Social Welfare Bill, 1995: Committee Stage (Resumed).
Question proposed: "That section 5 stand part of the Bill."
I welcome the Minister of State to the House. I especially welcome the changes made with regard to child benefit in this Bill. As I said last Thursday, the ESRI report published last year showed that one of the best ways of tackling poverty in families with children was to increase the child benefit. I did not speak on the two sections before this. While the 2.5 per cent general increase is not an acceptably high enough figure to any Members, one must accept that we have limited resources and huge demands and that with such a large proportion of the population depending on social welfare these limited resources must be targeted. We must try to reduce the number of people depending on social welfare and any changes that the Minister can introduce to do this would be particularly welcome.
I support the view that the allocation of child dependant allowances in our social welfare system does create inequities between families on social welfare and those supported by low income. My party would like to promote the development, at the highest possible rates, of the child benefit system. I was not in the House when the Minister replied to my question — I had to go to the Joint Committee on Women's Rights — concerning what the child benefit supplement would involve. I would be concerned that it might make it more difficult to move from unemployment to employment and create more poverty traps. Bringing child benefit to the highest possible level, allied to the maintenance of the real value of social welfare benefits, would represent a responsible attempt to combine the concern of everybody to promote employment growth with an effective strategy to secure the income position of those people who find themselves on social welfare.
I welcome section 5 and compliment both the Minister and the Minister of State on it. I would be happy if the Minister could address my reservation on the child benefit supplement scheme.
I am disappointed that the Minister has left——
——because I was going to thank him on this section for continuing the good work by substantially increasing child benefit this year.
I am sure Senator Cregan will inform the Minister of my thanks. I thank the Minister for acknowledging the fact that this was initially introduced by his predecessor, Deputy Woods, in setting up the child benefit review committee which recommended substantial increases in child benefit. I am glad the new Minister has accepted the broad thrust of this review.
While the child benefit is substantial, to suggest that it addresses poverty loses sight of the fact that tens of thousands of people are on extremely low rates of main benefit and assistance and therefore do not qualify to any great extent under the child benefit scheme. It is important to reiterate — for fear that it would go unnoticed in this House — that we are stringently opposing the 2.5 increase in basic social welfare payments. Of the 180,000 people in receipt of old age contributory and non-contributory pensions, only about 2,000 have qualifying child dependants. There are about 62,000 people on unemployment benefit but only 26,000 qualify for child benefit, while out of the 196,000 who qualify for unemployment assistance only 62,000 have child dependants. Less than one third of the almost 200,000 people on unemployment assistance will qualify for child benefit.
Overall, I welcome this section. I had to use it to voice our opposition to the increase in social welfare payments. There is just one point I would like clarified but unfortunately the Minister is not here. Last year he made a statement and it is important that we read it into the record. He said:
Any enhanced child benefit would be paid universally and those in the tax net with substantial incomes would repay——
I ask the Senator to give us the source of the quote.
My apologies. It is from the Select Committee on Social Affairs. S.2 No. 1, 9 March 1994. It states:
An enhanced child benefit would be paid universally and those in the tax net with substantial incomes would repay some of it through the tax system. The payment would be accountable for tax purposes...
That quote is from the Minister, then Deputy De Rossa. Could we have some clarification on this issue? The child benefit is welcome, but I have some fears about taxing it or clawing it back. A household where one person is working would be means tested and taxed and the child benefit could be clawed back on the income of the person who is working. It is important to clarify that matter. It does not relate to this section, but I would like the views of the Minister. I ask him to convey the seriousness of this issue to the Cabinet. Many unemployed people are maintaining children at home while the person out working is not be contributing their fair share. This is acknowledged across the board and causes much social deprivation and poverty among children. The essence of child benefit is to transfer it to the child and ensure they are kept off the poverty line.
Overall I welcome this section. The review committee set up by Deputy Woods when he was Minister for Social Welfare recommended substantial increases in child benefit and this has come about. This is the only section in the Social Welfare Bill which I can safely say I welcome. Unfortunately, the Minister is not here to hear this, because until now we have been stringently opposing the Bill.
I welcome the Minister of State to the House and I thank him for the increase in child benefit, because I am sure he had a substantial input into the improvements contained in the Bill. Child benefit is a good way of addressing poverty. It is a way of paying a benefit without risking other benefits, such as fuel allowance, which people lose once they go beyond a certain income limit. I also welcome the fact that it is being extended to children up to the age of 18. However, I have already had complaints from people who have lost out because their children have gone beyond 18, but at least it will benefit people in the future. I want some clarification on one matter which may have changed already. Is child benefit now payable to either a man or woman? Is it payable to a father if he is the sole minder of the children?
It is. I particularly welcome this section. We are very supportive of the Minister of State's action on this section.
Section 5 proves the general principle of change in the Bill by putting more into child benefit. Like the previous speakers, I welcome the section. This is a Bill of change which presents us with opportunity. It is a sad reflection on us that the Bill now involves a sum of £4 billion a year.
The benefits are now going directly to children through the mother, which is an excellent idea. The payment date has been brought forward by six weeks this year and the Minister hopes to bring it nearer to the budget next year. It is a better increase generally for the people in receipt of the benefit and I really welcome this section.
I welcome my constituency colleague, the Minister of State, to the House. I also welcome the changes in child benefit. They are certainly welcome and to be appreciated. I am also pleased with the changes which allow for the payment of benefit to members of the Defence Forces and civil servants who are serving overseas. That is a welcome addition to this section.
I thank the Members who correctly identified the purpose of this section. The proposal was to specifically target families in a way that would not be trapped by any other system, including taxation of benefits. This is not a criticism of anybody, but simply increasing general payments would not have been of any great benefit to people who might be taxed on the benefits at a later stage. Payments to the family unit by way of child benefit was a means of targeting the most vulnerable sector and making the payment directly.
This area has attracted the most favourable comment in any discussions that have taken place because it is generally agreed that child benefit is usually put to very good use. It has been accepted, following examination, that women in the household invariably put child benefit to the most important use. Money is always put aside for special purposes and is never squandered or wasted. It was in recognition of this fact that it was decided that this was one of the most appropriate ways of giving an increase to a family which was dependent on social welfare payments.
Senators Honan and McGennis correctly identified the strategy employed. Senator Kelleher was identifying another strategy, about which I would not be as positive. I am sorry that Opposition parties tend to spend a lot of time on the most negative aspects of any situation or budget, but that is the way things work. The point Senator Kelleher made about the alleged small increase of 2.5 per cent in general social welfare payments has to be looked at in light of the fact that the payment date for all payments is being brought forward by six weeks. The effect of that is to increase the 2.5 per cent, which has been referred to so disparagingly, to over 3 per cent.
