I move:
That a sum not exceeding £1,853,478,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1992, for the salaries and expenses of the Office of the Minister for Social Welfare, for certain services administered by that Office, for payments to the Social Insurance Fund, and for certain grants including a grant-in-aid.
My Department's Estimate for 1992 is in excess of £1,853 million. That is the amount provided from the Exchequer this year to fund social insurance and social assistance schemes and services. It represents an increase of 8 per cent over the outturn for 1991. This increase arises largely because of the continuing increase in numbers receiving social welfare payments and the increases in rates of payments which come into effect later this month as announced in the budget.
The increase in numbers claiming unemployment payments is obviously the major element of the increase in numbers of claimants. The level of unemployment has a crucial effect on social welfare expenditure. I have said before and I repeat that unless we make significant progress in reducing the level of unemployment, our capacity to fund the increasing scale of social welfare expenditure will be severely limited.
The Estimate of £1,853 million which I am introducing does not reflect total social welfare spending this year which is estimated at £3,353 million. Of that amount, the Exchequer will contribute £1,853 million — which is the amount of the Estimate — and the balance will be met by employers, employees and the self-employed by way of PRSI contributions.
These amounts highlight the importance of PRSI contributions in the financing of social welfare services. Total PRSI income this year is expected to be almost £1,500 million.
Expenditure on social insurance payments out of the Social Insurance Fund this year will, however, be of the order of £1,650 million. The income shortfall in the fund is made up by the Exchequer and is estimated to be just over £143 million this year or under 9 per cent of total expenditure.
The scope of the PRSI system has been considerably extended in recent years. The extension of social insurance cover to the self-employed in 1988 and the extension last year of full social insurance cover to part-time workers are evidence of that. The self-employed are expected to contribute some £65 million this year in PRSI contributions. However, this increased income to the fund has to be balanced, against the commitment to additional expenditure on social insurance benefits and pensions to those involved. We have undertaken substantial liabilities for future expenditure on social insurance benefits and pensions and my concern relates to our capacity to meet those commitments, bearing in mind the economic and financial constraints which we face.
The Government are faced with an over-riding need to control the level of public expenditure. All areas of expenditure have had to share this burden in recent years and social welfare is no exception.
There is a number of options when one is considering how to achieve necessary expenditure savings in the social insurance system in an equitable way. Reductions in the basic level of payments is not an option in that across the board cuts of this kind could affect people who need and depend on social welfare payments. We are committed under the Programme for Economic and Social Progress to maintaining and improving the basic levels of social welfare payments and we will meet that commitment.
Another option would be to increase the income from PRSI contributions through increases in contribution rates and/or ceilings, thereby reducing the Exchequer liability to the system. This would have wider implications and the scope for such increases may be limited. A third option is to eliminate waste of any kind from the system. An aspect of this is to target benefits more effectively to ensure that they go to those who need them. We have already taken some steps towards better targeting by the introduction of earnings limits for entitlement to certain benefits.
These measures are in no sense an attempt to dismantle the social insurance system. I see the value of a system which gives benefits to people as of right, as against a system which is totally means-tested. Means-tested payments have inherent problems in relation to disincentives and to take-up of entitlements. Also there is no doubt that the social insurance system has broad acceptance among those who contribute to it and that people value the idea of benefits in return for contributions. The changes which have been made do not in any way undermine the concept of social insurance per se.
If we are to maintain the idea of a social insurance system however, we may have to consider a system which is actually self-financing and which does not depend on the Exchequer, i.e. the general taxpayer, to make good the deficit each year. This would mean a situation whereby over a number of years, income and expenditure in the Social Insurance Fund would be gradually brought into line to the point where an Exchequer contribution would no longer be necessary. Obviously such a move would have major implications and would require a combination of measures to ensure a healthy and buoyant contributions base so as to increase contribution income coupled with measures to target benefit expenditure more efficiently. Wasteful expenditure of any kind would have to be removed.
I will be looking at all the options in this area. I would like to think that the system could be self-financing, if for no other reason than that it would impose a better discipline in terms of proposed increases in benefits, because a corresponding increase in contribution income would automatically be required. It would also compel us to take a more long term view of future costs and income for the fund to better guarantee its orderly management and consequently its future.
Social welfare is complex, far-reaching and touches the lives of almost every person in the country in one way or another. It currently provides a weekly payment to around 780,000 persons which in turn benefits almost 1.4 million persons when adult and child dependants are taken into account.
The true extent of our overall social welfare spending may be easier to comprehend if you consider that we now spend more than £9 million each and every day on social welfare. This figure may be broken down into a number of categories, as follows: payments to the elderly £2.6 million per day; payments to the unemployed £2.6 million per day; payments to the sick and disabled £1 million per day; and family income support and other miscellaneous allowances £2.4 million per day. It is not so long ago that we were talking of expenditure of £7 million a day, and the increase which has taken place graphically illustrates the size of the financing problem we face.
