Vol. 95 No. 4
I move:
That the Social Welfare (Modification of Contribution Conditions for Benefit) Regulations, 1980, proposed to be made by the Minister for Social Welfare and laid in draft, sanctioned by the Minister for Finance, before Seanad Éireann on the 12th day of November, 1980, under subsection (4) of Section 14 of the Social Welfare Act, 1952, be approved.
The draft Social Welfare (Modification of Contribution Conditions for Benefit) Regulations, 1980, are necessary because of the introduction, as from 6 April 1979, of the new system of pay-related social insurance contributions. The new system involves, inter alia, changes in the contribution and benefit years for social insurance purposes Hitherto, the men's benefit year commenced on the first Monday in June each year and the women's benefit year on the first Monday in December. The benefit year for both men and women will in future be the year commencing on the first Monday in the calendar year. The first common benefit year for men and women will, therfore, commence on 5 January 1981 and the governing contribution year will be the income tax year 1979-80, that is, the year which commenced on 6 April 1979.
Under existing legislation, claimants for disability benefit are required to have not fewer than 48 contributions paid or credited in the contribution year preceding the benefit year in which the claim is made in order to qualify for payment at the full rates. Reduced rates of benefit are payable if the claimant has fewer than 48 contributions but at least 26 contributions paid or credited in the governing contribution year. Claimants who have fewer than 26 such contributions in the governing contribution year are not entitled to payment in the new benefit year.
Because of this contribution condition it has been necessary for my Department to examine all claims to disability benefit before the beginning of a new benefit year to ensure that the claimants continue to have title to benefit. Hitherto, in accordance with this requirement, all men's claims have been examined in April and May before the beginning of the men's benefit year in June and women's claims in October and November before the beginning of the women's benefit year in December. The change to a common benefit year for both men and women would necessitate examination of all disability benefit claims in the months immediately preceding January each year. A large volume of work is involved in this exercise and it would be extremely difficult for my Department to cope with the examination of claims without the risk of delay in the payment of benefit in many cases.
The regulations now before the House are designed to deal with this problem by modifying the contribution conditions for disability benefit. In effect they provide that when a person claims disability benefit, the benefit year for that claim will be the year from the date of commencement of the claim. Consequently, the rate of disability benefit applicable at the start of the claim will continue to be the rate payable for one year unless the claimant ceases to claim or the right to benefit is exhausted. The rate of benefit will not be affected, as it may be at present, when a new benefit year supervenes in the first 12 months of incapacity. At the end of this period the claim will be examined on the basis of the person's contributions in the appropriate governing contribution year. Thus the re-examination of claims will be spread over the calendar year and will not have to be undertaken in the pre-Christmas period each year as would otherwise have been the case but for these regulations.
Regulations modifying the contribution conditions for unemployment benefit were approved in 1956. The proposed modification for disability benefit purposes is on similar lines and is intended to avoid possible delay in the payment of benefit at the commencement of each year. In the circumstances I now ask the House to approve of the Social Welfare (Modification of Contribution Conditions for Benefit) Regulations, 1980, in draft.
As far as this party are concerned, we obviously approve. We have to take the Minister's word that it is an improvement. I have to confess — I wonder how many others in the House would share the confession with me — I had not a notion what he was talkimg about. It is an indication of the complexity that has attached itself to the whole social welfare code. I take the Minister's point that this will be in an ease of the recipients. One thing I heard, understood and appreciate from what he said is that it will speed up claims. If it does that it will have the support of everybody in the House.
I wonder how the people involved, the claimants, can make head or tail of the system when it takes two complicated pages of script by the Minister to explain the change that is now being effected. The whole system will have to be examined with a view to scrapping it. It might not be possible, because of the complexity of administration, to bring in some new simplified form of assessing and issuing social welfare payments but we will have to try.
It is rather unusual that we did not have a copy of the Minister's speech available to us. It is a case of depending on memory in relation to what the Minister was telling us. As I understood it, there were two basic reasons why the Minister introduced this, firstly to take account of changes in pay-related social insurance contributions which have been effective for some time past and secondly to establish a common benefit year for both men and women. We cannot have any objections to that. It is streamlining the situation and on the face of it, we have no reservations about it.
