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Dáil Éireann debate -
Wednesday, 19 Mar 1997

Vol. 476 No. 5

Social Welfare Bill, 1997: Report Stage.

Amendment No. 1 is in the name of the Minister. I observe that amendments Nos. 1 and 2 are consequential on amendment No. 23, and No. 3 is related. Is it agreed that we debate amendments Nos. 1, 2, 3 and 23 together? Agreed.

I move amendment No. 1:

In page 5, line 8, to delete "AND".

Amendments Nos. 1 to 3 are consequential on amendment No. 23 which is being introduced to provide legal certainty in the powers in the Pensions Act, 1990 to make regulations in respect of external pension schemes, that is, those schemes set up in another jurisdiction with the members in Ireland. The amendment arises as a result of concern expressed by pension practitioners in Ireland and the United Kingdom about the situation that will arise when the UK Pensions Act comes into force in April of this year, particularly as it relates to schemes with members in Ireland and the UK. Existing pension schemes set up in the UK with Irish members may, from April 1997, technically be subject to the laws of two jurisdictions, as would be the case for Irish schemes with UK members. While the legislation of both countries on pensions will be broadly similar, there are some differences which will cause difficulties to schemes and practitioners dealing with them. For example, members of Irish schemes based in the UK could be liable to the indexation requirements of the UK which are different from the revaluation provisions in Ireland.

Accordingly, pension practitioners are pressing for legal certainty in such schemes. The possibility of making a pension scheme with members in both jurisdictions solely or largely liable to the legislation of the country where the scheme is set up is currently being discussed at official level with the UK DSS. This would exempt the scheme from the legislation of the other country on the basis that the safeguards in place in the set-up country are broadly similar and therefore provide adequate protection. If agreement is reached it would be implemented via regulations by each jurisdiction. The existing regulatory provisions relating to external schemes do not specifically provide that these schemes can be exempted from the provisions of the Pensions Act, and it is the purpose of amendment No. 23 to provide explicit powers to allow the exemption of such schemes and thereby provide legal certainty.

Amendments Nos. 1 to 3, inclusive, are consequential on amendment No. 23. They provide for reference to the Pensions Act, 1990 in the Long Title of the Bill and for the exclusion of the amendment being made to the Pensions Act from the collective citation of the Bill provided for in section 1(2).

Amendments Nos. 1 and 2 are technical amendments and are acceptable. Amendment No.3 is somewhat similar.

The Minister gave us initial notice of amendment No. 23 at the select committee when he said there would be an amendment on Report Stage, but he did not explain what its effect would be. The amendment provides that regulations may exclude external schemes or certain categories of external schemes from the application of some or all of the provisions of this Bill and of regulations made thereunder. This seems a straightforward and simple amendment to cover the movement of people between jurisdictions. In explaining the amendment the Minister mentioned the possibility of a scheme becoming liable to indexation. I am mainly concerned that the beneficiaries of such schemes should not lose out. We need a system that supports and facilitates mobility. We need to ensure pensions can be carried from one jurisdiction to another without being adversely affected. Such an arrangement already exists for social security pensions between the UK and Ireland and between the EU and Ireland, because Ministers in the Department of Social Welfare took the trouble to ensure people who worked in countries outside the European Union would get credit for accumulated pension entitlements. That arrangement is of great benefit to Irish workers working abroad and to people coming home to work or to enjoy their pensions in Ireland and who, but for the existence of this arrangement, could not have done so. We want to see fair play for individuals and to ensure that by providing for exemptions we will not disadvantage people who, of necessity, move from one jurisdiction to another. It appears from what the Minister said the technical details have not been worked out and it will be necessary to inquire further into them. I note also that in the amendment it is stated: "Regulations may exclude...", not "Regulations shall exclude...".

Our first interest should be to ensure that workers who work in different jurisdictions get full credit for pensions to which they built up entitlement while working in another jurisdiction. I would like the Minister to elaborate on the situations that might arise and give us an assurance that the workers who benefit from the pensions will not be disadvantaged.

