Vol. 419 No. 2
4 Mr. Connaughton asked the Minister for Social Welfare if he will outline the savings to the Exchequer in 1992 arising from the decision not to pay pay-related benefit to claimants of unemployment benefit on short-time work, and if he will make a statement on the matter.
33 Mr. Byrne asked the Minister for Social Welfare the total number of, (a) short-time workers and (b) week on/week off workers, who have had their social welfare incomes reduced as a result of changes in pay-related benefit under the Social Welfare Act, 1992; the average amount of the loss; if his attention has been drawn to the difficulties posed for many families by these losses, and if he will make a statement on the matter.
36 Mr. McCormack asked the Minister for Social Welfare if he proposes to allow people who are on short term employment such as one week on, one week off, to qualify for pay-related benefit for the week they are off work, and if he will make a statement on the matter.
I propose to take Questions Nos. 4, 33 and 36 together.
The matter referred to by the Deputy arises as a consequence of section 30 of the Social Welfare Act, 1992. The effect of the legislative change is to extend to workers who systematically work a pattern of work that includes periods of layoffs, such as week on/week off, fortnight on/fortnight off, the restriction on payment of pay-related benefit that has applied since 1983 to workers three days on/two days off or a similar rota each week.
The extension of the restriction on entitlement to pay-related benefit is in response to the growth of work practices similar in effect to the systematic three-day week which maximised entitlement to unemployment benefit and which were considered unacceptable, particularly where the arrangements were continued over a long period.
In recent years, it had become apparent that some industries faced with reduced demand had devised work patterns to maximise the social welfare entitlement of their workers through the imposition of a week on/week off or similar pattern of short-time work. Indeed, there were instances of firms which were already engaged in short-time working switching from a short working week to a week on/week off situation. There were instances of overtime working occurring concurrently with short-time working so as to replace earnings lost during the period of temporary lay-off.
It was considered that the two patterns of short-time working, that is the short working week and week on/week off working, were for all practical purposes identical and, therefore, the same arrangements in regard to benefit entitlements should apply equally to both. Section 30 of the Social Welfare Act, 1992 seeks to achieve that objective. It provides that workers who systematically work a reduced working pattern such as week on/week off or fortnight on/fortnight off are no longer entitled to pay-related benefit while still employed with the same employer.
The number of persons claiming unemployment benefit on a systematic short-time basis prior to the introduction of section 30 was approximately 6,500. It is estimated that up to an additional 2,000 claimants will lose their entitlement to pay related benefit. The saving to the Exchequer which will arise in 1992 is estimated to be of the order of £1 million.
It is not possible to estimate the average weekly loss to those affected by section 30. The maximum weekly entitlement and consequential loss to those affected is £17.40. The maximum loss arises where weekly earnings reach or exceed £220. The loss for those on lower earnings is proportionately less.
Is the Minister aware of the havoc his new policy has created in sensitive areas, for instance in Waterford Glass and in Dubarry Shoes Ltd. where because of erratic overseas orders they have no alternative but to let the workforce go? If they do not, they will have redundancies on their hands. For the sake of £1 million the Minister has upset the applecart. This proposal has not been thought out and will create more redundancies. There is a ground-swell of opinion among those industries genuinely involved in overseas marketing that even though workers who paid their PRSI and work two or three days a week, when they need help most they are not entitled to pay related benefit. That is something the Minister will have to examine. Indeed I hope he is aware of what is happening around the country.
I do not accept what the Deputy says. I spoke about this matter on a number of occasions in the course of the debate on the Social Welfare Bill, 1992. I might reiterate that, since 1983, people on a short working week — that is three days on, two days off — were disallowed pay-related benefit and have been in that position since then. But people who worked one week on and one week off, or under similar working arrangements, continue to qualify for pay-related benefit. To all intents and purposes both systems of working are similar. Under the provisions of the Social Welfare Bill, 1992, people who are working say, one week on/one week off, will be treated the same as people on a short working week since 1983; that is fair and equitable. We estimate that there will be approximately 2,500 people affected this year.
In fairness to Deputy Connaughton I should say the majority of those workers are in Waterford Crystal. But I am not prepared to accept that whatever may be the difficulties being experienced in Waterford Crystal — whatever they may have been in the past or will be in the future — they arise from the change outlined in section 30 of the Social Welfare Bill, 1992. Deputy Brian O'Shea recently raised on the Adjournment the matter of the Waterford Crystal workers when this change came into effect. I gave examples of the earnings of people in Waterford Crystal and said that the maximum loss there can be is £17.40 per week. Whatever may be the difficulties experienced, particularly in the case of Waterford Crystal, where the majority of workers are affected, it does not arise as a result of a change in the legislative provision. I do not, nor will I accept that it has anything to do with the provisions of the Social Welfare Bill, 1992, or decisions taken by me.