The next point we must examine is the optimum level of an increase at a particular time. On Second Stage I mentioned that the Leader of the Opposition in the other House identified 3 per cent, given inflation rates and so on, as being about the right amount. While everybody agrees that it would be nice to give a bigger increase, the fact remains that there are many people dependent on social welfare and the budget is now in the £4 billion bracket, which is a considerable payment.
It also means that the Department of Social Welfare is responsible for the weekly running costs of a very large number of households in the country. There is a huge responsibility on the Department, the Minister and the Government to ensure that sufficient resources are available to meet requirements to the end of the year. If a greater increase had been given it would not have been possible to increase child benefit as the money would have had to be taken from somewhere else. This would have been a wrong strategy. The strategy which has been employed is absolutely correct.
Senator Kelleher implied that the Government parties, either individually or collectively, have a secret wish to impose taxation on child benefit. The source of this unfortunate reference escapes me.
It may have been a leak, but it was not very inspired. It certainly did not come from the Government parties.
Fine Gael leaks are always inspired.
This matter was also mentioned in the Lower House by the Opposition as a possible means to resolve some problems in the future. I am worried about this and I hope it is not an indication of thinking in this area.
Tax social welfare first.
The Opposition first introduced the taxation of social welfare benefits——
The Minister was playing a blinder up to that.
——with very serious consequences for some people. The benefit to either the Government or the community at large of the suggestion put forward by Senator Kelleher escapes me.
The Minister is being mischievous.
Acting Chairman
The Minister without interruption.
I am quite sure mothers in receipt of this benefit would look at a suggestion from any Opposition party to that effect with justifiable concern.
Particularly from Opposition parties, in case a situation might arise at some stage whereby they might introduce——
That is the last compliment the Minister will receive.
——another raft of taxation on another benefit. That would be very sad.
How could the Opposition introduce taxation?
Acting Chairman
The Minister without interruption.
I thank the Senators for their contributions on this section, particularly those who correctly identified the thinking behind the proposal. With regard to the points raised by Senator Honan on the supplement, the purpose of the proposal, when it comes on stream, will be to fine tune and eliminate any traps which might still exist. I assure the Senator that it is not intended to create further anomalies. I thank Senator Cregan, Senator Wall and others for their positive contributions.
Question put and agreed to.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."
Sections 6 to 10, inclusive, provide for changes in the payment of social insurance contributions. This includes an exemption from PRSI on the first £50 of weekly earnings and an increase in the income threshold below which the lower rate of 9 per cent PRSI contribution applies. This is an acknowledgement that the rates of PRSI applicable to employers are a disincentive to employment. Does the Minister accept that PRSI is a form of double taxation? I contend that it is much more a form of double taxation than the local government service charges. Considering that it is such a crazy tax, has the Minister any intention of abolishing PRSI——
——in the future, given that it is for most people, particularly those in low paid——
——employment, a tax on almost everything they earn. I accept the measures the Minister has introduced this year, but they appear to confirm that my points are correct.
It would be hypocritical if I did not welcome certain initiatives in the Bill. There is no doubt that PRSI is a disincentive to employment. It has been pointed out on numerous occasions that it is a double taxation. It is time the Government acknowledged this fact. I am now in Opposition, but we pushed from the Government side of the House for major movement in this area. This was acknowledged in the previous Social Welfare Bill and the 1994 budget. It is also acknowledged in this Bill. I plead with the Minister to ensure continual movement in this area as it militates against employment, specifically in the lower sectors.
Question put and agreed to.
SECTION 7.
Acting Chairman
Amendment No. 3 is out of order as it involves a potential charge on the Revenue.
Amendment No. 3 not moved.
Question proposed: "That section 7 stand part of the Bill."
I ask the House to agree to take sections 7 to 10, inclusive, together.
Acting Chairman
That is not possible as, according to Standing Orders, each section must be discussed and decided separately.
May I speak on section 7?
The Senator may, after I have spoken.
Acting Chairman
I assure Senator Cregan that we will not hinder any positive aspects of the Bill. We stated this from the outset, which explains why there was a long and arduous debate on the Bill's negative aspects. Amendment No. 3 was ruled out of order, but the issue is important. My amendment states:
...of the Principal Act (inserted by section 4 of the Social Welfare (No. 2) Act, 1993) is hereby amended by the addition in subsection (1) of the following paragraph:
The amendment alludes to share fishermen and others. What section are we dealing with?
Acting Chairman
Section 7. Amendment No. 3 was ruled out of order.
My apologies. I thought we were dealing with section 8.
I wish to broaden the question of PRSI payments, which is relevant to sections 6 to 10, inclusive. The Minister emphasised the report which will be forthcoming on the review of the tax and social welfare systems. We must recognise the need to create an atmosphere of initiative and give incentives to people who wish to employ others. This is particularly so for those on the border line who are not working or who do not want to work because of the amounts they would earn.
There is no reason why there cannot be only one payment. I do not see the logic in saying that no more PRSI contributions should be taken after £21,500. We should not consider the idea of taking the same amount of PRSI from a person who is earning less than £80. People who are working should make just one payment, which would include tax. If a person is working as a general operative and earning in the region of £8,000-£9,000 a year gross, or £180 a week, they should not be put in the position of considering that they would be better off not working. That has been going on for far too long. We have all heard it from many people.
I hope the review that is coming up will give consideration to the amount stopped from a person's earnings. For example, if one is paying 25 per cent tax and earning £160 per week, the PRSI would total almost 20 per cent again between employee and employer, making a total of 45 per cent of the gross amount. Why can we not have a system whereby out of, say, £10,000 earned there would be an allowance of £5,000 and 40 per cent of the remainder will be stopped? Everybody should get the same benefits under such a system.
We argued earlier about people who ran out of contributions, having worked for some years. That is unfair. I hope this will be considered in the future. The system should entice people to work. People want to work but we should not create a system whereby people do not want to work because they would be better off not working.
The points made by the Senators are valid. Generally speaking, people have been of the opinion for several years that any charge or levy which is seen as an impediment to employment is counterproductive. That is true. I note Senator Kelleher requested that further indication be given as to reductions in subsequent years. It is the Government's policy to try to bring about a situation whereby people are encouraged back into the workforce by the removal of barriers which have been seen to have developed there over a number of years. The reason it has happened is that, unfortunately, one does not have a total review of the financial Acts in any given year at budget time; one does not have a total review and reconstruction of the Social Welfare Acts either. One has a series of amendments built up over the years. The result is that in some ways they have created problems.
