I am very happy that my first appearance in this House is to promote a Bill which will make significant improvements in our social welfare services, and be of particular help to those genuinely in need of them.
Before I deal with the provisions of the Bill I would like to explain to Senators why this year's Social Welfare Bill has an unfamiliar look. It contains some complex technical sections which are designed to facilitate the consolidation of all social welfare legislation. As Senators are aware, the Social Welfare (Consolidation) Bill, 1976, is with the Standing Joint Committee on Consolidation Bills but four further statutes have been enacted since it was introduced in 1976. Arrangements to have these Acts and the present Bill incorporated into a revised measure are well advanced. I propose, in due course, to withdraw the present consolidation Bill and to introduce the revised Bill. This will assist the Standing Joint Committee in their examination of the matter.
The principal technical changes arise out of the creation of a new Schedule—the Eighth Schedule—to the Social Welfare Act, 1952. This new Schedule sets out the rates of social assistance payments on the same lines as the rates of social insurance payments are set out in the Third Schedule to the 1952 Act. It will thus be possible to provide for future changes in rates of assistance by amending the Schedule without making changes in the main text of the Principal Act or other statutes. Before I leave this point, I should mention that the technical or structural changes in themselves do not affect entitlements under the social welfare code.
The new Bill will give effect to the increases in the rates of social welfare payments and other changes in the social welfare schemes announced in the budget. The explanatory memorandum which accompanies the Bill sets these out and to facilitate comparison includes tables which in previous years were incorporated in the text of the Bill itself. I trust that Senators will have found the memorandum of assistance in their consideration of this legislation.
During last year the Government's commitment to keep social welfare payments in line with increases in the cost of living was fulfilled and, in addition, real improvements were brought about in the value of these payments. The increases now being provided for—25 per cent on the long-term payments and 20 per cent on the short-term payments will continue this process.
Retirement pensioners, old age pensioners and widow pensioners and other persons on long-term payments are generally regarded as requiring special attention in the social welfare context and I am sure that the desirability of higher increases in their case will be readily acknowledged.
I should point out that these percentage increases are on top of the temporary increases of about 6 per cent provided from October of last year under the terms of the national understanding. The decision to continue these increases means that the annual rate of increase over the rates provided from April 1979 exceeds 31 per cent for long-term and 26 per cent for short-term payments.
I would now like to illustrate the effects of the increases on individual payments and to express them in cash terms which is the form in which they will be judged by recipients.
The maximum weekly personal rate of non-contributory old age pension is being raised by £4.20 to £21.00 for persons aged under 80 years and by £4.50 to £22.50 for those over 80. The reduced rates of pension payable where weekly means exceed £6 are also being increased. A further step is being taken this year towards rationalising the scales of means and rates of pension. Since last year's improvement, pensions are reduced by £1.30 for every increase of £1 in means. Under the present Bill, the stages between rates will now be lowered to £1.20. This will extend the scale of means and pensions to include six additional rates of pension and reduced rates of pension will be payable up to a means limit of £23. For a pensioner with qualified children, of course, the means limit will be higher. The maximum rate of payment in respect of an adult dependant under 66 years of age is being increased by £2.10 to £10.55. The overall maximum payment for a pensioner with a dependent spouse will, therefore, go up to £31.55 and to £33.05 if the pensioner is over 80 years. The additions to pension payable to pensioners with qualified children are being raised by £1.15 to £5.70 a week for each of the first two children and by 90p to £4.40 a week for each subsequent child.
This year a number of further changes to individual schemes have been found to be possible. Two such improvements affecting blind persons are being made in the Old Age Pensions Acts. The qualifying age for blind pension is being reduced from 21 to 18 years, and the amount of a blind person's earnings which may be disregarded, when means are being assessed for pension purposes is being increased.
Section 6 of the Bill provides for the increases in the general rates of unemployment assistance. The increase in the personal weekly rate of assistance will bring the maximum up by £2.85 to £17.00 in urban areas and by £2.75 to £16.45 in rural areas. The rates for adult dependants are being increased to £12.25 and £11.95 respectively and the rates for dependent children to £5.30 for each of the first two and £4.10 for others. Thus the rate of assistance for a married couple with two children is being increased by £6.70 to £39.85 in an urban area and by £6.55 to £39. in a rural area.
The means of certain smallholders in specified disadvantaged areas may be assessed notionally for unemployment assistance purposes. The assessment is based on land valuation but only where the valuation is £20 or less. In these cases, special rates of unemployment assistance are payable. The notional system of assessment is a concession having regard both to the present levels of farm incomes and the means test for unemployment assistance generally.
The special rates payable to smallholders who continue to avail of notional assessment will be maintained at the level payable from October 1979. The additional increase of 20 per cent will only apply to those smallholders on factual assessment.
