I do not wish to infer that all our business is not of the utmost importance and significance but we have today, as the first item on our agenda, one of special importance, that is the draft report on the Proposed Directive on the Progressive Implementation of Equal Treatment for Men and Women Workers in Matters of Social Security. I am sure you readily appreciate, from the contents of the draft report, that this is a matter of far-reaching significance and fundamental importance in so far as the future of our social welfare legislation is concerned and, indeed, has very important financial implications also. We have two amendments in the name of Senator Robinson, which are of significance and are directed to important aspects of the draft report. I take it that all members have read the draft report and are familiar with the issues that are involved. Perhaps I could mention one aspect of it, first of all, that is that some members, because of the importance of the matter dealt with in this draft report and, indeed, the proposed Directive, felt that it would have been desirable to have the Minister for Social Welfare or his Parliamentary Secretary present at our meeting. I do not know if members wish to proceed with a discussion of the draft report or if they would like to say something on that matter first. Perhaps it would be better if we had a look through the draft report as laid before us and later on then we could advert to the question of whether or not we would want to ask either the Minister or the Parliamentary Secretary to come to talk to us about it.
Equal Treatment for Men and Women Workers in Matters of Social Security.
I think the first important items in the draft report are on page 2, where it sets out the phased timetable of implementation. You see that certain measures are proposed within two years, further measures within three years and the final measures within four years. These measures are set out in detail in the draft report.
We now move on to page 3, section 3, which deals with the implications in Ireland. They are set out in paragraphs (a) to (f), inclusive. Members might like to come back to other aspects but, perhaps, the first thing we should talk about is the financial implications. At the top of page 6 the draft report states:
The Joint Committee is informed that in the first stage of the implementation of the proposed Directive the additional state expenditure required would be about £81/2 million a year. In the second stage about a further £23 million a year might be required if both husband and wife would be entitled to claim for the same dependants. The increase in the women's social welfare contributions would yield about £1.1 million to the Social Insurance and Occupational Injuries Funds and £94,000 to the Redundancy Fund.
That last point refers to the fact that an essential part of the elimination of discrimination would be that social welfare contributions would be the same for men and women. If that were implemented, it would bring in £1.1 million extra into the Social Welfare funds in general. The significant point to keep in mind at this stage is that this question of husband and wife being entitled to claim for the same dependants could cost £23 million a year in our circumstances.
The draft report says:
The Joint Committee is doubtful if the arrangements to be implemented during the second stage as regards payments for dependants meet this criterion.
It goes on to indicate what the Committee thinks should be excluded from the operation of the Directive insofar as our country is concerned.
There are a number of reasons why that could be justified. One is that it is felt it meets the dictates of equality by giving the same benefits and that these dependant allowances are, in fact, supplementary payments, and that it should be left to the discretion of each Member State to make its own rules about them. I should like to point out that Senator Robinson disagrees with that interpretation. Her first amendment expresses her basic disagreement with the draft report.
Senator Robinson's amendment states:
In page 7 to delete the final sentence of the second paragraph and substitute the following:
"In the Committee's view Member States should also be entitled to provide in national law that allowances for the same dependants cannot be claimed by more than one claimant."
In other words, Senator Robinson feels that the matter should still be dealt with in the Directive but that Member States should be able to provide in national laws that the same dependants cannot be claimed for by more than one claimant.
Could I explain?
Certainly.
It is very important that the question of the allowances for dependants comes within the ambit of the Directive so that it is governed by the principle of equality or the principle of no discrimination on the basis of sex. When the draft Directive is adopted it should be open to each Member State to provide in its national laws that there is not a double claim in relation to dependants but it must so provide in a way that ensures that the principle of equality, the principle of no discrimination on the basis of sex applies. I have a very substantial fear that, if we recommend the exclusion of the question of allowances for dependants from the Directive, we would not guarantee that under our own law and approach that there would be no discrimination on the basis of sex. That is not the position under our present Social Welfare code. I have no reason to believe it would be the position if we left it out of the ambit of the Directive.