For the information of the House I will give an indication of the costs. The weekly disregard of £50 in classes A and H in 1995 will cost £60 million. In a full year it will cost £100 million. This emphasises the considerable expenditure already undertaken. It may seem small to some, but it is quite a considerable measure. The impact might not necessarily be seen immediately, but as time goes on it will be. The weekly disregard of £10 — an annual disregard of £520 — for the self-employed and reduced minimum self-employed contribution of £230 will cost £2.5 million in the remainder of 1995 and £4 million in a full year. The increase in the threshold for the reduced 9 per cent employers contribution to £231 per week in the rest of 1995 will cost £28 million and £46 million in a full year. The increase in the threshold for exemption from levies to £178 per week for those on lower incomes — £9,250 per annum — will cost £1.9 million in 1995 and £3.3 million in a full year.
The total cost of those measures in 1995 is £92.6 million and in a full year £154 million. I emphasise their importance in the total social welfare budget. A couple of years ago such measures would be seen as a major initiative in the total national finances, let alone in the social welfare budget. These initiatives have been taken in the social welfare budget and will have a positive effect. It might not be obvious for the first couple of months, but as the year progresses the intentions will become more obvious and beneficial. I am sure Members will have found there is quite an amount of interest in those proposals. They will be seen to be progressive and constructive and beneficial to the economy and to those for whom they are intended.
Question put and agreed to.
SECTION 8.
Acting Chairman
Amendments Nos. 4 and 5 are out of order as they involve a potential charge on the Revenue.
Amendments Nos. 4 and 5 not moved.
Question proposed: "That section 8 stand part of the Bill."
My amendments have again been ruled out of order. It is an unfortunate plight of being in Opposition that one cannot discuss them.
Question put and agreed to.
Sections 9 and 10 agreed to.
NEW SECTIONS.
I move amendment No. 6:
In page 6, between lines 24 and 25, to insert the following new section:
"11. Section 24B of the Principal Act (inserted by section 4 of the Social Welfare (No. 2) Act, 1993) will be reviewed by the Minister and a report on this review will be laid before each House of the Oireachtas.".
The amendment is self-explanatory. It was discussed in the other House. It requires that the efforts to bring about equity in our society and coming to terms with the recommendations of the Commission on Social Welfare should be laid before the Oireachtas.
I support the amendment and I would be surprised if the Government does not accept it. The Minister for Social Welfare, Deputy De Rossa, was vocal about the direction he intended taking in terms of the review of and improvements to the social welfare system.
Acting Chairman
The amendment relating to the Commission on Social Welfare is amendment No. 7.
Did I refer to the Commission on Social Welfare or did my colleague? He may have inadvertently referred to it, but both amendments basically concern reports.
I would just like the Minister's view on it.
Acting Chairman
We will discuss amendment No. 6.
I will speak on the section as I have a separate comment to make.
This amendment is opposed. The Social Welfare (No. 2) Act, 1983, introduced a special scheme of optional insurance for share fishermen.
Acting Chairman
We are dealing with amendment No. 6.
The review of social welfare services is ongoing. Constant reviews are undertaken with the hopefully beneficial effect of identifying ways and means of streamlining the system with a view to ensuring that the sort of thing we talked about in the previous section does not become apparent and that those matters do not arise interminably.
It has been the practice over the years, for which there are a variety of reasons, that a social welfare Bill builds on previous ones and does not fundamentally revise previous legislation. This applies not only to social welfare Bills but also to other legislation pertaining to financial matters. The difficulty arises when a fundamental review is required. Such a review is a major issue at any juncture. The points made are noted and when such a review is undertaken it will be made available to the Houses of the Oireachtas. It will be beneficial at that stage to obtain the views of the Members of the Oireachtas to fine-tune the review. I apologise for the confusion earlier.
Amendment, by leave, withdrawn.
I move amendment No. 7:
In page 6, between lines 24 and 25, to insert the following new section:
"12.—Progress on the implementation of the recommendations of the Commission on Social Welfare will be reviewed by the Minister and a report will be laid before each House of the Oireachtas.".
To be fair to the Minister, we added to the confusion earlier. We were speaking about this amendment.
The Minister already gave a commitment and an indication of where he was coming from in relation to the implementation of the system and improvements to it. Rather than having the commission's report sit on the shelves like many other reports and not do anything about it, it is vital that we introduce improvements in social welfare and I know we are doing this.
The Minister indicated how much it would cost this year to implement the proposals in Senator Kelleher's earlier amendments, which were ruled out of order. We accept this. When Fianna Fáil was in Government, we were not in a position to immediately implement the recommendations of the Commission on Social Welfare.
It is important that we should monitor how we are trying to achieve those objectives. The Minister should not have any problem with this amendment. It simply proposes that he should make a progress report on how his Department is implementing the commission's recommendations.
I appreciate the Senator's positive response. One always tries to be helpful in situations like this. A number of the commission's priority recommendations have been implemented. The Government and the Minister do not have to take on board further enhanced proposals. The Government is already tackling this. It is part of the Government's policy and it is proceeding along that road. I mean no disrespect to the House but the Government's intention is to meet the guidelines set out in the report.
Reviews, if and when they take place, will be undertaken against the backdrop of guidelines laid down on public expenditure, inflation and so on. This is commonplace. There is no need to do other than proceed along the lines laid down in the A Government of Renewal programme, which contains a commitment to commission the ESRI to review rates and recommend new ones in light of improvements in social welfare and other changes since the report of the Commission on Social Welfare was first published and changes agreed in the Government's programme itself. The initial discussion between the ESRI and officials in my Department has commenced for the purpose of drafting the terms of reference for this review.
This work is ongoing and there is no benefit in having a major confrontation about it. We agree in principle with the thrust of what Senator McGennis is saying. Government policy is actually ahead of her very constructive proposal. Restating what is already Government policy will not make any difference one way or the other.
I accept what the Minister has said. In the Programme for a Partnership Government, which preceded the A Government of Renewal, the previous Government also gave an indication that this was the direction in which we were going. This amendment is very constructive.
The Commission on the Status of Women stated that there should be a committee to monitor the implementation of its report. We should also monitor the implementation of the Commission on Social Welfare's report. I accept that the Government, like the previous one, is moving along these lines and there is nothing wrong with highlighting this fact by issuing a progress report each year on the implementation of the commission's proposals. This would be a positive way for this Government and the next Fianna Fáil one to show how the recommendations are being implemented.
This amendment will not change the status of the Bill in any way. It is very positive and could be appended to the Bill. It would give effect to reports on the implementation of the commission's recommendations. There should be implementing committees or, at the very least, annual reports to show how the recommendations of the reports of commissions are being implemented. I am glad the Minister accepts the spirit of this amendment. If he inserts it in the legislation we will all be happy.
I do not think there is any need to have a disagreement on this matter. The Government is ahead of the Opposition's most constructive suggestion. The Government is always willing to take on board constructive proposals from the Opposition.
