This Bill gives effect to the undertakings given by Fianna Fáil in the recent general election in regard to social welfare increases. The Bill was passed by the Dáil on Tuesday last, two days before the budget and it now comes before the Seanad one day after the budget. I am sure Senators will have realised this is the first time ever in which a Social Welfare Bill has come before them so promptly. Members of the House will, however, be familiar with the political circumstances which have given rise to this situation. The increased payments come into operation from Wednesday next, 31 March, which is only a few days away. The legislation providing for the increases must be enacted by then and it is for this reason that I have had to move so quickly. I am sure that I can rely on the co-operation of all Members of the House in giving this deserving measure speedy and favourable consideration.
A number of harsher measures provided for in the January budget drawn up by the former Minister for Finance, such as the removal of the food subsidies and the imposition of VAT on footwear and clothing, were not acceptable to this Government because of their impact on the less well off sections of the community. I am pleased however to include in the Bill the social welfare increases proposed in the January budget and to include also some additional items for which I have got the sanction of the Government and to which I will refer later. Fianna Fáil Governments have always been conscious of the need to provide a satisfactory level of welfare services even in times of economic recession and to develop these services and bring about worthwhile improvements in them.
Rates of payment generally are being increased by 25 per cent, apart from children's allowances in which case the increase is substantially greater. It is clear that the increased payments will be of considerably more benefit to those receiving them than the same level of benefits would have been if they had been awarded in the context of increased prices for food, clothing and footwear which would have resulted from the proposals of the previous Government to remove food subsidies and put VAT on clothing and footwear. The present Government's decision to eliminate the harshest effects of the budget proposed by the former Government by maintaining food subsidies at existing levels and cancelling the proposed new 18 per cent VAT on clothing and footwear will be a substantial relief especially for those who are dependent on social welfare payments.
I will now turn to the effect of the increases on individual payments. Section 2 of the Bill provides for the increases in social insurance payments. The personal rate of contributory old age and retirement pensions for persons under age 80 is being increased by £8.05 to £40.25 while pensioners aged 80 years or over will get £43.05. The addition to the pension for an adult dependant is being raised to £25.70 where the adult dependant is under pensionable age and to £30.05 where the adult dependant is aged 66 or over. Accordingly, a married couple both over pensionable age will get £70.30 as compared with £56.25 at present and, if the pensioner is aged 80, the new rate will be £73.10 as against £58.50 at present. The new rates for a married couple represent well over 50 per cent of average industrial earnings.
The new personal rate of widow's contributory pension which also applies to deserted wife's benefit will be £36.25 for a person under pensionable age, £36.95 for a person aged between 66 and 80 and £39.45 for a person aged 80 years or over. An invalidity pensioner aged under 66 will get an increase of £7.10 bringing the personal rate to £35.50, while the rate for a person aged 66 or over will be raised by £7.25 to £36.20. The addition to pension for an adult dependant is being increased to £23.05 for a pensioner under age 66 and to £23.50 for a pensioner aged 66 or over. The personal rate of disability and unemployment benefit is increased from £25.30 to £31.65 and a married couple will receive £52.15 as against £41.70 at present. Maternity allowance is also being increased to £31.65. The maximum rate of death grant goes from £75 to £100.
Section 2 also provides for increased occupational injuries benefits in line with the general increases in social insurance payments.
Increases in social assistance payments and in the rates of children's allowances are provided in section 3 of the Bill. The standard rate of non-contributory old age pension is being raised by £6.90 to £34.45 for persons aged under 80 years. It will go up to £36.95 for persons aged 80 or over. The maximum rate of payment in respect of an adult dependant under 66 years of age is being increased by £3.45 to £17.30 bringing the overall maximum payment for a married couple to £51.75 and, where the pensioner is 80 years of age or over, to £54.25. The allowance payable in respect of a prescribed relative looking after an incapacitated pensioner is being raised to £19.30. The additional allowance payable to pensioners living alone is being increased to £2.70.
The maximum weekly personal rate of widow's non-contributory pension is being increased from £27.05 to £33.80 where the widow is under age 66, from £27.55 to £34.45 where the widow is aged between 66 and 80 and from £29.55 to £36.95 where the widow is aged 80 or over. The improvements in widows' pensions will automatically apply to the social assistance allowance for deserted wives, unmarried mothers and prisoners' wives. Increases in the prescribed relative allowance and living alone allowance for persons over age 66, in line with those payable with non-contributory old age pensions, are also provided. The social assistance allowance payable to single women aged between 58 and 66 is being increased by 25 per cent bringing the maximum rate of the allowance to £29.50.
