This Bill is necessary to implement the decisions of the Government announced by the Minister for Finance in his Budget Statement on 23rd April last to increase the rates of non-contributory old age, blind, widows' and orphans' pensions and unemployment assistance, to increase the rates of various social insurance benefits and pensions and to modify the means test for old age pensions in the case of veterans of the War of Independence. The Bill also includes a number of provisions designed to improve further the social insurance and assistance schemes, some of which are consequential on the decisions announced in the Budget Statement and others of which are the outcome of the continuing examination of existing provisions which is carried out as a normal part of the work of my Department.
Of necessity, the Bill consists mainly of amendments to existing Acts and there may be difficulty in some instances in following the amendments without the text of the Acts. The explanatory memorandum which was issued with the Bill has therefore been made as comprehensive and informative as possible so that it will be clear what each amendment really does where the text of the Bill itself is not self-explanatory. I trust that Senators will find it of assistance.
The Budget increases on the social assistance side, which it is proposed to bring into operation at the beginning of next month, will give an extra 7/6d a week to all existing non-contributory old age, blind, widow and orphan pensioners, making the maximum personal rate of old age and blind pension £3 5s a week and the maximum personal rate of widow's pension £3 3s 6d a week. An additional 2/6d a week will also be given in respect of each qualified child of a pensioner making the weekly rate 12/6d for each of the first two children and 7/6d for each subsequent child. These increases in the pension rates allow the scale of means and rates of pension to be extended in each case to bring in additional rates at the bottom of the scale and these will be payable to persons who cannot at present get pension because their means exceed the present limit. Also where a pensioner has qualified children, the means limit is raised in respect of each qualified child.
The rates of unemployment assistance are also being increased by 7/6d a week for the recipient himself, by a further 7/6d where there is an adult dependant and by an additional 2/6d for each qualified child. The maximum rate will then be £2 11s 6d for a single person and £4 17s 6d for a married couple resident in an urban area. It will be £2 5s 6d for a single person and £4 9s 6d for a married couple resident outside an urban area. These increases of unemployment assistance at the maximum will have the effect of automatically extending the means limit for qualification for assistance.
On the social insurance side the increased rates of benefit and pensions will come into operation at the beginning of January next. Recipients of disability benefit, unemployment benefit, maternity allowance, widow's (contributory) pension, orphan's (contributory) allowance and old age (contributory) pension will get an extra 7/6d a week. There will also be an additional 7/6d a week for an adult dependant and an extra 2/6d a week for each qualified child. The rates of unemployment and disability benefit will then be £3 5s a week for a single person and £5 17s 6d for a married couple. A widow without children will get £3 5s a week. In the case of old age (contributory) pension, a pensioner who is single will get £3 12s 6d while the rate for a married couple will be £6 12s 6d. The rates for children will be 15/6d for each of the first two and 10/6d for each subsequent child. Certain rates of unemployment benefit, which are payable after the first 156 days of benefit and are the same as the maximum rates of unemployment assistance payable in urban areas, are, however, being increased from the beginning of next month when the equivalent assistance rates are being increased.
An increase in the social insurance contributions payable by employers and employees is necessary to meet the extra expenditure on the increased rates of benefits and pensions. In recent years, the Exchequer has borne considerably more than one-third of the cost of the social insurance scheme. Accordingly, as forecast by the Minister for Finance in his Budget Statement, the increased contributions provided for in the Bill have been calculated so as to adjust the Exchequer's burden nearer to the traditional one-third. Where all insurance benefits are covered, it is proposed to increase the rates of contributions by 3/4d a week. Where only some of the benefits are covered, there will be lesser increases. The increase of 3/4d in the ordinary rate of men's contribution will be shared equally by the employer and employee and the total contribution will then be 21/4d a week. The existing contribution of 2/1d in respect of occupational injuries insurance must, of course, be added to this while the contribution of 1/- under the redundancy scheme will be added from January, 1969, under a further provision of the Bill. Voluntary contributions will also be increased, those covering only widow's pension by 6d, and those which also cover old age (contributory) pension by 1/2d. The explanatory memorandum contains a table showing the present and proposed rates of contribution exclusive of the contributions in respect of occupational injuries benefit and redundancy. On the basis of this year's estimates of expenditure plus the additional costs incurred by the provisions of the Bill, and taking account of the expected yield in a full year of the increases in contribution rates proposed, it is estimated that the Exchequer contribution will be close to one-third of the expenditure from the Social Insurance Fund.
