Tá áthas orm bheith anseo agus tá siúl agam go n-éirí go maith linn inniú leis an mBille. I am pleased to be here in the Seanad today to introduce the Social Welfare Bill, 1997.
The Social Welfare Bills which are enacted each year in the aftermath of the budget will always be among the most significant legislation to come before the Oireachtas. This is because they serve the vital purpose of protecting and improving the living standards of so many people — pensioners, people with disabilities, the sick, the unemployed and families — by giving legislative effect to the increases in the various rates of social welfare payments announced at budget time. While this Bill is no different in that respect, it, allied to other social welfare legislation introduced by this Government over the past few years, carries an added significance.
This legislation effectively underpins the radical transformation of the social welfare system which has been undertaken in recent years. It also reflects the change in focus and ethos of the Department of Social Welfare which has stemmed from a recognition of the fact that alongside the provision of critical income support there is a need to ensure that the social welfare system is able to actively support the aspirations of people to participate in a full and meaningful way in society by facilitating them in gaining access to training, education and employment.
The Bill exemplifies this two pronged approach. It comprises a wide ranging and comprehensive package of measures which provides for an improvement in the living standards of all who receive social welfare through increases in weekly rates of payment which are double the projected rate of inflation for the year; it continues and enhances the pro-work and pro-family policies which have been central to the Government's work; it completes the process of ensuring equal treatment of men and women in all social welfare schemes; it brings about further significant reform of our social welfare system through the introduction of new pro rata pensions and it introduces a new payment entitled sickness allowance to provide a more appropriate response to the needs of certain social welfare recipients and strengthens the social insurance system by enhancing the benefits available to all workers who pay social insurance.
Before proceeding to set out the purpose of various sections, I wish to draw attention to specific measures in this Bill of particular importance in the development of the social welfare code.
First, I am pleased the Bill provides for the introduction of improved pro rata contributory pensions. No doubt many Senators will have been witnesses to the frustration of people who, for a variety of reasons, may have a broken or sporadic social insurance contribution record over their working lifetime, and find that when they reach the relevant age they have no entitlement to a contributory pension. This group includes women who may have worked for a number of years prior to getting married, then spent a long period outside of the paid workforce, for example, on home duties, and who may have later returned to paid employment. The group may also include self-employed people who started on their own before 1988 when PRSI for the self-employed was introduced. It may also include returned emigrants whose work period abroad cannot be reckoned for pension purposes in Ireland. The provisions contained in section 12 will greatly benefit those people.
The present conditions require a minimum average of 20 contributions over a working lifetime in order to qualify for the minimum rate of pension. Under the new arrangements, reduced rate old age contributory pension will be payable to persons who have a yearly average of between 10 and 19 contributions from when they first became insured until the end of the contribution year before reaching age 66. Regulations under this section will provide that people with a yearly average of between 15 and 19 contributions will qualify for 75 per cent of the maximum rate while those with an average of 10 to 14 contributions will qualify for 50 per cent of the maximum rate, provided they have a minimum of 260 paid contributions. As the current minimum rate of pension is 92 per cent of the maximum rate, the rates of pro-rata pension payable are reasonable by reference to the low averages required. These new arrangements will come into effect in November 1997.
In line with the recommendations in the final report of the National Pensions Board, section 12 also provides for an increase in the number of paid contributions required for entitlement to old age contributory pension from 156, that is, three years to 520, that is, ten years.
Given that this represents a fundamental change to state pension provision, the increase is being introduced in two phases — an increase to 260 paid contributions in the case of a person who reaches pension age on or after 6 April 2002 and an increase to 520 in the case of person who reaches pension age on or after 6 April 2012. The ten years of contributions may comprise an aggregate of 520 qualifying and voluntary contributions of which at least 260 must be qualifying contributions. In addition, a person who is a voluntary contributor on or before 6 April 1997 may qualify on the basis of an aggregate of 520 qualifying or voluntary contributions of which at least 156 must be qualifying contributions. Similar changes in the contributions required for retirement pension are also provided for in this section. The number of paid contributions required for the purpose of becoming a voluntary contributor is being increased from 156 to 260 with effect from 6 April 2002.
