I move: "That the Bill be now read a Second Time".
This Bill — the third Social Welfare Bill since I took up office 15 months ago — contains some of the most significant changes ever proposed to our social welfare system. Last January, I described the budget as innovative in that, for the first time, an integrated approach was being taken to addressing our most pressing social and economic problem, long-term unemployment.
This Social Welfare Bill goes further than its primary purpose of giving legislative effect to the improvements in social welfare rates of payment announced in the budget last January. I have said before in this House that the days of the piecemeal and ad hoc approach to the development of the social welfare system are over. We need comprehensive, co-ordinated and integrated strategies which reflect the needs of people across the full spectrum of those in receipt of social welfare support.
This Bill is doing just that. Its 46 sections comprise a package of measures which will mark some of the most significant and far-reaching changes ever in the development of our social welfare system, simplify many aspects of an overly complex system, strengthen the rights of our citizens, consolidate the pro-work and pro-family policy direction commenced in last year's Bill, and provide for an improvement in the living standards of our citizens dependent on social welfare through increases in weekly rates of payment which are in excess of projected inflation for the year.
In addition to providing for a three per cent increase in weekly personal and adult dependant rates of payment from early to mid-June this year and for an increase of £2 in the monthly rates of child benefit from next September, the Bill also makes provision for such matters as the introduction of a new disability allowance to be administered by my Department as a replacement for the existing disabled person's allowance payable by the health boards, a new one-parent family payment which will amalgamate the existing, lone parent's allowance and deserted wife's benefit and remove once and for all the concept of "desertion" from the social welfare system. Recipients will no longer have to prove they have been "deserted" to qualify for payment; merely that, for whatever reason, they are raising a child or children alone and require income support. The new scheme will also apply equally to men and women.
It also provides for important reform of unemployment assistance with the aim of making it more attractive for people to take up part-time employment by enabling them to retain a higher proportion of their social welfare payment when they do so, an independent appeals system for people whose claims for supplementary welfare allowance have been turned down by enabling them to make a further appeal to the Social Welfare appeals office, and provision to allow unemployed people to have access to the social welfare tribunal at an earlier stage in trade disputes in line with a commitment I gave last year arising from the experience of the Irish Press dispute.
Before discussing the provision of the Bill on a section by section basis, I would like to draw the attention of the House to a number of specific initiatives in this year's Bill.
Perhaps the most fundamental and far-reaching initiative in this year's Bill is the introduction of a new one-parent family payment. This new payment, which I envisage coming into effect from the beginning of 1997, will replace and enhance the existing lone parent's allowance and deserted wife's benefit.
It has two main objectives. It will remove once and for all the requirement to prove "desertion" which has often been seen as difficult or degrading to women. It will also ensure equality of treatment for men and women in the area of lone parenthood, the denial of which has been increasingly seen as unfair to men who nowadays more often raise children alone. The necessary legislative changes required to facilitate the introduction of the one-parent family payment are contained in sections 17 to 21 of the Bill and I will outline those provisions in greater detail later.
The introduction of a new disability allowance is a major step forward in our provision for people who have disabilities or are unable to return to work due to long-term illness. This new allowance will be administered by my Department as a replacement for the existing disabled person's maintenance allowance payable by the health boards.
At present, the disabled person's maintenance allowance is administered by the health boards under regulations made by the Minister for Health under the Health Act, 1970. The Bill provides for the inclusion of the disabled person's maintenance allowance as a social assistance payment under the social welfare Acts. The new payment will be known as the disability allowance and existing recipients of disabled person's maintenance allowance will transfer to the new scheme.
The necessary legislative changes required to bring the new allowance into operation within the social welfare system are contained in sections 13 to 16 of the Bill. These provide for some improvement in the eligibility criteria for the new allowance compared with conditions currently applying in the case of the disabled person's maintenance allowance. In line with a commitment I made last year following a High Court judgment on this issue, for the first time couples will receive two personal rates of disability allowance rather than the lower rate which currently applies to one spouse where both partners are in receipt of disabled person's maintenance allowance.
Another far-reaching measure to which I want to draw particular attention concerns the reform of unemployment assistance which is provided for in section 22 of the Bill. The intention is to simplify the existing arrangements which are extremely complex and to make it more attractive for people to take up part-time employment by ensuring that they retain a higher proportion of their social welfare payment than is currently the case.