I put down this amendment because I feel that we should certainly concede that it would be a problem if, say, both husband and wife could each claim for the same dependent child. The country could not afford a double claim of that sort, but we should be able, within the scope of the principle of equality, the principle of eliminating discrimination on the basis of sex, to regulate the grounds on which one or other parent could claim for a dependant. Therefore, I would prefer that the question of dependants' allowances still be included in the draft Directive as it is at present. Accordingly, I move amendment No. 1:
In page 7 to delete the final sentence of the second paragraph and substitute the following:
"In the Committee's view Member States should also be entitled to provide in national laws that allowances for the same dependants cannot be claimed for by more than one claimant."
The difference between what Senator Robinson proposes and what is in the draft report is quite clear. If the husband and wife are both entitled to claim for the same dependants, then the cost to this country could be an extra £23 million. The draft report suggests that this question of dependants' allowances be excluded from the Directive altogether. Senator Robinson's amendment proposes that dependants' allowances be retained within the scope of the Directive but provision should be made whereby individual Member States could ensure that the same dependants could not be claimed for by both husband and wife.
I support Senator Robinson's amendment. It would be unwise for the Committee at this stage to support excluding the question of dependants' allowances from the Directive. It would be a negative move on the part of the Committee if we were to recommend that course. After all the Joint Committee have noted that it is proposed that national rules can deal with the acquisition of rights to benefit by virtue of the insurance status or contribution record of a spouse. It would be in the spirit of the general European social insurance situation that only one claim would be allowed.
The amendment covers this.
It would appear from the draft Directive as it stands that it would be possible for both parents to claim benefit for a dependant. In Ireland we have a tradition whereby a husband could classify his wife and children as dependants. The opportunity for a wife to make a comparable claim for her own children has been denied even in the history of our children's allowances. Senator Robinson's amendment is a progressive and rational one. I do not think there should be any disagreement in the Committee in relation to it.
On the face of it I agree with Senator Robinson's amendment. It seems to be a commonsense approach. It is not denying any justice. However, I should like to know the circumstances in which two parents would be claiming for the same children. I am not considering fraud on the part of one of them.
If a husband and wife were, as we hope they will be, absolutely equal in the eyes of the Social Welfare code, both contributing the same amount and so on, in circumstances where one would claim benefit, attendant on which benefit would be the dependants' allowances, then they could both claim the main benefit and the supplementary benefit. In fact, both would be claiming for the same children because they are equal.
We are saying that there does not appear to be anything in the draft Directive which would prevent both a husband and a wife being paid for the same dependants every time either had a claim for benefit. The amendment proposes that allowances for the same dependants cannot be claimed by more than one claimant.
There is a subtle difference between the draft report and the amendment; I am not totally wedded to the draft report. The draft report proposes that these dependant allowances should be excluded from the ambit of the Directive altogether. Senator Robinson accepts that in our circumstances we could not, for some time at any rate, foresee both parents being allowed to claim for the same dependants but she does not want this question of dependants' allowances excluded from the Directive. She wants to meet the situation by allowing individual Member States to decide at national level that two people cannot claim at the same time for the same dependants.
There is another aspect here that is important and this is where I would support Senator Robinson's proposal. If we did not provide for exclusion of double payments of dependants' allowances, I could see a tendency arising at national level in all countries whereby dependants' allowances would be kept at a very low level. There would have to be a more realistic approach if there was one dependant's allowance claim. I believe that if both parents in certain circumstances could claim dependants' allowances there would be an overall tendency for an unrealistically low dependants' allowance.
Both the draft report as it stands and the amendment envisage refusal to pay benefits twice for the same dependants. The only difference is that the draft report suggests that these allowances should be excluded from the Directive altogether. The general feeling is in favour of the amendment so I suggest we make the amendment.
One might say, as you said, Mr. Chairman, that there might be certain implications in this in relation to the inter-relationship between the social welfare departments of Member States. We know this is giving rise to much difficulty and that delays have taken place so there might be some point in the Department being consulted on this. They might know the background of the actual machinery.
We may not all be in agreement with the next matter. We are now moving on to the question of pension schemes in the private sector.
