Written Answers. - Social Insurance.
Eamon Gilmore
Question:
40
Mr. Gilmore
asked the
Minister for Social, Community and Family Affairs
the level of the deficit in the social insurance fund for each of the past years from 1990 to 1997; and the level of the surpluses for 1998, 1999 and 2000 in this regard.
[15041/00]
Brian O'Shea
Question:
58
Mr. O'Shea
asked the
Minister for Social, Community and Family Affairs
the level of projected surpluses from 2001 to 2005 in the social insurance fund if Budget 2000 levels of spending were to increase with inflation.
[15042/00]
I propose to take Questions Nos. 40 and 58 together.
From 1953 until 1996, benefit and pension payments from the social insurance fund have exceeded contribution income. The balance has been met by the Exchequer.
The detailed figures for the deficit and surplus from 1990 to 2000 are in a table which I am arranging to have circulated in the Official Report. In summary, the figures from 1990 to 1996 show a deficit; the size of this has fluctuated over the time period, ranging in size from just over £41 million in 1994 to over £214 million in 1995. Since 1997, the fund has shown a surplus in each year, which has been gradually increasing from £6.6 million in 1997 to an estimated £275 million in 2000.
Regarding future projections, indicators are that the surplus will continue to increase in the short-term. It is estimated that the surplus will, in each year, range from £275 million in 2000 to about £1,250 million by 2005. These figures assume that benefits will increase only in line with inflation, and also take account of the increased contribution income from projected wage growth – no account is taken of future possible improvements in the social insurance system. Again, the detailed figures are in the tables which I am circulating.
As I have previously indicated, PRSI income is currently buoyant due to the increased numbers of persons in the workforce and the economic climate generally. The availability of social insurance fund resources has enabled me to widen the contingencies covered by the social insurance system. This year's Social Welfare Act provides for the introduction of a carer's benefit which will be paid, without a means test, to all workers who are required to take time out of the workforce in order to provide full time care and attention for incapacitated persons. This is an innovative enhancement of the social insurance system and will be of significant value to all workers who have to balance work responsibilities with their responsibilities to care for persons who are sick or incapacitated.
While the financial position of the fund is secure in the short-term, significant funding challenges lie ahead in the medium and long-term. These arise mainly from the increase in the numbers of older persons in society, the vast majority of whom will have an entitlement to a pension paid from the fund. The Government decision to set up a reserve fund to part pre-fund social welfare pensions in the long-term represents a significant commitment by the Exchequer towards ensuring that pensions will be paid in the future. The current social insurance fund surplus will play an important role in the financing of projected growth in social insurance expenditure in the medium term as well as improvements in the rate and range of benefits provided. I am fully committed to safeguarding the fund and to the enhancement of the social insurance system so that it continues to be a key component in the delivery of social protection in this country in the years ahead.
Table 1
Social Insurance Fund Deficit-Surplus from 1990 to 2000
|
Year
|
Deficit-Surplus£000
|
|
1990
|
81,379
|
|
1991
|
146,194
|
|
1992
|
154,813
|
|
1993
|
105,696
|
|
1994
|
41,078
|
|
1995
|
214,760
|
|
1996
|
99,902
|
|
1997
|
6,667
|
|
1998
|
54,099
|
|
1999
|
268,137 (Provisional)
|
|
2000
|
275,000 (Estimated)
|
Notes:(1)The 1990 figure was lower than might otherwise have been the case due to the dissolution of the redundancy and employers' insolvency fund.
(2)Equal treatment provisions increased the 1995 and 1996 deficits significantly.
Table 2
Social Insurance Fund Surplus (Estimated) 2000 – 2005
Surplus
|
Year
|
£m
|
|
2000
|
275
|
|
2001
|
395
|
|
2002
|
606
|
|
2003
|
815
|
|
2004
|
1,030
|
|
2005
|
1,250
|
Notes:(1)Income projections assume increases in earnings and employments.
(2)Expenditure projections assume benefits rise in line with inflation, and QAAs increase to 70% of personal rate.