The second issue I want to highlight is contained in section 13. It involves a change in the rules relating to requalification for unemployment benefit. It will have a substantial beneficial effect on the incomes of many workers, particularly seasonal and casual workers, such as dockers, firefighters, creamery workers, hotel staff and people in the tourism industry.
Since 1992, such workers were precluded from requalifying for unemployment benefit until they had a further 13 PRSI contributions paid after they had exhausted their entitlement to unemployment benefit. That meant that until such time as they acquired the necessary 13 contributions they had to have recourse to unemployment assistance which was means tested and took account of their earnings from casual employment. The method by which those earnings were assessed caused particular difficulties in areas where the volume of casual work available was declining. Thus many workers found themselves on a reduced rate of unemployment assistance or no payment at all on the basis of projected earnings which had not materialised.
Section 13 provides that a person can requalify for unemployment benefit by having the necessary 13 PRSI contributions paid at any time after the 156th day of unemployment, that is, six months. This means that where 13 requalifying contributions are paid between the 156th day and the 390th day, the claimant can requalify for unemployment benefit immediately after the 390 days have been exhausted. Instead, therefore, of having to have recourse to unemployment assistance, a claimant in those circumstances will requalify for a further 15 months of unemployment benefit.
It is expected that at least 5,000 casual workers who are currently receiving reduced rates of unemployment assistance will benefit by an average of £11 per week under the new arrangements. This is, I believe, an important improvement which further strengthens the social insurance system and makes it even more worthwhile for people to work and pay PRSI.
A third notable feature of the Bill involves the introduction of a new social assistance scheme, which will be known as sickness allowance. Under the existing arrangements, people who are incapable of work due to illness but do not satisfy the contribution conditions for disability benefit or the qualifying conditions for receipt of disability allowance must have recourse to supplementary welfare allowance in order to secure income support.
As Senators will be aware, supplementary welfare allowance is a safety net mechanism for people who do not qualify for a social welfare payment or whose special needs are not covered by social welfare payments generally. During 1995 there were over 12,000 cases where SWA was paid to people who were unable to work due to illness but had no entitlement to either disability allowance or disability benefit. SWA was never intended as a sickness payment. Consequently, I am providing for the introduction of the new sickness allowance which will complete the cover available under the social welfare system for those who are unable to work due to illness or injury.
Sickness allowance will be payable at the same rate as unemployment assistance, that is, at the short term rate of assistance for the first 15 months and at the long-term rate thereafter. To qualify for the allowance a person must be aged 18 years or over and under age 66 years, be incapable of work and satisfy a means test. The provisions as to the assessment of means will be specified in regulations. I envisage that sickness allowance will provide for an estimated 13,500 people per year who are incapable of work due to illness and currently seek SWA.
Sections 1 and 2 contain the usual provisions relating to the short title, construction and definitions used throughout the Bill.
The increases in the weekly personal and adult dependant rates of social insurance and social assistance payments announced in the budget are provided for in sections 3 and 4. All personal rates are going up by £3 a week and all adult dependant allowances by £1.50 a week, thus providing all social welfare recipients with substantial increases of between 4 and 4.8 per cent, which is about twice the expected rate of inflation for this year.
Section 5 provides for increases of £1 in the lower rate and £5 in the higher rate of child benefit, with effect from 1 September 1997. These increases will bring the rates to £30 per month for each of the first two children and to £39 per month for each subsequent child. In the past three years, child benefit has increased by 52 per cent for a three child family and 54 per cent for a five child family. In 1991, a four child family got about £70 a month; this year they will get £138, which is nearly double that. The dedication of substantial resources to child benefit in recent years represents part of our planned strategy of reforming income support for children, removing disincentives to employment and working towards putting in place a system of basic income for children.