I move amendment No. 2:
In page 8 to delete the final sentence of the first paragraph and substitute the following:
"Nevertheless, the Joint Committee believes that the principle of equality of treatment requires that there be no differentiation on the grounds of sex in the rates of pensions payable under such schemes and it considers that this should be achieved without any impairment of benefits at present enjoyed under the schemes."
Most private pension schemes operate in such a way that when a person retires a lump sum is provided which buys an annuity for him. The Directive envisages that the terms on which a man or woman would retire would be equal. You might think that that could be achieved by providing the same lump sum for a man or a woman but in fact the actuaries point out that the lump sum provided in the case of the woman, because of actuarial reasons, would buy an annuity which would be less than that which the same lump sum would buy for a man. We considered that it would be enough to provide the lump sum for both and that the fact that the amount of the annuity it purchased was less in the case of the woman would not be discriminatory and need not come within the ambit of the Directive. The reason behind that in the draft report is as follows: at the moment only about 31 per cent of our population is included in private pension schemes. In other words, somewhere around 70 per cent of the persons employed in the private sector do not have pension schemes and annuities. Every effort should be made to increase the sector of the population coverd by private pension schemes and annuities. If the provision that large lump sums be provided for women on retirement in order to meet actuarial assessments and to secure annuities equal to men were applied it might be a disincentive to employers. At this stage, anyway, in the development of these schemes we should not have any disincentive. We should be encouraging private enterprise employers to introduce annuities and pension schemes.
Senator Robinson sees the force of that argument but feels that, as the amendment states, the principle of equality of treatment requires that there is no differentiation on the grounds of sex in the rates of pensions payable under such schemes and considers that this should be achieved without any impairment of benefits at present enjoyed under the schemes. We should all get back to this vexatious actuarial consideration—that the same lump sum provided at the same time for a man and a woman does not purchase the same level of annuity and can it be regarded as non-discriminatory if the same lump sum is provided even though the level of annuity that it buys in the case of a woman is less or should we insist that the level of annuity be the same in both cases? I think I have put this issue reasonably fairly.
Can one do anything about that in actual terms?
Does this arise from the fact that women live longer?
Yes.
Their expectation of life is greater and, therefore, it takes a bigger sum to give them the same pension.
It is very important from the point of view of this Directive and operating within its full scope that we endorse the same approach as the Commission have adopted, that is, that actuarial considerations do not apply here to the equality of treatment required, and that there should be no differentiation on grounds of sex in the rates of pensions payable. I could really turn against you the point you were making about the fact that the voluntary schemes in Ireland at the moment cover only about 31 per cent of all workers. It is essential in expanding the pension schemes, with which I would agree, that they be expanded on the basis of equality, and that rather than continue under the present system of taking into account actuarial considerations we adopt the principle in the draft Directive and expand the pensions in the private sector without any impairment of benefits enjoyed under these schemes. This is a much more positive approach. It is a necessary approach if we really mean what we say about equality. I would agree with the Commission that there is a hidden discrimination in using actuarial considerations in this way. We must take the principle of equality seriously and be prepared to implement it across the board and not create any differentiation in pension rates.
That might be very laudable but it might amount to the employers having to make a bigger subvention to the fund to make up the difference than would otherwise be the case. This might be a disincentive to those employers with a high female employment quota. I agree with what Senator Robinson is saying but I am talking about the actual practical applications. We are dealing with the private sector and it is a voluntary matter for the private sector to take up this type of scheme. I would be somewhat careful on this. It is hard enough to encourage firms to introduce these private schemes without implementing something that would prove a hindrance.
I would be afraid that this might have a hidden effect which would very much militate against the employment of women, that an employer faced with the fact that he would have to pay more to pension off a woman, would tend to employ men. Such a situation might hinder very much the employment of women in certain types of jobs. I am not saying that as in any way being against the amendment but as one who has seen the law having an entirely different effect from that for which it was intended.
