One of the two Bills which I have brought to the Seanad, the Social Welfare Bill, 1951, falls into two main divisions. The first of these divisions — which comprises Parts I to IV inclusive — is devoted to two main purposes: (1) to secure the long-awaited co-ordination of the various existing schemes of social insurance, thereby providing an effective framework for their more rational development from time to time in accordance with contemporary needs and the nation's resources; (2) to provide the increased and uniform contributory benefits during sickness, unemployment and widowhood which have been my aim since the establishment of the Department in 1947.
The second division of the Bill, Part V, is concerned with the implementation of the Government's decision, announced by the Minister for Finance in his Budget statement, to increase the rates of pensions for the aged, the blind, the non-contributory widows and orphans; to modify substantially the means test in favour of applicants for such pensions; and to improve the rates of unemployment assistance, at the same time introducing radical changes in the structure of the scheme, all of which are advantageous to recipients and designed to apply to unemployment assistance the general pattern of the other social welfare schemes.
The second Bill — which deals with children's allowances — implements the Government's undertaking, also announced by the Minister for Finance in his Budget speech, to raise the level of these allowances and to make provision for a payment in respect of the second child in every family. At present, as the House is aware, allowances are payable only in respect of the third child and all subsequent children.
The increased benefits, pensions and allowances provided for in these two Bills are to be paid as from dates varying from the 25th of the present month to the first few days of July, the respective days being chosen for administrative convenience, and all of them being the earliest by which it was possible — with the generous cooperation of both Houses — to get the legislation enacted.
Before mentioning the cost of these measures, I may be permitted a brief digression. It is not without some pride and satisfaction that I would remind Senators that when Fianna Fáil first took office in 1932 the Exchequer expenditure on all social welfare schemes amounted to £3,250,000 and that by the time we left office in 1948 the Exchequer contribution had advanced by £8,000,000 to £11,250,000. During that period, the unemployment assistance scheme was introduced, for the first time, in 1933; both contributory and non-contributory schemes for widows' and orphans' pensions were added to the social services in 1935; wet-time insurance— a service not to be found elsewhere, as far as I am aware — was brought into operation in 1942; the scheme of children's allowances was established in 1944; several miscellaneous welfare schemes commenced during those years, such as free or cheap fuel for necessitous households and free or cheap footwear for needy schoolchildren; and many improvements were brought about, from time to time, in the scope and the standards of the benefits under the various services, old and new.
When Fianna Fáil resumed office in 1951 they found that the annual Exchequer expenditure on the social welfare schemes had been advanced during their absence by £1,500,000 to £12,750,000. My Act of last year, to increase old age and blind pensions and to relax the means test, added a further £750,000 to Exchequer costs and the two Bills now before you will advance the State's direct liability by £5,750,000 to £19,250,000 in the present financial year. In the coming financial year, throughout which the new schemes will be in full operation, the Exchequer will carry a burden estimated at £21,250,000. Of that vast annual total £16,500,000 is attributable to measures sponsored by Fianna Fáil Governments — £8,000,000 prior to their departure in 1948 and £8,500,000 since their return a year ago. It is our telling answer to critics who themselves merely maintained, over a term of ten years, services inherited from the British régime at an annual cost of £3,250,000, and, during three and a half years of Coalition Government, added only £1,500,000 to the State's contribution towards the needs of the less privileged sections of the community.
So much for the cost to the State of the Bills now before you. Under the Social Welfare Bill, however, workers within the scope of the contributory schemes will also contribute something towards their cost, as will also the workers' employers. The present combined contributions of employers and workers to existing insurance schemes total about £4.1 million annually. There will be slight increases in the rates of contribution but not until October next, although the improved benefits will be made available, at the expense of the Exchequer, as from the beginning of next month.
The higher contributions from employers and workers should bring up the revenue from that source by about £700,000 to £4.8 million per annum. Of that £700,000, only about £250,000 or £300,000 will fall on the workers. Adding this revenue to the State subvention of £21,250,000, the total expenditure on the insurance and assistance schemes affected by the present Bills will amount to £26,000,000 in the coming financial year. If I were to add, also, the cost of miscellaneous social welfare schemes administered by or under the supervision of my Department, amounting to a further £1,000,000 per annum, it will be seen that £27,000,000 per annum will be the grand total in the first full year (next year) in which the new legislation will be in operation.
