The purpose of this Bill is to amend the Public Charitable Hospitals Acts, 1930 to 1932, and the Public Hospitals Acts, 1933 to 1976, so that unclaimed prize money and accrued interest arising from the operation of the Irish Hospitals Sweepstakes may be vested in the Minister for Health and disposed of by him in respect of service by certain former employees of Hospital Trust (1940) Limited, the private company which promoted and operated the Hospitals Sweepstakes.
All of you are familiar with the Irish Hospitals Sweepstakes. When they were operating, the governing legislation required that, in relation to each individual sweepstake, sufficient funds were deposited to secure the total value of prizes in that sweepstake. Trustees were appointed to be responsible for these deposits. Inevitably some prizes, mostly small ones, were not claimed and the parties entitled to these prizes were never identified or did not submit valid claims. Over the years these funds remained on deposit and, now amount to approximately £480,000, consisting of prize fund deposits and accrued interest.
As the House will be aware, Hospitals Trust (1940) Limited was placed in voluntary liquidation in March 1987. In effect, this signalled the demise of the sweepstakes. The last sweepstake was run in January 1986 and all the company's employees were made redundant in March 1987. Following that, the trustees of the prize fund deposits indicated that they wished to be relieved of their trusteeship, largely because they felt that few, if any, of the unclaimed prizes would become legitimately payable in the future. In the circumstances the Government decided that the unclaimed prize money, together with accrued interest, should be taken over by the State and used for the benefit of former employees. Basically, that is why I am sponsoring this Bill.
The amount of money available for distribution, £488,000 approximately, is relatively small. Consequently, we have to be somewhat selective in our approach to deciding who will benefit. For this purpose the former employees can be divided into three broad groups. First, we have those former employees who completed their service and retired on pension in the ordinary way. Included in this broad category you will also have short service employees who worked in the sweepstakes for a period and then retired to go elsewhere. All of these employees received their full entitlement over the years. They could not be said to be disadvantaged in any way by the closure of the sweepstakes. Those who are in receipt of pensions are at least as well off now as they would have been had the sweepstakes continued in operation.
The next group are what I shall call the voluntary redundancies. These are employees who accepted voluntary redundancy on the basis of schemes drawn up in 1987 and in 1980. Many of those received the standard non-contributory company pension of about 14 per cent of their salary; plus a top upex gratia pension element which would bring the pension up to 50 per cent of salary in some cases; plus enhanced redundancy payments paid by the company — Hospitals Trust (1940) Limited; plus in many cases the promise of 13 weeks employment every year while the sweepstakes were operating. When the company went into liquidation the ex gratia element of the pension was withdrawn and of course the promise of 13 weeks employment was no longer relevant. This group of workers could certainly be said to be disadvantaged.
The final group comprise of what I shall call the compulsory redundancies. These are the employees who lost their jobs when the company went into liquidation in March 1987. A total of 147 workers was made redundant on that date and a small number on the days immediately preceding it.
The compulsory redundancies received only statutory redundancy plus, where the service was sufficient, the standard pension of 14 per cent. The Labour Court recommmended that something on the lines of two weeks' salary per year of service should be paid in addition. However, these workers never received this payment and it appears extremely unlikely that they ever will. This compulsory redundancies group has certainly been seriously disadvantaged.
We have had discussions with SIPTU and various staff representatives and, of course, we have had a considerable volume of representations on the issue. All the views put forward have been fully considered and they have been very helpful in our efforts to divide up this money. It is clear that there are two disadvantaged groups — the voluntary redundancies and the compulsory redundancies. What we propose to do is to give a flat rate payment of, say, up to £1,000 to the voluntary redundancies. These are the people who lost theex gratia element of their pensions. Where any of them have died the payment will be made to the spouse if alive. I am afraid that legal difficulties would rule out making payments to any other relatives of deceased persons. The balance will be shared out between the compulsory redundancies who are still alive.
