I will be discussing the Supplementary Estimate for Vote 40 — Social Welfare.
A Supplementary Estimate of £19 million is necessary on the Social Welfare Vote for 1995. This is the extra amount required in the period up to the end of this year to meet additional costs arising in my Department. The effect of this additional amount will be to increase the published Estimate for my Department to £2,473.9 million.
The reason for the Supplementary Estimate is essentially to part-fund the cost of this year's Christmas bonus which was paid last week to all long-term social welfare recipients. The bonus payment this year amounted to 70 per cent of normal weekly payments with a built in minimum payment of £20. Over 1.25 million people have benefited from the payment, that is, 755,000 recipients and their 500,000 dependants.
The full cost of this year's Christmas bonus is £40 million but only some £36.5 million of that amount is proper to the Social Welfare Vote. The balance of the bonus costs relates to health allowances and community employment participants and is borne on the Votes of the other Departments concerned. However, not all of the £36.5 million is required in the Supplementary Estimate as projected savings in the Vote for 1995 will amount to £17.5 million. This has the effect of reducing the requirement for the purposes of the Supplementary Estimate to £19 million.
I will now detail the main areas in which savings and excesses occurred. In summary, savings arose through income from PRSI contributions being higher than expected and through reduced expenditure on pensions as a result of the number of recipients being lower than expected. On the other side, an increase of 12,000 in the original live register forecast for 1995 and higher expenditure on our employment support services account for the excesses.
An additional sum of £6.7 million is required to meet the Exchequer's share of the cost of operating the social insurance fund out of which all social insurance benefits and pensions are paid. This is a net sum which takes account of excesses in some areas being offset by savings in other areas.
The social insurance fund is the cornerstone of our social welfare system. It operates on a tripartite basis with workers, employers and the State all contributing their share. It provides necessary protection for over 1 million workers in times of illness, unemployment, survivorship, occupational accidents and when they reach pension age. Since 1988, it has provided security of pensions for 120,000 self-employed people and their survivors. The Government is committed to the maintenance of the social insurance fund and to its future development in the interests of those who pay into it and those who draw benefits from it.
The 70 per cent Christmas bonus to social insurance pensioners cost £16.3 million this year and a further £17 million is required to meet the higher cost of unemployment benefit payments as a result of the numbers being higher than originally estimated. Those excesses have been partially offset by an increase of £15 million in income from PRSI contributions over what had been originally provided for and savings in contributory pensions of £11.6 million as a result of lower numbers of recipients. This leaves a net additional requirement of £6.7 million to be provided as part of the Supplementary Estimate.
The balance of the requirement in the Supplementary Estimate arises from social assistance payments which are funded entirely from the Exchequer. The main elements are additional spending of £10.7 million on unemployment assistance arising from the Christmas bonus paid to the long-term unemployed and the higher live register forecast which I already mentioned; additional spending of £9.2 million on our employment support services as a result of higher numbers participating on the back-to-work allowance scheme and students' summer jobs scheme; additional spending of £1.5 million on lone parent's allowance arising from the cost of the Christmas bonus for these recipients, which is partially offset by lower numbers than originally anticipated, and additional spending of £3 million on supplementary welfare allowance as a result of increased costs of rent supplements and provision for recoupment of certain administration costs to health boards.
As the House will be aware, responsibility for the National Social Services Board was transferred from the Department of Health to my Department with effect from 1 June 1995. As the funding arrangements were not settled in advance of the original Estimates being finalised, a token provision of £1,000 only was provided in the published Estimates. The funding position has since been regularised and the Supplementary Estimate includes an amount of £970,000 which represents the cost to my Department of funding the NSSB since 1 June 1995.
An additional sum of £1,050,000 is included under this heading to fund grants of £1 million to the Society of St. Vincent de Paul and £50,000 to Protestant Aid. I am delighted that the Government has found it possible to make these special allocations at this time of the year in order to meet the very heavy demands that are made on the services of both organisations. I wish them both continued success in their very important work.
The sum of the additional spending which I have just detailed has been reduced as a result of miscellaneous savings during the year in a number of areas, amounting to £14.9 million and due primarily to lower than expected payments.
As I indicated earlier, the net effect — after taking account of the excesses and the savings which I have detailed to the House — is a Supplementary Estimate of £19 million. This is the amount I am asking the House to approve. I emphasise, however, that even taking account of the Supplementary Estimate, the amount of the revised Estimate for 1995 does not do justice to the overall level of social welfare spending today. Total social welfare spending this year will exceed £4 billion, exclusive of the £200 million being provided to cover the cost of equal treatment payments. Of the £4 billion, the Exchequer will contribute almost £2.3 billion, employees £445 million, employers £1,200 million and the self-employed £85 million through pay-related social insurance.
We spend almost £11 million on social welfare every day, £77 million for each week of the year. In doing so, we provide a weekly payment to around 800,000 people which in turn benefits almost 1.5 million people when adult and child dependants are taken into account. The £11 million a day paid includes £2.9 million in payments to elderly and retired people, £2.9 million a day in payments to unemployed people, £1.2 million a day to the sick and disabled and £3.4 million a day on family income support including widows, widowers, lone parents, carers, child benefit and families at work on low pay and other miscellaneous allowances. There is an additional sum of £0.6 million for administration. I commend this Supplementary Estimate to the House.