I support Senator Robinson's amendment. It is a positive amendment designed to ensure the ending of discrimination as such. The definition of discrimination is also very difficult to encompass. For example, an employer who employs a woman must evidently face the fact that, because of maternity leave, for instance, he may have to bear additional costs and commitments. Likewise, it has to be pointed out that while 31 per cent of all workers are covered in the private sector in occupational pensions schemes only a fraction of these are women. It is fair to say that of this 31 per cent, only about 10 per cent are women and that would be putting the figure at its highest. In any event, less than five per cent of women workers are actually covered by voluntary private occupational pensions schemes.
There is no doubt in my mind from experience of those schemes, as one who was involved in the introduction of many of them in the late fifties and in the sixties, that many of them are entirely inadequate or are funadmentally discriminatory against women.
That will change in the future but we must accept the fact that because of the actuarial bias and the consideration of costings which evidently have to be taken into account in relation to any pension scheme, employers must accept that they will have to pay a percentage more for the funding of such schemes in relation to women.
Would that not be a disincentive? The women would be the losers.
Employers throughout the country are only paying 60 per cent in gross wages anyway to women workers and this will decline in future but we have to have what we call "equality of entitlement to parity of benefit". That is the fundamental issue. The cost thereof subsequently is an entirely different matter.
The point I am making is that this is a voluntary matter. You have to induce employers to introduce these schemes. Are we not, if we support this amendment, working against the best interests of getting these schemes brought in?
We may be working on a different premise here because it would be my view—and I am sure the view of some members of this Committee—that the voluntary aspect would be ruled out in terms of entitlement to an occupational pension and that we would have a national occupational pensions' scheme in operation by the mid-eighties. It would take at least five years to get it properly under way. I should hope that by then everybody would be covered either by a voluntary private scheme, which would be at least as good as the minimum of a State scheme, or by a State scheme. I have no doubt at the moment that the State scheme we have for retirement pensions, old age pensions and so on, is fantastically superior to anything which any private scheme can offer and which is run at an administrative cost—there is nothing propagandistic about this—of 5 per cent when, in fact, private schemes cost 30 per cent.
I would take that with a pinch of salt.
I should prefer if we did not go into these delightfully ideological matters.
I have read, as I am sure a lot of the Deputies and Senators have read, the report on this question of the costings of these schemes. I have grave doubts about the validity of some of the findings of that report.
In our efforts to be ideologically just I am a little nervous that we might be actually doing an injustice to the employment of women. Quite genuinely I am not against their employment. Industry should be able to bear the extra cost involved. The fact that women live longer is just as much a fact of life of a woman as the other negative things that affect her employment, such as pregnancies and so on. I would like to be sure that, in our efforts to do good, we would not do something that would be giving the employment of unfortunate women a knock that we never intended.
I do not think it is a question of employing women rather than men. In future that sort of consideration will disappear, will become minimal, if equality is introduced on the scale and comprehensiveness that these Directives seek. It is only a question of whether in the interim—and I am not sure that I share Deputy Desmond's optimism about a comprehensive national pension scheme—we would in this regard be doing anything to inhibit the introduction of pension schemes in the private sector.
I see the choice as between the inadequacy of the legal print and the force one gives to the situation which one brings about. In the end I have to come down in favour of the case put by Senator Robinson and Deputy Desmond.
If I could just meet the point about whether this would result in some sort of discrimination against women: that is met to a very large extent by the other Directive on no discrimination in relation to promotion and opportunities.
This is a voluntary thing. It is in addition to what people are entitled to by way of the existing State schemes. It is an extra. We should do our best to encourage people to provide that extra. I appreciate the good intention behind this amendment but I fear that it would have the wrong effect. That, also, is what Deputy Dockrell and the Chairman are worried about. I endorse fully the principles behind this but, in fact, it is going to have a very damaging effect on these schemes. Therefore, we would be well advised not to include it at this stage.
