we would not have arrived at the position we are at today.

There is another glaring omission in this Bill. It refers to the desirability of having a single means test for all social welfare benefits. There is in this country a very profitable industry for assessing people. We are probably the best nation in the world for assessing others. With no disrespect to the people concerned — it is their job and they do it professionally — I genuinely believe that their masters in the Department of Social Welfare should be well able to design a scheme that would certainly cut out a lot of the red tape.

There is no particular reason a code of practice could not be devised which would encompass eligibility for the major social welfare schemes like unemployment assistance, non-contributory old age pensions, application for medical cards, and so on.

From Dáil questions which I tabled to the Minister in recent times, it appears that the Minister thinks that it is not feasible to have a single means test. Surely if we were to have any sort of rationale in the maze that is now social welfare we should start there.

Before I leave the whole question of the poverty trap, could I say that it should not be beyond the bounds of possibility that the Department of Social Welfare could organise a gradual eligibility so that if a person was just marginally over a particular guideline he or she would not be deemed to be ineligible entirely. If we had that gradual approach we would not have this huge problem of people deciding automatically that they would be better off on the dole than working.

Taken together with a beefed up family income supplement, we would beat that trap and that is vitally important. I fully understand that it is not possible to wipe it out altogether, but duplication must be eliminated.

I turn my attention to another anti-woman section of this Bill. For whatever reason, women have been singled out for special treatment in this Bill.

I notice there is almost no change in the carer's allowance. What a tragedy this is when one considers the heroic deeds that are being done by countless thousands of people, particularly women, day in day out, week in week out, all round the clock and for nothing.

If the elderly had to be looked after in a State run geriatric home, it would cost £300 per week. Many women I speak to do not want money. They want a small recognition of this 24-hour a day job. I ask the Minister, even at this stage, to consider introducing a respite scheme whereby women who are under severe stress in the home because of their responsibilities and duties towards the elderly would be allowed a break of a couple of weeks a year and, perhaps, occasional weekends. This could be done, for example by taking on unemployed women who would be only too glad to make a few pounds to help the family budget. This scheme could be tightly controlled, applying only to difficult cases.

I make a special plea to the Minister to consider the £2 means eligibility limit on the carer's allowance because it is an absolute disgrace. As I said on a number of occasions with regard to the carer's allowance the people were deceived and their hopes were raised by the way the scheme was advertised. In 1991 many people decided that the allowance was not worth applying for. It is my understanding that approximately 9,000 people applied, half of whom were deemed ineligible and 50 per cent of the remainder received the full benefit. In other words, about 2,000 carers out of 80,000 to 100,000 received the full payment. Obviously there is something wrong with that scheme.

I hope the Government understand the huge problems experienced in many Irish homes. Usually it is a daughter or daughter-in-law who has to care for elderly relatives. I am not advocating that the State take full responsibility for looking after the elderly. The prime responsibility rests with the family, and that has been the tradition in family life. Young people must always remember the extraordinary sacrifices made by parents on their behalf and it is their Christian duty to repay in a caring and responsible way. However, the State has a role to play in this regard. First, people can be cared for in their homes — this is where the carer's allowance applies. Second, there is private residential geriatric care. However, many people cannot afford such care. There is a lesson to be learned here, that anybody who has the opportunity to do so now should make provision for their retirement because I doubt if the State will do so. Third, people are cared for in public geriatric homes. However, it is not possible to gain entry to most such homes. Recently I telephoned a geriatric home in my constituency but was told that the person for whom I was making representations could not expect to gain entry for at least nine months. The lady in question is on a medical card and her family are on the dole. It is very difficult to know where the lady can turn for help. I believe that home care is the best care for the elderly. A community nursing care programme should be considered under which respite care would be provided, and there would be no problem getting people to help out in these circumstances.

I should like to refer briefly to moneylending. I congratulate the Minister on making available an extra £260,000 to combat the problem of moneylending. While I do not carry a candle for the credit union movement — I am a member of the credit union in Mount Bellew in Galway — the more I see of their operations the more I believe that there is a possibility that they could play a role in this area. I am talking about the credit union movement throughout Ireland and not just in the four or five cities designated for pilot projects. By working in conjunction with the St. Vincent de Paul Society the credit union could discourage people from borrowing from moneylenders. Despite what some people think, moneylending is not confined to the big cities. I am speaking about legal moneylenders who lend money at rates of 47 to 48 per cent. Many people cannot afford to borrow money at these rates. I suggest to the Minister and his officials that they consider what role the credit unions could play in this regard.

