I am pleased to come before the Seanad again this year with a measure to provide very substantial increases in social welfare payments. The Government's resolve to protect the old, the weak, the deprived and the underprivileged sectors in our society is restated clearly by the provisions in this Bill. Social welfare payments are being increased in real terms and not just in line with the cost of living or movements in earnings.
While in recent years considerable attention has been devoted to consolidating the statutory provisions relating to the social welfare code, the real emphasis has been on improving the living standards of social welfare recipients, and of providing substantial extensions of schemes. On a phased basis each year, anomalies have been removed, qualifying conditions have been eased and the scope of certain allowances has been extended to those not previously entitled to them. This is being continued and certain anomalies and minor discrepancies which came to light during the preparation and passage of the Consolidation Act are being dealt with in the Bill now before the House.
The main provisions of this Bill relate to the proposals for increases in the rates of payments which were announced in the budget and also for changes in the pay-related benefit scheme and for the new maternity allowance scheme for women in employment.
The new rates of payment set out in the Schedules represent increases of 25 per cent in the adult long-term rates of payment, giving increases ranging from £5.25 to £6.15 a week in the personal rate of payments of the principal pensions and allowances. The single women's allowance is being increased by £4.60 a week, while pensioners under the occupational injuries benefit scheme will receive increases of up to £7.40 a week. The amounts payable in respect of adult dependants are also being increased by 25 per cent as are the "living alone" and "over 80" allowances.
In the case of short-term payments, that is disability benefit, unemployment benefit and assistance, injury benefit and supplementary welfare allowance, the increase is 20 per cent. All smallholders, including those whose means are assessed on the notional basis, qualifying for unemployment assistance will receive this increase. The amounts paid for dependent children under all insurance and assistance schemes, both long and short-term, are going up by approximately 10 per cent, in addition to the 30 per cent increase in children's allowances.
The explanatory memorandum circulated with the Bill sets out a number of examples showing the increases being granted. I would like to deal with an aspect not set out in that memorandum, and which is sometimes lost sight of. The value of many pensions is enhanced by the various additional services available. Pensioners over the age of 66 are entitled to free travel and frequently also to fuel vouchers. In addition, these pensioners receive an increase of £2.05 per week if they are living alone. They may also receive free electricity allowance, free TV licence and assistance towards the cost of having a telephone if they are living alone or with certain relatives or with other pensioners.
The monthly amounts of children's allowance are being increased by about 30 per cent this year. The new rates will be £6 for the first child and £9 for the second and each subsequent child. The monthly allowance for a family with three children will be £24 from 1 July next compared to £18.50 at present.
Section 8 of the Bill provides for the total removal of the condition which requires that in order to qualify for old age pension a person must have had at least 15 years' residence in the State. The improvement will be of general application but it is being done at this time to ease the position for South-East Asian refugees who have recently settled in this country. The five year residence condition for blind pension is also being removed.
The pay-related benefit scheme is being revised in two respects. At present pay-related benefit is payable only from the 13th day of incapacity for work or of unemployment in a period of interruption of employment. In other words, there are 12 ‘waiting days' for pay-related benefit purposes. Where two periods of incapacity or of unemployment are separated by not more than 13 weeks, the ‘waiting days' served on the first claim count also for the subsequent claim.
The effect of section 6 is that 12 ‘waiting days' will be applied for pay-related benefit purposes for each distinct spell of incapacity. It does not affect the position of claims for unemployment benefit. Where, however, a person has a relapse within three days of resuming work or his incapacity occurs during a period of unemployment, additional ‘waiting days' will not generally be imposed.
It was not envisaged that pay-related benefit would be paid for very short interruptions of employment due to illness or unemployment and this is why the existing waiting days provision was introduced under the 1973 Act which brought in the pay-related benefit scheme. In the case of unemployment, tax refunds are taken into account in determining the rate of pay-related benefit to be paid in conjunction with unemployment benefit. It has not proved possible to take tax refunds into account in the same way for disability benefit cases. The change being made is an alternative way of ensuring that the objectives of the pay-related scheme will be equitably met in all cases of short absences from work whether due to incapacity or unemployment.