I know and fully accept that the vast majority of claimants receiving payments from my Department are bona fide. I am also well aware that there is a certain level of fraud and abuse within the system. The control of fraud and abuse is an integral part of the administration of my Department's schemes. As in any large spending organisation, whether public or private, control measures have to be in place, have to be effective, and therefore have to be updated and reviewed on a regular basis. I am determined to take effective action to deal with abuse of the system.
The campaign launched last year against PRSI abuse will continue into this year. As I have already announced, a major publicity campaign is under way to remind employers of their obligations under the PRSI system and of the penalties for non-compliance. In addition to the 15,000 employer investigations carried out last year, a target of a further 10,000 visits has been set for this year. I am glad to report that the target is well on course for being met with about half that number of visits already carried out. In money terms, about £5.5 million additional PAYE/PRSI has been determined as being due as a result.
The full range of our activities in relation to anti-fraud and abuse measures is now co-ordinated by a new Control Unit which has been established at senior management level in my Department. This development establishes control measures on a more formal footing within the Department and emphasises the importance I attach to the proper monitoring and control of social welfare payments.
I want the message to go out loud and clear that abuse of social welfare by employers or employees will not be tolerated. To do so would totally undermine those employers and workers who are operating within the law. The bill for social welfare services represents a very large proportion of overall State expenditure. Each year it is becoming more and more difficult to fund that bill. It is essential, therefore, that any loss through fraud and abuse of our payments systems is minimised. As I have already said, this is the least the ordinary taxpayer, whether an employer or employee, can expect.
The House will be aware that I have spoken many times since my appointment as Minister for Social Welfare about the sheer complexity, range and multiplicity of our social welfare schemes and conditions for entitlement. These give rise to a number of problems with which I am concerned. They include: the confusion and lack of understanding among social welfare clients; the resultant lack of benefit take-up, particularly among those who are most in need; and the difficulties which the current level of complexity causes for administration generally. I intend to make simplification of the social welfare system a priority.
In recent years, considerable progress has been made in streamlining the rates structure for assistance payments. The number of child dependant rates has been reduced from 36 to 3 and a unified lone parent's allowance scheme has been introduced. I will be building on these developments so as to progress towards a unified social assistance scheme in which the conditions for entitlement and rates of payment will be simplified and standardised to the greatest extent possible.
My Department are currently examining the issues involved with a view to formulating proposals which I can bring to Government for consideration.
The standardisation of means tests for the various social assistance schemes is an essential prerequisite for a simplified social assistance scheme, I hope to bring forward proposals in this area in the near future. Because of the multiplicity of schemes and conditions of entitlement which apply at present this is not an easy task. As far as means tests are concerned there are numerous rules, some of which are more favourable to one category of claimants and others which are more favourable to another category. It would be much easier, of course, if we could standardise simply by applying the most favourable rule to all categories in all situations. This, of course, is not possible because of the sheer cost involved and possibly explains why a rationalised means test has not been introduced before now. If we are to simplify the system, however, we will have to recognise that there are certain features of the present system which it will not be possible to continue to apply. However, overall I am confident that we can devise a system which is fair and equitable to all people who depend on the social welfare system.
The Estimate includes £85 million in respect of the social welfare improvements provided for in this year's budget, including the increase in rates of payments which will come into effect later this month. The full year additional cost of these improvements will be £162 million.
A sum of £22 million represents part of the cost of the restrospective application of equal treatment for the period of delay in implementing the 1979 EC Equal Treatment Directive. The total cost will be £60 million over a three-year period. Under these provisions, married women who were affected by the delay in implementing the directive will receive the higher personal rate of payment which men got in that period; an extra three month's unemployment benefit to bring them up to the 15 months paid to other claimants, subject to their having been unemployed in that period; and increases for dependants in the form of a household supplement. In addition, married women will be able to qualify for unemployment assistance provided they were unemployed at the time and satisfy a means test.
The overall cost of the package is £60 million, and the retrospective payments in question are being made on a phased basis. The increased rate of benefit and extended duration of unemployment benefit are being paid immediately. The other entitlements are being paid in two equal instalments, the first instalment being made in 1993 and the second instalment being made not later than July, 1994.
Providing for equality of treatment in respect of the period of delay has very significant administrative implications for my Department. A new Central Unit which is now fully operational has been set up within the Department to process claims and the required additional staff have been recruited.
The Department have identified over 110,000 potential beneficiaries and personal claim forms together with an information leaflet are being issued to the women concerned. In addition, the Department have launched a nation-wide advertising campaign designed to ensure that all potential beneficiaries are aware of their entitlements.