I do not think it would be of any benefit to the Bill to incorporate the amendment. A structure is already available which is likely to be the most appropriate way to evaluate the ESRI's review. This structure is the Dáil Select Committee on Social Affairs, which has specific and special responsibilities in this area. It has the time and energy to target this aspect of social welfare and social legislation generally. This would be the appropriate place to deal with this rather than attempting to do so through an amendment to the Bill.
Amendment put and declared lost.
SECTION 11.
Acting Chairman
Amendment No. 8 is out of order as it involves a charge on the Revenue.
Amendment No. 8 not moved.
Question proposed: "That section 11 stand part of the Bill."
As I only have a copy of the Bill as it was initiated, I may be out of order and I am open to clarification by the Minister. The amendment which Senator Kelleher tabled on this section was in regard to adoptive leave and benefit. The Minister went to great lengths earlier to talk about how he abhorred inequality; he almost claimed to be personally sending out the cheques in the post to the 70,000 women who have been paid.
I support any efforts to wipe out inequalities in our system. Dates have been specified for the payment of child benefit, unemployment assistance and so on. The Adoptive Leave Bill was initiated in this House in 1993. It only came into law this year, which was a very long gestation period for any Bill. This appears to be the only benefit for which the Minister is not committed to a specific date.
The Minister appears to be saying that a commitment has been given, because the Bill has been passed in both Houses, to pay maternity leave to adopting parents but that it will be done sometime. The final line of section 11 states: "This section shall come into operation on such day as the Minister may appoint by order".
The Minister spoke about equality for all within the social welfare system, although there are different payment dates. I acknowledge the fact that social welfare payments are being brought forward by six weeks. We have already said on this side of the House that we welcome that and we know that it is an additional burden on the Exchequer. In section 3 the Minister specified the dates on which he intends to pay the various allowances.
Section 11 was referred to quite some time ago in this House when the Minister for Equality and Law Reform referred to the fact that the Minister for Social Welfare had included this in his Bill. The conditions probably mirror the conditions which are laid down in the Adoptive Leave Act itself. However, the final line of section 11 gives no equality to parents of adopted children. I received correspondence from people when the Bill was initiated in 1993 whose children are now running around and there is no chance that they will now qualify for adoptive leave. Although we have enshrined this right in this Social Welfare Bill, as we enshrined it in the Adoptive Leave Act, we are not saying when we will do it. That is totally unacceptable as stated policy in a Social Welfare Bill.
Unfortunately, we did not specify a date in our amendment which tried to specify when and how much leave could be taken. We tried to make that amendment to the Act itself and we may table such an amendment on Report Stage.
The Minister made great play about achieving this equality, as the Minister of State's colleagues will tell him, and how great he was in ensuring that everybody got their entitlements, even if they had been deprived of them by previous Governments, including ones led by Fine Gael. If he was to make such a play about how wonderful he was in giving people their entitlements, the very least he could have done would be to acknowledge the spirit of the Adoptive Leave Act, which was welcomed by the Minister of State's party when it was in Opposition. We were in Opposition by the time that it was enacted and we stayed the same ground and made no attempts to amend it just for the sake of it.
While I acknowledged the Minister of State's input into the increase in child benefit, I will pin this one on the Minister because he claims to be the Minister for equality in terms of social welfare. I want the Minister to insert into section 11 that this section shall come into operation on 7 June 1995, as prescribed by the earliest payment date in section 3.
I thank the Senator for being constructive and supportive of the Minister and the Government, which is to be encouraged, although I do not necessarily agree with everything she said. I think that the Minister rightly identified the need to comply with both domestic and EU equality legislation. I watched the debate on the monitor and he correctly pointed out the danger of postponing such payments, as happened in another instance. He quite rightly pointed out the necessity to respond positively and quickly rather than to defer any such payments which would result in far greater amounts of money having to be made available from the Exchequer.
In relation to this item, I am sure that the Senator will be quite happy to know that a number of regulations will be made under the provisions of section 11. The Minister will make those regulations immediately the Bill is passed into law, so there is no need for a specific date. The sooner that this Social Welfare Bill, including section 11, is passed into law, the sooner the provisions to which the Senator referred will be operational.
I find the Minister of State much easier to work with than the Minister, which makes it very difficult for me to put him under pressure. However, I cannot accept the regulations because section 4 of the Bill specifically states in relation to the various payments that:
This section shall come into operation——
(a) in so far as it relates to unemployment assistance on the 7th day of June, 1995.
(b) ...on the 12th day of June, 1995.
(c) ...on the 15th day of June, 1995, and
(d) ...on the 16th day of June, 1995.
I could accept what the Minister is saying if he said that this section will come into operation, as with the other sections of the Bill, by way of regulation. However, that is not the position in relation to all of the other entitlements. When we enshrined the adoptive leave legislation we tried to show that people adopting children are equal to those in receipt of maternity benefit. I genuinely do not accept that these people should be treated differently. The date for the implementation of this section should be written into law.
With all due respect to the Minister, I do not want him to bring in regulations. In order to treat this section of society with the same kind of respect and equality to which other sections are entitled, he should have put in the date. I would suggest 7 June 1995, but I am quite willing to accept 16 June 1995. I will table an amendment on Report Stage which I ask the Minister to accept.
I think the Minister agrees with me that this is not the right way and it does not send out the right message. We had a very emotional and positive debate in this House when we decided to give people this entitlement. Let us not say now that they will be dealt with differently to any other section of society. The Minister should accept the spirit of what I am saying and accept an amendment to insert a date.
Question put and declared carried.
Sections 12 to 15, inclusive, agreed to.
SECTION 16.
Acting Chairman
Amendments Nos. 9 and 11 are related and may be discussed together.
I move amendment No. 9:
In page 12, between lines 21 and 22, to insert the following subsection:
"(6) That the fine of £1,000 for a summary offence in the payment of unemployment assistance be increased to £1,500.".
The Social Welfare Acts provide for a wide variety of offences, and prosecutions are considered in the case of employers who fail to carry out their statutory obligations and people who fraudulently receive social welfare payments. Conviction for an offence may have severe consequences for the individual concerned and for this reason discretion is exercised in determining which cases warrant prosecution.
The decision to prosecute is taken on the basis of the circumstances of the case, the nature of the alleged offence, the availability of evidence and the circumstances of the person concerned. The criteria applied in determining whether prosecutions should be taken include the duration of the offence, whether the individual or employer is a persistent offender, the amount of money involved, the incidence of fraud in a specific firm, industry or area and the existence of collusion between employers and employees to the fraud.
Prosecution involves gathering a large body of documentary evidence for each case. Only the most serious cases are pursued with the view to prosecution. The maximum penalties at present for cases heard summarily is a fine not exceeding £1,000 or a term of imprisonment not exceeding one year, or both such fine and imprisonment. The maximum penalty for cases heard on indictment is a fine not exceeding £10,000 or a term of imprisonment not exceeding three years, or both such fine and imprisonment.