I too welcome this amendment. My concern is that nobody should incur a loss in moving from one jurisdiction to another and any loss should be recouped in a short time. I welcome the existence of an arrangement between the two countries. It is satisfying for people who have to work overseas that they can come and go and their pensions are secure.

I agree with the Deputies on the preservation of benefits. The purpose of the exercise is to ensure that people who have contributed to a scheme will not lose out as a result of the enactment in either jurisdiction of legislation that causes a conflict for people involved in the delivery of pension schemes. Concern was expressed by pension practitioners in Ireland and the UK about the application of such laws in either jurisdiction. That is the reason these amendments were introduced. It would be virtually impossible to anticipate all possible scenarios with absolute certainty but, given the concern expressed by pension practitioners, it was thought necessary and desirable to introduce this legislation. I agree with the Deputies opposite who rightly pointed out the necessity to protect and preserve the rights and entitlements of subscribers, and we are doing that in this legislation. If agreement is reached, the measure will be implemented by way of regulations in each jurisdiction. Those regulations will be in concert with each other to facilitate the protection of subscribers in both jurisdictions.

Amendment agreed to.

I move amendment No. 2:

In page 5, line 9, after "1981" to insert ", AND THE PENSIONS ACT, 1990".

Amendment agreed to.

I move amendment No. 3:

In page 5, lines 14 and 15, to delete "VIII and IX" and substitute "VIII, IX and X".

Amendment agreed to.

I move amendment No. 4:

In page 6, between lines 13 and 14, to insert the following:

"4. — The Minister shall consider the possibility of increasing the personal rates of benefit of widows and widowers over age 66, over the course of three years, to the level of the personal rate of old age contributory pension, and place a report on this matter on the table of Dáil Éireann within three months.".

There are many widows and widowers over 66 who, even though they are in the old age category, are not entitled to old age contributory pension. The maximum pension they will receive from next June is £71.10 whereas the personal rate for old age contributory pension will be £78. A substantial number of widows and a small number of widowers and invalidity pensioners are in this category. Will the Minister examine this matter, take all the elements into consideration and place on the table of the House within three months a report outlining the parameters on which future policy may be debated? It is not possible to put down an amendment stating that we should do this because it would involve a charge on the Exchequer — that is the rule of the House — but the facts should be noted and consideration given to whether that should be done. I believe strongly that it should. I am aware it cannot be done in one fell swoop in one budget, but it is reasonable to expect it would be done over a period of, say, three years.

It is interesting that there are now fewer widows at a young age because, fortunately, men are surviving a little longer — with further improvements in medicine I hope they will live even longer. There is less demand therefore on widow's pension in the under 66 bracket, although there is still a demand on window's pension for those over 66. On the other hand, the steps being taken to ensure women get pensions in their own right will facilitate pensions for those over 66. Since that is the direction we are going, why not give those widows the support they very badly need? A widow who reaches 66 years still has to maintain a household, to deal with all the problems associated with old age and be capable of meeting the financial needs. She should therefore receive the same rate as a person on old age contributory pension since she is an old age pensioner and is entitled to money from the social insurance fund, which is cash rich to such an extent that the Minister is stealing from it £133 million. Why not assist beneficiaries by giving them that support? That raises a wider question about the fund, but the problem is that widows in that position do not have sufficient contributions in their own right. This matter should be addressed without delay.

I hope it is possible to place on the table of the House a report on this matter, as proposed in the amendment. This is simply a request for information to enable proper discussion of an issue that affects a substantial number of people who need our support. The other group that comes to mind includes people on invalidity pension who reach 66 years and do not have suitable qualifications for old age contributory pension. Those people, who by medical definition have a serious problem and are rigorously assessed, should receive the same rate as those on old age contributory pension when they reach 66 years.

