Dáil Éireann debate -
Wednesday, 15 Dec 1999

Vol. 512 No. 7

Written Answers. - Social Welfare Benefits.

Richard Bruton

Question:

196 Mr. R. Bruton asked the Minister for Social, Community and Family Affairs if the introduction of the minimum wage from April 2000 will cause him to review the adequacy of the social welfare payments of those of working age to prevent recipients such as widows, lone parents, the unemployed and the ill falling behind with their basic payments of only £77.50 compared to the minimum wage of £171.60; and the value of these rates in other EU member states. [27255/99]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

The future direction of social welfare rates generally is under continuing review within my Department and all relevant research from the ESRI, Combat Poverty Agency and others such as the national pensions policy initiative will be taken into account in this regard. As I have previously indicated to the House, this must also take account of the wider economic and financial implications as well as complementary developments in other areas of Government policy such as a national minimum wage and the employment action plan. This issue is also addressed by the NESC in its strategy document Opportunities, Challenges and Capacities for Choice which will be an important input into the discussions on a possible successor to Partnership 2000. No doubt, the outcome of these discussions will also make a significant contribution to considerations on social welfare policy and income adequacy in general.

I would not accept that a direct comparison between the minimum wage and the personal rate of social welfare payments is valid. While it is true that, from next May, the personal rates of a number of social welfare weekly rates of payment will be £77.50, this would be considerably higher where the person has dependants. For example, a person with a dependent spouse or partner and two children would receive £150.90 a week, in addition to child benefit.

As regards social security rates in other member states of the EU, the information, in so far as it is readily available, is set out in the following table. Figures generally refer to the situation at 1 January 1999. I would point out that some care needs to be taken with these figures, as systems vary significantly from one country to another, for example, in relation to time limits on benefits, different coverage under social insurance and social assistance, and availability of family benefits.

	Sickness	Survivors	Lone Parents	Unemployed
Belgium	60% of earnings	80% of retirement pension, subject to minimum of 8,286 per year	Maximum 124 per month	Daily allowance of 17 to 33
Denmark	Linked to hourly wage with celing of 370 p.w.	Lump sum payable related to deceased's pension	No specific scheme	82%-90% of reference earnings. Ceiling 370 per week
Germany	70% of normal salary, subject to limit of 90% of net salary	25%-60% of deceased's pension	Supplement of 40% to 60% depending on number of children, with standard rate of assistance	60%-67% of net earnings.
	Sickness	Survivors	Lone Parents	Unemployed
Greece	Maximum of 11-21 daily depending on duration and dependants	50% of deceased's pension	No specific scheme	Maximum – 70% of reference earnings; minimum – 13 daily
Spain	60% of earnings for first 3 weeks, 75% thereafter	45% of deceased's calculated earnings	No specific scheme	60%-70% of earnings, subject to maximum of 220% of minimum wage and minimum of 75% of minimum wage
France	50%-68.66% earnings with daily ceiling of up to 50	54% of deceased's pension	491 per month plus 164 for each child	57.4 of daily wage, subject to minimum of 9.26 per day
Italy	40%-66.66% earnings	60% of deceased's pension – 70% where there are children	No specific scheme	30%-80% of average earnings up to maximum of 884 per month
Luxembourg	100% of earnings	Lump sum subject to duration of insurance and contributions	No. specific scheme	80% of earnings
Netherlands	70% of daily earnings, subject ot maximum of 99	830-1,015 monthly depending on number of children	No specific scheme	Earnings related – 70% of wages, up to maximum of 141 daily and minimum of 70 of minimum wage
Austria	50%-60% of gross earnings subject to monthly limit of 3,096	40%-60% of deceased's pension linked to survivor's earnings	No specific scheme	56% daily net income up to maximum of 34 and minimum of 4.25
Portugal	65%-70% of average daily earnings	60% of deceased's pension	No specific scheme	65% of reference wage, subject ot maximum of 3 times the minimum wage and minimum of 100% of minimum wage
Finland	12-71 per day, plus 25%-70% of daily earnings	195-442 per month depending on income. Means-tested after 6 months where there are no children	No specific scheme	20 per day, plus earnings related benefit
Sweden	80%-85% of insurable income, depending on duration	Rate of pension determined by amount of contributions	No specific scheme	80% of earnings, up to maximum of 61 per day and minimum of 25 per day
U.K.	69 to 87 p.w. depending on duration and age	Weekly pension of up to 91 depending of age of widow and where there are children. Otherwise lump sum of 1,406 paid.	No specific scheme	56-71 per week

Richard Bruton

Question:

197 Mr. R. Bruton asked the Minister for Social, Community and Family Affairs if he will change free schemes in order that all widows age 60 and over can qualify either automatically or if their income does not exceed the contributory old age pension by more than £30. [27256/99]

David Stanton

Question:

198 Mr. Stanton asked the Minister for Social, Community and Family Affairs the supports available to widowed people over 60 years of age not qualifying for the old age pension and whose spouses did not qualify for the old age pension; the plans, if any, he has to improve supports available to these people; the number of such people availing of the widow's or widower's pension; and if he will make a statement on the matter. [27316/99]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

It is proposed to take Questions Nos. 197 and 198 together.

