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Seanad Éireann debate -
Wednesday, 10 Dec 1958

Vol. 50 No. 3

Social Welfare (Amendment) Bill, 1958—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

The Bill I am now submitting to the Seanad has as its main purpose an increase in the remuneration limit for insurability under the Social Welfare Acts of persons employed otherwise than by way of manual labour. As Senators are aware, this remuneration limit, which has always been a feature of our social insurance schemes, has been increased from time to time. The present limit of £600 was fixed by the Social Welfare Act, 1952. Because of increases in wages and salaries over the past few years many persons have ceased to be insurable due to their remuneration having exceeded the £600 limit, and thus are no longer eligible for the benefits to which they were formerly entitled and for which they may have paid contributions over a long period. It is considered that the raising of the remuneration limit to £800 would restore insurance cover to such persons, and thus bring back within the scope of the scheme the classes to which the scheme was originally intended to apply.

I should perhaps explain that the Bill makes no change in the position of manual workers. Such workers are insurable irrespective of their rate of remuneration.

Persons whose employment ceased to be insurable by reason of their remuneration having exceeded the £600 limit, and who again become insurable on the coming into operation of this Act, would not, because of the gap in their contribution records, be able to satisfy the contribution conditions for benefit for a substantial period. It is considered that some concession should be made in these cases, as the deficiency in contributions could not be remedied by any action the insured persons could themselves take. Subsection (1) of Section 3 of the Bill provides for the crediting of contributions in respect of a period sufficiently long to enable such persons, if they already have 26 contributions paid, to satisfy the contributions conditions for benefit on again becoming insurable.

Sub-section (2) of Section 3 provides for the crediting of contributions to persons becoming eligible for a new benefit. This is a general provision not specifically related to the main purpose of the Bill. As Senators will have seen, from the explanatory memorandum circulated with the Bill, the need for this provision arises from the fact that persons who are insurable for limited benefits only could, by regulations, be made eligible for a new benefit. Their previous contributions would not count for purposes of the new benefit, and it is proposed to credit contributions to them on the same lines as contributions are credited to new entrants to insurance generally.

This is another Bill made necessary by the fall in the value of money. It has some very interesting points about it. A person with £800 a year is now eligible for health benefits and for certain social welfare benefits. It would appear to me that under the Health and Mental Treatment Bill, a person may now have £1,100 a year and be eligible for benefits. I am not objecting to that, but it would appear that we will very soon be in the position when a person may be liable for payment of surtax on £1,500 a year and at the same time, eligible for social welfare benefits, which to me would seem to be the reductio ad absurdum of our whole treatment of the position arising from the fall in the value of money. Some people are getting benefit out of it; others are getting none.

I should like to deal with the position with regard to Dublin City, about which I happen to know something. It appears to me that if money is to be spent, it might be spent perhaps in at least as desirable a way as this Bill contemplates. In Dublin, for example, there are more than 250 out-patient clinics. In these clinics, before the Health Act came into operation at all, a great number of patients came in, usually at the recommendation of a general practitioner. They were treated very often by specialists and asked no questions about their means, but treated well.

May I point out to the House that Senator Hayes is dealing, not with the Bill before the House, but with another Bill on the Order Paper—the Health and Mental Treatment Bill? This is the Social Welfare Bill.

Are we not taking the two together?

Very good; I am sorry.

This Bill is a long overdue amendment of the income limit for insurance. I know that the limit of £600, which was fixed, I think, in 1952, is long out of date and I know the trade unions interested in the problem have been pressing for a considerable time for an amendment. I am sorry that action was not taken to amend that income limit long ago and sorry also that when the Minister has come to amend it, he stops at £800.

I should prefer not to see any limit at all, but if there has to be a limit, certainly it should not be £800, because with the ever-increasing cost of living, especially in the past 12 months or so, the £800 limit will be very quickly out of date and the trade unions will have to press again for a further amendment.

I have read the Bill and I have read the explanatory memorandum. I know I am rather stupid but I still find it very hard to understand exactly what is happening. I am particularly concerned about bringing back into benefit those who since 1952 have gone out of benefit, because of exceeding the £600 per annum income limit. As I understand it, the Bill will give these people who are now being brought back into benefit 104 credits. These are not sufficient to bring them into immediate benefit.

Provided they have 26 previous contributions.

If they had 26 previous contributions.

At any time.