Section 6 provides for an increase of £10 at each point in the weekly income thresholds used to determine entitlement to family income supplement. The effect of this threshold increase is that virtually all current recipients will get an extra £6 in their weekly payments from mid-June next.
The new weekly thresholds range from £205 for a one child family to £344 for a family with eight children or more. This section also provides that from 12 June 1997 the rate of FIS payable will be calculated on the basis of gross earnings less any superannuation, PRSI and levies which may be payable. This revised calculation method is an important first step towards meeting the commitment we made in Partnership 2000 to base FIS entitlement on net rather than gross income. The measure introduced in last year's Social Welfare Act which provided for the continued payment of child dependant allowances for up to 13 weeks to people who have been unemployed for a minimum of 12 months and who take up employment which is expected to last for at least four weeks, has helped to overcome the disincentives facing unemployed people with families who have the opportunity to take up work.
Section 7 extends these provisions to cater for other groups, namely, people on community employment immediately before taking up employment and people on the live register or on community employment who take up employment under the "jobs initiatives" announced last year.
Sections 8 and 9 reflect the changes announced in the budget last January with regard to PRSI. Section 8 provides for a reduction of 1 per cent, from 5.5 per cent to 4.5 per cent, in the standard employee contribution rate. This section also increases from £22,300 to £23,200 the annual earnings ceiling up to which social insurance contributions are payable by employees and increases from £26,800 to £27,900 the earnings ceiling up to which contributions are payable by employers.
The weekly earnings limit for the lower — 8.5 per cent — rate of employer's contributions is being increased from £250 to £260 per week. Section 9 increases from £22,300 to £23,200 the income ceiling up to which social insurance contributions are payable by the self-employed. All of these changes are to come into effect on 6 April 1997.
Sections 10 and 11 provide for the extension of maternity benefits and adoptive benefit to women in insurable self-employment along the same lines as currently available to women in insurable employment. These sections also provide for a consequential amendment to section 18(1) of the Social Welfare (Consolidation) Act, 1993, which extends the benefits covered by self-employment contributions to include maternity benefit and adoptive benefit.
I described earlier the introduction of reduced old age contributory pensions. Section 12 gives legislative effect to this measure. I also referred earlier to the reform of the arrangements for requalifying for unemployment benefit, and the relevant legislative changes are provided for in section 13.
The purpose of section 14 is to provide for two improvements in relation to the occupational injuries benefit scheme. First, it removes the more restrictive conditions applying to widowers in the case of widower's pension payable under the scheme, thus ensuring that widows and widowers are treated equally. It also abolishes the requirement that the claimant must have been living with, or have been wholly or mainly mainly maintained by, the deceased. This brings the conditions of entitlement into line with those applying to widow's and widower's contributory pension.
Second, this section extends the scope of the scheme to provide for payment of pensions to widows and widowers and to the surviving spouse and recipient of disablement benefit whose degree of disablement is assessed at 50 per cent or more, irrespective of the cause of death. The purpose of this provision is to overcome a problem which arises with the existing arrangements in cases where the cause of death cannot be attributed directly to the occupational injury or disease.
I spoke earlier about the introduction of a new social assistance payment to be known as sickness allowance. The relevant legislative provisions are contained in sections 15 to 18. Section 17 provides for disability benefit to be renamed sickness benefit and invalidity pension to be renamed disability pension to more accurately reflect the contingencies these payments are designed to meet.
The completion of our programme of implementing equal treatment of men and women across the social welfare code will be achieved by virtue of the provisions contained in sections 19 to 21 which introduce a new scheme which will be known as the widower's non-contributory pension scheme. This new payment is designed to meet the needs of widowers who are not rearing children; those who are will continue to receive the one-parent family payment. It will be available to widowers on the same basis as the existing widow's non-contributory pension. This part of the Bill also extends entitlement to the new widower's pension to divorced men on the death of their former spouse, provided that they have not remarried and that they continue to satisfy the other conditions of entitlement. Similar provisions have already been put in place for widows in the Social Welfare (No. 2) Act, 1995.