Before proceeding to the main proposals in the Bills before you, I should like to say a little about the numbers of persons who will financially benefit by them. The 160,000 old age and blind pensioners who gained by the Act of last year will again benefit by the further increases now proposed. The further relaxation of the means test, for which provision is made as from the commencement of next year, will bring in about 4,000 new old age pensioners. Health insurance beneficiaries average about 33,500 each week, and they will benefit not only by the increase of the basic benefit to 24/- weekly as from the beginning of next month, but those who have dependents will, for the first time, benefit by the receipt of an additional 12/- weekly in respect of a wife and 7/- weekly in respect of each of two children. The estimated number of claimants to unemployment benefit at the beginning of next month, when the new and better rates will commence to operate, is approximately 21,500.
When the Employment Period Orders are not in operation (i.e., as from October), the number of recipients who will benefit by more generous rates of assistance will be about 36,500, and the number to benefit right away (i.e., from the 25th of this month) will be about 23,500. There are almost 17,000 widows under the contributory scheme who will benefit as from the beginning of July. over 11,000 of whom have no children, the balance having one or more than one child. Under the non-contributory scheme, increased benefits will reach about 27,800 widows, of whom about 4,500 have one or more than one child. The number of orphans who will benefit exceeds 1,000. The introduction, as from next month, of a children's allowance of 11/- monthly for the second child will bring in almost 62,500 children, thus benefiting that number of families which at present do not receive any allowance. Over 147,000 families will then receive increases of the allowances which are already being drawn in respect of over 490,000 children.
Under the Children's Allowances Bill alone, therefore, over 500,000 children, distributed over 210,000 families, will benefit. These figures do not lend themselves to totting, as, of course, there are some persons who benefit simultaneously under more than one scheme. Without making any allowance for that consideration, however, it may be taken that approximately 800,000 individual benefits will be favourably affected by the measures now before you, and that is without including in the reckoning the number of wives and children who will attract additional allowances to the benefits payable to the sick and unemployed, or the children who will add to the pensions of widows.
There is no need to pause for long over the new rates of benefit provided by the Social Welfare Bill as these are clearly set out in its Third Schedule. They are, in the case of sickness and unemployment, 24/- a week for a man or a woman, except a certain class of married woman, 12/- a week extra being payable for a dependent wife, or a woman having the care of dependent children, and 7/- a week for each of two children. Thus, a man with a dependent wife and two children will henceforth receive 50/- weekly as compared with the present 35/- weekly during unemployment and as compared with the present 22/6 weekly during sickness, the present sickness benefit being reducible to 15/- after six months. Similarly, the contributory widow will receive 24/- weekly and 7/- weekly for each of two children. Orphans' allowance will be 10/- weekly, without the existing distinctions, for widows' as well as orphans' pensions, between employment in urban and rural areas and between agricultural and non-agricultural employment. Those discriminations are being removed by the Bill.
In regard to the new rate of 24/- a week for widows, I should say that under existing legislation there are three different rates—12/6, 14/- and 16/- a week. Since by far the greatest number of beneficiaries under the Widows' and Orphans' Pensions Acts are widows without children, my proposal represents a very considerable improvement as compared with the present position. I find that at the end of last December, of 16,600 recipients of contributory pensions, over 11,300, or almost 68 per cent., were widows without children who were in receipt of either 12/6, 14/- or 16/- weekly. Of the balance — composed of widows with children — about 3,800, or 23 per cent., were in receipt of pensions of various amounts from 18/- to 28/- a week.
The increases in these cases will, in some instances, be as much as 16/- a week and, in all cases, not less than 8/6 a week. A further 1,200, or 7 per cent., will also receive increases. Thus, of the total widow beneficiaries, the proposal means an increase in pension for about 98 per cent.
There is a marriage benefit of £10 for female employed contributors. Maternity benefit comprises the existing lump sum maternity grant of £2, payable on the husband's insurance or on the wife's assurance or on both qualifications, and a maternity allowance of 24/- weekly for 12 weeks, payable on the woman's own insurance. Treatment benefits——hospital, dental, optical and the rest — will, for some years to come, continue as heretofore, subject to a maximum expenditure of £500,000 which the Exchequer intends to provide without charge on the insurance fund or on the contributions of workers and their employers.
I had hoped to produce a coordinated insurance scheme which would not involve any or much increase in the existing workers' and employers' contributions, and I think that I have come fairly close to achieving that aim. Take, first, the case of the ordinary male-employed contributor. He now pays 1/11 weekly, and his employer pays 2/-, i.e., 3/11 between them. I shall require 5d. extra from the man and 4d. extra from his employer. In other words, there is a one-sixth increase of contribution in exchange for participation in an insurance scheme so improved that expenditure on benefits under it will be more than double present benefit expenditure. In the case of the ordinary female-employed contributor, who at present pays 1/2 weekly, the Bill provides for a contribution of 1/4—i.e., an extra 2d. weekly. Her employer now pays 1/10, and there, too, an extra 2d. weekly is required.
