The purpose of this Bill is to give effect to those major improvements in social welfare which were provided for in the budget in line with the Government's commitment to social reform.
The Bill includes provisions for increases in rates of assistance and benefits and for significant new schemes designed to broaden the scope and effectiveness of our system of social protection. These advances represent another stage in the implementation of the Government's undertaking made in the statement of intent, to bring "immediate assistance to those in need and lay the foundations of long-term policy that will root out the causes of low income...". They also continue the work begun in last year's budget and Social Welfare Act in giving effect to the commitment "to deal with the plight of the aged, deprived children, the widowed, orphaned and deserted" and other groups in need.
The Government are working systematically towards their declared goal of introducing a truly comprehensive system of social security covering all members of the community. The proposals contained in this Bill thus form part of a coherent programme of reform of the social welfare system.
This task is a long-term one, in volving as it does review and reform of a vast and complex system which will be charged in the year ahead with the expenditure of almost £300 million and which provides coverage of one kind or another for the great bulk of the population. I see the provisions of this Bill as a most significant and positive contribution to the evolution of our welfare system, strengthening the foundations upon which the Government can build the necessary structures for the future.
I should like to refer first of all to the non-contributory old age pensions scheme which caters for so many of our senior citizens and also for blind persons. The budget proposals included a number of provisions to improve this scheme—substantial increases in rates of payment, further easing of the means test, the further reduction of the qualifying age for pension from 69 to 68 years and, an important innovation, the payment of allowances for adult dependants who are not themselves entitled to pension.
Hitherto a pensioner whose wife was not old enough to qualify in her own right for pension did not receive any allowance for her in his pension and many thus suffered a severe drop in income on ceasing to be entitled to unemployment assistance when they reached pensionable age. The maximum weekly rate of this allowance for an adult dependant will be £3.65. The maximum weekly personal rate of non-contributory old age pension is being increased from £6.15 to £7.30 for persons under age 80 and from £6.65 to £7.85 for those aged 80 and over. Thus the overall weekly payment for a non-contributory pensioner with a dependent spouse will, at the maximum rates, go up from £6.15 to £10.95 a week, or if the pensioner is 80 or more, from £6.65 to £11.50 a week.
The further easing of the means test by disregarding the first £5 of assessed weekly means instead of the first £4 as at present will again improve the position of all existing pensioners who have less than the maximum pension and will enable many persons who are at present debarred on grounds of means to qualify for pension. In addition the reduction in qualifying age from 69 to 68 will bring over 10,000 new pensioners into the scheme. Blind persons who are not affected by the reduction in pensionable age will benefit from the new rates of pension, the easing of the means test and the new allowance for adult dependants.
Non-contributory widows' pensions are also being improved; the maximum weekly personal rate of pension will be increased from £6.15 to £7.30 and the weekly increases for qualified children are being raised to £2.40. Taken in conjunction with the amounts of a widow's earnings which may already be disregarded in assessing her means, the ignoring of the first £5 of weekly income will further improve the position of a widow who supplements her income by working.
The new weekly rates and the easing of the means test in the case of widows' non-contributory pensions will apply also to the allowances for deserted wives and unmarried mothers.
Orphans' non-contributory pensions are also being increased under the Bill—the increase being 75p which will bring the maximum weekly rate for an orphan up to £4.75.
The maximum weekly rates of unemployment assistance for persons in urban and rural areas are being increased by £1 per week in the personal rate, with a further 70p where there is an adult dependant. This will raise the maximum rate for a single person to £6.35 in an urban area and to £6.05 elsewhere: the rate for a married couple will go up to £10.95 in an urban area and to £10.55 elsewhere. The rates for children go up to £1.95 for each of the first two and to £1.50 for each additional child.
Following the very substantial improvements last year in the general children's allowance scheme we have found it possible this year to make a further improvement. The rates payable for each qualified child are being increased by 30p a month. This will bring them up to £2.30 per month for the first child, £3.30 for the second and £4.05 for each additional child. The new monthly rates will therefore be £2.30 for a one-child family, £9.65 for a three-child family and £17.75 for a five-child family. These rates compare very favourably with the rates payable under the general family allowance scheme in Britain and Northern Ireland, where nothing is paid for a one-child family, £8.23 per month is paid for a three-child family and £16.90 for a five-child family.
I come to increases in the rates of pensions and short-term benefits under the social insurance system which are set out in some detail in the Bill and the explanatory memorandum. I will refer briefly to some of the main items. The personal rates of retirement and old age contributory pension for persons under age 80 go up by £1.30 a week to £8.50 and by £1.40 a week to £9.10 for persons aged 80 or over. The rates of widow's contributory pension, deserted wife's benefit, maternity allowance, flat-rate unemployment and disability benefits and invalidity pension are all being increased by £1.20 a week. In the case of a recipient of widow's contributory pension who is aged 80 or over the increase will be £1.30 a week.
The allowances paid with pensions and other benefits in respect of adult dependants and qualified children are being increased also. Thus a married couple with four children will get £20.80 a week by way of flat-rate unemployment and disability benefit compared with £17.50 at present while a widow with four qualified children will get £18.00 as against £15.20 at present.
In the case of retirement pensions and contributory old age pensions, a married couple both of whom are aged over 68 will get £15.00 by way of weekly pension or £15.60 if, in addition, the pensioner is aged 80 or over, as against £12.35 and £12.85 respectively at present.
Pensionable age under the social insurance system is being reduced to 68 years. This affects not only the qualifying age for old age contributory pension but also the maximum age up to which the short-term benefits such as disability and unemployment benefit can be paid. Liability for payment of social insurance contributions will, of course, also cease at 68 years instead of 69 as at present. Because of this the reduction in pensionable age could have undesirable repercussions on some contributory pensions. In order to prevent these there are some special provisions in section 11 of the Bill, including a number of "saver" clauses, to protect the position of existing pensioners and persons approaching the age of 69 years.
