I move:
That Seanad Éireann approves the Draft of the Order entitled Social Welfare (Remuneration Limit for Insured Persons) Order, 1971.
Social Welfare (Remuneration Limit for Insured Persons) Order, 1971: Motion.
I wish to thank the House for agreeing to take the motion today because there was some urgency.
It is proposed to raise the remuneration limit for social insurance which applies to non-manual workers and, as required by statute, the draft of a Government order giving effect to this proposal has been placed before each House. The existing limit of £1,200 has been in operation since the 6th September, 1965. The new limit contained in the order is £1,600. It is estimated that 30,000 employed persons will be brought into insurance by the raising of the remuneration limit.
Since the first scheme of social insurance was introduced into this country in 1912, there has been such a remuneration limit for compulsory insurance in operation but only in relation to persons employed otherwise than by way of manual labour. The insurance position of workers employed by way of manual labour is not affected by the remuneration and they are compulsorily insured regardless of their earnings. The limit, which was fixed at £600 in 1953 at the time of the introduction of the social welfare system now in operation, has since been raised twice: in 1958 to £800 and, as I have said, in 1965 to £1,200.
If the order receives the required approval of both Houses, I intend to make regulations providing for the granting of credited contributions to persons who are brought back into compulsory insurance by the raising of the limit to £1,600 and who might otherwise in some cases not be qualified for certain benefits, such as unemployment benefit and disability benefit. I commend the motion for the approval by Seanad Éireann.
We are, of course, agreeable to this. We accept it.
The House will be pleased to hear that I know little about this code. There were a couple of things however that occurred to me in relation to this raising of remuneration. I had a case myself in relation to the Social Insurance Fund, wherein an employee declined to take an increase because it would put her outside the range of insurance. That was the situation. I then ascertained that in her circumstances she was free within a period of, I think, a year to make an option to stay on. Where the orders raising the remuneration take place at intervals that are greater than a year this ought to be amended so that persons could have at least the length of time which stretched between the making of one order and the next to pay up and opt back again where they have lost out through not having opted in at the time of the earlier raising of the limit.
Would it not be possible to have some sort of tapering relief? I know there will be difficult calculations to make here. A person should be able to exceed the minimum to the extent of some estimated value of the sacrifice made through not being able to continue the benefits in question. I do not know whether that is a thought capable of being realised or whether it has been considered by the Minister at all?
What sort of principle is applied in determining these levels? We start off with a figure of 1953 in relation to non-manual workers and we have had these increases. Have these increases been related to cost of living figures or to what have they been related? My ignorance will be displayed in magnitude by asking the other question: why do we have limits in the case of non-manual workers while we have no limits in the case of manual workers? Is there any basic philosophy behind this? Apart from that, is it a matter of cost? I should have thought that the bigger remuneration, the greater the relief to the fund, if the contributions are coming in from people with larger incomes. I do not know whether these questions are within the Minister's power to answer at the moment.
Yes. The basic thinking behind this originally was that when persons reached a certain remuneration limit they would be in a pension scheme of their own or in a position to have their own pension scheme or perhaps the company for which they worked might have a pension scheme. Incidentally, it does not apply to manual workers; it is to non-manual workers.
I knew that. What the Minister has said applies equally well, does it not, to the manual worker?
The manual workers are insurable at all times irrespective of limit. One of the cases made for raising the limit at this time is that many manual workers are earning much more than, say, some of the clerical grades who were cut off at the £1,200 limit. There are other reasons, too, which are not generally referred to or thought of, which make it difficult for me to abolish the limit altogether, although it is something I would hope to do some time in the not far distant future.
These limits set down by the Department of Social Welfare have been used by other Departments as a yardstick in some of their schemes. This applies particularly to the Department of Health. For the middle income groups, income was measured by our limit of £1,200, by the Department of Education for some of their scholarship schemes, and by the Department of Local Government for the purpose of loans in some cases—the statutory limit which requires a person to qualify for a loan. Other Departments have adopted these limits for the purpose of using them as a yardstick and this has made it difficult to have them adjusted because it affects other Departments as well.
The main criticism of this is that the £1,600 is not going far enough, but it is as far as one could conveniently go now. Having regard to increases in the past, it picks up any slack that existed. I said in the other House, and I will repeat it here, that I hope at some stage to abolish the limit altogether and indeed to reach a stage where we could extend the whole field of insurance to self-employed people as well as to people who are employed. For the time being this will take in 30,000 extra and will, I think, be equitable in relation to past increases.
What happens to the person who has exceeded the £1,200 limit and stayed out until the £1,600 is reached missing four years contribution? Is there any provision in the scheme whereby his period of absence can be restored so that he can have that period of time counted in relation to his contributions to the fund?
Yes. In most of these cases we bring them up with credited contributions.
Question put and agreed to.