Widows, widowers and invalidity pensioners are included in this category and it is time we gave due consideration to putting their position right. Since there is no money involved — it would simply involve putting a report on the table of the House within three months, and I know the Department would be capable of doing that — I ask the Minister to consider this matter. The report on child benefit is a classical example of what the Department can do to aid policy formulation and development. This would be a good precedent because if committees of the House are to be relevant and discussion is to be worthwhile, reports of that kind should be a feature of consideration of policy. I hope the Minister will agree to the amendment.

The Deputy is dealing with one of my favourite subjects, but since this is Report Stage I do not have time to discuss it at length. The Minister and I are anxious to improve the position of widows over 66 years of age, but we have gone as far as possible this year. We should not anticipate what will happen in the 1998 budget, which will be introduced in 1997.

When one partner dies, with the exception of the food bill, the outlay of the household remains the same. It can be traumatic for an elderly widow to run a household on roughly half the income to which she was accustomed. Widows and widowers under 66 years of age do not qualify for many of the ancillary benefits available to persons over 66 years of age. While the Deputy made a valid case, he was somewhat selective because there is a large section of people for whom we would love to do more. It was not possible last year or this year to resolve all the problems in this area, but we will continue to make progress. When we were in Opposition we highlighted many of the problems faced by people on social welfare. We must operate within the current budget and next year's budget will be determined by Estimates compiled over the next few months.

In keeping with the commitments in Partnership 2000, the Minister's priority is to bring all rates up to the main rate recommended by the Commission on Social Welfare. Deputy Woods requested that a report be laid before the House. We are already conforming to the recommendations of a report and have surpassed its targets in many areas. In 1997 the cost of increasing the rates provided for in this Bill will be almost £83 million and more than £148 million in a full year. We are making significant progress in meeting the commitment to which I referred. Most social insurance payments are now at or well above the main rate recommended by the Commission on Social Welfare. Old age and retirement pensions are now 113 per cent of the rate recommended by the commission, while unemployment and disability benefits are being increased from 95 per cent to 98 per cent of the main rate. Similarly, all long-term social assistance payments are being increased from 95 per cent to 98 per cent while short-term unemployment assistance and supplementary welfare allowance are being increased from 92 per cent to 98 per cent. The extent of our achievements in this area is illustrated by the fact that the cost of increasing all rates to the CSW main rate when we came into office was £150 million, but following this year's increases it will have reduced to under £60 million. Considerable progress has been made in that area. It is our intention to eventually eliminate the difficulties and poverty traps that have developed over many years.

To bring all rates up to the main rate recommended by the CSW additional resources will have to be allocated to those payments currently below the main rate. This is the approach the Minister adopted this year. Providing additional increases to payments already above the CSW rate would inevitably mean those in greatest need would have to wait longer before their payments reached the rate recommended by the commission.

The flat rate increase of £3 provided this year in all personal rates represents a much more balanced approach in that it provides an increase in real terms to all recipients. Widows and widowers on contributory pensions received an increase of 4.4 per cent and those on non-contributory pensions received an increase of 4.7 per cent. At the same time significant progress has been made towards bringing all payments up to the CSW rate.

Deputy Woods also referred to the difficulties faced by people on invalidity pension when they reach the qualifying age for old age pension. The same rate applies to both. This highlights the progress made in recent years to bring all payments up to a similar level while adhering to the recommendations of the Commission on Social Welfare. To a large extent we have succeeded in treating all people equally.

It is regrettable the Minister of State is not prepared to accept the amendment. If we are to have openness, accountability and informed debate in advance of budgets or Estimates the reports to which I referred must become a feature of the system. If the House is to be involved in debates on these matters, we must know the facts. We can no longer play hide and seek with figures and information. The information should be consolidated in a comprehensive manner and related to particular issues and groups of people. While I accept information can be drawn from various reports, we must focus on groups of people with particular problems. The Minister of State referred to the rates proposed by the Commission on Social Welfare and said the Government has gone as far as possible this year. While I welcome the progress made this year, many problems remain to be resolved and the social welfare fund will record a deficit of £133 million. By reducing the fund the Minister is weakening his position and that of his successors to get resources for necessary improvements in the future.