There is a trend throughout this Bill that I had not noticed in recent years and one about which I am concerned. The Minister seems to be seeking power but he is not in a position to tell us exactly what is involved. All he says is that he will introduce ministerial regulations later. We should not be asked to buy a pig in a poke. It is only reasonable that the Minister should outline the areas in which he intends to introduce ministerial regulations. We should have an opportunity of discussing this matter before it becomes law.

I refer specifically to what I would call a great penalty on redundant workers. Redundant workers who are paid a certain level of redundancy will be penalised to the tune of nine weeks unemployment benefit, and that is unacceptable. When people lose their jobs they suffer great trauma. It is a very anxious time for them, and the Department should not decide that they are not entitled to what they genuinely believe is theirs. As people are obliged to pay PRSI they should be paid unemployment benefit for at least 15 months after they are made redundant. Second, the whole question of voluntary redundancy will come into question. If this nine week penalty is imposed fewer people will take voluntary redundancy. This is an insensitive measure which will create many problems. The Department have decided to penalise people who receive a certain level of redundancy by deducting nine weeks payment from their unemployment benefit. This is a negative measure and the decision should be reversed.

I referred earlier to the cost of rearing children. To my knowledge the only social welfare payment that has not been increased is child benefit, or the children's allowance as it was called. I find it extraordinary difficult to understand why this allowance has not been increased. Every report I read from NESC, the Combat Poverty Agency, the Conference of Major Religious Superiors and so on, and every conference indicates that the best targeted money ever paid out in social welfare went via the children's allowance, the child benefit scheme, as it was called. There is a variety of reasons for considering the money to be well targeted. The allowance is paid to the mother and is used to provide children's clothing, footwear, food, school books and so on. For the life of me, I cannot understand why the Minister decided to rebuff the mothers of Ireland. Is this an anti-women measure? Irish mothers are very sore about the provision relating to the child benefit scheme. At the very least, they should get the same treatment as everybody else, and this measure calls our priorities into question.

Although no provision in this regard is contained in the Bill, I want to take this opportunity — because I have not been afforded one before — to tell the Minister about a problem for the self-employed concerning PRSI. The Minister will know that in 1988 self-employed people had to pay PRSI like everyone else. It was then decided that those with a continuous contribution record for ten years prior to their reaching the age of 65 or 66 would be eligible for an old age contributory pension. That was good legislation, and the Government went a step further, on which I congratulated them at the time by providing that widows whose spouses had made contributions for three years would be eligible for a contributory widows pension. A few problems have arisen with that scheme, although I do acknowledge that they could not have been foreseen. I know four of these widows involved — there are about 21, or possibly more, of them around the country——

The Deputy has less than two minutes left.

I do not have time now to deal with the issue in the way I should like to. All that I shall say is that the issue is creating unholy havoc for those concerned, that the amount of money involved is not such that the Government would be opening the sluice gates. I understand the contributions were paid but there was a time lag of three or four months. There should be some kind of pro rata pension for those who are caught just because they were born in the wrong year. Having paid six, seven or eight years' pension contributions, they should be paid part of a pension. Those involved are self-employed people, mostly farmers.

My party will oppose many sections of this legislation, which I regard as a backward step. I am dumbfounded by some of its provisions, and I certainly hope to deal with them tomorrow on Committee Stage.

I take this opportunity to congratulate the new Minister on his appointment. I look forward to working with him, in a constructive way. I know from the many contributions he made in the past when I was Social Welfare spokesman that he and I share common ground in relation to social welfare and social welfare recipients.

To some degree, I am left with a certain amount of sympathy for the Minister because I know that he has inherited the Bill. Reading the contribution of the Minister's predecessor, Deputy Daly, of Thursday, 19 December 1991, one realises that virtually everything contained in that speech is included in the Bill in one form or another. I assume that the present Minister has not had time to influence the Bill in the way that he would personally have liked to do. I do hope that some of the thinking enunciated by the Minister from the back benches in years gone by might lead to constructive changes in several sections of this Bill on Committee Stage.

I share Deputy Connaughton's view that it is difficult to deal with such a technical Bill, and many explanations will be required, particularly on Committee Stage.