The extra cost of the improvements in the social insurance services provided for in this Bill must be met by the Social Insurance Fund, which is financed by contributions from employers and insured persons with the Exchequer meeting the annual deficit. It will be necessary to increase the rates of social insurance contributions payable by employers and insured persons to meet their share of the extra cost. As announced by the Minister for Finance in his budget statement, employers are being asked as last year to bear a higher proportion of the cost of improvements in view of the further relief which they are getting in their rates liability on industrial and commercial premises.
A total increase of 60p in the rates of social insurance contributions, which cover all benefits of the social insurance system, is necessary. I propose in the Bill that the employer should bear 40p of this and the employee 20p. Increases of less than 60p will be applied to those rates of social insurance contribution which do not cover all the benefits of the system.
The ordinary rates of social insurance contribution, including the occupational injuries contribution, will thus be increased to £2.98 for men, of which the employer will pay £1.74 and the employee £1.24. For women the new ordinary rate will be £2.87, of which the employer will pay £1.69 and the employee £1.18. These rates do not include the health contribution of 15p where that is payable. Neither do they include the redundancy contributions which are 13p for men and 12p for women, of which the employer pays 10p in each case.
In line with the improvements in the general social insurance system the Bill also provides for increases in the rates of benefits payable under the occupational injuries scheme. The increases in weekly rates will broadly be in line with those provided in the general social insurance benefits. It is not proposed on this occasion to increase the weekly contributions which are payable by employers only to the Occupational Injuries Fund from which the cost of occupational injuries benefits is met.
I am glad to be able to make provision in this Bill also for three new schemes to widen and improve the income maintenance services. The first of these is a scheme of allowances for single women who have attained the age of 58 years. Many of these women have never been in wage-earning employment because they remained at home as housekeepers and they can no longer be regarded as having a reasonable prospect of securing employment. Thus they cannot hope to come within the scope of the various social insurance schemes. The new scheme will be non-contributory and subject to a means test and the allowance will be paid in the form of a pension, the maximum rate being the same as the urban rate of unemployment assistance. The means test to be applied will be broadly on the same lines as for unemployment assistance.
The second new scheme will provide a social assistance allowance for the wives of prisoners serving sentences of not less than six months. This scheme will be parallel to the schemes of allowances for deserted wives and unmarried mothers. The rate of allowance payable to a prisoner's wife will be the same as the rate of widow's non-contributory pension which would be payable to her if she were a widow and there will be appropriate increases in respect of qualified children.
The third new scheme is designed to help the family of a social welfare beneficiary who dies leaving an adult dependant. Inevitably in such cases there is an immediate drop in the family income and thus the stress and hardship which are occasioned by a family bereavement are aggravated. To alleviate the plight of the dependants in these cases it is proposed that, where a person who is receiving benefit, including an increase in respect of an adult dependant, dies, payment of the benefit will continue to be made for six weeks to the surviving adult— normally the widow. As a corollary to this proposal it is also proposed that title to the appropriate widow's or orphan's pension which would be payable to the survivor will not commence until after the six-week period has expired, but regulations may modify this to save an individual from loss where the appropriate pension is greater than the benefit paid.
Detailed conditions of these new schemes will be prescribed in regulations.
The Bill also makes provision for a number of miscellaneous improvements in the social welfare code. The first relates to widows of retirement pensioners. At present the widow of an old age contributory pensioner is awarded a widow's contributory pension on the death of her husband without further reference to insurance records and I propose to extend this provision to the widows of retirement pensioners. This automatic entitlement will simplify procedure and expedite the award of pension to these widows.
In last year's Act widows, deserted wives and unmarried mothers who were receiving pensions or allowances as such under one or other of the Department's schemes were relieved of the liability to pay the employee's share of the social insurance contribution when working. I propose in the Bill to extend this concession to working widows receiving widow's pension under the occupational injuries benefit scheme or from a member state of the EEC.
Provision is included in the Bill for some improvements in the scheme of deserted wife's benefit which are designed to bring it more closely into line with the widow's contributory pension scheme on which it is based. The first of these will enable a prescribed relative allowance to be paid to an incapacitated recipient of deserted wife's benefit who is over pensionable age and requires full-time care and attention. The second improvement will allow a person who can qualify for both deserted wife's benefit and non-contributory old age pension to draw only the deserted wife's benefit except where the rate of non-contributory old age pension is greater, in which event the pension only will be paid. The third is concerned with the contribution conditions for deserted wife's benefit which are somewhat more stringent than those for widow's (contributory) pension. I propose to bring the contribution conditions of both schemes into line and, as a result of this change, a deserted wife will have a better chance of qualifying for the maximum benefit.
There are some minor provisions in the Bill, one to relax the waiting days requirement for unemployment assistance in certain cases and the others of a technical nature to clarify the position arising out of the introduction of pay-related benefit.
All the improvements proposed in the Bill are to come into operation at the beginning of July next or on the first pay-day in July. The substantial nature of these improvements can to a certain extent be measured by their cost. On the social assistance side, which includes children's allowances, it is estimated that the increase in cost to the Exchequer will be £26.23 million in a full year and £13.12 million in the current financial year up to the end of December, 1974. On the social insurance side, the gross increase in expenditure from the social insurance fund is estimated at £21.93 million in a full year, of which £17.92 million will be met by increased contribution income leaving just over £4 million to be borne by the Exchequer in a full year and some £2 million in the current year. The total cost for the full year will therefore be £48.16 million.
I have great pleasure, therefore, in recommending the Bill to Seanad Éireann for speedy and favourable consideration.