At any time. They are immediately brought back into benefit again?

That satisfactorily disposes of that question. Another aspect of it is that this amending Bill could very well bring people into benefit on a salary scale of £775. They are brought back into benefit and they could get a normal increment this year or the year after which would bring them over £800. They would then go outside the limit again. I am wondering if these people have the right to maintain their position for widows' and orphans' benefits by paying voluntary contributions.

As I understand it, they must have five years' membership before they can opt for voluntary contributions.

Three years.

Three years? My information is not right then. Supposing they are now brought back, supposing they were insured previously and are now brought in under £800 for the next two years. They then go over £800 and they have not the right to continue on as voluntary contributors. I think in large measure we may be taking contributions from them under false pretences. We are not giving them the same rights as other contributors have of maintaining their position with voluntary contributions for widows' and orphans' pensions.

I should like the Parliamentary Secretary to look at this aspect. I should not imagine there would be many involved, but it does seem that provision might be made for such people to opt to maintain benefits for widows' and orphans' pensions.

I should like to support what the last speaker has been saying. I approve of this Bill and I am glad to see it coming in. I do not think, however, that it goes far enough, and, in fact, I do not think I am misinterpreting Senator Murphy when I say I agree with him in feeling that it should go all the way. So far as the scheme in practice is concerned it would be better if the scheme were to cover the whole community and not apply a means test.

As the Parliamentary Secretary has told us, this is a Bill mainly to increase the remuneration limit. I notice it jumps from £600 to £800—a jump of 33? per cent.—since 1952, since it was first established. I wonder is there an implied suggestion there that in 1952 a remuneration of £600 a year is equivalent in 1958 to £800 a year. If that is the case, may we hope to see some kind of echo, as it were, in Government policy in relation to increased pensions and so on?

I should like to ask the Parliamentary Secretary, if he has figures to show us, or a reasonable estimate, as to how many people are affected by this change, how many people, including dependents, is it calculated would be brought in under the scheme by this change in the remuneration limit? I should also like to ask him if he has figures—I think the last Minister for Health had them at his disposal because he mentioned them in the form of a proportion when he was introducing the voluntary health insurance scheme legislation—what proportion of our community will this new arrangement bring in under the scheme, what proportion of our community will it cover, will it be four-fifths, five-sixths, seven-eighths or just what percentage or proportion, what fraction of the community will now be covered by our social welfare legislation? I have a feeling that the figure may not be very far from seven-eights. If so we may soon reach the position, I hope, where practically the whole community will be under this legislation.

I should like to ask the Parliamentary Secretary for figures on that, if he has them readily available. Arising out of that, and arising out of my suggestion that the proportion of the community which will now be covered by this will be a pretty big fraction, why do the Government still feel that they cannot go all the way? I want to advert to the fact that in establishing whether or not a particular patient qualifies for the scheme, whether he has £800 or £815 and whether, in fact, he qualifies, he is to be asked a lot of questions when he fills in his form applying for the benefit. I suggest that out of every 20 questions, about 12 relate to his means in one way or another, and consequently half the amount of form filling required under the social welfare scheme could be cut down if the means test, of which this Bill still remains a symbol, were to be abolished. In other words, it would be an enormous administrative simplification if we were to go all the way, and to bring in everybody into the scheme.

Another question I would ask is how will this affect landowners and farmers? As I understand it, it was not merely people with an income not exceeding £600 a year who were in under the scheme but also farmers whose valuation was not more than £50. It seems to me that the two categories came in under the scheme. I am prompted to wonder whether, by some dispensation, the cost of living has not gone up since 1952 for farmers, or why is it that no change in the valuation under which their land must fall in order to qualify under this scheme is contemplated? Why is there no change?

I should also like to ask whether an examination has been made of the manner in which the voluntary health insurance scheme will be affected by this increase. As I understand it, a pretty large section of people between the £600 and £800 a year level who might be regarded as the big market, as it were, for voluntary health insurance will now come in under the free or semi-free scheme. Therefore, I would ask the Parliamentary Secretary whether any representations have been made on behalf of those concerned that admission to the voluntary health insurance scheme, as a non-profit venture by the Government, or whether any expression of concern on their behalf has been put forward——

On a point of order, is the Senator not out of order in referring to another Bill which is not before the House?

An Leas-Chathaoirleach

The Senator will have to leave that to the Chair. The Chair is usually very wide awake when Senator Sheehy Skeffington is speaking.