I understood that it also is to take account of certain modifications in the contribution conditions for the payment of disability benefit. I did not hear fully part of the Minister's speech but my recollection from reading what was said in the Dáil is that there is a certain danger in dovetailing, as it were, the contribution years and starting from 5 January 1981 in that in the adjustments some people in receipt of disability benefit will gain slightly but others will endure some loss. I gather there are some people in receipt of disability benefit who will be on the wrong side, as it were, of the situation when this comes into being and their loss could be in the region of £2 per week. I also understand that if they continue to qualify for disability benefit in the future this, in the normal course of events, would be made good. Nevertheless, we must recognise that people on disability benefit are people who are obviously suffering or enduring a disability of some kind or other and, very often, their financial resources are limited to the benefits they receive. I find it very hard to contemplate or agree that people on a tight income, as it were, would be expected to accept a reduction or that we would bring in a system that would result in a reduction in what is already a meagre income to them.
I accept the necessity to have a common contribution year and that the regulations are necessary because of changes that were introduced some time ago. I accept there is merit in it from the administrative point of view. However, it is unreasonable in this day and age to say to a person on disability benefit, particularly in the middle of winter: "You are going to be at a bit of a loss. Your income will be reduced by anything up to £2 per week but if you are still drawing benefit in 1982 in the normal course of events you will recover the loss that arose in early 1981." That is unreasonable and I should like the Minister to assure the House that he is in a position to take steps to ensure that nobody suffering a disability will be asked to carry a loss of £2 per week in income as and from 5 January next.
I agree with the common contribution year and I realise that for administrative reasons it is very necessary. I support Senator Cooney when he talks about the way this is worded. To be quite honest, I do not think the top civil servants really understand that there are people who will be drawing this benefit or will have to apply for it who have not even got their primary certificates. We throw out this jargon to them and expect them to try to get around it. I do not think that is good enough. If there are any soldiers around they will know that one must always cater for the thickest guy in the squad. This does not do that. I am sorry to see the way in which it is worded. I thought it would have been worded differently. That does not, of course, detract from its purpose which I support.
What Senator Howard said was right. It is difficult to ask somebody who is out sick, say, for about three months and may not be out sick again for another three or four years, to suffer £18 of a loss and in the case of a married woman £9. I do not know whether it is possible or not but instead of waiting to benefit when a person goes sick again, which might be after three or four years, if the person was really badly off could he not be given £18 out of the assistance to supplement him for this loss of nine weeks at £2 a week? It is a pity that we have to start wording things in such a manner as to ensure that people do not fully understand them. People in this Chamber, and in the other Chamber, found it difficult to understand the order. Nevertheless, having got the gist of it we think it is a good idea and we do not want to delay it going through.
Since the introduction of the PRSI system can we find out exactly how a person knows whether his contribution is being paid or not? Under the old system of insurance there was a stamp to be purchased. When the stamp was purchased there was an indication as to whether insurance was being paid for that person or not. Under the new PRSI system — I am trying to protect myself and my employees — how does an employee know whether he is covered by insurance or not? How do the Department know whether anybody at present is covered under the PRSI system? The first statement says that the necessity for these regulations arises from the introduction of the PRSI system. At present there may be employers who, because there is not a physical purchase of a stamp, might decide to wait until the end of the year to pay their PRSI contributions and in the intervening period they may go out of business or their circumstances might change. I cannot see what check there is to find out whether anybody is covered under the PRSI system.
I thank Members for their contributions. It is the first time I have been in the Seanad since I was a Member of it and I am glad to be back here. I accept in a certain way what Senators Cooney, Howard and Harte said about regulations of this kind which are sometimes difficult to understand. This is the most simple regulation that I have seen in any Department because it means that women and men are being treated in the one contribution year. For next year from 5 January the contribution year for benefit will be the income tax year 1978-79. This system is easier to understand than the old system where the benefit year for men started in June and the benefit year for women started in December.
The question Senator Howard raised was that of people who may for a short period of seven or eight weeks lose 60p or £2, as the case may be. This was also mentioned in the Dáil. When we amend any regulations in the Department we always try to amend them so that there will be the least hardship involved. In amending this regulation claimants will be in benefit to the extent of some £150,000. There will be no grave hardship. We have at present 67,000 people in receipt of disability benefit. Fewer than 5,000 will be affected and most of those people will actually gain by the changes in the system. I take the point that there may be isolated cases where persons would lose out but it will be negligible.
Senator Lanigan raised the question of how does a person know whether he is insured or not, or how does the employer know. This is a matter for the Revenue Commissioners as they are responsible for collecting PRSI. They in turn notify us. An employee will not suffer in any way as a result of an employer not paying his PRSI because if it happens that a firm has not paid PRSI for two years and a receiver was moved in or if it went bankrupt the Department would pay the employee's full benefit but we would have to try to verify was he in employment at the time or was he insured. That can be done. He normally gets a P60 and we could check up with the Revenue Commissioners to see what the position was.