The Bill makes major changes in the whole social welfare code. Many of the proposals made in the Bill are good and are proposals that Opposition members collectively have advocated for many years. In many respects the Bill will tidy up loose ends and anomalies that have emerged from the system through the years. However, certainly in my 30 years of dealing with social welfare issues at every level, I have never heard so much criticism of a Bill as I have heard directed at this Bill. The Minister accepted that there were many anomalies that needed to be tidied up, and I agree with that statement. The Minister has to realise, though, that when a loophole is closed off or an anomaly is tidied up very often innocent people are caught in the process. That is what will happen if these provisions are accepted. The issues of concern will emerge clearly when we reach the debate on Committee Stage.

I certainly favour rationalising and simplifying the social welfare code. Frankly, there are very few people in the country who understand even a proportion of social welfare activities. Social welfare requires an enormous amount of administration and there is much wastage in administration costs and in the cost of implementing the system itself, both nationally and locally. Because there are now more than one million people involved in social welfare at one level or another, it is obviously time for us to tidy up the whole social welfare system. I am glad that a new Bill is being prepared with a view to achieving that end. We should work collectively towards making an input into that Bill, which, it is to be hoped, will achieve its aim.

I am sure the Minister would agree with me that it is most unusual for criticism of the Bill to have come from the ICTU, from the largest trade union in the country, SIPTU, and from the CII. If the ICTU criticised a measure, then normally one would expect the CII and the FIE to welcome it. I have never known virtually all sections of the community, including all voluntary agencies, to be so strong in criticism of a Bill. The Minister should take the criticism into account and make effective amendments on Committee Stage, amendments that will at least draw the fire away from some of the draconian measures contained in the Bill.

As someone who came from a labour-intensive industry, I am concerned about the effect that some of the Bill's provisions will have on some industries. From the Minister's own experience, he will know full well, as will everyone in the House who has dealt with industry, that because of the seasonal nature of their activities, many industries must organise themselves in the best manner possible for short term working, if you like, to cater for the hills and hollows they encounter, when there will be a shortage of work in one period and larger quantities at other times of the year. For example, the clothing industry, which employ 15,000, must so organise their work because of its seasonal nature. They must endeavour to retain their skilled workers, machinists, cutters and so on, while sharing out the work in such a manner that will allow them retain their skilled workers on whom they will have spent much time and money training.

Let us call a spade a spade; they do so with the help of the Department of Social Welfare. Obviously it is better to have 15,000 people working than have to lay them off in slack periods between the autumn and spring seasons. Otherwise they would have to declare such workers redundant, placing them permanently on unemployment benefit, when they might well emigrate, with a loss of their skills, necessitating training other workers when the climate improved. That is a very costly exercise. We should remember that, in the interim, those people would have to be paid all the other ancillary benefits for which they would not be eligible while drawing temporary unemployment assistance.

Therefore, the provisions of this Bill and its effects on people on short term working, will have to be carefully scrutinised if the trade unions are forced to negotiate redundancies using the traditional approach, last in, first out. Over the years policies leading to such negotiations vis-à-vis voluntary redundancies have changed. I heard the Minister make this point in the House but I might remind him that the policy of voluntary redundancies arose mainly within the public service, initiated by a previous Government, in order to reduce the numbers of employees within the public service, when 16,000 workers opted for voluntary redundancy, all of them being paid the benefits to which they were entitled under the severance package negotiated between Government and public service unions. Indeed, that policy percolated throughout the public sector to health boards, harbour boards, corporations, county councils and all public authorities. All the people who opted for that package, including senior employees in Government Departments, in the State and semi-State sectors, were in the upper age bracket, encouraged and paid for by taxpayers in order to reduce the numbers employed in the public service. That was and remains Government policy, the public service embargo still being applicable to the public service itself. For example, local authorities cannot employ people to replace those who may have opted for early retirement. That is Government policy. Yet, in the provisions of this Bill, we propose doing the exact opposite, in that we will render it almost impossible for employers and trade unions to negotiate voluntary redundancy packages if both social welfare benefits and redundancy benefits are to be taxed, catching people on both counts.

It was never intended that voluntary redundancy schemes would be reluctantly accepted by the trade union movement only to be followed by taxation of the same benefits of such workers. I contend the provisions of this Bill will force trade unions to return to the former policy of last in, first out because they will have no alternative. I should like to hear the Minister's explanation in that regard.