The Minister of State said we should not anticipate next year's budget. To prioritise matters, the facts must be established well in advance of the budget. No less an authority than the Minister for Finance said we should talk to him before the budget. Some people were even invited to a dinner before the last budget, but that is a separate matter. He has also invited people to talk to him more generally before the budget. There seems to be a conflict between the Minister for Social Welfare and the Minister for Finance on whether we should discuss or anticipate matters before the budget. It is not very desirable or democratic for such discussions to be held only with the select few. It is much better to put matters openly on the table of the House.

The Minister of State also said I was being selective in picking out widows over the age of 66 years. I tried to explain to him that there is a special problem there which will have to be addressed. I spelled out that not only are those people widows, they are also older people. The only reason they do not receive the same rate of payment as the old age contributory pension is that they do not have that entitlement in their own right. We must move away from that and give women entitlements in their own right, especially where they already have derived entitlements and are due credits in other areas. Fortunately, that system has begun to operate.

The Minister of State feels he has done enough this year and that widows have done very well. I cannot agree with him entirely because over the three years a widow will receive——

I did not say that. On a point of order, that is a deliberate misquotation. I never used that expression and I resent it being used in that fashion.

The Minister of State pointed out that he reckoned he had done well for——

I did not. We have done reasonably well.

An Leas-Cheann Comhairle

Let us proceed without interruption. A point of order has been made.

I will readily accept the Minister of State has not done well for these people.

The Deputy should not put words in anybody's mouth.

I know the Minister of State has not done very well for them.

We have done much better than the Deputy did.

The reality is that over the three years a widow will have received an increase in the personal rate of £2.20 per week per annum. That is nothing to shout about. We discussed it on Committee Stage and I did not intend to raise it again but the Minister of State has brought it up. When the Minister of State talks about the £3, he very conveniently side steps or forgets to mention that if the widow happens to have children the increase is less. For example, a widow with five children will get an increase of 1.9 per cent. A widow on a contributory pension with three children will get an increase of 2.5 per cent. The Minister of State is being quite selective in talking only about the personal rates in this regard. Many widows have families and the personal rate is only part of the money they will receive.

Widows over the age of 66 years will receive £71 per week from next June, which is not a princely sum. We must close the gap between the amounts received by widows, widowers and invalidity pensioners and that received by old age contributory pensioners. I intend to press the amendment.

Amendment put and declared lost.

I move amendment No. 5:

In page 6, between lines 13 and 14, to insert the following:

"4.—In the case where a person who is in receipt of a Social Welfare benefit or assistance payment, and either that person or an adult dependant of that person dies, the Minister shall consider the implications of continuing the current payment in full for a period of six months during the first year of bereavement, and he shall place a report on this matter on the table of Dáil Éireann within three months.".

Under the present system when a dependant of an adult beneficiary dies the beneficiary receives the full payment for six weeks. That was introduced to help people, particularly widows, to get over the trauma, sense of loss and difficulty in dealing with the problems which arise following a bereavement. The six-week period gave the Department an opportunity to establish entitlement to a long-term contributory pension. That is a very caring and considerate measure which is particularly welcome at such a traumatic time.

It is important to understand the tremendous sense of loss, hurt, loneliness and lack of support which occurs after a bereavement. It is a huge wrench and a period of great difficulty. It is a time when people find it very difficult to cope. The Department has grant aided many studies of the difficulties which arise in such situations. In my experience, the sense of trauma lasts for about a year but it is obviously much more difficult in the earlier months.

I am asking the Minister of State to follow up the interim report of the Commission on the Family which recommended special support for bereaved people and recognition of the need to introduce a bereavement allowance. That issue was frequently highlighted in the reports the commission received from around the country. That report set out some principles, the results of the surveys conducted around the country and the important issues, one of which was how to handle bereavement.

