Vol. 77 No. 1
I move:
That the Social Welfare (Agricultural Employees) Regulations, 1974, proposed to be made by the Minister for Social Welfare and laid in draft before Seanad Éireann on the 20th day of December, 1973, under subsection (4) of section 10 of the Social Welfare (Pay-Related Benefit) Act, 1973, be approved.
It might be convenient, subject to agreement, to deal with Nos. 3 and 4 together. The purpose of these regulations is to extend the pay-related benefit scheme to cover male and female agricultural workers. That scheme is provided for under the Social Welfare (Pay-Related Benefit) Act, 1973, and the necessary order has been made to bring it into operation from the beginning of the next income tax year on 6th April, 1974.
Pay-related benefit is designed for persons whose social insurance covers them for disability benefit, maternity allowance and unemployment benefit. It will be paid as a supplement to these flat-rate benefits at a rate calculated from the claimant's earnings in a previous income tax year. Particulars of these earnings will be supplied to my Department by the Revenue Commissioners.
The scheme will be financed by pay-related contributions levied on employers and employees. These contributions will amount to 3 per cent of the employee's current earnings up to a ceiling of £2,500 in the year, the employer paying 2 per cent and the employee 1 per cent. They will be collected by the Revenue Commissioners through the income tax collection machinery.
It had originally been thought that the scheme would, initially, cover only persons paying the ordinary flat-rate social insurance contributions and the Act was framed accordingly. This was due to the difficulties encountered in arranging a system of collecting pay-related contributions in respect of persons not in industrial, commercial and services-type employment. The Act, however, provides in section 10 that other classes of employees could be brought into the scheme by regulations.
With the abolition from 1st April, 1974, of the remuneration limit of £1,600 for social insurance in the case of non-manual workers, all employees in those employments will be brought within the scope of the pay-related benefit scheme. The main groups of workers who would not be included in the scheme although insured for disability benefit, maternity allowance and unemployment benefit purposes would be male and female agricultural workers.
It has always been the intention to have the coverage of the scheme as wide as possible and to bring agricultural workers in particular into the scheme as soon as it was feasible to do so. As a result of further examination of the matter since the Act was passed the Revenue Commissioners have found it possible to agree to collect pay-related contributions from employees in the agricultural sector from 6th April next. It is, therefore, proposed to bring agricultural workers, both male and female, into the scheme from the start and regulations for that purpose have been prepared as provided for in section 10 of the Act. That section, however, requires that drafts of the regulations must be laid before each House of the Oireachtas and that the regulations cannot be made until the draft has been approved by resolution in each House. The necessary resolution has been passed by Dáil Éireann.
The draft regulations, which are the subject of this resolution, will apply the provisions of the 1973 Act to persons employed in agriculture for whom the special agricultural rates of social insurance contributions are payable by including pay derived from employment in agriculture in the definition of earnings reckonable for the purposes of pay-related benefit and contributions. I recommend these regulations for the approval of Seanad Éireann.
I come now to the regulations concerning the alteration of rates of social welfare contributions. These regulations are consequential on the introduction of the pay-related benefit scheme. Under that scheme, pay-related benefit will be payable to persons as a supplement to flat-rate disability benefit, maternity allowance or unemployment benefit. It will also be paid with injury benefit under the occupational injuries benefit scheme where that benefit is paid in lieu of disability benefit or maternity allowance.
The rate of pay-related benefit will be calculated on the part of the claimant's reckonable weekly earnings in a previous income tax year, lying between £14 and £50. A pay-related contribution amounting in all to 3 per cent of the employee's current earnings will be charged of which the employer will bear 2 per cent and the employee 1 per cent. The contributions will be collected by the Collector-General of Revenue through the income tax system. In order to facilitate this method of collection, it is necessary to charge contributions on all earnings up to the ceiling of £2,500 in the year. This will mean that pay-related contributions will be levied on pay up to £700 in the year which is the equivalent of £14 a week for pay-related benefit purposes. Pay up to £14 a week will not attract any pay-related benefit, and there will, thus, be what amounts to an overcharge of pay-related contributions on it. The most practical way in which to compensate employers and employees for this overcharge is by reducing the flat-rate contributions.
The purpose of these regulations is to reduce appropriately the flat-rate social insurance contributions payable in respect of persons who will be covered by the pay-related benefit scheme. The rates being reduced are therefore the ordinary rates which are payable in general by persons in industrial, commercial and services-type employments and the special rates payable by male and female agricultural workers.
The amount of the reduction proposed for the 3 per cent levied on pay up to £14 a week is 42p per week. The employer is liable for 2 per cent of the pay-related contribution as against the employee's 1 per cent and his flat-rate contribution is being reduced by 28p per week while the employee's is being reduced by 14p per week. These reductions are of necessity flat-rate and affect all persons paying the contributions equally regardless of their earnings.
The liability for pay-related contributions will commence as from Saturday, 6th April, 1974, which is the start of the 1974-75 income tax year and I propose that the reduction in the appropriate flat-rate contributions should take effect as from Monday, 1st April, 1974, which is the start of the first contribution week in that year.