Having dealt with that subject over a 30 year period, since I was 18 years of age, I know that, unless people are given an incentive to opt for early retirement or voluntary redundancy, they will not go; they will simply wait until they reach the normal retirement age of 65. The inevitable consequence will be that younger people — the people we want to retain in employment, young married people with mortgage repayments, heavily in debt, with families, with many commitments, including hire purchase payments — will be forced on to the unemployment scrapheap if some of the provisions of this Bill are passed.

I cannot overstress the importance of short term working, to which the Minister referred in his introductory remarks. It is true to say that this can be manipulated, because it is done only to keep people at work and to share out available work as evenly and fairly as possible, but if such circumstances do not prevail, employers will be forced to lay off workers permanently which will cost the Department and taxpayers a lot more.

Under the provisions of this Bill, the PRSI system will be virtually abolished, which is the only way I can describe it. The system was originally devised to assist people who were out of work due to illness or who were unemployed temporarily, and they had to pay a fairly high premium for this assistance. For example, average benefit payments in the year 1981-82 amounted to 30 per cent of wages, subsequently reduced to 20 per cent and, yet again, to 12 per cent. Since 1981 three successive Governments were involved in that reduction, but the fact remains that these benefit payments have been reduced to 12 per cent. During that period, the eligibility for such PRSI benefit was pulled back to five weeks, which means a worker receives no PRSI benefit whatsoever until the fifth week. The floor for eligibility purposes has been increased over 50 per cent since 1981 while the ceiling has been dropped, which means effectively greater numbers of workers do not qualify for PRSI benefit, even discounting the provisions of the Bill before us.

Last week I had at least four or five people attend my constituency office who could not understand why they received no PRSI payment whatsoever, yet contributions had been deducted from their weekly wages. They discovered, when out of work, they can reap no benefit from those weekly deductions whatsoever. The only way to describe that is to say it is like insuring one's car against accident, but, when one is involved in an accident the insurance company say the car is insured but they cannot compensate for the damage incurred. We are actually charging workers, whether engaged in services or industry, and the self-employed, a tax, an insurance cover contribution, yet when they need benefit, when they have an accident at work, become ill or are unemployed, we tell them they cannot receive such benefit. That is what has happened.

I am not for one moment suggesting the present Minister is responsible for all that; that has occurred since 1981, but if the provisions of this Bill are superimposed on that, then it would be better — and I have said so in the House before — that the PRSI system of contribution was totally abolished. Were we honest about it, that is what we would do rather than tamper with it as we are now doing. Rather we should increase the basic rates of social welfare benefits on the lines recommended to Government by the Commission on Social Welfare.

Before the conclusion of this debate, it would be interesting if the Minister could produce statistics on how many people were entitled to draw social welfare/PRSI payments in 1981 and how many would be entitled to draw those same payments now is similar circumstances. I predict we would discover a substantial drop in the numbers who would qualify. I do not see how it can be legally and constitutionally possible to deduct money from a person's weekly pay package, whether he or she be a professional, industrial worker or employed in the public service, and then, when they are entitled to benefit say sorry, we cannot give it to you. I do not think that could be justified in any country. If people make a contribution to the system, they should get some assistance from it when that need arises. The ordinary man in the street cannot understand this decision by the Government.

As I said, I welcome many of the provisions in the Bill. I will deal with these in greater detail on Committee Stage tomorrow but I am asking the Minister to concentrate on two specific points. I ask him not to tax social welfare benefits. Should he proceed to do so, he will go down in history as the person who started the demolition of our social welfare system. The proposed taxation of social welfare benefits is a little like the abolition of car tax in 1977 and its replacement by a £5 disc. We were told at that time there would be no tax on cars. However, I pay £250 in car tax at present. Next year a different Minister may be in office — one of the parties on this side of the House may be in Government — but the same people will be in the Department. They are the people who will have to put into operation the legislation passed by this House. In ten or 15 years time people will remember Minister McCreevy as the person who introduced the Bill in the Dáil which taxed social welfare benefits.