Unemployment assistance personal rates go up to £26.25 in urban areas and £25.45 elsewhere. The rates for adult dependants are being increased to £18.95 and £18.50 respectively, so that the rate for a married couple will be £45.20 in an urban area and £43.95 elsewhere. Small-holders with land under £20 valuation in certain disadvantaged areas whose means for unemployment assistance purposes are assessed notionally by reference to land valuation will also have their special rates of unemployment assistance increased by 25 per cent.
Recipients of supplementary welfare allowances will also get the benefit of a 25 per cent increase bringing the maximum rate of supplementary allowance for a married couple to £43.95 per week with additional payments for children.
The increases for dependent children of social welfare beneficiaries have been calculated in such a way that, taking account also of the increases in the general scheme of children's allowances, an increase of 25 per cent is provided in payments for children.
The increase in children's allowance rates is also provided in section 3. The present rates of allowance of £6 for the first child and £9 for each additional child are increased to £11.25 for each of the first five children and £17.50 for each subsequent child. This will effectively mean an increase of some 45 per cent in those payments in the nine month period from April to December 1982. On this occasion the increases in children's allowance will have effect from April instead of July but for administrative reasons the current rates will continue to apply until July when arrears from April will be paid. Additional orders will be included with the normal July children's allowances book issue to enable the increases due for the months of April—June to be paid retrospectively. This will be done in conjunction with the July renewal of allowance books.
The reduced rates of social assistance pensions and allowances payable where the weekly means exceed a certain amount are also, of course, being increased. The application, in previous years, of uniform percentage increases to all reduced rates of pension resulted in a scale of means and pensions under which weekly pensions were reduced at one stage by £1.40 for every increase of £1 in means. The reduction for each £1 increase in means is now £1.20 and this Bill provides in section 4 for the removal of this anomaly so as to ensure that reductions in pensions will be made in steps commensurate with increases in means. The abolition of this anomaly, at a cost of some £760,000, together with the increase in the rate of pension would have the effect of greatly stretching the scales of means and pensions to an extent that would make them far too cumbersome and complicated. To avoid this, section 4 also provides that the steps of means in the tables will be increased from £1 to £2.
Section 6 eases the means test for certain single parents by enabling them to increase their earnings without suffering a reduction in social assistance payments as a result. At present the means test includes a provision, in the case of applicants with children, to disregard any earnings of the applicants up to £104 a year for each child. The provision which I am now making is to increase the "disregard" to £312 a year for each child in the case of applicants for widow's non-contributory pension, deserted wife's allowance, social assistance allowance for unmarried mothers and prisoner's wife's allowance.
Section 7 provides for a particularly desirable extension of the prescribed relative allowance scheme to invalidity pensioners under age 66. This allowance is at present payable as an increase of pension to incapacitated pensioners who need full-time care and attention and who are over 66 years of age. An exception is made in the case of blind persons who may receive the allowance under that age. Section 7 provides that the age limitation will also be abolished in the case of invalidity pensioners thus extending the allowance to those pensioners no matter what their age.
Section 8 will remove an anomaly in the unemployment assistance scheme. In order to qualify for unemployment assistance under existing legislation married women living apart from their husbands must have a child dependant, even though their position is analogous to that of a single woman who is subject to no such condition. The removal of this anomaly will benefit a number of cases which have arisen.
I would like to mention briefly two additional measures which I am introducing from April but which do not require to be provided for in legislation. I am extending the free telephone rental scheme, which at present applies mainly to social welfare pensioners aged over 66, to eligible blind pensioners under 66. I am also extending the free travel scheme to residents of the State who are in receipt of Northern Ireland or British invalidity pensions and who are under 66 years of age.
Allowances payable under the Health Acts, such as disabled persons' maintenance allowance, infectious diseases maintenance allowances and blind welfare allowances are also being increased from April broadly in line with the increases in social welfare payments. For example, the maximum personal weekly rate of disabled persons maintenance allowance is being increased from £26.05 to £32.55, the rate for an adult dependant from £14.80 to £18.50 so that the rate for a married couple will be £51.05.
In addition to what was provided for in the January budget I am pleased to be able to say that the Government have also decided to increase the domiciliary care allowance for handicapped children from £45 to £55 per month. Also the mobility allowance which is payable to disabled persons will be increased from £200 to £250. Finally, the capitation allowances which are payable to voluntary organisations for the vocational training of disabled persons will be increased. Apart from recouping those organisations for their increased costs these additional payments will enable them to increase the allowances which they pay to their trainees.