I suggest to the House that these increases are as near to nothing, and as near to my promise not to add unavoidably to present levies on workers and employers, as any reasonable person could expect. They iron out certain long-standing disparities in the financial bases of our insurance schemes; they impose no heavy burden on industry or the worker; and, leaving out of consideration the £500,000 to be provided by the Exchequer for treatment benefits without any change on other contributors, they succeed in placing the insurance schemes, as a whole, on the basis of equal contributions of one-third from the State, the employers and the workers respectively.
I should say, however, that there is one other important departure from this principle of one-third division between State, employers and workers. I have naturally tried to keep down the number of special categories of workers because they create a corresponding range of contribution stamps of various denominations. There will be general agreement, however, that men working in agriculture should receive the same treatment during unemployment and sickness as their brethren in non-agricultural industry. The Social Welfare Bill assures that to them, but the decision to create equality of benefits presented me with considerable difficulty because, it would be impossible to expect the average farmer and the average farm worker each to pay 2/4 weekly when at present they pay only 10d. and 9d. respectively, as their weekly contributions for insurance purposes.
While making provision for full ordinary benefits for farm workers, I have provided for extremely low contributions from the farmer and agricultural worker, i.e., 1/3 weekly from each, which is only 5d. extra from the farmer and 6d. extra from the man. This has been done by imposing a heavier charge on the Exchequer in respect of this class, and it is, if you like, a further subsidisation of agriculture. Instead of contributing an equal one-third with employers and workers, the State has, in respect of this group, undertaken to contribute four-sixths as against the farmers' one-sixth and the male agricultural workers' one-sixth.
So much for the contributions, which are set out in the Second Schedule to the Bill. As to the scope of the insurance provisions of the Bill, I need only say that, in a country such as ours with so many smallholders constituting so large a part of our main industry, it is almost impossible to achieve comprehensiveness. No scheme-which does not include the self-employed within its scope can be regarded as comprehensive. After considerable deliberation, I came to the conclusion, embodied in the Bill, that there should be an insurability ceiling of remuneration at a rate not exceeding £600 yearly. This is an advance of £100 on the existing ceiling of £500, which I introduced in 1947 to replace the then existing limit of £250 per annum. There is power taken in the Bill to, in effect, exclude or partially exclude certain classes of workers, such as civil servants, officers of local authorities and so on, who already enjoy benefits comparable to those provided by the national insurance scheme.
Part V of the Bill deals with the non-contributory pensions schemes for widows, orphans, the aged and the blind. The provisions relating to widows and orphans follow the pattern of the contributory side of the scheme, and here, again, substantial improvement is being effected. The present rate of pension for a widow without children is 14/- a week in an urban area and 10/- a week in a rural area, as compared with 20/- a week, irrespective of area of residence, under-the Bill. In this instance, of the 27,000 beneficiaries about 22,000, or almost 82 per cent., are widows without children. These, together with a further 4,000, or 15 per cent. (that is, a total of 97 per cent.), will receive increases of 6/- or 10/- a week. Just under 99 per cent. of all beneficiaries will receive some increase in pension.
The means test for widows' non-contributory pensions is very considerably relaxed. Under present legislation a widow will obtain a maximum pension only if her means are less than 7/- a week, or £18 4s. a year. If her income is from personal exertions she receives an additional income exemption of 10/- a week. If she had children she is entitled to an additional exemption of 4/- a week for an only child or 8/- for two or more children. As from the 2nd January, 1953, under this Bill the £18 4s., together with the other exemptions applicable to the particular cases cited, will be replaced by a means scale under which the maximum pension will be payable if means do not exceed £52 10s. per annum, or just over 20/- a week.
The proposals relating to widows' non-contributory pensions contain another feature, namely, the very large measure of co-ordination which has been achieved between that scheme and old age and blind pensions. The relaxation of the means test has made it possible to apply practically identical rules for calculating means. These rules are contained in the Seventh Schedule.
I come next to that important portion of the Bill which relates to old age and blind pensions. Firstly, I ought perhaps to recapitulate briefly what was done last year for old age pensioners by the Social Welfare Act, 1951, which became law on the 17th July, 1951. That measure brought about an all-round increase in old age and blind pensions — increasing the maximum weekly rate from 17/6 to 20/- and providing for increases of 5/- and 2/6 down the scale. Five shilling and 7/6 pensions were increased to 10/-; 10/- and 12/6 pensions were increased to 15/-; and 15/- and 17/6 pensions were increased to 20/-. The raising of the upper means limit from £52 5s. to £65 5s. a year provided for a new class of pensioner at 5/-. Certain other concessions were given to the small farmer class, and to persons getting disability and similar pensions and charitable grants.