In addition to the loss, loneliness, hurt, sense of isolation and the need for support felt during a bereavement, there is also a need for financial support. Under the previous amendment we discussed the types of financial losses incurred by the bereaved. For example, from June onwards the old age contributory pension personal rate will be £78 with a dependant rate of £51, giving a total of £129 per week plus the fuel allowance and so on. The household income of a widowed dependant will be reduced from £129 to £71.10, which is a very large reduction of £57.90. If a non-contributory old age pensioner is involved, the figure drops to £67.50, which is an even greater fall.

Given the severe loss of income involved, there is a need for a period of adjustment and recovery. While the provision of a period of six weeks, which has been in place for many years, is beneficial, we have reached a stage in our economic growth, levels of income and buoyant income contributions to the social insurance fund that it would not be difficult to allow for a six month period of recovery.

Given the Minister of State may take the view that this provision cannot be made immediately and I am prevented from moving a motion which would involve a cost, I am obliged to move this amendment requesting the Minister to place a report before the House within three months to ensure the matter will be considered. That is plenty of time in which to produce a comprehensive report.

The amendment is sensible. The Deputy depicted cases of trauma which arise from the income gap created when a spouse dies. The survivor is suddenly obliged to run the household on an income approaching only half of that provided up until then. In cases where both spouses have separate old age pension books a surviving spouse is not entitled to the six week payment. Some years ago, I brought such a case to the attention of the Minister of State's Department. The matter must be rectified.

With regard to amendment No. 4, I said short-term unemployment assistance and supplementary welfare allowance are being increased in the current year from 92 per cent to 98 per cent of the main rate. I should have said from 92 per cent to 95 per cent and I apologise for that.

I note the case made by the Deputies regarding amendment No. 5. It is similar to the case made in respect of amendment No. 4. However, it is well recognised that the trauma experienced by a surviving partner is significant and arises at a time when two people in the household have become accustomed to working to a fixed budget which is almost double what the remaining partner must survive on in the future.

Nevertheless, while there is a five weeks payment, made for a specific laudable purpose, I do not accept that the trauma is any less in financial terms after a period of six months or even after a period of 12 months. We should recognise that the problem continues and it is not just the personal loss associated with the death or the loss of a partner. This point was made to me when I addressed the National Association of Widows in Ireland on this matter some time ago. The association is in the best position to assess the situation because its members deal with it on a daily basis and at first hand. Given this, we must look at increasing the basic rate as opposed to dealing with the problem on an ad hoc basis or attempting to alleviate it for a short period, such as by extending the period from five weeks to six months, or even from six months to 12 months.

While recognising the case made by the Opposition, the right way to address the problem is as I have suggested. Present arrangements provide for the continuation of payment to a recipient of social welfare benefits or his or her adult dependant for a period of six weeks. The purpose of these payments is to ensure the family has an income pending the surviving spouse making and processing a claim for widow's or widower's pension where this arises, and also to avoid a sudden reduction in income at a distressing time for the person concerned. They are also designed to relieve people of the need to make a claim for a payment in their own right at such a difficult time.

While the Deputies opposite have referred to the importance of these arrangements, which we also recognise, it is more important and of greater benefit to people to increase the basic rates of payment, thereby providing an ongoing improvement of a permanent nature for the family. That is fundamental to the debate. While there is nothing wrong with the interim arrangements suggested in the amendment, they are only interim. The manner and method by which we are proceeding is better. There is no benefit in assessing the situation, placing a report before the House and suggesting that matters be improved next year. We must address the situation head on and this will be done when the Estimates are reviewed.

From my knowledge of dealing with individual cases, there are two categories to be considered. The person surviving the death of a partner faces huge trauma, whether he or she is over or under 66 years of age. That is why some measures have been taken over the years, such as the extension of payments for the six week period, to attempt to alleviate the financial hurt and the person's trauma. However, the solution to this problem does not simply lie in postponing the financial impact to a period further down the road in the hope it will go away. It does not go away, indeed, in the case of persons over the age of 66 the problem can be accentuated because they can be in worse circumstances six months or a year after the original loss.