This type of reform is one I have favoured for some time and is also in line with a recommendation made to me in late 1995 by the Expert Group on the Integration of the Tax and Social Welfare Systems. The work of that group is now being finalised and I expect that its final report will be concluded shortly. In the interim, the group submitted an interim report and a number of recommendations to me in the context of the 1996 budget. I am pleased I was able to take several of their recommendations on board in drawing up my budget proposals.
Briefly, the Bill provides for changes in the manner in which earnings from occasional or part-time employment are assessed for unemployment assistance purposes. Under existing provisions, unemployment assistance is payable in respect of a day of unemployment provided the person is unemployed for at least three days in a period of six consecutive days. As a result, someone who works for four or more days in a period of six consecutive days loses entitlement to unemployment assistance for the remaining days in that period.
Furthermore, unemployment assistance paid for days of unemployment in the period of six consecutive days is reduced, where earnings from the days worked exceed a certain threshold or disregard. This disregard amounts to one-sixth of the maximum weekly rate of unemployment assistance appropriate to the person's family circumstances, plus £15 for each day worked.
Any earnings in excess of the disregard are assessed as means and are deducted from the appropriate weekly rate of unemployment assistance. The resulting amount — the weekly rate less means — is then divided by six to give the person's daily rate of unemployment assistance. It is this daily rate which is then payable in respect of each day of unemployment in the six day period. It is an extremely complicated system which cries out to be simplified and the provisions in this year's Bill set out to do just that.
The new arrangement will provide that unemployment assistance will be payable in respect of a week of unemployment rather than in respect of a day of unemployment as at present; a week of unemployment will be defined as any three days of unemployment in a period of six consecutive days; unemployment assistance will be payable at the full weekly rate, in other words, it will be paid in respect of the days of unemployment as well as the days of employment in the relevent week; and 60 per cent of any earnings during that week will be deducted from the weekly rate of unemployment assistance for claimants with children. For claimants without children, a daily disregard of £10 will be applied for each day worked and earnings in excess of this amount will be assessed at 60 per cent. This daily disregard will protect people without dependent children from losses which they would otherwise suffer. The combined effect of these changes is to ensure that everyone gains.
To illustrate the effect of these changes, let us look at the position of a married recipient of unemployment assistance, with an adult dependant and three dependent children, who earns £90 for three days' work. Under the new arrangements, he or she will be better off by £9.50 per week. If that person earned £60 for the three days' work, he or she will be better off by more than £27 per week. The change is of greatest benefit to people who manage to secure relatively low paid work; its purpose is to encourage people to take up job opportunities which may arise from time to time even if these are not always well paid or secure.
I am satisfied that these changes will be beneficial to many unemployment assistance recipients as they make the option of taking up part-time or casual work much more attractive than at present. This may give them the type of employment they are seeking or may provide them with valuable work experience that enables them to move into higher grade employment subsequently.
I am pleased to be able to make provision in this Bill for an independent appeals system, via the social welfare appeals office, for people whose claims for supplementary welfare allowance have been turned down by the health boards. The existing supplementary welfare allowance appeals system has been the subject of criticism for some time past; the Ombudsman has expressed concern about the adequacy of the current arrangements. I am satisfied that the approach I am adopting now will meet those concerns.
It had been suggested to me that there might be an immediate right of appeal to the social welfare appeals office following an adverse decision on a claim for supplementary welfare allowance. However, it is appropriate that the first avenue of appeal should remain with the health boards. Given the immediate and urgent need associated with SWA claims generally, it is important that, as far as possible, claims for SWA are processed satisfactorily from the claimant's point of view within the health board. It is my intention that the right of appeal to the Social Welfare appeals office will be provided initially in respect of claims for basic SWA payments and for the rent, mortgage and other supplements available under the scheme.
I want to ensure that the administrative arrangements for appeals against adverse decisions in respect of the basic SWA payment and supplements are seen to be working efficiently and satisfactorily before I can consider extending it to the main remaining entitlement under the SWA scheme, the exceptional needs payment. This payment differs greatly from other SWA payments because of its discretionary nature and, therefore, the right of appeal to the SWAO will not be provided, for the present, in respect of claims for it.
