Seanad Éireann debate -
Wednesday, 3 Jan 1973

Vol. 74 No. 1

Social Welfare (Pay-Related Benefit) Bill, 1972: Committee Stage.

Question proposed: "That section 1 stand part of the Bill."

Mr. Reynolds

On this section I had intended to table an amendment but on the day the Seanad adjourned before Christmas I thought we were not to meet until this day week and did not put down the amendment. The Minister should look into the case of agricultural workers. On the earlier Stage of this Bill I made the case that under the Bill these people will be graded as fourth and fifth class citizens. People employed in industry, et cetera will qualify for pay-related benefits but agricultural workers will not qualify.

The Minister stated this was a new Bill and must get a trial, but it is most unfair to give it a trial at the expense of this section of the community. Before agreeing to this section I should like the Minister to consider the rights of agricultural workers.

Mr. Alexis FitzGerald

I should like to make two points on this section. The first supports the point which Senator Reynolds has made. It is clear that categories of employment in respect of which contributions are to be payable are limited to those mentioned in paragraph 1 of the Second Schedule to the 1952 Act and excludes those mentioned in paragraphs 2 and 3 which include agricultural workers and females in domestic employment.

I should like the Minister to go into more detail than he has so far in this House, or in another place, with regard to the problem of including farm workers in this legislation. Farm workers come under PAYE, and tax in respect of their remuneration is deductible and accountable to the Collector General by their employers, as would be any contributions by the farm workers in respect of the pay-related benefits under this Bill are accountable to the same person who is at present responsible for collecting from farmers the pay as you earn tax liability which, with an extraordinary irony, farm employees are subject to but not their employers. I should like to know what the practical difficulties are which lead the Government to propose to rate them as persons who, having an income in excess of £14 per week, are thereby excluded from the benefits of this Bill.

I should like to raise a further point which is appropriate to this section. May I ask the Minister when we may hope to have a codification of social welfare legislation? The Acts mean the Social Welfare Acts of 1952 to 1972. They are legion. It is an almost impossible task for even a trained person to trace from one section to another and to ascertain what is the applicable law with regard to social welfare. One is dependent on the assistance which is undoubtedly forthcoming from the Department of Social Welfare, but that is not adequate. I am informed that there is no up-to-date practice of recording and circulating the appropriate decisions as to the true meaning of the various sections.

There is a report contained in the current issue of Social Studies, the Irish Journal of Sociology. I should like to quote a paragraph so that Senators may be aware of the views of that committee on social welfare set up by the Roman Catholic Hierarchy:

The present legislation on social services is too diffuse. Not only is it divided between too many Acts of the Oireachtas (and of the West-minister Parliament) but the legislation itself is almost impossible to read. The Social Welfare Act, 1971, is an example. Firstly, there is the unsatisfactory wording of some sections of the principal Acts, e.g. Social Welfare Act, 1952...

An excerpt is then given from section 5 (1).

Section 20 (inserted by the Act of 1952) of the Act of 1935 is hereby amended by (a) the substitution for subsection (1) (b) (inserted by the Act of 1970) of the following: "(b) (i) where the yearly means of the widow..."

This is far too difficult to understand. The income Tax Act of 1967, a most helpful volume, has been produced. Amendments to that income tax code are circulated which can be slipped into the appropriate pages of the book. Unfortunately, we have not had a codification of the estate duty code but we have had a fine green volume bringing together the very many different Acts of Parliament which could be found otherwise in 150 books. This has been done also with regard to stamp duty.

There must be a master document which, being appropriately and correctly annotated, at a ready glance of the appropriate officer provides the solution to any problem which may arise. Could a like volume not be produced and circulated with the assistance of the countless people, many of whom unlike those who have to concern themselves with income tax, estate duty and stamp duty, are without legal professional training but have the desire to get the knowledge quickly as to the right of the particular person? Such a volume would be useful. I have made use myself of a very helpful volume produced annually. It is a summary of the effect of provisions. It does not give one all these provisions brought together with suitable amendments. I would ask the Minister to consider this matter so that this jungle could be cleared up and drained.

Mr. J. Fitzgerald

I should like to refer to the points raised by Senators Reynolds and Alexis FitzGerald in relation to the agricultural worker. I am baffled as to why the agricultural worker is not included in this scheme. References were made on Second Reading to people in the higher income bracket and it was stated that they were at a greater loss as a result of illness or injury. The position of the agricultural worker must be faced, and why the Agricultural Wages Board lay down a minimum rate of wages to be paid.

Every Senator is aware that many farmers have to pay much higher wages to agricultural workers to retain them in their employment. There are other sources of employment open to them, such as building or factory work, if the farmer pays them an inadequate wage. Many of these employees are highly skilled workers dealing with sophisticated machinery. They must be paid adequate wages. They, too, will suffer as a result of illness or injury. This fact must be taken into consideration in relation to the Bill. I should like to hear the Minister's reasoning as to why these agricultural workers have been excluded. They pay their social welfare contributions. In many cases they have to pay income tax. Their exclusion from the scheme cannot be justified.