Spouses of deceased persons will, of course, be catered for in the same way as those in the previous group. However, payments in the case of the compulsory redundancies will be calculated on the same basis as was used to calculate statutory redundancy, that is, weighted according to age and service. This would be fairer for this group because many had relatively short service. We will have to be allowed a little latitude in deciding who are in this group, as a number left some days earlier, that is, prior to the liquidation. In all equity I think that these must be regarded as belonging to this group. All of these workers will qualify for, I hope, at least 60 per cent of statutory redundancy. We may be able to put a floor or lower threshold on such payments of possibly up to £500.
I am afraid that we will have to ask for the submission of claims in all cases. However, we should be able to process them very quickly as most of the beneficiaries are probably located in Dublin. Our aim will be to have as many as possible paid out before Christmas.
There is one other issue which was a cause of concern, that is the question of taxing these benefits. My officials have consulted with the Office of the Revenue Commissioners on the taxation treatment of the proposed payments. The position is that the payments will fall to be treated as payments received in connection with determination of employment which are chargeable to income tax by virtue of section 114 of the Income Tax Act, 1957. However, section 115 of that Act exempts from the charge to tax the first £6,000 of the aggregate of all such payments received by an employee in respect of employment. In addition, Schedule 3 to the Act provides for the exemption level to be increased up to £10,000 or more in certain circumstances. Statutory redundancy payments which are specifically exempt from income tax by virtue of section 37 of the Finance Act, 1968, are not taken into account for the purposes of the exemption under the 1967 Act.
In the circumstances, while the proposed payments will be technically chargeable to income tax, it is highly unlikely that any of the former employees of the Hospitals Trust will actually be liable to tax in respect of the amounts received by them since it is likely that none of the proposed payments will exceed the threshold.
May I briefly run through the main provisions of the Bill. Section 2 provides that the deposit funds will be vested in the Minister for Health. Section 3 authorises the Minister for Health to disburse these funds, with the consent of the Minister for Finance. Section 4 indemnifies the trustees against future claims. Section 5 provides for the audit of accounts and their presentation to the Dáil and Seanad. Section 6 covers any future liabilities which may arise — these will be met from the Exchequer. Section 7 provides that future claims against the funds must be made within four years unless some legal disability is established.
Further sections provide that the expenses involved in disbursing these funds will fall on the Exchequer, that the Sweepstakes Acts may be repealed if there is no longer any need for the legislation, and in that event any moneys payable into the Hospitals Trust Fund shall instead be disposed of for the benefit of the Exchequer.
As you will see, the Bill has emerged as a short one which provides a simple and easily managed system to take over and disburse these funds and one which will not give rise to any drain on these funds to meet distribution costs. I am very anxious, as I am sure is every Member of the House, that these funds be paid out before Christmas. For that reason I would ask for your co-operation in progressing the Bill to finality as rapidly as possible.
In that context I would like to make two points. First, many people have suggested that the additional funds be made available to assist the former employees specifically from receipts from the sale of the Hospitals Trust Board's premises in Ballsbridge or indeed grants from the Exchequer. It is not open to the Hospitals Trust Board or to the Minister for Health to direct that the proceeds of the sale of the premises in Ballsbridge be diverted for the benefit of employees of the private company which rented these premises. Indeed, virtually all the proceeds of that sale have now been used up, the bulk of it in supporting the Health capital programme.
In relation to Exchequer assistance, many people have suggested that funds should be provided to help the liquidator meet additional redundancy payments which have been recommended by the Labour Court. Here again, I have to point out that Hospitals Trust (1940) Limited is a private company. Therefore, neither I nor the Minister for Finance have any function in this matter and there is no action we can take to secure implementation of the Labour Court recommendations.
While I have every sympathy with the position of these workers, I am sure you will appreciate from what I have said that there is no other way open to the Minister for Health to assist them.
I have outlined the position in some detail and have no hesitation in commending this Bill to the House. I would again earnestly urge your full co-operation in progressing the Bill to finality so that the money can be distributed as soon as possible.