Likewise the trauma suffered by a widow under the age of 66 following bereavement does not lessen after six months, a year or two or three years. In countless such cases widows have had to survive on substantially less income. Notwithstanding family loss, they have had to cope with economic problems. I know of widows who have had to cope with economic problems for 20, 30 or 40 years. As the financial problem involved is ongoing, a basic requirement is to deal with it in the most satisfactory fashion by addressing the issue of the basic rates of payments to ensure that in the event of a tragedy the survivor will be catered for in financial terms in so far as that is possible. We cannot compensate for their personal loss.

I am disappointed the Minister of State does not agree with my proposal to present a report on this matter to the Dáil. I am also disappointed with his approach to the matter. He said the main requirement is to address the issue of the basic rates. They will remain an issue. While the 1986 report of the Commission on Social Welfare is a yardstick, a new yardstick based on the adequacy of current payments must be used. The Minister of State agrees there is a period for which it is beneficial to make an extra payment and, hence, he is very much in favour of the six week payment after bereavement. He does not consider there is any point in postponing the decrease in benefit, but I believe there is. While the six week payment is beneficial, it is not sufficient in financial terms to enable people cope with their bereavement.

The Minister confirmed what I said earlier and know to be true, that the six week payment was initially introduced because of the difficulty of ensuring payments were made in that period following bereavement. With computerisation it is now much easier to issue payments on time. In the past people suffered a great deal financially because of delays in issuing a book to the recipient which resulted in the need to pay supplementary welfare benefit. The introduction of the six week payment eased the trauma suffered by those concerned over that period. However, it is necessary to recognise that a substantial financial need arises from a bereavement. As the people concerned suffer a financial loss at that time, it is important to consider extending the six week payment. My amendment proposes extending it by six months, but if, on analysis, the Minister considers extending it by three months that would be beneficial too. All the evidence supports its extension. If the Minister of State took the time to read the report of the Commission on the Family, he would note it strongly highlights the need for the provision of finance and counselling over that period following bereavement.

I am trying to look forward, I want to get out of the current time warp of being tied into the recommendations of the 1986 report of the Commission on Social Welfare and accepting that is all that is at issue. That process has been ongoing for a number of years. As the Minister of State said, when the Government came into office some of the payments were more than 100 per cent of those recommended in the report and others are close to it. Rather than waiting until the recommended level of payments is achieved, we should plan how to address issues that are considered important. Addressing them is a matter of will. The Minister of State knows a Government can find £100 million, £200 million or whatever depending on its will at a time. In recent times substantial moneys were found and that matter is regularly boasted about inside and outside the House.

The payment of benefits following a bereavement is an important issue. It is necessary to provide resources to address the issues that affect the people concerned. Bereavement is a real issue for widows, widowers and others affected. We have shown some consideration for them in the provision of a six week payment following bereavement, but we must show greater consideration. We must acknowledge those affected are special and must be given greater attention and assistance at the time of their bereavement. We should focus on the issue of bereavement to ensure it is on the table when considering the next budget and set of Estimates. In that way we will advance by tackling problems experienced by bereaved people.

The financial problems associated with bereavement were highlighted by a recent report prepared by the widows' association with the assistance of a grant from the Department of Social Welfare. It has done excellent work in highlighting the trauma and financial difficulties experienced following bereavement. We know that bereavement is an exceptionally difficult period and we should do more to help those affected by it. We should prepare a report on that matter and lay it on the table of the Dáil to enable us consider it from the perspective of the forthcoming budget and the next set of Estimates. If we did that, we would advance the position. When Ministers consider what the priorities should be at the next budget, they will have the necessary information, as will members of the relevant select committee and other Members of the House, to make the correct decisions and to provide the type of care and support the Members would like to provide for those affected by bereavement, taking account of the quantification and costing of the payment of benefit for different periods. Having examined the figures, they could take rational and reasonable steps to address the problems while showing we recognise people face special problems following bereavement and want to help them and show care and compassion. We could do that as well as addressing the issue of the basic rates of payments.

Debate adjourned.
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