At end November 1999, 80,874 people aged 60 and over were in receipt of the widow(er)'s contributory pension while a further 16,775 in the same age cohort were in receipt of the widow(er)'s non-contributory pension.

The widow(er)'s pension schemes which are not age related recognise the particular financial difficulties that arise for people following the death of a spouse. A widowed person may qualify for the widow(er)'s contributory pension under more flexible qualification criteria than apply to the old age contributory pension, namely, payment is based on either the claimant's own or late spouse's social insurance record. In addition, a person may use the full record or the record over the previous three to five years to satisfy the yearly average condition.

Where a person fails to qualify for a contributory-based widow(er)'s pension, it is open to him/her to apply for either of two means-tested social welfare payments – namely, the one-par ent family payment if they have child dependants or the widow(er)'s non – contributory pension where there are no child dependants.

As I indicated in my recent budget speech, and following the review of An Action Programme for the Millennium, this Government is committed to extending a pension rate of £100 per week to all social welfare pensions for older people. In this regard, from May 2000, the weekly rate of payment to widow(er)'s contributory pensioners for those aged 66 or over will increase to £89.10 while the maximum personal rate of the widow(er)'s non-contributory pension will be £85.50 per week, as an increase of £7 per week. For those under 66 years of age, the budget has provided for a weekly increase of £4 – or in percentage terms between 5.2% to 5.6% – on the maximum personal rates of payment with proportionate increases for those on reduced rates. A person, under 66 years of age, on the maximum rate of the widow(er)'s contributory pension will, from May next, receive £81.10 per week while a person, again under age 66, on the maximum rate of the widow(er)'s non-contributory pension will receive £77.50.

In addition, I announced major improvements in the way capital will now be assessed for all means-tested pensions whereby the first £10,000 will be disregarded completely, the next £10,000 will be assessed at £1 per £1,000, the subsequent £10,000 at £2 per £1,000 and the balance at £4 per £1,000 thereafter. This measure, effective from October 2000, will substantially benefit many people in preserving their pension payments.

The death of a partner is always a very difficult time for everyone. Last February, I introduced an enhanced bereavement grant of £500 and, as I announced in my budget speech, I have now decided to provide an additional once-off grant for newly widowed people with dependent children. This is intended to give some breathing space in the immediate aftermath of a bereavement while they begin the process of adapting to their new situation.

The grant will be a once-off payment of £1,000 payable in respect of deaths which occur on or after the 1 December 1999. The grant will be payable to widows and widowers with dependent children who qualify for a widow(er)'s contributory pension or a one-parent family payment or a bereavement grant payable on the death of their spouse. It is estimated that the payment will benefit over 1,500 widows and widowers each year at a cost of £1.5 million. Payments will commence as early as possible in the new year when the administrative and operational arrangements for the scheme are in place.

The free schemes are generally available to people living in the State, aged 66 years or over, who are in receipt of a social welfare type payment and to certain people with disabilities under the age of 66 who are in receipt of certain welfare type payments.

Following the recent budget, the free schemes will be extended to all persons aged over 75 regardless of income and household composition. In addition, carers in receipt of carer's allowance and carers of people in receipt of prescribed relatives and constant attendance allowance, will also qualify for all free schemes. These improvements will come into effect from October 2000.

Widows or widowers aged from 60 to 65 whose late spouses had been in receipt of the free schemes retain that entitlement. This is to ensure that households do not suffer a loss of entitlements following the death of a spouse.

The extension of the free schemes to all widows/ers would have significant cost implications. It would also increase demands for the extension of the free schemes to all persons over the age of 60. This proposal could only be considered in a budgetary context with due regard being paid to the availability of resources and the need to set priorities among the various other competing demands being made on all areas of the social welfare system.

A fundamental review of the free schemes is being carried out to assess whether the objectives of these schemes are being achieved in the most efficient and effective manner. This includes an examination of the qualifying conditions for the schemes, the target group and the scope for alternative policy arrangements.

This review which is already at an advanced stage, is being carried out by an official of my Department on secondment, as a visiting research fellow at the Policy Institute, Trinity College, Dublin. It is expected that the research conducted will be published by the Policy Institute in the "Trinity Studies in Public Policy" series in March 2000.