Professor Jessop

I should like to support Senator Alexis FitzGerald's plea for some form of rationalisation of all the measures on our Statute Book in relation to social welfare. He mentioned the difficulties the possible beneficiaries may face in trying to find what relates to them. Various members of my profession and the ancillary professions find themselves in a similar difficulty. Doctors do not know the benefits their patients may be entitled to. The social workers in the hospitals do not know either and find it very difficult to find out. Last but not least, people teaching medical students do not know what to tell them on this subject, very often leaving them in a complete fog as to where we stand. A student goes away with the impression that there is no proper provision at all. The sooner this job is undertaken the better.

Minister for Social Welfare (Mr. J. Brennan)

First, I should like to refer to the point raised by Senator Reynolds in regard to agricultural workers. I dealt as comprehensively as possible with this on Second Stage. However, I have no objection to refreshing the minds of Senators on the points I then made. I am not defending the exclusion of agricultural workers on the ground that they are not entitled to the benefits. They are just as much entitled as any other worker and, perhaps, more so. I could not find it possible to get arrangements made to collect the agricultural contributions by the Revenue Commissioners who have made provision to collect the contributions in respect of what is in the Bill. It would have delayed getting this legislation off the ground. It would have required my waiting and doing further work, which I am continuing to do, regarding the agricultural workers.

Agricultural workers are a category which are not adequately indexed with any institution of the State. While they are subject to income tax, it is no secret that they are not all contributing. I find the problem of collecting contributions and getting the reckonable earnings in order to pay benefits difficult to surmount at the present time. While we do not intend to collect contributions until April, 1974, I hope to put the legislation into effect well in advance of that date. In the meantime, as I promised the House during Second Reading, I shall continue to see what can be done about the agricultural workers. I made the same statement regarding this matter in the other House also.

The agricultural workers have their wages fixed by the Agricultural Wages Board for so many months. Employers are quite free to pay more if they wish. There are other factors to be considered, such as, payment in kind, lodgings, housing accommodation, supply of produce from the farm and so forth, but they alone would not make the problem of collecting the benefits insurmountable. I did not succeed in getting the people who have kindly consented to undertake the gigantic task of collecting contributions in relation to the workers covered in the Bill, to agree to extend the operation to the other workers at this time.

There are 38,000 agricultural workers and 15,000 female agricultural domestic employees. With regard to female agricultural domestic employees, there is an anomaly in relation to the payment of benefits. I have given an undertaking that this anomaly will be abolished so that they will be brought into line with other workers as soon as possible. These are the genuine reasons for not collecting the contributions. The Minister could have no ulterior motive because the Bill is designed so as not to cost the Exchequer anything. I would prefer to have the benefits conferred on employees extended to everybody including the agricultural workers as soon as possible.

While the legislation will not be put into effect until a date to be fixed by me, we will continue to seek a way of including the agricultural workers in the scheme. Coupled with this intention is my decision to abolish the insurability limit of £1,600 which could bring in a lot more money to the social welfare code than at the present time. This is my case with regard to agricultural workers. Section 10 gives the Minister power to bring in any section of workers which it is possible to bring in at any time he desires. Section 10 is there for that specific purpose. Therefore we will not require further legislation to include the agricultural workers when the time comes.

With regard to the codification of legislation, on which we had made some progress during my first term in the Department of Social Welfare, and in respect of which as late as 1960 we had preparations made, one of the problems which I should like the House to appreciate is that Social Welfare above all other Departments is one which is continuously progressing in relation to legislation. Every year sees a new Social Welfare Bill and changes in scope and rates with regard to the general scheme of social welfare. No sooner has one codified existing legislation than it is out of date. While I appreciate that from the legal point of view it would be very necessary to have legislation codified so as to simplify the matter for people who should know the legal position, in so far as the beneficiaries are concerned our guide to the social welfare services gives them adequate information on the benefits to which they are entitled and how to get them. It can also be useful to lawyers and others in so far as it points to the Acts under which these benefits may be paid. In this way it is useful, in the absence of codified law, even to those who must deal in a legal manner with the different benefits. We appreciate the need for some codification of the law even up to a particular time but no sooner has it been brought up-to-date than it goes off at a tangent with the next miscellaneous Social Welfare Bill, which upsets the whole applecart. The people who so frequently criticise the Department of Social Welfare about their way of operating never seem to appreciate that we are dealing with very large numbers of people with the smallest possible Department.