Any smallholder whose means are assessed on a notional basis may have his means assessed on a factual basis if this would be to his advantage and some 3,000 smallholders have already opted for factual assessment and are receiving unemployment assistance at the rates generally applicable. Smallholders on factual assessment will receive the general 20 per cent increase provided in the Bill.
Sections 7 and 8 of the Bill deal with two improvements in the unemployment assistance scheme being provided this year.
Section 7 will increase the amount of earnings from seasonal fishing disregarded in assessing means for unemployment assistance purposes to a maximum of £120 as against £80 at present.
The six months' continuous residence requirement for unemployment assistance purposes is being removed by section 8.
Sections 9 and 11 provide for increases in all rates of non-contributory widows' and orphans' pensions and other improvements. The improvements in widows' pensions automatically apply to the social assistance allowances for deserted wives, unmarried mothers and prisoners' wives.
The maximum weekly personal rate of widow's non-contributory pension is being increased by £4.20 to £21 and the amount for each qualified child by £1.40 to £6.90. Provision is also made for reductions of £1.20, as opposed to £1.30 at present, in pension for each £1 increase in means and for additional rates of pension.
Section 13 applies a 25 per cent increase to the social assistance allowance payable to single women aged between 58 and 66 bringing the maximum from £14.65 to £18.30, and section 14 applies a 20 per cent increase in the rates of supplementary welfare allowance.
Section 10 provides that a deserted wife who becomes widowed will qualify automatically for widow's non-contributory pension at the same rate as the deserted wife's allowance which was in payment to her. Under present procedures, a woman in receipt of a deserted wife's allowance whose husband dies must, if she wishes to obtain a widow's non-contributory pension, apply specifically for it; this entails a reinvestigation of means. The means test and the rates of payment are the same in both schemes, and I consider that title to widow's non-contributory pension should be conferred on such widows with the minimum of formalities. While the provision will convey no monetary advantage, I know that the simplification of procedures will be welcomed. It will, of course, be open to a widow to apply for a reinvestigation of her means if she considers that a higher rate of pension should be paid to her.
The present definition of orphan for social welfare purposes includes a child whose parents are dead and who does not reside with a step-parent. It also includes a child whose mother dies while deserted wife's allowance or benefit was payable to her and whose father does not wholly or mainly maintain him. Cases have arisen where a woman who was deserted by her husband dies but, prior to her death, had not applied for, or had not qualified for deserted wife's allowance or benefit. Similar situations have occurred where a husband was deserted by the wife and, on his death, the children were left without rights to benefit. Accordingly, it is proposed to expand the definition of "orphan" to include the child of a deceased parent, who had been deserted prior to death where the other parent has abandoned the child. The provisions in sections 12 and 22 of the Bill will enable orphan's non-contributory pension, orphan's contributory allowance or orphan's pension under the occupational injuries scheme to be paid in respect of such children.
I will now turn to the increases in the rates of contributory benefits and pensions under the social insurance scheme which are provided by section 15 of the Bill. The personal rate of disability and unemployment benefit is increased by £3.40 to £20.45 and a married couple will now receive £33.70, an increase of £5.60 per week. Allowances for children with these benefits are also being increased.
The personal rate of invalidity pension is being increased by £4.40 to £22.05 with an addition of £14.30 for an adult dependant, while maternity allowance, which is a short-term benefit, is being increased to £20.45 in line with disability benefit.
The new personal rate of widow's contributory pension and deserted wife's benefit, will be £22.50 and, for those aged 80 or over, £24.05. The additions to widow's contributory pension and deserted wife's benefit for qualified children are being raised to £7.50 for each child. A widow or deserted wife with three qualified children will now get £45, an increase of £9 per week.
The personal rates of contributory old age and retirement pensions for persons under age 80 go up to £24.50 and, for those over 80, to £26.25. The addition to pension for an adult dependant is being raised to £15.65, where the adult dependant is under pensionable age, and to £18.30 where the adult dependant is aged 66 or over. Accordingly, a married couple both over pensionable age will get £42.80 as compared with £34.25 at present and, if the pensioner is aged 80, the new rate will be £44.55, an increase of £8.90 per week. In the case of these pensions, the increased amounts for child dependants will be £6.40 for each of the first two children and £5.30 for each subsequent child.
All the personal rates contained in section 15 of the Bill are the maximum rates, payable where the contribution conditions for the benefit concerned are fully satisfied. Most people qualify for the maximum rates, but when the claimants' insurance records are deficient, reduced personal rates are payable. As is normal, these rates will be increased by regulations. I would remind Senators that it is only the personal rates of benefit that are reduced where there is a deficient record. The allowances for a dependent wife and children remain unchanged.
A persistent criticism of the disability benefit scheme is that it can act as an inducement to malingering. It is alleged that some workers claim benefit in respect of unnecessarily frequent short absences from work.