This is the first time in the history of the State that such a proposal has been put forward. I would hate Minister McCreevy to be labelled as the person who introduced taxation of social welfare benefits. He is a Minister with very liberal views on our social welfare system. As a backbencher he made contributions on various budgets and Social Welfare legislation that were similar in content to my own contributions on those issues. The Labour Party will be opposing the section containing that proposal as we will be opposing a number of other sections. However, Opposition parties can put down amendments to the various sections but as the House knows, the Chair will have to politely tell us that because this is a financial Bill the only amendments which will not be ruled out of order are those which would not have financial consequences. Therefore, any amendments which will have a financial consequence will have to be put down by the Minister.

On the basis of the three provisions I have concentrated on, will have to oppose virtually every section of the Bill. Even if a number of sections were taken out we could not vote for the Bill in total because this taxation proposal will eventually have an effect on all the other provisions in the Bill. The Labour Party will strongly oppose this Social Welfare Bill, 1992, at its various Stages this week. As has been made clear already on the Order of Business, the Labour Party consider it disgraceful that this Bill is being guillotined. It is far too important to be dealt with it in this way. I ask the Minister to use his influence to ensure that more time is devoted to the remaining Stages of the Bill.

During a week when tentative steps have been taken to agree the terms of reference for a jobs forum it is disgraceful that the Government should launch this thinly disguised attack on the rights of working class people who have to depend on social welfare benefits. This is the first time in the history of the State that a Government have proposed to treat social welfare benefits for tax purposes, benefits which have been paid for week in and week out by the PRSI contributions of people at work. Many people will regard this decision of the Government as the beginning of the end of the PRSI system. In fact, it will be the end of the PRSI system as it was framed and introduced. That system was based on the principle that people at work would pay insurance so that when they were ill or unemployed there would be a source of support for them. How much longer will this be the case? That is a very important question. This is the first step in the removal of that insurance. As I said, it would be much more honest for this House to put through a Bill which would abolish the PRSI system altogether and increase the basic rates of social welfare. This would save the country and the Department of Social Welfare millions of pounds in administrative costs. Millions of pounds will have to be spent in administering a system which will not be of any benefit to a substantial proportion of the people who are actually paying for it. Therefore, this is a double taxation. Workers who pay their PRSI contributions will not get their PRSI back for the first five weeks they are out sick or are unemployed or working short term. On top of that they are now to be taxed. I do not understand how anyone could justify that proposal. I appeal very strongly to the Minister to reconsider those aspects of the Bill.

The Labour Party condemn this decision by the Government. This Bill is a savage attack on the principles enunciated by the Minister. It will ensure that increasingly fewer people will be entitled to reducing benefits. I fully appreciate that over one million people are on social welfare benefits of one kind or another. However, these people did not ask to be on social welfare. The reason they are on social welfare is that successive Governments have failed to provide employment for them. If the Government fail to create employment for people, then they must provide some source of income for them which will enable them and their families to have a reasonable standard of living. So far, we have collectively failed to do this. Even the recommendations set out by the Commission on Social Welfare in their report have still not been implemented and are not likely to be implemented. Indeed we seem to be moving further away from these recommendations.

If we could say that over a period, in a planned way, we would introduce as many of the recommendations of the Commission as possible, there would be some hope of achieving a reasonable standard of living for people on social welfare, so that they could at least keep their families with some dignity.

I have seen headlines in the newspapers this week in regard to giving people on social welfare tinned bully beef which we cannot sell or give away. It reminds me of what happened in the trenches during the 1914-1918 War. We are paying millions of pounds for the intervention system to keep food in cold storage; we are paying more to keep food in cold storage than it costs to produce it. This money comes from people all over Europe who pay tax and yet we hand those on social welfare tinned meat worth £15. It is degrading, to say the least. By all means give it to those who need it but it would be much better to give them the money it cost to produce so that they could shop like anybody else and not have to go, cap in hand, to a voluntary organisation for a tin of meat. If people on social welfare had a decent level of income we would not have to give them tins of beef.

I also read in a newspaper where some people on social welfare never eat fresh meat. What kind of a State is it that will go after social welfare recipients, with all the resources at its command, and turn a blind eye to abuses ripping off the economy to the tune of millions of pounds every year? Many people have defrauded the system and offshore companies have unloaded money by the truckload while people on social welfare are being hounded because they have received an over-payment or have cleaned windows to try to supplement their allowances. People on social welfare should be allowed to take little part-time jobs to supplement their incomes. We should sell the tinned meat to the Russians or the underprivileged of the Third World or, indeed, give it to them. However, we should look after our own people in a much more humane way.