The amount of the Departmental Vote which is used in administration is relatively small in relation to other Departments. We try to ensure that as much of the voted moneys as possible go to the payment of benefits rather than for administrative purposes. Every year we deal with some 2,000,000 people—practically every household comes within the ambit of the Department—and when the whole code is changed, requiring complete new sets of books, stamps, issues and, forms constitutes a large volume of work which is not always appreciated by those who are ready to criticise the Department. We have a small section set aside for research who are doing very good work in the preparation of the future requirements of the social welfare code and its extension to other fields. In the same way, the number of people who are available for codification of the law must necessarily be fairly small. They have completed a good part of the work which was due to come before both Houses in 1960 but which had to be postponed owing to the annual Bill of that year which required that most of the work be started a second time. I say nothing further on the question of codification other than that I should be very happy to come to the House with a Bill which would consolidate the law regarding social welfare. I hope that even a limited Bill will be accepted by the House as soon as it is possible to draft it. I do not wish to draft such a Bill until after this year because it is well known that this year we will be making some further changes in the code. They fill be fairly far-reaching changes and it would be as well to have the most important parts of social welfare legislation incorporated in any consolidation that will be undertaken.

Mr. Alexis FitzGerald

I am grateful to the Minister for the way in which he met the point with regard to the provision, in a single volume, of relevant legislation. I appreciate the difficulties involved in doing so but it will be worth it. A similar situation to that of social welfare exists with regard to income tax and estate duty. The income tax people undertook this task in 1967 in the Income Tax Act and there are amendments every year to the income tax code. The existence of the 1967 Act gives a very helpful starting point. I appreciate also that there are substantial changes imminent. The timing must take account of those changes and the appropriate time to do so is, obviously, when they are are made.

With regard to agricultural employees, I agree that section 10 would seem to give the Minister all the powers he needs to add to the persons in respect of whom this Act provides benefit. However, I would like to ask whether it might not expedite and accelerate the process of bringing agricultural employees within the network if they were included at as early a date as possible even if some people hoped to avoid their liability. Would not the very existence of the benefit be a morsel which would attract into the whole network of collection the people who lie outside it, notwithstanding their liability? If the Minister is proposing to take the power to do this, at a time when he can decide, I suggest this might be a factor worth considering in determining what that time should be.

Question put and agreed to.

Section 2 agreed to.

SECTION 3.

Question proposed: "That section 3 stand part of the Bill."

Mr. Reynolds

This is the section which deals with the widows of insured persons. Those people do not qualify for benefit despite the fact that their husbands may have been paying stamp contributions, perhaps voluntarily, for years. When the husband dies his widow will not qualify for pay-related benefit but will qualify for the ordinary benefit. In the case of agricultural workers the Minister has given us the reason that there is no machinery to deal with them. He said there is no means of calculating the numbers and, to use his own words, "They are not tabbed as yet". Their unfortunate widows are tabbed. In my opinion, they are entitled to benefit.

Mr. Russell

I should like to support Senator Reynolds in his remarks and to ask the Minister to give some additional benefit to this section of our community. They are quite a substantial section. A widow with a family cannot qualify by getting employment due to the fact that she has a family to look after. She cannot qualify for benefit under the social welfare code unless she is available for employment. She is, therefore, automatically excluded from the provisions of this Bill.

I should also like to draw the Minister's attention to another category of people who are, according to the terms of this Bill, entitled to benefit because they have paid the necessary number of qualifying contributions but, for other reasons, cannot be paid their entitlement. I refer to persons who have been disqualified for one reason or another and whose payments are in suspension for, say, six weeks or until such time as an investigation by an officer of the Minister's Department takes place. I refer also to a further category who would be qualified under the Social Welfare Acts because they have paid the necessary number of contributions but because they have committed an offence, either under the Social Welfare Acts or under some other legal code and as a result have received a prison sentence, they cannot be paid their due benefit while they are in prison. What is even worse, their wives and dependants cannot receive payment either.

I believe the Minister should have considerable sympathy with those people. Anybody who is in public life or a member of a local authority or public body will know that there are men who have fallen foul of the law for one reason or another but as long as they are serving their sentence in prison neither they nor, more importantly, their wives or families can draw the existing benefits nor will they now be in a position to draw the better benefits proposed in this Bill. In fact the ratepayers of the local authority or the charitable organisations have to take over the responsibility of such dependants until such time as the breadwinner is discharged from prison. I do not believe it was ever the intention of the Minister, or indeed of any Minister, that the ratepayers should be called upon to bear a proportion of the social welfare code but they are doing so under the present legislation.

I do not propose to put down an amendment on this on Committee Stage because I know the Minister is doing his best to cater for all cases. He has pointed out already, and we have to give him credit for it, that he has endeavoured each year to improve the social welfare code. However, I think there remains a glaring gap in the code in regard to the cases I have mentioned and I would ask him if, in the provisions of this Bill or by bringing in a consequential Bill, he could make some provision for the wives and dependants of men who are not available for employment.

Mr. J. Brennan

In regard to widows, I would point out that the Bill only extends to unemployed and disability benefit cases presently qualified for unemployment benefit, disability benefit and maternity allowances. In certain circumstances persons drawing occupational injury benefit would also be qualified. It does not extend to pensions.