These, then, are the improvements which are coming into effect from April. As I said earlier, these measures, when taken together with the Government's decision to maintain food subsidies and remove the proposed 18 per cent VAT on footwear and clothing will significantly improve the situation of social welfare recipients.
In recent years recipients of long-term social welfare benefits have received double payments at Christmas. On such occasions, however, on which temporary increases of this nature have been provided it has been necessary to introduce legislation. Since it is already possible by regulation to provide for permanent increases in rates of payment it is anomalous that temporary increases, such as these double payments, cannot be provided in the same way. I am accordingly providing in section 9 that the power to vary rates of payment by regulation will be extended to cover such temporary increases. This provision will give greater flexibility in relation to the time of year at which such increases can be provided in the future. For instance this year I will be making a double payment for the child dependants of social welfare beneficiaries in September and December. Statutory provision for these payments can be made by means of a regulation under this section. It is particularly important to be able to do this in the case of the September payments because the Dáil and Seanad are unlikely to be sitting at that time.
The only other provision made in the Bill is to amend a number of minor printing errors in the Social Welfare (Consolidation) Act, which have come to light since its enactment.
The overall cost in 1982 of the rates increases and other changes being provided for in this Bill is £230 million and this will bring overall expenditure on social welfare to approximately £1,565 million. The cost to the Exchequer in 1982 of the increased expenditure will be approximately £128 million. Some £102 million will be met by increases in social insurance contributions which are provided for in section 5 of the Bill together with the raising from £8,500 to £9,500 of the ceiling of earnings on which contributions are levied. The raising of the ceiling will also lead to corresponding increases in the amount of pay-related benefit to employees.
The increases in social insurance contributions allow for an Exchequer contribution of 25 per cent to the social insurance fund towards expenditure in 1982. The increase is 1.75 per cent for the employer and 1.75 per cent for the employee. This brings the standard contribution for social insurance from 13.3 per cent to 16.8 per cent of which the employer will bear 11.3 per cent and the employee 5.5 per cent. This is the same increase in PRSI rates as was proposed by the previous Government. Proportionate increases are being provided in the rates of voluntary contributions. Reduced rates of contributions are payable under regulations in respect of certain employments, for example, pensionable public service employees and certain share fishermen and outworkers. These are not covered for all the benefits of the social insurance system and increases due in those rates will be made by regulation. The contribution increases will be effective from 6 April 1982.
I am satisfied that the measures which I have just outlined will bring about a real improvement in the situation of social welfare recipients particularly when account is taken of the more sensitive budget strategy of this Government. It is my intention to maintain the process of improvement.
Before concluding I should like to take the opportunity to mention briefly some areas which I consider to be in need of attention. The social welfare code is a complex one. In my previous term of office I was responsible for the enactment of the Social Welfare (Consolidation) Act which was a major contribution to the simplification of the system by bringing many complex legislative provisions together in the one Act. It was always my intention to continue the review of various aspects of the social welfare code with a view to further rationalisation and removal of anomalies.
The rationalisation of the means scales as provided for in section 4 of this Bill is an example. It may be only a small step but the beneficiaries concerned will get an additional £760,000 as a result. Details of the new means scales are being published in booklet form. An example will help to illustrate the point. Under existing provisions the maximum rate of non-contributory old age pension of £27.55 is payable to a pensioner with means assessed at £6 per week. If his means were £8 per week his pension would be reduced by £2.40 to £25.15. Under the provisions in this Bill a pensioner in a similar situation would have his pension reduced from the new maximum of £34.45 to £32.45, a reduction of £2 only, whereas previously the reduction would have been £2.40.
I am also looking at the consolidation of the very complex code of regulations which forms part of the social welfare system. This is an area in which I am satisfied that more worthwhile progress could be made.
I also intend to review the supplementary welfare allowance scheme to ensure that everything possible is done to improve its operation and ensure that it fulfils its original objectives. This scheme has been in operation for almost five years and is now in need of major review and improvement. It is the one scheme which deals at the closest quarters with financial need at the most critical level. Of all the social welfare schemes it is the one which must operate most quickly and flexibly to meet needs as they arise.
My immediate task, however, is to have this Bill put through as quickly as possible so as to allow for the implementation of the improvements which it contains. The first of these improvements in payments takes effect from 31 March so the matter is urgent. I commend the Bill to Seanad Eireann and ask Senators to give it speedy and favourable consideration.