Section 7 provides the second change. The basic rate of pay-related benefit is calculated by deducting £14 from the reckonable weekly earnings and by then taking a percentage — 40 per cent for the first 147 days and 30 per cent, 25 per cent and finally 20 per cent for each subsequent 78 days — of the balance of those earnings. The disregard now in operation was fixed in 1973 and first applied when the maximum rate of disability benefit and unemployment benefit was £6.55 and the yearly ceiling for reckonable earnings was £2,500. It has not been revised since despite the increases in the flat-rate benefit and the ceiling. From next month the weekly flat rate of benefit goes up to £24.55 and the ceiling will be £8,500.
While the provision now proposed will not restore the old relativity, the amount disregarded will now be linked to the maximum personal rate of short-term benefit payable at the beginning of each benefit year. The new disregard will, accordingly, be £20 in the present year and will apply to fresh claims commencing after 6 April.
This Bill provides for a new pay-related maternity allowance scheme for women in employment which relates to the provisions for statutory maternity leave recently introduced by the Minister for Labour and approved by the Houses of the Oireachtas. An improved allowance will be payable for 14 weeks to women on maternity leave. The level of payment is designed to correspond to take-home pay when tax refunds are taken into account. The actual payment will be 80 per cent of the earnings which are reckonable for pay-related benefit purposes.
An important feature of the package is that there will be a minimum weekly payment of £45.75 as compared with the minimum of £20.45 payable at present. The minimum payment is based on the average earnings of female workers. In addition, the contribution conditions for maternity allowance are being eased under the new scheme so as to cater for women who re-enter the workforce after an absence of some years.
The new scheme will give considerably greater amounts of benefit to persons entitled to maternity leave. For example, a person receiving the current average earnings of about £80 per week in the food and drink industry will receive more than £300 in additional benefit, while a woman now earning £55 in, say, the textiles industry will receive an additional £200 or more. In addition, the claimant would usually receive tax refunds. I believe that the levels of payment proposed will not only make it easier for a woman to abstain from work outside the home for a suitable interval before and after her confinement, but will make a valuable contribution towards the many expenses which a family incurs on those occasions.
The scheme provided in Part III of this Bill will subsume the existing 12 weeks scheme in the case of women entitled to maternity leave. The additional cost will be met in full by an addition of 0.15 per cent to the employer's pay-related social insurance contribution. This 0.15 per cent increase is included in the overall increase of 0.25 per cent for the employer. This arrangement will equalise the cost of maternity leave for employers. Currently an employer with a predominantly female workforce is severely disadvantaged if he pays in respect of maternity leave. The existing 12 week maternity allowance scheme will continue to apply to women who do not qualify for maternity leave under the maternity protection of employees legislation.
The Bill also contains a number of miscellaneous amendments designed to achieve uniformity in the social welfare code. Most of these items arose from work on the preparation of the Consolidation Act and many of them were debated in the private sessions of the Joint Committee on Consolidation Bills. In fact, I undertook during the Committee's deliberations to provide for some of these items at the first suitable opportunity.
The cost in 1981 of the improvements being provided by this Bill is estimated at £137 million. In addition, £7 million is being made available for improvements in the fuel voucher and telephone rental schemes which do not come under the scope of this Bill, giving a gross cost of £144 million. The increases provided by section 5 of this Bill in the rates of pay-related social insurance contributions, effective from 6 April 1981 will yield an estimated £33 million, leaving £111 million to be borne by the Exchequer.
The new rates of social insurance contributions will be 9.55 per cent for employers and 3.75 per cent for employees as compared with 8.5 per cent and 3.5 per cent respectively, at present. The rates of voluntary contributions are also being increased. The new employer's contribution of 9.55 per cent includes the element of 0.15 per cent to meet the cost of the new maternity allowance scheme. The occupational injuries contribution is being reduced from 0.45 per cent to 0.3 per cent as the yield from the current rate has proved to be more than is required to meet the fund's outgoings; this contribution is borne in full by employers. The earnings ceiling up to which contributions are payable is being raised from £7,000 to £8,500.
The new overall PRSI contribution goes up from 14.3 per cent to 14.8 per cent, with employers paying 10.05 per cent and employees paying 4.75 per cent, the net increase in each case being 0.25 per cent.
I commend the Bill to Seanad Éireann and ask Senators to give it speedy and favourable consideration. In this connection I would point out that this Bill must be enacted before 1 April 1981, the operative day of the increases in the rates of unemployment assistance. Increases in the other schemes, except children's allowance, will all apply from the first appropriate date in April.