Social welfare cases are generally prosecuted summarily as the penalties which may be imposed by the District Court are seen as adequately reflecting the seriousness of the offence. Ultimately, the penalty to be imposed in any case is a matter for the courts to determine. Generally, the courts tend to impose fines below £200, and a maximum fine of £1,000 has been imposed only on very rare occasions. In these circumstances I see no point in increasing the maximum fines and, in any event, I am satisfied that the existing penalties provided for in the Social Welfare Acts represent an adequate deterrent. Consequently, I oppose the amendment proposed by the Senator.
Amendment, by leave, withdrawn.
Question proposed: "That section 16 stand part of the Bill."
Regarding those who inadvertently end up on the wrong side of the law on social welfare, there are a number of cases where people continue to receive family income supplement in ignorance — for example, spouses may take up part time or temporary work and may not inform or may not be aware that they must inform the Department of Social Welfare. In circumstances where people may not be au fait with regulations and may not be in a position to comprehend all of their consequences, the Department or the Minister should be conscious of this situation and be lenient, because in such cases punishment, such as penalties or pay backs, can inflict terrible hardship on a family situation if there are children involved.
Those who are liable, or who are likely to be prosecuted in such situations, are people who are often not in good circumstances, and the Senator makes a valid point in this regard. The Department has a dual role. In the first instance it must protect the Exchequer and ensure that payments are made to those who are eligible and that there are no abuses. Secondly, and at the same time, where abuses inadvertently or otherwise take place, it is essential that no undue hardship is created as a result of measures which are in place to protect the State. At the same time there must be recognition that abuses are certainly not to be encouraged and there must be some form of retribution for those who have abused the system to ensure that the State's finances are protected.
However, from my own experience of dealing with the Department over the years — and I am sure this is the experience of other Members also — it has always been amenable to attempting to ensure that where something has gone wrong serious hardship would not be imposed on a vulnerable group of people or a vulnerable person or persons in society.
Question put and agreed to.
SECTION 17.
Acting Chairman
Amendment No. 10 is out of order as it involves a potential charge on the Revenue.
Amendment No. 10 not moved.
Section 17 agreed to.
NEW SECTION.
Acting Chairman
Amendment No. 11 has already been discussed with amendment No. 9.
I move amendment No. 11:
In page 12, before section 18, to insert the following new section:
"18.—Section 218 (1) (a) of the Principal Act is hereby amended by the substitution of '£1,500' for ‘£1,000'."
Amendment put and declared lost.
SECTION 18.
Question proposed: "That section 18 stand part of the Bill."
The Minister will have to address the community employment schemes later in the year because by the end of the year there will be a reduction of approximately 7,000 in the number of people on these schemes. This will be a blow to many people who found the opportunity to leave unemployment by participating in social employment schemes, or community employment schemes as they are now termed.
This is retrograde step. I deal with offices in Athlone and Roscommon where community groups, tidy towns groups and development groups have extensively availed of the schemes. There was a quota in the Roscommon office of 840 people for 1994, but for 1995 this has been reduced to 540, representing a cut of 300 from last year. It is a severe blow for those in the county who wished to get out of unemployment and become involved in productive work, both for themselves and their families.
Participation in these schemes averted tensions in many households where there were a number of people unemployed. In such circumstances the atmosphere of households can deteriorate and it is an established fact that unemployment brings its own problems, such as alcohol abuse and so on.
The reduction in these schemes is, therefore, a major blow. If the county which I come from has a cut back of just over 300 places, then the situation in other counties is similar. I am advised that on a national basis, 35,000 people will participate in these schemes by the end of the year, whereas the figure was 42,000 last year.
I attended a meeting in Brussels last week and — other people on the delegation can vouch for this — we were taken aback when a senior official of the European Commission said that it took a meeting in Brussels to bring together the Department of Social Welfare and the Department of Enterprise and Employment. That is disturbing. There should be ongoing contact between the two Departments about how to deal with the problem of unemployment. Many people on the delegation questioned the official in order to establish if that was the case. He was adamant as he had recently experienced this situation. It is terrible if one hand does not know what the other is doing.
Departments must liaise with each other. There is something seriously wrong if the Department of Enterprise and Employment is working on its own without consulting the Department of Social Welfare. This situation should be rectified. Discussions should take place between the two Departments, particularly in relation to community employment schemes.
I ask the Minister to look again at the proposal to reduce the number of people on community employment schemes. These are excellent schemes which provide an outlet for people who wish to be employed instead of being on social welfare.
I support Senator Finneran. The Minister referred to the third level students scheme and said he would not introduce "workfare" under any circumstances. We are not asking him to do that. There is no need to change the name of the scheme because it does not matter what it is called. We are talking about unemployed people who are anxious to contribute to the community because they do not like sitting at home every day.
The number of these excellent schemes is decreasing because of trade union problems. The Minister may change the name of the scheme, but it will make no difference unless he can resolve the problems which local authorities are experiencing in trying to establish these community employment projects in their areas. There are no social employment schemes in some local authorities outside Dublin because the unions have vetoed them. These are excellent schemes which contribute greatly to the community because they give respect to those involved. It means nothing to change the name of the scheme. The Minister — it may not be this Minister because it may not be a social welfare problem but a labour one — must solve this conflict with the unions which are insisting that there should be permanent jobs in the areas where social employment schemes — now called community employment schemes — are established.
It is not possible for local authorities to employ additional staff, given their financial positions. In addition to works being carried out by permanent staff, these schemes allow other works to be done which would not be done by the staff currently employed by local authorities. They are not a threat to people in permanent employment in local authorities, but an addition to the work they do. I ask the Minister to address this issue.
Fingal County Council has had little success in this regard. Community employment schemes have not been established in some other local authorities because, as I have said, the unions have vetoed them. The Minister said he would not have "workfare". That is a negative approach to this issue. The schemes would be more successful if he viewed them as an opportunity rather than as an obligation to work.
The points made by the two Senators have been made for many years in relation to employment schemes and local authorities. Anyone who has been a member of a local authority has had first hand experience of this situation. It is not true that there is a reduction in the total number of people whose employment is being provided through schemes. A large number of schemes are operated by several Departments, including the Department of Enterprise and Employment and the Department of Social Welfare. The purpose of the exercise is to encourage people away from unemployment and into the workforce by positive inducements. This has been a success because approximately 40,000 people benefited from schemes last year. I note the points made in relation to a possible reduction, but that does not take into account the other schemes coming on stream which will offset any negative aspects which may arise as a result of difficulties experienced by local authorities.