Section 22 provides for a number of important improvements to disability allowance. It provides for regulatory powers to extend entitlement to disability allowance to persons who reside in an institution on a part-time basis and otherwise reside at home. The allowance will be payable to such people at half of the standard rate, subject to means.
Section 22 also provides that where one of a couple is in receipt of disability allowance and the other is in receipt of old age non-contributory pension or invalidity pension each of the couple may receive the full personal rate of payment. This section also provides that the cost of medical certificates issued for the purpose of claiming disability allowance and the new sickness allowance scheme will be met by the Department.
Two notable improvements to the carer's allowance are provided for in section 23. First, provision is being made for the payment of an additional amount, equivalent to 50 per cent of the existing personal rate, to carers who are providing full-time care and attention to more than one person. This measure aims to recognise the particular difficulties faced by those caring for more than one person and could benefit as many as 2,000 recipients of the allowance. Second, this section provides regulatory powers to relax the condition requiring full-time care and attention so as to entitle carers of incapacitated people attending rehabilitation training or day care centres on a limited basis to the allowance.
Section 24 provides that people who cease to be entitled to the one parent family payment or the carer's allowance may qualify for pre-retirement allowance without first having to have been in receipt of unemployment payments for 15 months as would ordinarily be the case.
The provisions contained in section 25 represent an important step towards the achievement of a more uniform, consistent and even handed treatment of capital and savings for means test purposes across the range of social assistance schemes by applying new and more generous rules to all means tested pensions and to carer's allowance.
Section 26 consolidates the provisions relating to amounts disregarded in the assessment of means for social assistance payments. It also makes provision for disregarding rental income from the assessment of means for old age non-contributory pension where the income involved is in respect of a person who lives with and pays rent to the pensioner. Section 27 states that the measures contained in sections 22 to 26, inclusive, will be brought into effect by way of commencement order.
The provision of section 28 are being introduced as a result of measures announced in the budget to deal with the poverty and unemployment trap created by the withdrawal of the adult dependant allowance — ADA — and half the child dependant allowance once the earnings of the spouse of a claimant exceeds £60 per week. This problem is being tackled by the introduction of a tapered withdrawal of the ADA in the case of recipients of a number of social welfare payments. Under existing provisions, where the spouse of a claimant to a social assistance payment is not his or her dependant, the claimant is assessed with the joint means of the couple. The purpose of section 28 is to amend these provisions to provide that, on the introduction of the tapered rates of ADA, a person in receipt of a reduced rate ADA will only be assessed with half the joint means of the couple.
Section 28, with Schedule F, also replaces the term "adult dependant" used for the purposes of paying an increase of benefit or assistance in respect of a spouse or partner with the term "qualified adult". This change in terminology is in line with a commitment I gave during the debate on last year's Social Welfare Bill.
Section 29 provides for a strengthening of the rights of citizens in circumstances where decisions relating to what are known as "liable relatives" are made by the Department or the health boards. The position at present is that where one parent family payment or supplementary welfare allowance is paid to a person, any other person who is liable to maintain the beneficiary and any child in respect of whom an increase is payable, is liable to contribute such amount as may be determined by the Department, or the health boards in the case of supplementary welfare allowance, towards the benefit or assistance payment in question. As these decisions are made on an administrative basis, in that they are not formal decisions made by deciding officers appointed under the Social Welfare Acts, the person concerned does not at present have the right to appeal.
Section 29 provides that these decisions will now become a deciding officer function and will thus afford the person concerned the right of appeal to the independent social welfare appeals office. In addition, it provides for regulatory powers to specify the basis on which the contribution which a person is required to pay is to be calculated. Section 29 also provides that a divorced person will remain liable to contribute towards the cost of the benefit or assistance paid to their former spouse and extends the definition of order of the court to include maintenance, lump sum, variation and interim orders in respect of maintenance made by any court. These provisions will be brought into effect by way of a commencement order.