I wish to outline the specific provisions contained in the Bill. Sections 1 and 2 contain the usual provisions relating to short title, construction and definitions. The general increase of 3 per cent in the weekly personal and adult dependant rates of social insurance and social assistance payments, payable from early to mid-June next, is provided for in sections 3 and 4. The special increases of the carer's allowance and the lone parent's allowance are also provided for in section 4.
Provision is made in section 5 for another significant increase in the monthly rate of child benefit. With effect from 1 September next, child benefit will be increased by £2 per child per month. This means that the monthly payment will amount to £29 for the first two children and to £34 for the third and subsequent children. Over the last two years, we have provided increases of 45 per cent in respect of the first two children and 36 per cent in respect of other children, which is unprecedented and which reflects the Government's determination to improve support for families in a way that is not clawed back by tax or rent increases.
This section also provides for the increase from £200 to £500 in the grant payable on the birth of twins. It further provides for the introduction of a new grant of £500 payable in respect of twins on reaching ages four and 12. This new grant will be effective from 1 January of this year for twins with birthdays on or after that date and is in recognition of the substantial extra costs which arise for parents of twins, both at birth and at the relevant ages.
Section 6 provides for an increase of £10 in the income limits which are applied in determining entitlement to family income supplement. This will mean that from mid-June next most current recipients will get an increase of £6 a week. The new weekly income thresholds will range from £195 for a one child family to £334 for a family with eight children or more.
With a view to removing one of the greatest disincentives to taking up employment, section 7 provides for the continued payment of increases for dependent children for up to 13 weeks to people in receipt of such increases at the full rate who have been unemployed for 12 months or more and who take up employment which is expected to last for at least four weeks. This will ease people's transition from social welfare to wage earning. It is a concrete way in which we can help unemployed people back into work.
The necessary legislative provisions required to give effect to the PRSI reforms announced in this year's budget are contained in sections 8 to 12. These changes will come into effect on 6 April next.
Section 8 provides for a number of significant changes affecting employees and employers as follows: an increase of £30 in the PRSI free allowance for employees insured at Class A — under this change employees will not be liable for PRSI in respect of the first £80 of weekly earnings; an increase in the ceiling up to which PRSI contributions are payable by employees from £21,500 to £22,300 per annum; a reduction in the lower rate of employer's PRSI from 9 per cent to 8.5 per cent; a reduction in the main rate of employer's PRSI from 12.2 per cent to 12 per cent; an increase from £231 to £250 in the amount of weekly earnings below which the new reduced rate employer's contribution of 8.5 per cent will apply; and an increase of £1,000, from £25,800 per annum to £26,800 per annum in the ceiling up to which PRSI contribution are payable by employers.
Section 9 deals with the position of self-employed people. First, it provides for the existing PRSI-free allowance to be increased from £10 to £20 per week, or £1,040 over a full year. Second, it provides for a reduction in the minimum social insurance contribution payable by the self-employed from £230 to £215 per annum. Third, it provides for an increase in the annual income ceiling, from £21,500 to £22,300, up to which PRSI contributions are payable by self-employed contributors.
Section 10 provides for an increase from £520 to £1,040 per annum in the amount of reckonable income in respect of which optional contributions are not payable by share fishermen under the scheme of optional social insurance. Section 11 provides for a reduction from £230 to £215 in the annual rate of voluntary PRSI contribution payable by a person who ceases to be a self-employed contributor and subsequently becomes a voluntary contributor.
The extension of class A insurance to community employment workers, currently insurable for the purposes of occupational injuries benefit only, is provided for in section 12. The new rate will apply only to those who commence working on a community employment scheme on or after 6 April next. The sponsors of community employment workers will be exempt from paying the increased employer contribution arising from this extension and will continue to be liable for their contribution of 0.5 per cent in respect of occupational injuries benefit. I also intend to extend the class A insurance rate to people who take up employment on the present core schemes.
Section 12 also includes provision for regulatory powers to modify the social insurance status of employees of Telecomm Éireann. This will enable the modified insurance of those employees to be maintained in the event of Telecom Éireann forming a strategic alliance.