Local authorities should ensure — I was a member of a local authority until recently and I know this may be difficult — that the works to which schemes apply do not duplicate those done by them. Difficulties have arisen in this area in the past. Having examined this situation closely, I understand the problems faced by both sides. The local authority will do its utmost to carry out the maximum amount of work under a scheme heading which it feels can be done within the confines of the scheme. On the other hand, the unions may see, by virtue of the type of scheme identified, permanent jobs being replaced by jobs under the scheme. A lot depends on co-operation between the local authorities and the unions in a particular area. The exercise will benefit the country and the environment and I hope the maximum amount of co-operation can be achieved.
Question put and agreed to.
SECTION 19.
Amendment No. 12 is out of order as it involves a potential charge on the Revenue.
Amendment No. 12 not moved.
Question proposed: "That section 19 stand part of the Bill."
This section appears to be extremely hard on the self-employed because it states that in order to qualify for an old age contributory pension one may only take into account the previous year's contributions. Was it not the case that if one had a certain number of stamps, one always qualified for a contributory pension? Does this section change that by stating that unless one has the correct contributions in a preceding year, one will not get a contributory pension?
I would have supported Senator Kelleher's amendment, but it was ruled out of order. There is an anomaly in this area. At present self-employed people who started to contribute when they were over 56 years of age do not qualify for a pension and they get a certain percentage of their contributions back. I would prefer if they had a pro rata pension, as Senator Kelleher proposed. I have had representations from people who paid for stamps for a year or two years in the past and do not even qualify for the repayment of a portion of their contributions. That anomaly should be addressed. Those who have never paid anything and started contributing over the age of 56 get back a portion of their contributions but those who made contributions to social welfare perhaps a number of years earlier, are not repaid any of their contributions they make from age 56 because they paid social insurance contributions — stamps — for a year or two. I would prefer if the spirit of Senator Kelleher's amendment providing for a pro rata pension could be accepted.
Would it be possible for the Minister to put down this amendment in his name on Report Stage? Is it because it involves a charge on the Exchequer or that the Minister will not accept it? Would the Minister accept the thrust of the amendment?
That is unfortunate. The amendment addresses the issues outlined by my colleagues. It is regrettable that this Bill does not address the issue. It is causing much concern and disquiet in what is, admittedly, a small section of the community.
I was a member of the Opposition when this was introduced in 1988 by the then Minister. Deputy Woods. I understand the point being made. If we are trying to get more self-employed people into the PRSI system we should create an opportunity for them to join it. We could add, for example, voluntary contributions. Can self-employed people make additional voluntary contributions? If so, is the Minister prepared to consider voluntary contributions added before the age of 56? Could this be backdated? I agree in principle with Senator Kelleher. Information on additional voluntary contributions by the self-employed should be forthcoming. I do not know if it was included in the booklet produced two years ago. These people should be informed of their benefits. The more self-employed people there are in the system before they reach the age of 56, the better it will be for them in the long term in terms of State benefits.
Everybody readily admits that there is a number of anomalies in the system. I was a member of the Opposition in 1988 when the scheme was introduced. It was identified then that problems would arise at a later stage. However, several of these matters have been referred to by the pension board's report on pro rata pensions in general.
Contributions made by people prior to 1953 are not taken into account as a result of the Social Welfare Act which determined the present system of contributory pensions. Some people have the average of 20 contributions required to qualify for the minimum contributory pension, which is approximately 85 per cent of the maximum but there are people who have 19 — one less — who do not qualify for a contributory pension. A combination of the 19 can be made up of those who were over 56 in 1988 who, despite adding self-contributions and previous contributions they may have had in employment, are still short and find themselves with no pension. There is a number of anomalies. A review of the implications in that area is taking place in the Department of Social Welfare.
It is not possible to accept an amendment which would have financial implications for the Exchequer. The financial consequences of the proposed amendment would be great, perhaps £300 million to £400 million. That is a substantial figure. This problem can only be resolved on a gradual basis over a number of years. Ultimately, it must be tackled. However, it is also a problem that will disappear by itself ultimately. Over a period of years the problem will decrease.
The ultimate solution to pension problems.
One cannot propose to reduce the pensions of those who already qualify. That is impossible. Those who at present have 85 per cent of the pension as a result of having an average of 21 annual contributions since 1953——
——are doing very well at present. If the pension board report was implemented those pensioners would suffer a dramatic reduction in their pensions. This is a problem and it is not a simple one. This problem should have been envisaged several years ago. It should have been provided for in 1988 but it was not. The debate will arise as to whether it is more beneficial for the individual to get back part of their contributions. Indications were given that, under the 1988 Act, people in that category would be entitled to some of their contributions. I am not certain that is such a great idea from their point of view. Changes might take place in the future which ultimately might be beneficial to people who are disadvantaged now. It might be beneficial to them today to get their contributions back, although it could have a negative effect on the Department's social welfare fund.
A number of people who have made considerable contributions to contributory pensions over a long number of years are obviously disadvantaged by virtue of the fact that they do not now qualify for a pension. It is particularly worrying for individuals who see that missing one contribution means they find themselves with no pension. The ideal solution was to introduce a pro rata system a few years ago. That was not done and, unfortunately, we now have people with the minimum 20 contributions receiving an 85 per cent pension while those with one less receive no pension. The financial implications of a change in the system for those with limited contributions at present are huge as are the financial implications for the Exchequer because opening the system to everybody would mean not interfering with those who have the minimum contributions now and who qualify for the 85 per cent pension.
The Minister is inclined to blame the Minister of 1988 for not introducing a scheme for pro rata pensions; at least he introduced the scheme. Is it not now appropriate that the present Minister for Social Welfare amend the legislation so that a pro rata pension would be paid? There is no point harking back to 1988. The Minister at that time gave self-employed people an opportunity to receive a pension. Unfortunately, people who were 56 years of age will not qualify. All they will receive is the return of their contributions. Is it not timely for the present Minister for Social Welfare to amend the scheme through legislation so that a pro rata pension will be made available to these people?
As I said at the outset, a review is taking place within the Department of the implications and consequences of not making this provision at an earlier date. The Minister and I have requested this review. We have no wish to exacerbate the position or create a divisive public debate, but there are serious financial implications. We will endeavour to deal with the problem to the satisfaction of those disadvantaged at present.
It is not possible to accept the amendment. It would result in serious breaches of financial guidelines. It could militate against those who are contributors at present and may remain so for the foreseeable future, younger people. In time we will have to face this problem against the backdrop of the changing age profile of our population; it may not be possible for younger people to finance that proposal.
I attended an informal conference of European Social Affairs Ministers at which this question was examined. All European countries have difficulties in collecting contributions adequate to meet social welfare pension requirements, while keeping those contributions pitched low enough not to become a deterrent to employment. We recognise the difficulties, which will have to be tackled at some stage. The Minister and I are anxious to do so, but we cannot in the short term for the reasons I gave.