As I have already said, like every other piece of social welfare legislation that has been introduced, there will be immediate demand to have it extended. No doubt, it must be extended as soon as it is possible to do so not merely to those but to other contributory pensions as well. Pensions are in an entirely different category from what is being covered here. The likelihood of having it extended to pensioners in the near future are pretty bright but I would not say we should amend this Bill for the sake of bringing in one type of pensioner, i.e. the widows. That does not say that, in the meantime, we cannot help widows in the ordinary way. Naturally, widows now in receipt of contributory pensions, whose husbands or they themselves, or both, may have long records of insurance, may not have benefit inherent in their payments to cover the payments that are being provided for in this Bill. It is not proposed in the Bill to qualify for future payments those who may be widowed in the future. Those who are drawing now cannot claim that they have contributed towards it because the contributions that will be payable in respect of this Bill will be collected later on. Those persons paying it will be qualified by the fact that they qualify for unemployment benefit or for disability benefit or maternity allowances.

People misunderstood when I said in the other House that no improvement would be effected in the rates of widows' pensions until such time as these pay-related benefits would be applied to pensions. That is not true. There is nothing to prevent the improvement of widows' pensions scheme at any time basically, as has been done time and again in the past. However, it will require separate legislation to apply this to pensioners later on. The demand will be that pay-related pensions should be payable. As Senators know, all contributory pensions, irrespective of what the recipients have been earning prior to their becoming pensioners, will all have the same rate. It would be only equitable to have a contribution collected in respect of pensions and of pensions made pay-related as well, similar to the provisions being made here. In the meantime pensions are not included.

I should like to refer to another point regarding persons in jail. This would require separate legislation. In order to qualify for unemployment benefit, one must be capable of, available for and generally seeking work and a person who is confined or who is in custody could not claim. Therefore, they would not qualify under——

Mr. O'Higgins

They might be genuinely seeking to get out and obtain employment.

Mr. J. Brennan

——existing legislation for unemployment benefit or disability benefit. The problem frequently arises, however, in regard to their wives and dependants at home because they are qualified only for home assistance. In the scheme which is undergoing examination in the various Departments at present there will be new arrangements in connection with home assistance. It may be possible to make better provision for cases of this kind rather than do it through the Unemployment Assistance Acts.

Mr. Russell

Could I ask the Minister when he says "under the home assistance code to mean better provision", if he means increasing the amounts payable through the home assistance scheme at the expense of the local ratepayers or does he mean some assistance to the home assistance fund from central funds, which would be a more practical way of dealing with it as an interim measure? Eventually, I hope that the Minister will agree that some provision should be made for these classes from central funds.

Mr. J. Brennan

The Senator may not be aware that the principal provision proposed in the new home assistance scheme which is under examination now, and which is at a fairly advanced stage but has not yet come up for Government decision, is that the scheme be nationalised. It is proposed that payments be made as a national assistance. It will include a number of categories that heretofore would have drawn unemployment benefit or unemployment assistance. Many of these categories are actually drawing these benefits and, as we are all well aware, if we strictly apply the terms of the legislation, they would not be qualified. It is conceivable that under that scheme one can do something worth while for the dependants of persons in custody.

Mr. Russell

I was not so aware. Would that mean that the home assistance being paid when this legislation goes through would be related to the former earning power of, say, an imprisoned person? At the moment it appears to be a very arbitrary calculation as the Minister knows that home assistance bears a very poor relation to the earnings of a man——

Mr. J. Brennan

It would have to be related to the requirements of the dependants and, of course, would have to be related to other social welfare payments as well. At the moment it is covered by home assistance only, as the Senator knows.

Question put and agreed to.

SECTION 4.

Question proposed: "That section 4 stand part of the Bill."

Mr. J. Fitzgerald

I should like to ask the Minister a question. Up to £14, one does not come within the ambit of this Bill. In the explanatory memorandum circulated with the Bill there is a scale of benefits. I notice that under reckonable weekly earnings the pay-related benefit is nil. The single person is just on the total benefit—the present benefit—of £5.55. Then there is a gap from £14 to £20 where the pay-related benefit is £2.40. In the case of the person on £15, £16 or £17 does he get the 40p per £, which appears to be the norm in this, if he is above £14 and between £14 and £20? In other words, would a person on £17 gain by £1.20?

Mr. J. Brennan

It is calculated at 40 per cent.

Mr. Alexis FitzGerald

I think this is the section in which on the Second Reading, our colleague, Senator Willie O'Brien, raised the question regarding the situation of someone who in the previous year has, for example, worked abroad. Is the reckonable weekly earnings in his case the income which arises in Ireland only? If it be so, is it not very unjust?