I referred earlier to the introduction of a new payment to be known as the disability allowance which will replace the disabled person's maintenance allowance which has up to now been administered by the health boards. The relevant legislative provisions are included in section 13 to 16. Section 13 sets out the eligibility criteria for receipt of disability allowance, outlines the basis on which means will be assessed and provides for the weekly rate of the allowance and for increases in respect of adult and child dependants. Section 14 contains a number of transitional provisions required to effect the transfer of existing recipients of disabled person's maintenance allowance to the new disability allowance scheme.
Section 15 makes the necesssary amendments to the Social Welfare (Consolidation) Act, 1993, arising from the establishment of the new scheme. It provides that all of the general provisions in the 1993 Act which relate to social assistance payments, such as claims and payments provisions, will automatically apply to the new disability allowance. It also makes appropriate provision for the inclusion of disability allowance in the system of continuing payments for six weeks after the death of the recipient and provided for a number of other consequential technical amendments to legislation. Section 16 is a standard measure which provides that the new allowance will be brought into force by way of a commencement order.
I also referred earlier to the introduction of the new one-parent family payment which is provided for in sections 17 to 21. Section 17 sets out the conditions of entitlement for the new payment. These are broadly similar to those which apply currently to the lone parent's allowance scheme. It makes provision for improved earnings disregards for lone parents in employment or self-employment and for a change in the method of assessing the value of capital. It also provides for the transfer to the new scheme of persons who have applied for or are already in receipt of the lone parent's allowance and ensures that their entitlements will not be reduced by virtue of that transfer.
Section 17 also provides regulatory powers to exempt a social welfare recipient from the obligation to transfer to the Department of Social Welfare or the health board any payments they receive from a liable relative. These powers are being taken as a consequence of the new arrangements being introduced for lone parents whereby a proportion of maintenance payments can be retained towards their housing costs.
The position of women in receipt of deserted wife's benefit, deserted wife's allowance or prisoner's wife's allowance is protected under section 18. Similar protection is extended to women who have applied for any of those three schemes and whose applications have not been finalised prior to the introduction of the new arrangements.
The present deserted wife's benefit scheme will be discontinued for new claimants once the new uniform payment for all lone parents is introduced. However, special transitional arrangements are being made for women who, by virtue of being under age 40, lose entitlement to deserted wife's benefit because they no longer have a child dependant and who would otherwise have requalified for benefit under the existing arrangements on reaching age 40. Section 18 provides that the entitlements of women aged 38 to 40 on the introduction of the new arrangements, who would otherwise have requalified for deserted wife's benefit on reaching age 40, will be maintained.
Section 19 provides for the appropriate amendments to the Social Welfare legislation consequent on the introduction of the new one-parent family payment while section 20 provides for the definition of a qualified parent for the purposes of the payment to include a parent who would otherwise be a qualified parent but for the fact that their marriage has been dissolved. This is to ensure that no one loses out in the event of becoming divorced.
Section 21 provides that the arrangements in respect of the introduction of the one-parent family payment will be brought into effect by way of a commencement order.
I outlined earlier the purpose and effect of section 22 which provides for significant changes in the way earnings from employment are assessed for unemployment assistance purposes, leading to major improvements in the level of social welfare support provided to prople who take up occasional or part-time job opportunities.
Section 22 also provides that unemployment assistance at the higher long-term rate will be payable to claimants who, immediately before claiming unemployment assistance, were in receipt of the carer's allowance.
Section 23 makes provision for two amendments to the rules governing the means test for unemployment assistance and the pre-retirement allowance. First, it provides that allowances in respect of accommodation provided for a child, paid by a health board under the supported lodgings scheme, will be disregarded in the assessment of means. Second, it provides that a specified amount, which will be set initially at £2,000, received under the rural environment protection scheme will be disregarded in the assessment of means for the purposes of unemployment assistance. These changes are very logical ones designed to ensure that people are not penalised by one State scheme because they receive support from another.
The purpose of section 24 is to incorporate into primary legislation the provisions relating to homemakers, made under regulations in 1994, which enable contribution years spent working in the home on a full-time basis caring for a child or an incapacitated person to be disregarded when calculating a person's yearly average number of contributions for the purposes of the old age contributory pension. This section also increases from six to 12 years the qualifying age for a child under this scheme — a very major improvement which will benefit thousands of women who work full-time in the home.