A number of provisions relating to unemployment payments are contained in section 30. First, it provides that the provisions under which a person is not paid for the first three days of a claim for unemployment benefit, known as waiting days, will not apply in the case of a claim for benefit made following a claim for disability benefit in the same period of interruption of employment. Second, it provides for regulatory powers which will be used to eliminate the requirement to serve waiting days for unemployment assistance purposes, in certain circumstances.
Third, it enables the Minister for Social Welfare to make regulations specifying the circumstances under which an unemployed person will be regarded as being available for and genuinely seeking employment for the purposes of entitlement to unemployment benefit and unemployment assistance. Finally, section 30 provides that people who, prior to their participation in the European voluntary service pilot action programme, were in receipt of unemployment benefit or unemployment assistance can resume such entitlement on completion of the programme. This programme, which was recently launched by the Commission of the European Union, is open to young people between the ages of 18 and 25 and is administered on behalf of the Department of Education by Léargas.
The provisions of section 31 of the Bill state that where a person who receives a social welfare payment by way of personation is subsequently convicted of the criminal offence of larceny, the amount of the payment to which the offence applies may be recovered from any social welfare payments to which the person is or becomes entitled.
Section 32 incorporates into primary legislation existing regulatory provisions governing the payment of arrears on foot of late claims for the various social welfare payments into primary legislation. Under existing provisions, the payment of arrears to people who fail to claim within the prescribed time is generally limited to six months the this section extends from six to 12 months the period in respect of which arrears of old age contributory pension, retirement pension, widow's contributory pension, widower's contributory pension and orphan's contributory allowance may be paid. It also provides for payment of arrears of up to six months in the case of late claims for family income supplement. Under the present arrangements, there are no provisions whatsoever for payment of arrears of FIS.
The opportunity was taken to introduce an amendment to this section in the Dáil, the effect of which is to make the current arrangements more flexible and responsive where claims are made outside the prescribed time. Senators will be aware that the whole issue of arrears in respect of late claims has given rise to a certain amount of criticism over the years, particularly in so far as claims for old age contributory pension and widow's and widower's contributory pensions are concerned. A number of complaints against my Department have been made to the Ombudsman over the years and the issue has been highlighted in several of the Ombudsman's annual reports. The issue is currently the subject of an investigation under section 4 (2) of the Ombudsman Act, 1980, and the provisions of section 32, as now amended, arise from some of the issues raised by the Ombudsman in the various consultations which have taken place with my Department during the course of the investigation.
The amendment provides for regulatory powers under which arrears may be paid for periods in excess of the six and 12 month limits specified in subsection (2) subject to conditions and in circumstances to be specified in the regulations. These decisions will be made by officers appointed by the Minister for this specific purpose. I believe that these powers will prove to be sufficiently broad to provide the flexibility required to address the issues arising from the Ombudsman's investigation.
Section 33 of the Bill provides for the collection of PRSI by my Department from certain categories of self-employed contributors. PRSI is normally collected by the Revenue Commissioners on behalf of my Department but there is a need for my Department to have powers in this area to enable PRSI to be collected from people who are exempt from tax liability, such as certain artists. I am not referring here to particular artists.
This section also provides that a person who became insured as a self-employed contributor after reaching age 56, and who was previously insured as an employee, will be entitled to a refund in respect of the old age contributory pension element of their self-employment contribution in cases where they do not qualify for old age contributory or non-contributory pension. Finally, section 32 also provides for regulatory powers to refund part of the employer's portion of contributions paid in respect of seafarers.
Section 34 is a new section introduced on Report Stage in the Dáil. Its purpose is to provide that social welfare appeals may, in certain circumstances, be referred for hearing to the Circuit Court rather than to an appeals officer. Senators will be aware of the appeals procedure in the case of social welfare claims. Where a person is dissatisfied with a decision on their claim, they may appeal against it to the chief appeals officer in the social welfare appeals office. The appeals service provided by that office is independent and impartial and is provided in an informal manner in keeping with the needs of social welfare claimants.