At present, a person is disqualified for payment of benefit for the first three days of illness unless those days fall within 13 weeks of a previous period of illness or unemployment. A person can thus get disability benefit from the first day of a sick absence occurring within three months of the end of the previous claim even though the second absence may be as short as three days. In order to tighten control in this area section 17 of the Bill will apply the three waiting days to every claim to disability benefit, except in the case of a person who becomes ill while unemployed or who suffers a relapse within three days of returning to work. The position in regard to waiting days for the purposes of unemployment benefit and injury benefit under the occupational injuries benefit scheme remains unchanged.
Rates of benefit under the occupational injuries scheme, including amounts in respect of adult and child dependants, are being increased by section 20. The increases being applied are in line with the increases under the general social insurance scheme. However, this year, for the first time, disablement benefit is being treated as a long-term benefit and the 25 per cent increase is being applied to it.
The allowance payable in respect of a prescribed relative giving full-time care and attention to an incapacitated pensioner who has attained the age of 66 years is being raised to £11.75 and in the case of a pensioner living alone, the additional allowance is being increased to £1.65.
Beneficiaries under the schemes of unemployment benefit and assistance, disability benefit, invalidity pension, injury benefit and supplementary welfare allowances can be affected by an anomaly as regards entitlement to an increase for an adult dependant. This is being dealt with by sections 6, 14, 19 and 23 of this Bill. A beneficiary under these schemes who is single or widowed or receiving deserted wife's benefit or allowance may be paid an increase—known as a "housekeeper's allowance"—in respect of a woman who is wholly or mainly maintained by the beneficiary to have the care of at least one child. However, certain married persons who are separated from their spouses cannot at present be paid the allowance even though their circumstances may be analogous to single or widowed persons. The amendments provide for the payment of the "housekeeper's allowance" to married persons in appropriate circumstances.
The amounts of children's allowances are being increased again this year. The monthly allowance for the first child will go up by £1 to £4.50 and by £1.50 to £7 for each subsequent child. The new monthly payment for a family of three children, for example, goes up to £18.50, an increase of £4.
Children's allowances, which are paid directly to the mother, constitute an important source of income for large families particularly in the lower and middle income groups. The adjustment in the child income tax allowance announced in the budget statement will ensure that the full value of the increase in children's allowance is directed mainly towards these families. The increased rates will be effective from 1 July 1980.
Section 25 provides for increases in the grants paid in respect of multiple births which, at present, are fixed at £100 in respect of triplets and £150 on the birth of quadruplets or any higher number. These amounts are to be increased to £300 and £400 respectively from 1 April 1980.
Section 26 raises the earnings ceiling from £5,500 to £7,000. The rates of pay-related social insurance contributions are also being increased to meet the employer's and employee's share of the cost of the improvements in the social insurance schemes. The effective increase of 0.8 per cent on the current rate of contributions, 11.2 per cent, applicable to persons eligible for all benefits, will be borne by employers and employees by increases in their contributions of 0.7 per cent and 0.1 per cent respectively.
While the section provides for the new rates of contribution by the substitution of "3.5 per cent" for "3.2 per cent" and "8.5 per cent" for "7.5 per cent" in section 6 (1) of the Social Welfare Act, 1952, I should point out to Senators that the present rates of contributions are not 3.2 per cent for employees and 7.5 per cent for employers. The rates were, in fact, temporarily increased to 3.4 per cent and 7.8 per cent respectively by section 5 (2) of the Social Welfare (Amendment) Act, 1978, for the tax year ending on 5 April 1980. This provision will lapse next month leaving the original rates in section 6 (1) to be increased from 6 April 1980 by this Bill.
Increases are also being provided in the rates of voluntary contributions. All these changes will be effective from 6 April, 1980. The new rates and the increased earnings limit are expected to increase the yield from contributions by £44 million to an estimated £380 million in the current year.
Any necessary increases in the special or "modified" rates of contributions payable in respect of certain employments, for example, civil servants, outworkers, certain share-fishermen, will be made by regulation.
The overall cost to the Exchequer of the provisions of this Bill will be £90.2 million in 1980. Of this amount, social assistance will account for £57.3 millio, all of which will be borne by the Exchequer. The total increase in the cost of the social insurance changes is expected to be £77 million and will be met out of the social insurance fund. This fund is financed by contributions from employers and employees and by an annual subvention from the Exchequer. As increases in pay-related contributions from employers and employees will yield an estimated £44 million, the extra cost to be borne by the Exchequer will be about £33 million in the current year.
The changes in the Bill which I have outlined can be summarised as the increase of long-term payments such as pensions, both contributory and non-contributory, by 25 per cent, the increase of short-term payments such as disability and unemployment benefit, unemployment assistance and supplementary welfare allowance by 20 per cent; the increase of children's allowances by an average of about 28 per cent; the extension of entitlements for various categories, for example blind persons, widows, orphans, seasonal fishermen and the taking of measures to prevent abuse of the disability benefit scheme.
I am satisfied that the provisions of the Bill will bring about a real improvement in the social welfare system, and I, therefore, have pleasure in recommending it to Seanad Éireann.