In addition, section 24 will also remove an anomaly in the existing provisions whereby the year in which a person commences or ceases to be a homemaker cannot, in practice, be disregarded since the person involved is required to be a homemaker for the entire contribution year in order to benefit under this scheme. The amendment provides for regulatory powers to award credited contributions in the contribution year in which a person first becomes, or ceases to be, a homemaker and to prescribe the time and manner of making application to be classed as a homemaker.
The provisions of section 25 arise from the proposed discontinuance of the the deserted wife's benefit scheme, to the extent that it affects women without children, and the deserted wife's allowance scheme. It provides for an extension of the pre-retirement allowance scheme to both separated men and women, aged 55 and over, who have not had an attachment to the labour force within a specified preceding period.
Section 26 provides that a person who is entitled to a pro rata old age contributory or reciprocal pension, an EU pension, or a pension under a reciprocal agreement, will be entitled to receive whichever is the higher.
This section also provides for a technical amendment to the Social Welfare (Consolidation) Act, 1993, arising from regulatory changes made in April 1995 providing for the extension of full social insurance to new entrants to the public service.
Section 27 provides for the survivor's pension to be renamed as widow's for widower's contributory pension. This is a response to the many pensioners who, for a variety of reasons, disliked the term survivor and requested the right to be termed widow or widower. This section also provides that a widow or widower who remarries will remain entitled to a pension at the rate which would otherwise have been payable had they not remarried. At present, if a widow or widower remarries and where the second spouse dies, it is possible that the widow or widower may on reapplying for a pension, fail to satisfy the contribution conditions, or may qualify for a pension at a lower rate than that payable before remarriage. The pension position of these people will now be protected under legislation and the change is designed to reduce what was seen as a disincentive to marriage by widowed persons.
Provision was made in the Social Welfare (No. 2) Act, 1995, giving effect to the commitment that no spouse would lose out in terms of his or her social welfare entitlements on becoming divorced. A corresponding provision is made in Section 28 as a result of the renaming of the survivor's pension to the widow's or widower's contributory pension.
Section 29 simply provides that the provisions of sections 25 to 28 will be brought into force by way of commencement orders.
Sections 30 to 32 provide for the new arrangements whereby claimants of supplementary welfare allowance who are dissatisfied with the outcome of an appeal to the health board against an adverse decision may make a further appeal to the social welfare appeals office. Section 30 provides for regulatory powers to give effect to these arrangements.
In the context of these new arrangements, section 31 provides for regulatory powers to specify the procedures to be followed on appeals decisions relating to claims both for social welfare payments generally and for supplementary welfare allowance. Regulations to be made under these powers will provide that all such decisions and determinations will have to be given to claimants in writing and will have to set out the reason or reasons for an adverse decision.
An amendment to the existing provisions relating to revised decisions by deciding officers, appeals officers and officers of the health board in the case of supplementary welfare allowance is contained in section 32. This relates to cases where a new fact comes to light resulting in a revised decision being made which reduces a person's entitlement. The deciding officer will now have discretion to decide that the reduction in entitlement should only take effect from a current date where, for example, he or she concludes that the person concerned could not reasonably have been expected to know the relevance of the fact.
The purpose of section 33 is to provide an immediate avenue of appeal to the social welfare tribunal, without first having to appeal the deciding officer's decision to the chief appeals officers, to people who are disqualified from receiving unemployment payments by virtue of their participation in a trade dispute. This arises from a review of procedures in the Irish Press dispute last year which showed that the interim appeal stage in that case served no particular purpose other than to delay a final decision.
Sections 34 to 36, inclusive, contain a number of miscellaneous provisions which are largely of a technical nature.
Section 34, provides for an amendment to section 261 of the Social Welfare (Consolidation) Act, 1993, relating to the award of expenses to representatives of appellants at appeal hearings. The practice at present, by agreement with the Incorporated Law Society, is that expenses of £30 are awarded to solicitors and other professional witnesses in respect of attendance at an appeal hearing. This practice has been the subject of a successful challenge in the High Court. Accordingly, the current legislation is being amended by section 34 which provides that costs incurred by a person in relation to any matter referred to an appeals officer will not be awarded but that expenses will continue to be paid as at present. This section is modelled on the legislative provisions applying to the employment appeals tribunal which similarly does not award costs.
