Written Answers. - Social Welfare Funding.
Ivor Callely
Question:
11
Mr. Callely
asked the
Minister for Social Welfare
his views on the issues that should be taken into consideration when discussing the question of funding the social welfare system and improvements thereto; and if he will make a statement on the matter.
[1214/96]
Total expenditure on the social welfare system was over £4,000 million in 1995.
The present system is funded partly by the Exchequer from general taxation and partly by the Social Insurance Fund from Pay Related Social Insurance (PRSI) contributions. Means tested payments, such as old age non-contributory pensions, unemployment assistance and supplementary welfare allowance, are paid from the Exchequer, while contributory pensions and benefits are paid from the Social Insurance Fund.
In general, the rates of payment received by individuals under the various social assistance schemes are lower that the rates paid under the equivalent social insurance schemes. However, a greater number of people depend on social assistance payments with the result that Exchequer funded assistance schemes account for about 56 per cent of social welfare spending.
The Social Insurance Fund accounts for about 44 per cent of all social welfare spending. It provides retirement pensions survivor's benefits, income support in the event of unemployment or illness and other benefits as a matter of entitlement based on contributions paid by workers and their employers. The PRSI system relieves employers of the need to make direct provision for such matters and provides assurance to workers which facilitates the smooth operation of the labour market.
As stated in the Government's policy agreement of December 1994,A Government of Renewal, this Government is committed to the maintenance and development of the social insurance system. In view of its significance within the social welfare system as a whole, it is important that the income to the Social Insurance Fund should be maintained at a level which is adequate to meet its current and accrued liabilities to insured persons. The future financing of pensions is of relevance here and I have referred to this in other questions which I am answering today.
The Economic and Social Research Institute are undertaking a review of the rates recommended by the Commission on Social Welfare, fulfilling a commitment given in the Government's agreed policy programme,A Government of Renewal. This review will be completed by mid-1996 and will form the basis, along with other reviews such as that of the expert working group on the integration of tax and social welfare, for the formulation of proposals for social welfare rates of payment and the funding of these in the years ahead.