Provision is made in the Bill for a very generous further easing of the means test. The lower limit, which is at present £22 2s. 6d. a year (8/6 a week), for the receipt of full old age or blind pension of 21/6 a week, is being raised to £52 10s. (£1 a week). A person who has £1 a week income from other sources (when all deductions to which he may be entitled have been made) will now be able to qualify for the maximum 21/6 old age or blind pension, instead of 10/- as heretofore. The upper limit is being raised from £65 5s. (25/- a week) to £104 15s. (£2 a week), and persons with income of over 25/- and up to £2 a week, as duly calculated under the Acts, will qualify as from the 2nd January, 1953, for a 11/6 or a 6/6 pension. All existing old age and blind pensioners at the 15/- and 10/- rates will have their pensions increased to 21/6 and those at the 5/- rate will go up to 16/6, as from the appointed day. Some 14,000 existing pensioners will benefit by these increases.
The Bill provides for the pension officer reviewing every existing pension in his area and adjusting it to the appropriate new weekly rate, to take effect as from the appointed day. It will not then be necessary to follow the usual procedure of submitting questions for adjustment of pensions to local old age pensions committees, and this reviewing procedure will effect the adjusting to the new rates more expeditiously than would be otherwise possible.
The Bill also amends the residence test by reducing the aggregate period of necessary residence in the State from 30 years to 15 years and by providing for five years' continuous residence up to the date of claim instead of the existing requisite of 16 years' residence after age 50 years in the case of a non-citizen. The period of residence after age 50 in the case of a citizen is reduced from six years to five years. The amendment is meant to bring the Acts more into line with modern thought in the matter of discrimination against aliens in countries subscribing to the views of the Council of Europe. The residence provision in the case of blind persons is being similarly amended.
The Seventh Schedule provides a codification of the existing provisions of the Old Age Pensions Acts (and the Widows' and Orphans' Pensions Acts) as regards the calculation of means, with some adjustments and concessions brought in, to the advantage of the claimants. For example, the exclusion of home assistance in the reckoning of means is now given legal effect. Any sums received under any other of the social welfare codes will no longer be reckoned as means. Under the Old Age Pensions Acts, as at present in force, only grants from defined charitable organisations, up to a yearly maximum of £52. 5s., are excluded from a person's means. The new rules provide that a voluntary grant from any source up to the same maximum will be excluded in the calculation of means.
Chapter V of Part VI of the Bill deals with unemployment assistance. The Minister for Finance, in his Budget speech, announced the decision of the Government to increase unemployment assistance when the food subsidies are reduced in July. As a number of amendments in the Unemployment Assistance Acts were needed to give effect to this decision, I decided to use the opportunity not only to implement the Government's decision, but also to bring some sort of order into the present unwieldy unemployment assistance code.
At present there are four different unemployment assistance areas—(1) county boroughs and the borough of Dún Laoghaire, (2) urban areas with over 7,000 population, (3) urban areas with 7,000 population or less and (4) all other areas — with a different rate of unemployment assistance applicable in each area. These four rates of unemployment assistance are again divided up into numerous categories depending on the number of dependents, etc., of the claimant, so that, in all, there are at present in operation 128 different rates of unemployment assistance. My proposals in Chapter V will reduce the number of areas to two by combining (1) with (2) and (3) with (4) and will reduce the number of different rates from 128 to 12—a considerable simplification. The reduction in the number of rates from 128 to 12 has been achieved by restricting payments in respect of dependency to one adult dependent and to the first two children in the family as in the insurance part of this Bill.
The new rates of unemployment assistance set out in the schedule in Section 97 will mean substantial increases for most recipients. These increases vary and will run to 16/- a week in urban areas and to 13/- a week elsewhere. In a very small proportion of cases there may be no increases, but when the increases in children's allowances are taken into consideration, there will be a reduction in only one type of case, i.e., the single man or widower over 40 with six dependents will have a reduction of 6d. a week. There were only two such persons in January last.
The present unemployment assistance means limit is (1) £52 per annum in a county borough or the borough of Dún Laoghaire, and (2) £39 elsewhere. The limit is now being raised to £98 16s. in the case of (1) and to £72 16s. in the case of (2) (Section 94).
It is estimated that the amendments to the unemployment assistance code will cost close on £400,000 in a full year and close on £300,000 in the present financial year.
That is all I want to say about the Bill at the moment. Of course, I shall be very glad to answer any questions which may be raised in the course of the debate.