Mr. Reynolds

There are a number of people in receipt of less than £14 a week who may be limited. I have in mind apprentices and people like that. They will not qualify for benefit under a pay-related scheme. I think the Minister should have a look at such cases. There are a very limited number of them but people who serve apprenticeships may get a nominal wage of £8, £10 or £12 per week. They must also pay for insurance stamps and, probably, income tax and it would be unfair to deprive them of pay-related benefit.

Mr. J. Brennan

As the Senator points out, this section very largely deals with the rates payable. It is the most interesting section in the Bill in that it actually measures out what we are going to do under it. In common with everyone else, we would like to do better, but we have cut our cloth in accordance with the resources available to us. We take from employers and employees in order to give them related benefit.

It is calculated that the first £14 does not come within the reckoning. The reason is that the amount of flat rate at present is approximately 40 per cent of £14. To reduce that amount and adhere to the 40 per cent of the pay-related element in the Bill would mean that persons under £14 could be getting less than they are getting in flat rate at present. They are already getting 40 per cent up to £14 and from that up to a ceiling which will be fixed. We propose giving them 40 per cent. The ten pence allowance will also be payable in the case of married people. In some cases people get up to 95 per cent of their earnings.

If we changed this scale by increasing the 40 per cent to 60 per cent we would increase the amount of contribution and the whole costings of the Bill are based on what is set down here. There was another interesting point raised in connection with a person's earnings abroad because as of now the Bill only covers reckonable earnings as computed by the Revenue Commissioners and the last year available to us for income tax purposes. We have entered into a new situation, which must be dealt with as we meet it, regarding membership of the EEC when there will be all round reciprocity with regard to payments or where payments under any social welfare code will be payable as from one country to another. That is a different day's work which would have to be met in relation to this or any other piece of social welfare legislation we have. Our people will be permitted to draw their benefits in any country they may go to, if it is a member state. In the same way as it provides a rearrangement under all other parts of the social welfare code, we will have to adjust to this scheme accordingly. One can easily visualise how this will benefit the recipient.

Mr. Alexis FitzGerald

With respect, I wonder is that the point. With regard to this matter is the EEC not such as would give some German worker coming here the right to get the benefits under our social welfare code but not necessarily determined by the German scale but by the Irish scale? In this case whether he be German or Irish he is not going to get a pay-related benefit unless he has got an income assessable for taxes in Ireland.

Mr. J. Brennan

The code operates to their benefit in that way. It is true that if some person comes here to work he only benefits under our code, but if he has been working in another country and comes here to draw his benefit he must get the same terms as the pay scheme in the country which he left.

Mr. Alexis FitzGerald

But he does not get a pay-related scheme under this section as of now.

Mr. J. Brennan

Under this Bill if a person coming from England claims pay-related benefits here—they are available in England at present—he is entitled to draw here, under EEC regulations, the benefits which he would receive if he was drawing them in England. They have had pay-related benefits in England for some time.

Mr. Alexis FitzGerald

Is this true of an Irishman coming to Ireland from England?

Mr. J. Brennan

I am talking about an Irishman.

Mr. Alexis FitzGerald

Here we have a situation where people who never leave Ireland have their pay-related benefits determined by their income for the preceding year. Is the Minister saying that if such a person managed to go abroad in the previous year that in some way his benefits would be enlarged and that he would, under the EEC regulations, get a benefit which if he had stayed in Ireland he would not have got under this Bill?

Mr. J. Brennan

I am trying to explain to the Senator that a person who was working in England and who would be entitled to particular benefits as a result of his contribution record in England is entitled to draw those benefits wherever he may go afterwards.

Mr. Alexis FitzGerald

Is this benefit determined at the English or Irish rate?

Mr. J. Brennan

It is decided at the British rate if his earnings were in England and at the domestic rate if his earnings were here.

Mr. Alexis FitzGerald

So an Englishman, or a person resident in England, coming here can have brought into calculation something in addition to what, if anything, he had earned for assessment in the preceding year, whereas if he were an Irishman he would be cut completely by his preceding year's earnings within the income tax meaning of that word. It may be that the Minister is having difficulty in solving this problem.

Mr. J. Brennan

I am not quite clear whether the Senator is arguing in terms relating to this Bill or to social welfare generally.

Mr. Alexis FitzGerald

I am really arguing in terms of this Bill which is what I thought we should be doing.

Mr. J. Brennan

As this Bill stands it only applies to reckonable earnings in this country and does not apply to the earnings of a person working in France, Germany, England or elsewhere. There is not a reciprocal agreement in relation to it—it is not even law yet—as there is with other payments of social welfare but it is, as I have already said, anticipated that we will have to readjust it to suit the case we are talking about.

Mr. Alexis FitzGerald

Is the Minister able to give us any indication as to the limit which it is thought will be imposed by the regulation which he will prescribe with regard to this? Is it contemplated that this is a limit which would vary from time to time whereas the minimum figure will not vary at all, it apparently being determined by the relationship between the flat rate contribution and the £14 per week? If I understand it correctly the flat rate benefit will be £14 per week.