The regulations for this purpose which it is proposed to make under subsection (9) of section 6 of the Social Welfare Act, 1952, may not be made until a resolution approving of the draft regulations has been passed by both Houses of the Oireachtas. The necessary resolution has been passed by Dáil Éireann. I recommend these draft regulations for the approval of Seanad Éireann.
I welcome these provisions. The Bill, as most of us know, has been debated here before. It enables social welfare contributors to receive a benefit in accordance with the wages they are earning. I am particularly pleased that agricultural workers, both male and female, have now been brought into the category from which they have been excluded for many years. Most of us will recall that the agricultural worker has been the cinderella of all our work force. For many years the female worker had to be ten years in employment before she could draw any benefit.
While welcoming the scheme, I regret that the agricultural labour force seems to be on the decline. I am greatly worried that that trend will continue this year because of the falling off in agricultural incomes and because of the inability of many farmers to continue to employ labour which they normally would. However, let us hope that something brighter is on the horizon and that the farming community will be in a position to continue to give the maximum amount of employment. The agricultural worker has been in many ways degraded, and this piece of legislation restores him to his rightful place among the work force in this country.
Let us hope that employment opportunities will be adequate to enable the work force to enjoy full employment during this year. If it should happen that we have unemployment or that somebody has to cease work because of illness or anything else, he will be in a position to enjoy benefits which are related to the wages he had been earning when he was in employment. Those are the main contents of these regulations and we support them fully.
I was glad to hear Senator Keegan speak on behalf of the agricultural workers. It is a sector we seldom hear about in the work context. One would think there were no labourers in agricultural areas, just farmers and ranch owners.
I should like to add the trade union voice to the debate. I should like to make it clear that, even though I refer to representations made by the Irish Congress of Trade Unions and by trade union delegations, I do not claim they were solely responsible for having brought about the benefits under the pay-related schemes. It is true that the trade union voice speaks not only for trade unionists, including agricultural workers, but also for the weaker sections of the community. Trade unions do not confine themselves to the question of wages and salaries. The representations which have been made have borne fruit and for that reason we give the Pay-Related Benefits Act an unreserved welcome and hope it is the beginning of many developments in this direction.
We have not only the increase in benefits but also the reduction by the Minister for Local Government of the local authority rents, subsidised mortgage interest, improved tenant purchase and so on. This is very good social legislation. I do not wish to wander from the point. I am well within the rules of order by merely referring to those other points and not dealing with them as part of the Act.
I should like to draw the attention of the Parliamentary Secretary to one problem. We are all aware of the great upsurge in the cost of living. This has offset the substantial benefits we gained in social insurance as a result of the adjustment upwards in the contributions from both employers and workers. The weaker section of the community will be hit very hard as the price increases continue to rise. Unlike centralised wage agreements, there is no way to introduce a clause which would safeguard people against rising prices. We welcome the legislation to regularise the pay-related contributions, but, unless we keep ahead of them and keep looking at them in comparison with the basic rates and take-home pay of the strongly organised sections of the community, they will lose their value.
Having regard to the fact that the employer-labour agreement, which provided for a minimum of £2, was rejected, the Parliamentary Secretary's thoughts should be running in that direction and the benefits which are derived from salary and wage increases should have some relationship to that minimum.
In welcoming the proposals and the statements made by the Parliamentary Secretary, it is also necessary to put on record that a once-and-for-all increase in these benefits should not be the attitude. Measuring the improvements in 1960, where we got an increase of 2s 6d in the old age pension and where the actual amount payable was 30s, against the present payment of £7.20, it is indicative of the fact that not only the present Government but also the last Government were sympathetic in relation to the problem and there was an awareness created in the people's minds of the necessity to build up social welfare. I should like to see the good work continuing. The last increase was the most substantial we have had. Let us hope this will not be the end of this type of legislation and that when the increases are being talked about in the future, the Parliamentary Secretary will bear in mind that the trade unions would not claim the entire credit for these improvements. Great credit must go to the Minister and the Government in general for this legislation.
Am I correct in thinking the position is that there is a Motion on the Adjournment fixed for 9.30?
The time of 9.30 has been specified.
Would it inconvenience the Parliamentary Secretary by agreeing to sit on after 10 o'clock to complete this?
Under the Standing Orders it would not be possible to sit on after the Adjournment Debate has concluded; and equally it does not seem possible to vary the time which was specified before public business today.
It looks as though it cannot be managed.
I might refrain from looking at the clock for five minutes.
I, too, would like to welcome these regulations. I am glad the agricultural workers are now to benefit from these provisions. They are a section of our labour force who are entitled to be included. Down through the years the agricultural worker has given outstanding service to the nation. For quite a long period in the past they gave devoted service. As any Senators who have been reared on farms know, it is not easy to measure that service in hours. Therefore the agricultural worker cannot be tied completely to time because the running of a farm cannot be regulated according to the hours on the clock. You have to have a dedicated set of workers and certainly I will say that the agricultural workers have been very dedicated in the past. It will be vital for the success of this nation and for the future outlook of farming that we should try to ensure so far as is humanly possible that in the future the livelihood of the agricultural worker will be safeguarded. The vast majority of our exports and indeed of our industrial endeavour is based on agricultural output. That really starts on the farm. It is there you have the agricultural worker who is as much skilled as any other section of our labour force.