Section 35 sets out to resolve a specific problem facing people moving from short-term payments such as unemployment benefit, unemployment assistance and disability benefit to old age pension. Under the existing provisions, the short-term payments are only payable up to the date on which the person reaches age 66 whereas the payment of old age pensions does not commence until the next following Friday. This means there can be a gap of up to six days payment between one and the other. To ensure that there is no gap, section 35 provides regulatory powers under which the short-term payment may be continued until the pension commences.
With a view to improving service delivery for claimants of short-term payments, my Department is currently implementing a new computer system known as the integrated short-term payment system. This system will encompass the making of supplementary welfare allowance payments, a function which under existing legislation is vested in the health boards. The regulatory powers required to enable supplementary welfare allowance payments to be made by my Department are provided for in section 36. I should emphasise that entitlement to such payments will continue to be determined by the health boards as at present.
Section 37 provides for a number of amendments to the Third Schedule of the Social Welfare (Consolidation) Act, 1993, in order to improve the provisions relating to the assessment of means for social assistance payments. These include, for example, that a prescribed amount of earnings in respect of employment of a rehabilitative nature will be disregarded in the assessment of means for social assistance purposes; provision for the deduction of child minding earnings before the 50 per cent disregard of remaining earnings is applied in the case of lone parent and one parent families; and the disregard of allowances paid by a health board in respect of accommodation provided for children under the supported lodgings scheme in the assessment of means for social assistance payments other than unemployment assistance, which is being provided for separately in section 23 of this Bill.
Last year's Social Welfare Act provided for an extension of child depend-and allowances, where appropriate, up to age 22 where children were in full-time education. This year, section 38 of the Bill provides for a further extension of that age to the end of the academic year after the 22nd birthday. This will benefit parents on social welfare who are seeking to support full-time students whose birthdays fall in the earlier part of the academic year.
Under the existing legislation, an increase of disablement pension, known as the constant attendance allowance, is payable where the degree of disablement is assessed at 100 per cent and the claimant is so incapacitated as to require someone to attend constantly to his or her personal needs. Section 39 provides regulatory powers for the payment of the constant attendance allowance in cases where the degree of disablement is assessed at less than 100 per cent. The amount of the increase payable in such circumstance will be less than the amount payable where the degree of disablement is assessed at 100 per cent and the rate may vary in relation to the degree of disablement.
Section 40 provides that fees payable to the Comptroller and Auditor General in respect of an audit of the accounts of the social insurance fund will be borne directly by the fund. This amendment arises because the Comptroller and Auditor General is now legally entitled to charge an audit fee.
The purpose of section 41 of the Bill is to extend, from two to six years, the period within which legal proceedings may be brought against the estate of a deceased person for the recovery of overpayments of social assistance.
Under the household budgeting scheme operated by my Department, certain social welfare recipients can opt to have deductions made from their payments and paid over to specified bodies such as the ESB and local authorities. Section 42 extends the scope of the scheme to include bodies not currently covered, in response to requests from existing participants.
Section 43 is a technical amendment designed to update a reference in the Social Welfare (Consolidation) Act, 1993, to section 9 of the Minimum Notice and Terms of Employment Act, 1973, which has been replaced by section 3 of the Terms of Employment (Information) Act, 1994.
Section 44 provides for an amendment to the Combat Poverty Agency Act, 1986, under which the period within the board or the agency is required to submit each three year strategic plan may be extended, by not more than six months, by the Minister of the day.
Sections 45 and 46 provide for an increase from £178 to £188 in the amount of weekly earnings below which employees are exempt from liability for the health contributions and the employment and training levy. The corresponding annual income exemption level for self-employed people is being increased from £9,250 to £9,730. These changes are being made at the request of the Departments of Health and Enterprise and Employment and will take effect from 6 April 1996.
I emphasised at the outset the innovative nature of this year's Social Welfare Bill. It is substantial legislation which will protect and improve the living standards of people who, for one reason or another, are outside the labour force, provide a clear pro work and worker focus in relation to incentives, simplify many aspects of a very complex social welfare system and continue the pro family policy direction I put in place last year.
I commend this Bill to the House and I look forward to a constructive and useful debate on its many provisions. I thank the Deputies for allowing me the additional time to finish my contribution.