I appeal to the Minister not to be influenced by the Department. On another occasion I told a Minister in another Government that a mistake had been made; four years later I was proved right. I should hate to have to stand up in this House in two, three or four years' time to remind the Minister that I made a special appeal to him this evening on behalf of the working class people — and on behalf of those who are not working — not to introduce a tax on social welfare benefits because, if he does, he will regret it until the day he dies.

I congratulate the Minister on his recent appointment and I wish him well in trying to resolve the many complex and difficult problems which go with the portfolio in the Department of Social Welfare.

This extensive legislation is a continuation of the excellent work and many reforms which were carried out by the Minister's predecessors, Deputy Woods. There are 63 sections in the Bill and it would be impossible in the time available to comment on each one. However, I am sure all Members will welcome the increases provided for in the Bill.

Social welfare payments have continued to rise steadily despite the financial difficulties of the Government. An increase of 4 per cent in the weekly personal, adult and child dependant rates for social assistance payments is welcome. A special increase of 6 per cent in short term payments, including disability and unemployment benefits, short term unemployment assistance and the carer's allowance are also welcome. These additional payments will bring the total expenditure of the Department of Social Welfare to in excess of £3.2 billion this year. This is an astronomical sum of money for any Government to find each year.

At present 7 per cent of the population are covered or receive some form of social welfare payment. The extension of the over 80 allowance of £4.20 per week to invalidity pensioners and the financial improvements in the family income supplement are also very welcome. Improvements in the method of determining yearly average contribution weeks for contributory old age pensions and retirement pensions is along awaited improvement.

The automatic extension of the contributory widow's pension to widows on the death of their husbands, will be a welcome relief for many people who will be widowed here. The provision where elderly people will be exempt from the assessment of means from the proceeds on the sale of the principal residence will go a long way in allowing the elderly different options when they become very old or infirm in that they can now choose to live with relatives or go into private nursing care without the fear of losing their pension. This will also go a long way in furthering the aims of the Government in relation to the care of the elderly generally.

Over the past number of years all the economic indicators told us that our economy was thriving. However, unemployment continued to rise and to date almost 300,000 people are out of work.

Many part-time jobs, ad hoc, temporary positions have come on stream from employers unable to take on full-time workers, and a substantial amount of these full-time jobs are taken up by social welfare recipients. I welcome any action taken by the Minister to eliminate abuse in the social welfare system. Those involved in this practice should remember that they are depriving the genuine social welfare recipient of an adequate income. Those people should also remember the injustice done to themselves and their families because at the end of their working career they and their families will be deprived of contributory retirement and old age pensions.

We have some cowboy employers who are into the "get rich quick" syndrome who fly by night, at the expense of an unfortunate worker left without adequate insurance protection.

I further believe that many who are legitimately employed are colluding with their employers so that basic pay is substantially reduced in order to avoid income tax payments, and pay-related social insurance payments. Transfers of money occur on a regular basis under the counter by way of expenses in lieu of salary.

There is a need for a proper balance between the efficient delivery of social welfare services, which has due regard to the dignity and sense of entitlement of claimants, and the necessity for measures to control fraud. I recognise that the opportunity for fraud exists in any system, whether it be social welfare, grants to industry, agriculture or taxation, and that control measures are necessary especially where public funds are concerned.

The occurrence of fraud in social welfare has to be considered in the context of almost a million payments per week being made covering 70 per cent of the total population. In recognising that control measures are necessary, we must also be concerned that the overwhelming majority of claimants are genuine and we should not stigmatise them with a regime which would infringe on their dignity or sense of entitlement.

There is no doubt in my mind that social welfare fraud in this country is very serious. Senior officials will privately admit that it is now as high as 20 per cent which is costing the State millions of pounds each year. It is an area of his Department where the Minister will have to find the resources for additional staff in the investigation units around the country.

The changes in the arrangements at employment offices, where unemployed people do not have to sign every week, should free substantial numbers of staff, and I urge the Minister and his officials to retrain the staff in order to give social welfare abuse and fraud the attention they deserve.

Section 17 of the Bill amends the definition of a spouse for the purposes of old age non-contributory and blind pension schemes to include a couple who are co-habitating as man and wife. As a consequence, cohabitating couples would be entitled to increases for partners on the same basis as married pensioners living with his/her spouses, and to the same rate of child dependant increases as a married couple.