The skills that are necessary in modern day farming cannot be acquired in many of our secondary schools or colleges. They are something that workers acquire themselves from the very fact of working on farms. They have an enormous amount of knowledge, they have a good idea of soils and crops and husbandry of animals and all that goes for making a successful business out of agriculture. Under the new EEC regulations and farm plans, the agricultural worker will be far more important now than in the past. It is necessary now to employ new skills, new means and new ideas in farming.
Therefore, we should try to ensure that the work force we have will remain and that if possible we should be able to attract to our farms more people of the same calibre, people who would be able to understand agriculture fairly well, who would attend agricultural classes sponsored by the local agricultural committees, to equip themselves in an occupation that they will follow to the very end of their lives rather than to have a staggered type of system because of which farm workers avail of the first opportunity to emigrate to the bigger towns or cities or to go abroad. We should encourage them to stay on the farms and make it possible for the farmer to pay them and to give them these facilities.
Because of the very low incomes of farm workers, there is a very grave danger at present that many of these people may drift into industry. They would be a very great loss to the nation. I sincerely hope it will not happen in agriculture generally. It is happening in the pig industry and in other branches of farming. Apart from that, I welcome these regulations and I am glad to see that they are bringing the agricultural worker into line with other workers.
I, too, accept and endorse these regulations. I should like to congratulate the Parliamentary Secretary and his predecessors on the excellent work done in this direction. First of all, I think these regulations constitute a definite advance in this particular area of social welfare but more important still they introduce a principle into social welfare which I have long advocated and which is of more importance today than at any time in the past. That is the principle of relating benefits to earnings, therefore in some measures relating benefits to fluctuations in the consumer price index. I would ask the Minister to bear this principle in mind when the Government are considering all future legislation in regard to social welfare. It is very important.
We have to do two things. First of all, we have to bring up as quickly as we can all social welfare benefits to EEC levels, and having done that we must ensure that those standards of benefits are increased in accordance with increases in the cost of living. The cost of living increased by 12½ per cent last year and it is estimated that in the current year the increase will be in the region of at least 15 per cent. Some experts put it at 20 per cent or more.
I am afraid the Senator is now going outside the scope of the debate on these regulations.
I think I have reached the end of what I have to say. I will conclude by repeating the request I have made that the Government should bear in mind this particular principle in all future welfare legislation.
While welcoming the Bill, is it not a fact that these pay-related benefits are largely in insurance — in other words, the group concerned are putting up the fund — and there would be relatively little Government input into it? The 3 per cent collected is in effect what the benefits are paid from.
This pay-related benefit scheme could be described as Fianna Fáil's greatest contribution to the weaker sections of the community — the disabled and the unemployed. It certainly should be a source of consolation for many workers who, fearing unemployment or disability, know that in the future their incomes will be supplemented to a point that will at least keep them living above the poverty line. Since this scheme was first introduced the cost of living has leap-frogged in this country. Is there any way under these regulations that consideration can be given to that fact? For example, 12 months ago a bag of coal cost less than £1 in my own county and today it is £1.80. I notice the Parliamentary Secretary is writing. I do not know if he is taking note of the £1.80. That may not be the right price but that is the price that is being charged for it. While this causes distress to most sections of the community, the greatest distress was caused to the very people we hope will benefit under this scheme. I was very pleased when the Government announced in the budget that they were abolishing the means test for disability allowances.
I am afraid that, as in the case of Senator Kennedy, the Senator is going on to a broad social welfare discussion which is not relevant to these regulations.
The request I was about to make to the Parliamentary Secretary was if in some way these regulations could be applied to the people who are in receipt not of disability benefits but of disability allowances. I have to confess I congratulate the Government on the help they have already given to people in this category, but a person in receipt of a maximum allowance of £5 odd per week just cannot survive in the world we are living in today.
First of all, I should like to thank the Chair and the House for facilitating me in getting these motions through. I will be very brief indeed in replying. The only aspect that I should like to refer to that has been raised by a couple of Senators is the question of prices going up and not being compensated for. There seems to be some confusion with regard to this regulation in so far as the benefits to be derived under it are confined to the insured work force. The benefits to be derived under this regulation are to be directly related to reckonable earnings. Senators can be assured that organised workers are able to take care of increasing prices by way of seeking compensation through increased wages. There is a built-in safeguard against this contingency. I do not think there is any other matter to which I wish to refer.
Would it be in order to ask the Parliamentary Secretary at this stage — I thought it might be covered in his reply or by some of the earlier speakers — the position of the self-employed man who has been a voluntary contributor over a period of years? Where will he stand under this scheme?
The self-employed are not covered by this particular regulation. It is the insurance stamp.
