Joe Walsh
Question:144 Mr. J. Walsh asked the Minister for Social Welfare when he will introduce a child benefit supplement for low income families; and if he will make a statement on the matter. [6753/95]
Written Answers. - Social Welfare Benefits.
The Programme for A Government of Renewal provides for the introduction of a child benefit supplement as follows: “We will work towards a basic income system for children by systematic improvements in child benefit and the creation of a child benefit supplement payable to all social welfare recipients and to low and middle income families.”
With the significant increase in child benefit announced in the budget, we have laid the foundation for the development of the child benefit supplement which is currently under consideration in my Department. At the same time, as announced by the Minister for Finance in his Budget Statement, the Expert Working Group on the Integration of Tax and Social Welfare is being asked to consider this proposal and to advise on the best overall strategy. I look forward to getting their views in due course. The introduction of the child benefit supplement will be considered in next year's budget.
Joe Walsh
Question:145 Mr. J. Walsh asked the Minister for Social Welfare the total cost of increasing social insurance schemes for each of the years 1994 and 1995. [6804/95]
Joe Walsh
Question:146 Mr. J. Walsh asked the Minister for Social Welfare the cost of increasing social assistance schemes for each of the years 1994 and 1995. [6805/95]
It is proposed to take Questions Nos. 145 and 146 together. The information requested by the Deputy in relation to budgetary provisions in 1994 and 1995 is set out in the table below.
|
Programme |
1994 Budget |
1995 Budget |
||
|
Cost in 1994 |
Cost in full year |
Cost in 1995 |
Cost in full year |
|
|
£m |
£m |
£m |
£m |
|
|
Insurance |
32.91 |
73.71 |
20.45 |
40.60 |
|
Assistance |
31.84 |
70.45 |
29.90 |
68.45 |
|
Child Benefit |
4.40 |
12.80 |
34.30 |
103.00 |
|
Total |
69.15 |
156.96 |
84.65 |
212.05 |
Joe Walsh
Question:147 Mr. J. Walsh asked the Minister for Social Welfare the cost of the increase in the family income supplement limits for each of the years 1994 and 1995. [6807/95]
The family income supplement (FIS) scheme is an income support for families on low earnings which attempts to address disincentive problems. A Government of Renewal envisages the replacement of FIS and child dependant allowances with a child benefit supplement. This will eliminate some of the worst proverty and unemployment traps in the tax and social welfare systems.
This year, as part of the Government's overall plan for major restructuring of child income support, the income thresholds for FIS were retained at the 1994 levels. However, a sum of £103 million in a full year has been allocated in the 1995 budget to improve the child benefit scheme, as a first step towards a basic income for children. The monthly payment rate for each child will be increased by £7 from September 1995 which represents an increase of 35 per cent for the first two children and an increase of 28 per cent for the third and subsequent children.
The cost of the increases in income thresholds for family income supplement was £1.5 million in 1994 and £3.3 million in a full year.
Rory O'Hanlon
Question:148 Dr. O'Hanlon asked the Minister for Social Welfare if he will provide an old age pension at a reduced rate to people who reach 66 years with fewer than ten years PRSI in view of the introduction of the scheme for self-employed. [6808/95]
To qualify for the old age contributory pension, a person must have entered insurance at least ten years before pension age. This condition has been a feature of the scheme since its introduction in 1961. The purpose of the condition is to link entitlement to a pension with a reasonable level of contributions to the Social Insurance Fund during the course of a person's career. This condition applies to self-employed persons in the same way as it applies to all insured people. Accordingly, self-employed people, who became insured for the first time when social insurance was extended to the self-employed in 1988 and who were then aged 56 or over would not qualify for the old age contributory pension. They are, of course covered for survivors' and orphans' pensions.
However, self-employed people in that age group who had been insured as employed contributors for any period prior to age 56 could qualify for the old age contributory pension. Such insurance can be combined with insurance as a self-employed contributor for old age pension purposes. Refunds of the old age contributory pension element of the contribution may be made to those who entered insurance for the first time less than ten years before pension age and who fail to qualify for either old age contributory or non-contributory pension.
Detailed consideration has been given by my Department to the possibility of providing for entitlement to the old age contributory pension to persons who entered insurance for the first time as self-employed contributors less than ten years before pension age. In this regard, costings done in 1989 estimated that the net cost of paying old age contributory pensions to all self-employed contributors, who were aged between 56 and 66 in April 1988 would amount to £756 million over the lifetime of the persons concerned. The extra rate of contribution which would need to be paid by self-employed contributors generally to finance such an extension would be 2.4 per cent over a 50 year period. Allowing self-employed persons to buy pension rights by paying the outstanding years' contributions in order to qualify for an old age contributory pension would also be very costly unless the payments made by the individual self-employed contributors were calculated on an actuarial basis. The cost to an individual contributor buying rights on this basis would be prohibitive. The National Pensions Board in its final report "Developing the National Pension System" puts forward,inter alia, a number of recommendations relating to eligibility for old age pensions, including proposals for a wider range of pro-rata pensions related to the average number of contributions over an insured lifetime. However, they also recommended that the number of paid contributions to qualify for an old age contributory pension be increased from 156 (three years) to 520 (ten years) contributions.
The report and its recommendations are being studied within my Department at present and I intend, in due course, to bring forward proposals on the issues addressed in the report.