However, the definition has caused field officers certain difficulties which I would like the Minister to address. The new definition of a spouse means each person of a married couple who is living together or a man and woman who are not married to each other but are cohabitating as a man and wife. It can be very difficult in certain circumstances for officials to determine who is or who is not cohabitating. In order to obtain two maximum personal rates of payment for any scheme, couples living together will frequently deny that this is in fact the case and will ask investigating officers or indeed deciding officers to prove that they are cohabitating. In this respect from inquiries that I have made it would appear that the Department or indeed the Minister have not issued any guidelines to staff who are involved in investigating or deciding on such claims.

Similar difficulties arose almost 20 years ago in Britain over the same issue and as a result a commission was set up which reported that staff had to establish a number of areas before they could conclude that a couple were cohabitating. Among these were: first, a common household had to be established; second, the stability of the relationship had to exist; third, they would have to show financial support; fourth, a sexual relationship; fifth, the existence of children; and sixth, there was public acknowledgement that a relationship existed.

I ask the Minister to give this area priority in issuing our own guidelines to investigating and deciding officers so that these officials have proper well documented guidelines to go by before making decisions in relation to cohabitation.

One would need to employ a private detective.

There is an additional £17 per week to be gained if a couple can show that they are not in fact cohabitating and that is a big financial incentive to make life very difficult for investigating officers to produce satisfactory evidence.

A controversy that arose from the Opposition benches when this Bill was published last week has me puzzled. In 1986 when my colleagues on the Opposition benches were in Government, the report of the Commission on Social Welfare was published. At that time, the then Minister for Social Welfare, Mrs. Gemma Hussey, wanted time to study the report closely. By 1987 the Government had changed and her colleagues in Fine Gael and Labour were demanding that the report be implemented in full.

That report highlighted, among many other things, that there was a growing concern over the fact that certain social welfare payments were exempt from income tax and that they should be liable for income tax. They argued that all income, irrespective of where it came from, which exceeded the tax threshold should be liable for income tax. The Commission on Taxation stated:

We believe that the exemption of short term social welfare benefit from income tax is contrary to equity principles, which dictate that the amount of income rather than its source should determine the amount of tax which is payable.

The Minister, in order to eliminate anomalies and other abuses, came forward with proposals to implement the commission's recommendations and the Opposition Deputies cried foul.

Every week in this country 50,000 people submit regular weekly medical certificates of unfitness to work, 31,000 of these people have spouses who have additional incomes from social welfare, employment or other sources.

Many of these people have become past-masters at getting sick between January and March in order to ensure their P.60 shows the smallest amount of earned income possible, in order to qualify for medical cards and other grants. They will also get the maximum tax rebates possible coming to the end of the financial year and, in some cases, they have the audacity to claim for mortgage or rent assistance through the supplementary welfare allowance scheme. I welcome the decision to implement the recommendations of the Commission on Social Welfare and the Commission on Taxation.

The provision of section 32 of this Bill will ensure that new claimants will have at least 13 paid contributions in the governing contribution year, and this will ensure that disability benefit returns to what it was intended to be, short term insurance payment for people who are temporarily out of work through illness, and not a continuous payment to people who have not been in the workforce for many years which is at present the case.

Disability benefit and invalidity pension amounted to almost £300 million per year. This is equal to almost the total amount which is contributed by every employee in the country and, as I said earlier, I am gravely concerned about the funding arrangements for such large expenditure.

Section 47 replaces the existing provision for payment of weekly and monthly supplements for rent and diet, etc., under the supplementary welfare allowance scheme. It empowers the Minister to make regulations specifying the class or classes of persons, the conditions and circumstances in which supplements are to be paid, and the amount of such supplements. These provisions are to be very welcomed indeed.

The supplementary welfare allowance scheme has always been regarded by me as the ideal vehicle for targeting the most needy and for providing assistance to the most vulnerable in our society. However, there appears to be a wide divergence in the interpretation of discretionary powers of health boards to make payments. I would ask the Minister to address this very important point.

Section 47 of the Bill deals with section 209 of the 1981 Act. Unfortunately, individual officers will have different views and different ideas as to what constitutes the necessity for a supplement, whether it be for rent, mortgage, diet, heat or any other reason. Because of these huge discretionary powers and the various interpretations that different health boards have put on them, the public often felt they were not getting a fair deal.