I would put that question to the Parliamentary Secretary, if I may, as to how many potential subscribers to that scheme he thinks are lost by this Bill. A great number of potential subscribers cease to be potential subscribers if they are to be given it free and do not have to insure. I think that is germane to our discussion to-day. In other words, is the voluntary health insurance scheme jeopardised?

This is my last question. I am sorry to appear to inundate the Parliamentary Secretary with the questions, but this is the last one. Have the doctors been consulted? As I understand it, I may again be misinterpreting it, but, at the stroke of a pen, by this Bill, in fact, there will be a transfer of a large section of paying patients to free treatment or partially free treatment. I take it that, under the terms of previous legislation, the doctors have to comply. Therefore, I would like to ask if they have been asked their opinion. I do not think it unreasonable to ask that question. I think courtesy would demand that they be at least consulted. I would ask also whether any related suggestions have been made for increased rates of medical fee or remuneration in that regard.

This is a Bill which can best be discussed in Committee. There are a number of points which I want to make. First of all, a scheme of legislation which applies to so many people ought to be drafted in a way that is intelligible to people who want to know their position at any time in relation to benefits, contributions and the like. It is not at all clear from this Bill what is in fact being done. We know in a broad way that the income limit has been raised from £600 to £800 per annum; but, after that, when it comes to the question of how people will fit into the new situation, it is very difficult to find out what precisely their position is. For that reason, I think it might be better to deal on the Committee Stage with a number of the points I want to make.

Here is a particular point which I wish to draw to the attention of the Parliamentary Secretary. There are quite a number of people who were compulsorily insurable under the 1952 Act and who, with the increases in salaries arising either out of increases in the cost of living—getting increases in their salaries through increases in the cost of living—or because they are on a scale, exceeded the £600 per annum limit and therefore ceased to be compulsorily insurable. Under the Act, they were entitled to become voluntary contributors. They had one year within which to exercise the option to become voluntary contributors and I think in some kinds of cases that year may be extended to 18 months.

The unfortunate position of those people who did not exercise their option is that, had they known about the option which they might have exercised and had they known of the value of membership of the scheme as voluntary contributors, they would have exercised their option and become voluntary contributors. Unfortunately —and I do not blame the Department of Social Welfare for this—many of these people did not know of their right to exercise the option and consequently, if they were to die, their widows and orphans would not be entitled to contributory widows' and orphans' pensions.

I think the Parliamentary Secretary should consider what I am about to suggest to him in the context that social welfare insurance, on the scale that we now have it, was not appreciated as widely as it might have been; that people did not know the benefits they were entitled to, particularly in the matter of becoming voluntary contributors, as well as they might between 1952 and the present day. I am wondering whether the Parliamentary Secretary would consider allowing all those people who had the option to become voluntary contributors under the 1952 Act and who did not exercise their option to make that option now by way of some amendment to this Bill. In making that provision, it could be provided that these persons now opting to become voluntary contributors would have to pay back the contributions for which they would have been liable, if they had made the option at the time they should have made it.

As I understand the position, there are only about 1,500 voluntary contributors. I think I came across that figure somewhere in connection with the Report of the Advisory Committee on Voluntary Health Insurance. It struck me as an amazingly low figure —1,500 persons. I think it exemplifies the point I make that people were not aware of the right they had to become voluntary contributors and, certainly, if they were so aware, did not appreciate the benefits that would accrue to them through becoming voluntary contributors.

I would go this distance in order to make these people's widows and orphans entitled to a contributory pension. If the Minister thought that, by making these people voluntary contributors, he was also bringing them in under the Health Act, I would be prepared to agree that these people should not be entitled, because they are voluntary contributors, to the benefits under the Health Act, but that they should be entitled to become voluntary contributors under the Act for the purpose of contributory widows' and orphans' pensions. I do not see that there could be any difficulty administratively in making an amendment to this Bill to meet the position of these people.

Under the First Schedule to the Act, Part I, paragraph 3 (a), that is, the schedule which determines the employments that are compulsorily insurable, one of the employments is employment in the Civil Service of the Government. I do not know if the Parliamentary Secretary is aware of the situation there, but the Civil Service of the Government does not cover all the persons that are regarded as civil servants. For instance, the employees of the Houses of the Oireachtas are not civil servants of the Government. Neither would the employees of the court who would be under £600, or £800 as it will be under this Bill. Neither are civil servants of the Government.