It would be more damaging if we exclude the private occupational pensions schemes from the Directive, if we allow the present position to continue whereby the vast majority of people involved in these schemes were men, where in general women are not involved in them or if they were it would be at a different rate. Setting down basic norms is a very basic principle in our society. Either we are serious about it and have to pay the cost of it or else we think of actuarial technicalities and do not implement it. The balance comes down very strongly in favour of maintaining the principle of equality, of ensuring that the maintenance of that principle does not impair the benefits at present enjoyed under the schemes. It would be unfair if it were to result in a diminution of pension rates in existing schemes. That should be covered by our report. As we expand the pension schemes we should also ensure that more women are covered by the voluntary schemes until there is a full State pension scheme. I agree with Deputy Desmond that we are in a transitional period and that there are difficulties because of that but I do not think they weigh against the establishment of the basic norm of equality of treatment.
There is a danger here. There may be an extended transition period. I am inclined to the Chairman's views on this.
There will be a long transition.
If that is so, it is very important that every encouragement should be given to private industries. I think it is a bad mark to see that there is only about 30 per cent of the workforce covered by private pension schemes. I know there are certain types of employment in which there is a fairly large female content, secretaries and so on, and these people have been the sufferers to date in relation to social welfare and pensions. We should do all be can to encourage a move towards bringing these people into those schemes. I feel the amendment would have the opposite effect.
If you pursue that argument, it would be more practical to say that we must be more practical to say that we must be more competitive; therefore, we must keep wages down and employ cheap labour. That is exactly the same argument.
No. What I am saying is that you have got to realise that you are dealing with the insurance world. You cannot bully insurance companies into doing things by bullying employers. It is the insurance companies you have to get at and not the employers.
It is desirable that we should have in our minds as legislators certain basic procedures for the operation of so-called private voluntary schemes. A substantial proportion of employers make deductions for many of these schemes from the salaries of their employees. Some of them are non-contributory and, of course, others are contributory. It is our job to ensure, now that these schemes are emerging—and many of them have been substantially improved over five years—that they have not got inbuilt rigidities and inbuilt discriminatory factors operating within them.
The report was drafted on the basis of having the issue discussed—having the whole thing threshed out. We have now discussed it long enough.
Senator Robinson referred to this as being an actuarial technicality. I think it goes much deeper. If it were only that, I would not be afraid of it. I have not said that I am actually against it but that I would be afraid that it might discriminate against women. That is deeper than an actuarial technicality. I would be satisfied if we could recommend some way in which it could be monitored or closely watched. If we could put in something to ensure that if there was any chance of that situation arising, then steps could be taken to bring relief.
If you look at it very realistically the draft Directive is asking for this. We would have to go against the draft Directive to adopt the draft report, as it stands. In so far as the draft Directive has weight it is against the draft report. I wonder if in practical terms the difference would be all that significant, whether the difference in the lump sum which will have to be put down to buy the annuity will be of such significance as to affect the issue.
I certainly support the suggestion that there should be some monitoring of the implementation to ensure that there is not any attempt to have discrimination. It is largely covered by the Directive on deliberate discrimination involved in the different sectors.
I think the monitoring suggestion is a sensible one.
The question of monitoring is not a matter for this draft report but a matter for somebody else. I think we would have to have a greater preponderance of argument in this Committee in favour of changing the draft Directive than we have. If we are going to suggest a change to the draft Directive, we will have to have very overwhelming support in this Committee for that view. We obviously have not got that consensus against the proposal in the draft Directive and, therefore, I think we should go along with it even though doubts have been expressed.
And accept the amendment?
In the back of my mind always in these cases is the consideration that in our wish and, perhaps, our anxiety to eliminate discrimination we do not thereby cause some other form of indirect discrimination which one cannot foresee, not discrimination in principle but something which one does to eliminate discrimination in principle and which, in practice, works out to the detriment of those concerned in the end.
Dare I mention what is called peaceful picketing? I understand that to be very often the exact opposite.
I think we had it in a slight way in the case of night working by women. We had that sort of situation there. We must take it in this case, however, that the people who drew up the draft Directive have gone into all these things and I think that unless we have a very strong view here against the draft Directive we should accept the amendment.
Is the amendment being put?
By accepting the amendment we are endorsing the draft Directive as it stands.
I have reservations and I want to be reported accordingly.
You can express them very briefly. Can we make the amendment and agree the draft report?
Amendment agreed to, Deputy Esmonde dissenting.