Mr. J. Brennan

The upper limit, if it were to be fixed now, would be determined for us because there is an insurable limit of £1,600 and persons over £1,600 would not qualify.

Mr. Alexis FitzGerald

This is the Minister's trouble.

Mr. J. Brennan

That is the reason I have not set the ceiling yet.

Mr. Reynolds

Will people who are in receipt of an income under £14 have to contribute to the scheme? It would be most unfair if they had.

Mr. J. Brennan

In practice yes, but in fact no. They are not out any contribution.

Mr. Reynolds

I find it difficult to understand.

Mr. J. Brennan

It is not correct to say that they do not contribute because the computerisation of the collection and benefits will be based on all rates of income, but benefits will only be payable from £14. Anything over collected from anybody is credited to them. In actual fact they do not contribute. They are out nothing.

Mr. Reynolds

What is the position of the employer who will also be making 50 per cent of the contribution? Will he get a refund also?

Mr. J. Brennan

Yes, the same applies.

Question put and agreed to.

SECTION 5.

Question proposed: "That section 5 stand part of the Bill."

Mr. Alexis FitzGerald

With regard to this, it illustrates the difficulty of a small point but not an unimportant one and it indicates the difficulty of dealing with legislation in this way.

Subsection (2) proposes to insert into section 58 (1) of the Social Welfare Act, 1952 references to pay-related contributions. Subsection (1) of section 58 is repeated entirely in subsection (2) of the section I have given in the Companies Act, with an important difference, which is that section 58 (1) of the Social Welfare Act gives priority to employment contributions payable by the company during the four months before the winding up, where as the Companies Act section gives priority for 12 months.

The section should contain an amendment. Section 285 (2) (e) of the Companies Act, 1963 should include here these contributions which are being made payable by this Bill. The other sections are in order to amend as proposed.

The 1952 Act gave priority to employment contributions due during the four months before the winding up of a company. That was changed to 12 months in 1963. The original section was not expressly repealed as it had a more extensive application. In my view that subsection was repealed and subsection (2) of section 285 of the Companies Act, 1963 should be amended in relation to the priority for these contributions.

Mr. J. Brennan

This Bill does not make any change in the existing system other than what is laid down regarding the collection of benefits. The Senator is referring to cases of bankruptcy and liquidation.

Mr. Alexis FitzGerald

This is what is referred to in section 58.

Mr. J. Brennan

The four months prevails here.

Mr. Alexis FitzGerald

This is gone.

Mr. J. Brennan

If the section is not repealed.

Mr. Alexis FitzGerald

It is partly repealed. If the Minister will look at the language of subsections (1) and (2) of section 58 he will find the language is repeated in its entirety in the appropriate section of the Companies Act with the single exception where 12 months is substituted for four months.

Question put and agreed to.

Sections 6 to 12, inclusive, agreed to.

SECTION 13.

Question proposed: "That section 13 stand part of the Bill."

Mr. Alexis FitzGerald

This section contains an important amendment of section 49 of the 1952 Act. We should be aware of the importance of this amendment, whether we agree with it or not. Under section 49 of the 1952 Act an offence, if proven, gives rise to a fine not exceeding £10. There is a saver to the effect that no one should be required under the section to answer any questions or to give any evidence tending to incriminate himself.

This section provides that any offence under section 49, not merely an offence related to the pay-related contributions, shall be liable in lieu of the penalty specified of £10 to a fine not exceeding £100 or at the discretion of the court to imprisonment for any term not exceeding three months or to both such fine and such imprisonment.

I should like the Minister to explain if this amendment goes further than merely protecting the position of pay-related contributions but relates to any type of offence which is proven to be committed in relation to section 49. I should also like to know if the requirement in subsection (4) "not to answer any questions or to give any evidence tending to incriminate himself" is still preserved.

Mr. J. Brennan

It is in the 1949 Act.

Mr. Alexis FitzGerald

I was referring to section 49 of the 1952 Act. It is important to realise that we are not dealing merely with the pay-related contribution but with the fundamental amendment of the 1952 Act, which in certain Acts is referred to as the Principal Act.

Mr. J. Brennan

This section provides that the Minister may for the purposes of pay-related contributions require employers to keep records. It brings the penalty into line with the Health Act regarding collection of contributions in respect of that Act.

Mr. Alexis FitzGerald

This seems to give the Minister power to keep certain records and to describe them as documents within the meaning of section 49. Subsection (2) goes on to create new penalties for an offence under the original section as amended.

Mr. J. Brennan

It merely extends and strengthens the powers in the 1952 Act and brings the penalty into line with what is prescribed in the Health Act in relation to breaches and the collection of contributions.