There is provision in the Bill for some improvements in the occupational injuries benefit. The rates of unemployability supplement and of payments in respect of adult dependants and qualified children under that scheme are being increased from January next. These payments came into operation on 1st May, 1967, and were then equal to corresponding payments under the disability and unemployment benefit schemes but they were not increased when the latter were increased in January, 1968. The increases now proposed will restore the parity that originally existed. The annual cost of these improvements in the occupational injuries scheme will be about £75,000 but it will not be necessary to increase the present contribution of 2/1d to meet them.
The Bill provides a new benefit for old age pensioners, both contributory and non-contributory, and for widows aged 70 and over who are receiving contributory pensions. The benefit takes the form of an increase of pension of 45s a week in respect of a prescribed female relative where the pensioner is so incapacitated as to require full-time care and attention and is living alone or has no other adult living with him who is capable of looking after him. It will be payable where a prescribed female relative with a reasonably good employment record specifically gives up employment to look after the pensioner. It is my intention to prescribe a daughter under the regulations to be made, as a daughter is most likely to be concerned in such cases. There will, however, be power to prescribe other female relatives as satisfying the conditions for the payment, if experience of the working of the scheme shows that this would be warranted.
In his Budget Statement the Minister for Finance announced that, as a token of recognition to those who served in the War of Independence, Old IRA pensions and allowances would be disregarded completely in future when assessing means for old age pension purposes. Hitherto only the first £80 of these pensions and allowances was disregarded. I have arranged that the total disregard will also be extended to applicants for widows' pensions and unemployment assistance and provision is made accordingly in the Bill.
During the period from August next, when non-contributory pensions are increased, until January next, when contributory pensions are increased, cases will occur where the non-contributory pension would temporarily be more favourable than the corresponding contributory pension. There is a provision in the Bill to prevent a person switching from contributory pension to non-contributory pension merely to gain them a temporary advantage. It was never intended that the statutory provision which enables such switching to be done should operate in these circumstances and the departmental machinery is not geared to deal with short-term transfers from one pension to the other and back again. The right of a pensioner to switch pensions where the advantage would be permanent will not, however, be affected.
At present, redundancy contributions are collected by the Department of Labour by means of a separate stamp. As I mentioned earlier, the Bill will enable these contributions to be collected with social insurance contributions from the beginning of January next, by means of a single stamp and the necessary adjustments to be made between the Social Insurance Fund and the Redundancy Fund. This arrangement will, I believe, be welcomed by employers.
A new superannuation scheme is being introduced by the Minister for Health to cover nurses and other persons employed in voluntary hospitals and by organisations providing district nursing services such as those providing Jubilee and Lady Dudley nurses. When admitted to the scheme, the position of these employees will be similar to that of their counterparts in the hospital and district nursing services of local health authorities who are insurable for widows' and orphans' pensions and occupational injuries purposes only. There is provision in the Bill, therefore, to enable the insurance position of those persons who are admitted to the new superannuation scheme to be modified so that they will be similarly insurable.
In conclusion it may be helpful to Senators if I summarise the cost of the various proposals in the Bill. On the social assistance side, the improvements will require an extra £2,284,000 for old age and blind pensions, £406,000 for widows' and orphans' pensions and £810,000 for unemployment assistance, making a total of £3½ million in a full year. All of this will be borne by the Exchequer. The gross cost of improvements on the social insurance side will be £5,719,000. Allowing for an increased annual income of £4,656,500 from the increase in rates of contributions, the cost to be met by the Exchequer will be £1,062,500 in a full year.
I have much pleasure in recommending the Bill to Seanad Éireann and I ask for speedy and favourable consideration of it.