I would also like to refer to the treatment benefit scheme and, in particular, the dental benefit scheme which, as Deputies will be aware, has been the subject of a long-running dispute with the Irish Dental Association. I am glad to have the opportunity today to welcome the results of the recent ballot among members of the Irish Dental Association on settlement proposals to end this dispute. This means that up to 300,000 dependent spouses of PRSI contributors will again have access to dental treatment from their local dentist.
The settlement proposals involved the introduction of a new dental contract for dentists operating the scheme. The new dental contract will more adequately reflect modern dental practices and will include mechanisms for improved consultation with the dental profession and improved monitoring of standards.
The other element in the settlement proposals involved an agreed schedule of fees for treatment carried out under the dental benefit scheme. The main features of the new schedule of fees are: increased fees which will provide dentists operating the dental benefit scheme with an economic and fair return for their professional services, and the introduction of a patient contribution of 30 per cent of the agreed fee for most items of treatment.
I would like for the information of the House to explain how the patient contribution will operate. There will be no patient contribution in the case of examination, scaling and polishing, and routine gum treatment. A patient contribution of 30 per cent will apply in the case of treatment items such as fillings and extractions. In the case of a single filling, this will amount to £4.50; in the case of an extraction it will be £5.40. In the case of dentures, there will be a reduction in the current patient contribution from 66 per cent to 50 per cent. With the increase in the total fee payable for a full set of dentures, the new patient contribution will mean no net increase in the amount payable by the patient for dentures.
I would like to remind the House that patient charges are not a new development. They have always been a feature of the dental benefit scheme since its inception. For example, certain fillings on front teeth have attracted a patient contribution of £2.50 while £7.50 was payable on certain more extensive fillings.
The advantage of the new arrangements is that it will rationalise the whole notion of patient contributions by setting a standard 30 per cent patient contribution on most items of treatment. I believe that in this day and age it is not unreasonable to expect people to contribute in some way to their own dental health. Under the new arrangements, it will be in the interests of the patient to visit their dentist on a regular basis and thereby avoid expensive dental treatment in the future. Where regular visits involve no more than examination, scaling and polishing and routine gum treatment, there will be no patient contribution payable.
I am particularly pleased to be able to provide in this Estimate an additional £500,000 for the Community Development Programme funded by my Department. This programme provides financial assistance to locally-based projects in disadvantaged areas to assist with the staffing and equipping of local resource centres which provide a focal point for community development activities in the area. While the amount of money involved is small in the context of my Department's overall spend, I have become convinced in the short time since becoming Minister for Social Welfare that it represents exceptional value for money and funds voluntary activities that are very worth while.
There are 21 projects operating under the Community Development Programme at present. The additional funding provided has allowed for the expansion of the programme earlier this year to four new areas, Mountwood/Fitzgerald Park, Dún Laoghaire, Dundalk, Galway and west Clare. Work on establishing the projects in these areas is well under way and it is expected that they will be fully operational shortly.
The activities being undertaken locally by community development projects include local enterprise initiatives and projects with the elderly, young families, single parents, the unemployed and other groups in need of help, support, advice and information. The emphasis in the projects is on the involvement of local communities in developing approaches to tackle the problems faced by the community and on creating successful partnerships between the voluntary and statutory agencies in the areas concerned.
Getting together with neighbours to think about the future of ones home patch and to devise strategies to meet its needs in the future, the creation of a living community spirit — things are central to the future viability of local communities up and down the country. Community development work of this type is not a sideline or a luxury, but is in fact an essential precursor and component of any social and economic development.
On this basis, I am very pleased to be able to announce today that the Community Development Programme is again being expanded to take in a further four new areas. I have just this week approved the establishment of four new projects in the following areas: Finglas South, Dublin, the Lifford/Clonleigh area of Donegal, Athy, County Kildare and the south side of Cork city. I am confident that the establishment of these projects will be of real benefit to the local people in the areas concerned. The Community Development Programme will represent a significant addition to the ability of the local community to respond to local social needs and to the range of services and opportunities available locally.
In my short time in the Department, I have come to realise the impact which social welfare has throughout the country and the huge number of people who depend on the system.
At any one time, we are handling payments to about 1.4 million beneficiaries on a weekly basis. I would like to pay tribute to the staff of the Department at head office and those who get the payments out, and to all staff without whom it would not be possible to deliver our services.
I am confident of the Department's ability to meet the needs of the present and to adapt to the needs of the future. I look forward to continuing our efforts at protecting the position of social welfare recipients, at targeting our resources to those most in need, streamlining and simplifying our social welfare schemes and services, and at taking a flexible and innovative approach to the delivery of our social welfare services.
I commend this Estimate to the House.