The Minister is being fair. It is not a happy outcome for those involved, but for the future we must consider those over 56 who do not have benefits. We have to recognise that if they do not receive a pro rata increase the State will have to provide for it in another way. It is only when people reach a certain age that they realise they have to provide themselves with a pension. Young people in particular do not recognise this. Unfortunately, many people are caught in this dilemma, but we should make no apologies for looking after the less well off over the age of 56. Benefits should be given to those who do not get them at present.
Booklets and information on pensions should be made available to younger working people. In the future there will be EU legislation laying down what social welfare and social services provisions we can make, how pensions will adapt, what people should do for themselves and what provisions should be taxed. The Minister has admitted this should be examined.
I am sorry for the people involved. It is sad that a 20 year old gets all the benefits but a 19 year old gets none. That should not happen. We should be planning from the age of 15 on and they should get a contribution accordingly. I am prepared to agree to the section, but we should think about the future.
All of us are concerned about individuals who come to us who are not eligible for pensions. On Second Stage I said there were many problems, including those mentioned by the Minister. It is estimated that in 25 years time the number of people over 66 in Ireland will have increased by over 50 per cent. Given the decline in the birth rate, the number working to support those on pensions will be greatly diminished.
It was said last week that 1.4 million people depend on social welfare. That includes pensioners — we tend to think only the unemployed on the live register are depending on the State, but the number is huge. There are no easy options and the resources available to the State must be shared. The Government will be faced with difficult choices, involving the distribution of money between younger and older people.
As legislators, we should promote private social security provisions. People should be aware they may have to provide pensions for themselves. This should be discussed more in this House. I hope the Minister can come to us during the year to debate these other issues, which are relevant to the future of this society and could be discussed in greater detail, separate from the Social Welfare Bill.
On the question of social welfare for the self-employed, people who have worked all their lives as tradesmen and have an excellent record of contributions paid to the State have found they cannot get employment unless they produce a C2 certificate for the contractor. When they work under a C2 they are in a different category. Consequently, if such a person becomes ill or unemployed after 12 months or so, they are in trouble. I ask the Department to examine this matter.
I am aware of the point raised by Senator Sherlock. The same issue arises for share fishermen. All of us in public life have come across cases where a long period on C2 certificates has caused problems for people in later years. People have not been sufficiently aware that at some stage they will depend on a pension, if they are lucky enough to live to that age. Unfortunately, younger people have not given enough thought to that, which will create problems.
There are other anomalies about contributions. At present people may have made up to 24 contributions per year between starting work and retiring, but part of that contribution period may have been before 1953. This is where the anomaly really arises. A person with 20 average contributions since 1953 actually qualifies for approximately 85 per cent of a pension while the person with several contributions more on average over their working life qualifies for no pension at all. A considerable number of people are caught by that anomaly.
The whole question of the social welfare fund, the pensions fund and provision for the future was adequately put by Senator Honan. We all have to look at the implications for the future in that regard and we should do it now; it should have been done before.
Although Senator Kelleher saw it otherwise, I was not being politically critical when I mentioned 1988. In my personal opinion, the private sector should have been used to a greater extent in 1988. Senators should remember that we are dealing with a situation where there is an ongoing guaranteed cash flow which can be utilised to good effect by the Department of Social Welfare in making provision for the future. We need to look at that in the context of any review which takes place.
I note the point made about private enterprise and about provision being made entirely through that area. I am not so sure that is the ideal situation either, because there are difficulties no matter which way is chosen. A combination of the public and the private sector may well have to be utilised at some stage in the future in order to meet future requirements. We had a small profit last year of about £50 million on the social welfare fund. While £50 million is insignificant in the context of total social welfare expenditure and total social welfare needs in the future, it is still a significant figure in itself, and to what extent that will be repeated in subsequent years remains to be seen.
All options must be examined. This area is being examined in the Department at the moment. There are two bottom lines. The State has to protect any money that it may invest in a way which will be beneficial to pensioners at a later stage. The State's resources and investment must be protected. Likewise, the people who reach retirement age also need to be protected and the State has a duty to protect their interests in that situation. Hopefully, we will achieve something in the course of the review that is taking place. That is the objective. Whether we are successful or not will remain to be seen.
Question put and agreed to.
SECTION 20.
Question proposed: "That section 20 stand part of the Bill."
I know it is getting late and I will not delay the Minister. I welcome the extension of the definition of orphan. I dealt with the case of a 17 year old boy who in effect had been abandoned by both mother and father. I was not aware that under the previous definition he would not have qualified. This provision recognises what is happening in society. Teenage children are being either thrown out or simply abandoned. We must ensure that they are looked after. I have before and I will again pay tribute to the community welfare officer who took this young boy in hand and looked after him. I welcome this section.
Question put and agreed to.
Section 21 agreed to.
SECTION 22.
Question proposed: "That section 22 stand part of the Bill."
Section 22 involves certain situations that are allowed to prevail if somebody is in prison. I have a question for the Minister. What is the authority of a chief executive officer of a health board to interfere with the benefits or payments due to people who are legally in custody in psychiatric hospitals?
The existing provisions governing payments to people while absent from the State or in prison vary from area to area. Generally speaking, the chief executive officers have a dual role in the sense that they have a responsibility to the individuals themselves and their families and they also have a responsibility to their boards which must operate within given financial constraints. Having spent a considerable number of years as a member of one of those boards I have, as I am sure have all Members, had the experience in the past of seeing regulations applied by chief executive officers of health boards which in one instance may be desirable, acceptable and beneficial, depending on one's standpoint, but which may be seen as negative, disruptive and obstructive from a different angle. The reality of the situation is that the chief executive officers have a dual responsibility and they have operated within those constraints to the best of their ability. I suspect the Senator is talking about individual cases.
Perhaps I did not make myself clear. I am asking whether the chief executive officer of a health board has the authority to confiscate a large portion, in some cases up to 90 per cent, of the payment made to a patient under the Social Welfare Acts, even though that person is there for treatment and may at a later stage leave that hospital. Does the chief executive officer have that right, even though the patient is entitled to the payment by contribution? I do not want to confuse this with people who may be in geriatric hospitals. I am talking about people who are incarcerated under the Mental Treatment Act, 1945.
Yes, he has. It would appear that an individual case inspired the question. There is nothing wrong with the question. The chief executive officer has powers under the Act. I cannot recall them exactly from memory but we can make them available to the Senator. Over the years this situation has come up on a number of occasions and, depending on the vantage point of the individual asking the question, it can be seen as being necessary and very important that the interests of the board be kept to the fore by ensuring that provision is made for the patient's upkeep.