I am quite certain that these people are being insured at present. I wonder what is the legality of the Minister for Social Welfare in requiring these people to be insured, when they are not liable to be insured under legislation as it stands? I am sure the Minister's Department is well aware of the situation which enables me to state that the people employed in the Civil Service of the Government do not embrace people of the kind I have mentioned. In view of that situation, would it not be proper, particularly if these categories are at present being insured under the heading of employment in the Civil Service of the Government, that the position ought to be rectified? It seems to me to be a case where there ought to be an amendment in order to bring the position into line with the decision of the Supreme Court, which decided the matter, and the more recent legislation, the Civil Service (Regulation) Act and the Civil Service (Commissioners) Act, which sets out and recognises the difference between employment in the Civil Service of the Government and the Civil Service of the State.

I have only one point to make and I should like the Parliamentary Secretary to give me an answer on it. Some years ago I came across the case of a man who had been 35 years in insurance and who then, because of an increase in salary, went over the limit. Shortly afterwards, the limit was extended and he was brought back again. During his whole 35 years, he never had a claim, but some short time after going back on insurance, he fell ill and died shortly afterwards, leaving a widow and two children.

When it came to claiming the widow's pension, I well remember the answer I got: that she was not eligible because he had not 156 stamps since his last entry into insurance. When it came to claiming the non-contributory pension for his widow, on account of her age and the ages of the children, she was ruled out. Can this sort of thing happen a man now? Having been in for 35 years, having been forced out by the law and having been brought back again by the law, just because he dies within a short time after being brought back into insurance, are his widow and children unable to get benefit? When I tried to alter the position before, I was unable to do anything about it.

The Parliamentary Secretary might tell us the position in regard to persons who have taken out voluntary health insurance policies, people who are in the £600 to £800 bracket, who have paid their premiums and committed themselves? Is there any provision that they do not lose?

In reply to Senator Colley, the case he instanced cannot happen now. Such a man is always in insurance.

Senator Sheehy Skeffington asked how many people would come under this Bill. Approximately 18,000. It might be information for him to know the number of insured people we had on 31st March, 1957. It was 719,063.

Senator O'Quigley dealt with the point about the lack of knowledge on the part of voluntary contributors. We have given every possible publicity to that. The only consolation I can give him is that his figure has gone up from 1,500 to over 2,000. I admit it is very small. The Bill was designed to induce the voluntary contributors to come along. They have not come along, but I certainly promise to give the matter all the publicity I can. I am afraid we could not go into this retrospectively. I am referring to voluntary contributors who neglected to benefit and did not avail of the period of a year or 18 months.

Senator Murphy asked about the position of a man or woman with between £600 and £800 under the Bill. They can become voluntary contributors when they go above £800 and they will qualify for the benefits, if they have the insurance he queried me about. The Senator will understand that, under the Bill, they get two years' credit. If they have 26 contributions in their insurance history, they get three years' credit. When they get an increment, they qualify for these benefits as voluntary contributors. Of course, if they have not a past insurance history, it is a horse of a different colour. It is hard to meet every difficulty on the road.

Senator Sheehy Skeffington talked about farmers and the cost of living. I am very much afraid he anticipated the Bill coming in. I am sure the Minister will deal with the points he raised.

I think the Seanad will agree that the Bill is not contentious. There may be criticism that we have not brought the salary scale up high enough. We have done what we consider is best. For that reason, we want the House to give all stages to-day as we want the Bill to become law on 1st January. If it does not become law then, there will be a six months' lapse period under the 1952 Act. We want to have certain publicity and have certain cards and credits marked up. A lot of things have to be done in the short period between this and the end of the calendar year.

Questions put and agreed to.

An Leas-Chathaoirleach

Committee Stage?

Next Wednesday.

Is there an objection to taking it now?

An Leas-Chathaoirleach

Is there a question of an amendment?

An Leas-Chathaoirleach

I presume all stages will be given next week?

An Leas-Chathaoirleach

Then there is agreement that all stages be given next week.

Subject to the proviso that a particular amendment is acceptable.

An Leas-Chathaoirleach

Anyway, the Committee Stage will be taken next Wednesday.

Committee Stage ordered for Wednesday, December 17th, 1958.
Business suspended at 6 p.m. and resumed at 7 p.m.
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