Various divergences have occurred over the years in different health boards, and also within the same health board. For example, some officers give assistance with mortgage repayments or arrears while others would never approve of assistance in similar circumstances. There is a need for uniformity and I would ask the Minister and his officials to address it.

I fully accept it is the Minister's intention to bring forward regulations which would eliminate some of the criticism often made about this scheme. I hope, as a result, of this Bill being enacted, people in similar circumstances will be dealt with in like manner throughout the length and breadth of the country.

Because of the prolonged and serious unemployment situation, the reduction in local authority housing and the return of emigrants, rent and mortgage supplements are now a common feature of the social welfare system. The substantial increase in the number of recipients over the past 12 months has put additional pressures on the small number of community welfare officers employed by the regional health boards.

The additional high level of case work was never envisaged and the necessary staff to deal adequately with this additional work load has not been provided for. There is a need to increase substantially the number of community welfare officers employed by the regional health boards or, alternatively, for the Department of Social Welfare to take over the payment of these allowances and reduce some of the intolerable workloads that some community welfare officers have to deal with. We are all witnessing this problem in our health boards.

For the fifth consecutive year, I have come into this House on the Second Stage of various social welfare Bills and on each occasion I have made a contribution concerning means testing. I said earlier that there should be a proper balance between the efficient delivery of social welfare services and due regard for the dignity and sense of entitlement of claimants.

I believe the time has come for one means testing office to be established that would give people the opportunity to explain clearly and concisely their circumstances, declaring all income and assets and in return being given the maximum amount of information and a certificate to entitlement to all the services that he or she would be entitled to receive. It should be in the form of an identity passport that when produced in other offices, whether health boards or Government Departments, the people concerned will know they have been assessed and approved for various services.

The most frequent complaint received is that in order to obtain unemployment assistance or supplementary welfare allowance by way of an interim payment, medical card or some other service, people are forced to go through several means tests which at times, to say the least, can be a humbling experience. I have expressed this view in this House on many occasions.

I would urge the Department in conjunction with the other Departments involved — such as Education, the Environment and Agriculture and Food — to come together to resolve this issue. If implemented, it would be one of the single greatest improvements ever in the social welfare system.

It is humiliating when a person goes to the labour exchange and is means tested for unemployment assistance — when walking through the door he knows he is entitled to a medical card — that he must then go to the community welfare officer and sit another means test. The same applies in respect of education and housing assistance. I ask the Minister, who is new to the Department of Social Welfare, to have a fresh look at that aspect of the service. It is humiliating for a person who has just signed off with the labour exchange to be told he has to go to the community welfare officer and have another means test. The same applies for supplementary assistance.

Have a means test card.

Why cannot we have one means test? Let us look at the economics of this. How many officials are involved in the labour exchange the community welfare office and so on. The same procedure is applied to people who seek grants for third level education. It would be beneficial if one could produce a certificate to show one had been assessed on a certain date at a certain time rather than being questioned so throughly. Officials may have to contact each other to see whether the applicant is telling the truth. This experience of means testing is humiliating. Recently I saw a widow who understood she was entitled to a non-contributory pension being means tested. I told her that because of her income level she was entitled to a medical card, but she still had to go through the same examination. I plead with the Minister to introduce one means test which would cover every service for which that person may apply. I make this request with all sincerity.

Full-time employment is a formidable political challenge which runs against the grain of current economic performance. Part of our problem is simply that ongoing technological change is likely to reduce further the total demand for labour with the result of even more unemployment. What is happening is that the structure of employment is changing and the demand for full employment is in fact a demand to promote the kind of policies that are necessary to ensure economic justice and equality for the unemployed.

The world of work is changing and will continue to change. We will have to narrow the gap between full-time work and part-time work. Conditions of part-time work will have to be further improved and pay levels and social welfare benefits will have to be upgraded.

By narrowing the gap individuals will then have more freedom to move back and forth between part-time employment and full-time employment without sacrificing access to well paid work. It would then be possible for individuals to alter their work commitments to fit with with different life core situations, such as the need for more education, retraining, more time for child rearing and a preference for a less rigourous work schedule as we get older.

Together these measures would contribute to a more equitable distribution of work opportunities. There are no easy solutions and I am certain the Department of Social Welfare will play their part in the changes that I envisage in the years ahead.

Debate adjourned.