I note the point raised that this might not necessarily be a voluntary situation. It would not be a voluntary situation under that particular Act in any event. Provision is made for the patient's upkeep, and resources are deducted at source for that provision. There has been contention and argument about that over the years, and not only in relation to the Mental Health Act but in relation to hospitals generally. The provision is there and this is permissible. Generally speaking, it is also provided for that the individual patient will have a certain amount of pocket money, for want of a better word, made available to them. Again, that has been the subject of considerable contention over the years. The answer might not be what the Senator has in mind.
It would appear from my experience on a health board that, when this issue was discussed on numerous occasions, the answer is yes and that generally speaking this is provided for.
A question has been raised in regard to psychiatric patients. There may be a need for the Department of Social Welfare to check with health boards to see if regulations exist. Such regulations existed some years ago and health boards had no hesitation in giving copies of them showing how deductions were made and what percentage was put by for patients. Now there is a question as to whether in some instances anything is put by for patients or whether they get a weekly allowance. This may be attributable to the financial constraints. It is a social welfare pension payable to a person and there is a need to see if regulations are in force.
I understand the section which states that in certain circumstances a person who is outside the State or in prison should lose a benefit. However, we are talking about members of the community who have not committed a crime and who are legally held in custody under the 1945 Mental Treatment Act. They are held in some cases against their will and their money is being taken from them. I always found this to be obnoxious. It is inappropriate that the chief executive officer has the power and authority to confiscate a person's contributory disability benefit or contributory invalidity pension while they were committed to a psychiatric hospital for treatment. I suggest that this should be further investigated.
These people are not in hospital because they have committed a crime, but because society felt they needed compulsory treatment. However, society has overstepped the mark by giving the people to whose care they are entrusted the authority to remove up to perhaps 80 or 90 per cent of their weekly payments. I was a member of a health board for many years and I worked for the Dublin health authority for some years before that. I hold strong views on this and I have challenged chief executive officers and administrators of hospitals on this matter.
The law is unclear in this regard, although I note the Minister's statement that the chief executive officer has the power to remove a portion of a person's social welfare payment, but he must leave some comfort payment. The pension of a person who is committed to a psychiatric hospital as a result of the 1945 Act should not be removed against their will. That is what is happening in psychiatric hospitals if what the Minister said is correct. If that is the case, the matter should be further investigated and there should be a change in the law. The regulations governing this activity should be brought to the attention of every member of a health board. To give the authority to a chief executive officer of a health board to remove the pension of a person incarcerated in a hospital against their will is going too far. I ask the Minister to look into that and make the necessary changes.
I understand the points raised by Senator Finneran. As I said. it is an area which has caused some animated debate at health board meetings. This section refers to that general area. From my recollection, it is something which developed over a period of time. Regulations exist whereby those deductions may be made. They are also made from a number of other institutions of a similar nature, not necessarily psychiatric ones.
They are not legally held in custody in other places.
That is true. The pocket money to which I referred is supposed to be made available. I understand that it is made available or is retained for the patient for whatever length of time is required. I will endeavour to identify the precise regulations or legislation and I will make it available to Senator Finneran. A person can also be incarcerated in another institution where similar deductions may be made.
While I take on board the points made, I point out that I have sat in on health board debates where the opposite view was put forward, which I felt was incorrect. I agree with the view expressed by Senator Finneran. If pocket money is provided, it will resolve part of the difficulty. I cannot give the answer the Senator might like, but I will bring the matter to the attention of the Department and I will inform him of the precise regulations under which that procedure operates.
Question put and agreed to.
Section 23 agreed to.
NEW SECTION.
I move amendment No. 13:
In page 15, between lines 9 and 10, to insert the following new section:
24. No levy pursuant to the Health Contributions Act, 1979, or the Youth Employment Agency Act, 1981, shall be payable by any married woman in respect of any payment to her of arrears of social welfare payments arising by virtue of the failure by the State to implement EC employment equality legislation.".
The amendment is to ensure that none of the equality payments to be made to the women under the equality legislation will be liable for either the youth employment or the health contribution levy.
I support Senator Honan's amendment. I do not believe the Minister will have any problem with it, given the tone of his contribution earlier and his commitment to the 70,000 women who hope to get the bulk of their arrears this year.
Under the provisions of the Health Contributions Act, 1979, and the Youth Employment Agency Act, 1981, social welfare payments are already exempt from liability for health contributions and employment and training levies, so there is no need to introduce such a levy.
But it is the thought that counts and we appreciate it.
The element of social welfare contributions paid since 1970 in respect of death grants need to be reviewed. If this means increasing the contributions so as to increase the grant, that should be done, because the current grant is so small that it is irrelevant. People expecting to receive an adequate grant from the Department of Social Welfare find that they are getting £100 to cover something that costs between £1,200 and £1,300 in some instances. If it means that a greater percentage of the contribution should go towards a death grant it would be worthwhile.
That is a positive suggestion. While I cannot accept it in the context of this Bill, it is something that bears consideration. That will be done when and if it is possible. I take the Senator's point that when the death grant was first introduced the cost of funeral expenses was considerably less than it is today; also, in different parts of the country these costs vary considerably. In view of those factors it would be no harm to focus our attention on that aspect. There is merit in looking at a number of other once-off payments like that where a nominal increase would be greatly appreciated but there would not be a dramatic impact on the Exchequer. Many of the proposals which have been genuinely put forward would have huge financial implications, whereas suggestions like this one, which do not have such a dramatic financial impact, can be looked at in the context of future proposals.
Amendment, by leave, withdrawn.
SECTION 24.
Question proposed: "That section 24 stand part of the Bill."
In sections 24 and 25, neither the health nor employment levies apply to maintenance payments. I welcome section 24 (c) and section 25 (c). It is my understanding, although I may be wrong, that maintenance payments would still be liable to the 5.5 per cent PRSI rate. Is that correct? Maintenance payments are made from income that is already liable to PRSI contributions, so are these payments subject to two PRSI deductions at the basic level?
I accept that health and employment contributions are not subject to those but they are still subject to the basic 5.5. per cent PRSI level. That is not acceptable because whoever received the payments would be passing them on as maintenance payments and would already have paid PRSI on the income.
In relation to PRSI contributions, it should be noted that it may not be beneficial to eliminate the payments even in the area to which the Senator referred. It may have a knock-on effect which would militate against a person's pension rights at a later stage. Having regard to what we said already about the unfortunate people in the pro rata sector, a clean sweep is not envisaged in this area, but the question is now being reviewed in any event.
Question put and agreed to.
Section 25 agreed to.
Schedule A agreed to.
Schedule B agreed to.
Schedule C agreed to.
Title agreed to.
Bill reported without amendment.
Acting Chairman
When is it proposed to take Report Stage?