Mr. Russell

Could the Minister state when such requirements might be prescribed or if they have ever been prescribed? I am referring to subsection (1) of section 13 of the Bill which states:

The Minister may, for the purposes of pay-related contributions and pay-related benefits, by regulations require employers to keep such records as may be specified in the regulations of the earnings of persons employed by them and to retain the records for such periods as may be prescribed and any records so specified shall be deemed to be documents for the purposes of section 49 of the Act of 1952.

Would the Minister prescribe such periods as from year to year?

Mr. J. Brennan

Only if deemed necessary. On the coming into operation of the Bill the Minister would make the regulations. I am not too clear as to the Senator's question. Is it how long the records would have to be kept?

Mr. Russell

Yes. That is what I wished to know.

Mr. J. Brennan

I would not be in a position to answer that. It could be for whatever term would be considered necessary for the purpose of ascertaining the reckonable earnings of an employee.

Mr. Russell

That would be from year to year.

Mr. J. Brennan

It could be.

Mr. Reynolds

Under this section records are already kept by employers for PAYE purposes. Is it not from that the benefit is going to be paid? Surely the employers will not be asked to keep a separate record for pay-related benefit.

Mr. J. Brennan

If they already keep records that is all right.

Mr. Reynolds

It does not arise. For health deductions employers do not keep a record because they purchase the stamp. A record is kept of the price of the stamp. That is all.

Mr. J. Brennan

Under the provision we are discussing the Minister may make it compulsory for them to keep records and have them available for inspection if they are not already doing so.

Mr. Reynolds

Am I right in assuming that the record kept for PAYE will do this particular job? If so, that is simple enough.

Mr. J. Brennan

It is done for the purpose of pay-related benefits.

Question put and agreed to.

SECTION 14.

Question proposed: "That section 14 stand part of the Bill."

Mr. Alexis FitzGerald

I have a question with regard to subsection (4) of this section. This relates to section 39 (9) (b) of the Act of 1952, which is the provision with regard to the social insurance fund and which states:

(a) The amount by which the income of the Fund for any financial year is less than its expenditure shall be paid into the fund out of moneys provided by the Oireachtas.

(b) The income and expenditure of the Fund for the financial year should be determined for the purposes of this subsection by the Minister on such basis as may be agreed upon between him and the Minister for Finance.

It is now proposed to add to (b)

but for such purposes any expenditure arising from the provisions of the Social Welfare (Pay-Related Benefit) Act, 1972, and such income from pay-related contributions under that Act as is used to meet that expenditure shall be disregarded.

What will happen in regard to pay-related expenditure which is found to be in excess of pay-related income in any given year? Is this covered by the borrowings made by the Minister for Finance which, under subsection (1), he can only make during a period of five years? Let us go further than five years. What happens in the seventh year if your pay-related expenditure is in excess of your pay-related income?

Mr. J. Brennan

You would extend the provision in that case.

Mr. Alexis FitzGerald

By virtue of what?

Mr. J. Brennan

By power taken under this Bill as Minister. This section deals with the interim. If the Bill comes into force before benefits have been collected it makes provision for an Exchequer repayable loan.

Mr. Alexis FitzGerald

I understand that very well. Subsection (4) of this section is a permanent provision of this code.

Mr. J. Brennan

Similar provision has been made in other social welfare legislation.

Mr. Alexis FitzGerald

With the greatest respect, that does not help me in the slightest. I should still like to know what happens when there is a shortfall of income during the period when, in relation to this particular pay-related code, you no longer have provision for making repayable borrowings from the Minister for Finance. You cannot avail of subsection (9) of section 39 of the Act of 1952 because it provided that the shortfall is to be excluded in determining what is to be the provision out of the Exchequer.

Mr. J. Brennan

I will read what the amended section will be when the amendment as set out here will be incorporated.

Mr. Alexis FitzGerald

I have that.

Mr. J. Brennan

It will then read:

The income and expenditure of the Fund for a financial year shall be determined for the purposes of this subsection by the Minister on such basis as may be agreed upon between him and the Minister for Finance but for such purposes any expenditure arising from the provisions of the Social Welfare (Pay-Related Benefit Act), 1972, and such income from pay-related contributions under that Act as is used to meet that expenditure shall be disregarded.

Mr. Alexis FitzGerald

I was able to do that exercise myself. Does it simply mean that the fruit of the fund is used to make good the shortfall in the pay-related scheme and that you cannot go to the Exchequer?

Mr. J. Brennan

Naturally the amount of the contributions is conjectural to a great extent, since one has not the practical experience to know what will be necessary to meet the requirements without any cost to the Exchequer. If we find the contributions are too much or too little we can adjust them accordingly as in every other contribution scheme in social welfare.

Mr. Alexis FitzGerald

Would I be giving a short and simple answer to myself if I said that you will be able to adjust the contributions if they are inadequate to cover the benefit by an order under the earlier section?

Mr. J. Brennan

We could adjust the contribution anyhow. We have already had to do it under the Redundancy Payments Act.

Question put and agreed to.

Sections 15 and 16 agreed to.

SECTION 17.

Question proposed: "That section 17 stand part of the Bill."

Mr. Alexis FitzGerald

I should like everybody to look at this one. What are the limitations on the power of the Minister? What is the nature of the difficulty? The phrase "any difficulty" is not defined. The section reads:

If in any respect any difficulty arises in bringing into operation this Act, the Minister may, subject to the sanction of the Minister for Finance, by order do anything which appears to be necessary or expedient for bringing this Act into operation, and any such order may modify the provisions of this Act so far as may appear necessary or expedient for carrying the order into effect.

Does that mean the Minister appears to have the power to set aside and vary any other section of this Act including the £14 per week, the 40 per cent in excess of the £14 per week, the category of employee to be affected; his own ability to extend the category of employee; the section which entitles him to borrow from the Minister for Finance and the Minister for Finance to advance to him. What sort of precedent have we for giving an all-wise Minister with an all-wise colleague such power? What have we been doing for the last two hours? Should we not have debated this one first? Is this not the section which says: "It is all over to you"?

Mr. J. Brennan

This is to expedite the bringing in of the Act. There is a precedent. Other Acts in the past, indeed the 1952 Act, made the same provision for the expeditious bringing in of the Act. In the transition stages one can meet with unforeseen difficulties.

Mr. Alexis FitzGerald

It is in the 1952 Act?

Mr. J. Brennan

Yes. It only lasts for one year.

Mr. Alexis FitzGerald

I beg the Minister's pardon. That is a distinct help. I had failed to observe that.

Mr. J. Brennan

I can assure the Senator it is necessary.

Mr. Russell

I presume "after the commencement of this section" means commencement of the Act?

Mr. J. Brennan

Yes.

Question put and agreed to.

SECTION 18.

Government amendment No. 1:

In page 6, lines 12 and 13, to delete subsection (2) and to substitute the following subsection:—

"(2) The Social Welfare Acts, 1952 to 1972, and this Act may be cited together as the Social Welfare Acts, 1952 to 1973."

Mr. J. Brennan

This is an amendment which some Senators pormed out to me should not be necessary when it was mentioned on the Second Stage. I asked to have all stages of the Bill that day. I pointed out that I would have to make a slight change to the Bill, in that 1972 would have to be changed to 1973. Some Senators thought we could do that without bringing in an amendment but the parliamentary draftsman advised that it be done by way of amendment. It is to change 1972 to 1973. If we had had all Stages the last day it would not have been necessary.

Amendment agreed to.

Section 18, as amended, agreed to.

Title agreed to.

Bill reported with amendment.

An Leas-Chathaoirleach

On the question of the next Stage——

Mr. Alexis FitzGerald

I raised a point which I thought the Minister would consider before taking the next Stage. I do not wish the Minister to be in the position with regard to insolvent companies that he will not rank in priority through the pay-related contributions. This may be the position.

Mr. J. Brennan

This does not make any change in the existing system in England. The Senator is referring to the power to get priority in the collection of contributions where there is insolvency?

Mr. Alexis FitzGerald

I have expressed the greatest doubt as to whether pay-related contributions will have any priority at all. This is a matter for consideration by the Minister.

Mr. J. Brennan

I have the whole question of social welfare contributions and the priorities you get in such cases under consideration. It must be done as an omnibus piece of legislation in relation to all payments, not just pay-related ones. I would not postpone the Report Stage just to write something in specially in relation to these benefits. I would like priority in relation to all contributions.

Mr. Alexis FitzGerald

Meanwhile the Minister leaves the fund unprotected.

Mr. J. Brennan

To some extent. It will not be exactly unprotected.

Mr. Alexis FitzGerald

This would only take two minutes at our next sitting.

Mr. Reynolds

We are sitting on 17th January.

Mr. J. Brennan

I do not mind.

Mr. Alexis FitzGerald

We will not delay the enactment of this at all. It is just to have this point considered.

Mr. J. Brennan

There is not that great urgency because there are quite a lot of things to be done before the Bill becomes effective.

Mr. Keery

A Leas-Cathaoirleach, is this not an example of something which could be dealt with under section 17 (1) in respect of any difficulty arising in bringing this Bill into operation?

An Leas-Chathaoirleach

Since the question is addressed to me, I am not in a position to give you a legal opinion.

Mr. J. Brennan

I would not be in a position to answer that either because——

An Leas-Cathaoirleach

We are considering the question of when the next Stage will be taken.

Mr. J. Brennan

The provisions in section 17 lasts for only one year.

Mr. Reynolds

We are meeting on the 17th.

An Leas-Chathaoirleach

There are two suggestions, one, that the next Stage be taken now and the other that it be taken on 17th January. What does the House wish to do?

Mr. J. Brennan

I quite agree with the 17th if there is any doubt.

Report Stage ordered for Wednesday, 17th January, 1973.

Business suspended at 4.40 p.m. and resumed at 5 p.m.