The administration of the social welfare system inevitably involves having to deal from time to time with difficult and potentially dangerous situations where staff of the Department could be subject to threats or intimidation. Senators will recall that it was necessary last year to provide in some instances for investigations and decisions on social welfare entitlement to be carried out by the Criminal Assets Bureau. Under the Criminal Assets Bureau Act, 1996, I may refer cases to the bureau for investigation and determination where there are reasonable grounds for believing that such threats may exist. In this way the investigation and deciding functions are taken from Department officials and given to the bureau. The functions of the bureau are carried out with necessary safeguards for the staff of the bureau.
Section 34 is intended to apply a similar level of protection to appeals officers. Having considered how best this might be done, I have concluded that the most reasonable approach, which will preserve the right to an independent appeal, is to provide for an appeal to the Circuit Court in such cases. The service provided by the social welfare appeals office would not be adequate to cope with appeals which might require, for example, special arrangements for the anonymity of witnesses at an appeal hearing; neither would it be possible, under existing arrangements, to provide necessary safeguards similar to those available to officers of the Criminal Assets Bureau for the appeals officer hearing such appeals.
The procedure envisaged in this section is straightforward. In relevant cases, the chief appeals officer may direct that the person submit the appeal to the Circuit Court which will determine the appeal in accordance with social welfare legislation and on the same evidence available to the appeals officer. The decision of the court would, as is the case with appeals officers, be final and conclusive except, of course, for the general right of appeal to a higher court on a point of law. I emphasise that this process will be used sparingly and will not affect the vast bulk of normal appeals made to the social welfare appeals office.
Section 35 provides for the amendment of a number of references to regulatory provisions contained in the Social Welfare (Consolidation) Act, 1993, as a result of the consolidation, in 1996, of regulatory provisions relating to contributions and insurability. This section also provides for the deletion of subsection 212(7) of the 1993 Act which provides that a person shall not be required to give any evidence or answer questions tending to incriminate himself. This provision is regarded as unnecessary in that there is a recognised common law right against self-incrimination and it would be more appropriate for a court to decide whether the right may be relied upon in the particular circumstances of a case.
Section 36 is a technical measure which provides for the continuity of regulations made under the Social Welfare (Consolidation) Act, 1993, which are being amended by this Bill.
Section 37 provides for the amendment of the functions of the National Social Service Board, which were bestowed on the board when it was originally established under the aegis of the Department of Health in 1984. In 1995, responsibility for the board transferred to my Department and, consequently, it is appropriate that its functions should be reviewed in light of that transfer of responsibility. The revised functions are designed to reflect more accurately the important role played by the National Social Service Board in promoting and supporting independent information, advice and advocacy services throughout the country to ensure that all citizens have access to accurate, comprehensive and clear information on the full range of social services.
Sections 38 and 39 provide for a number of changes relating to health contributions and the employment and training levy and are introduced at the request of the Ministers for Health and Employment and Enterprise.
Section 40 introduces an amendment to the Pensions Act, 1990, to provide legal certainty in respect of the power in the Act to make regulations in respect of external pension schemes, that is, those schemes established in another jurisdiction which have members in Ireland. The amendment arises as a result of concern expressed by pension practitioners in Ireland and the UK regarding the situation that will arise when the UK Pensions Act comes into force in April of this year, particularly as it relates to schemes with members in both Ireland and the UK.
Existing pensions schemes established in the UK, but with members in Ireland, may, from April 1997, technically be subject to the laws of two jurisdictions as will be the case for Irish schemes with UK members. While the legislation of both countries in regard to pensions will be broadly similar, there are some differences which will cause difficulties to schemes and practitioners dealing with them. For example, members of Irish schemes based in the UK could be liable to the indexation requirements of the UK which are different from the revaluation provisions in Ireland. Accordingly, pension practitioners are pressing for legal certainty in regard to such schemes.
This Bill forms an integral part of our strategy to make the social welfare system more equitable, dynamic and responsive to the ever changing needs of Irish society. The provisions in the Bill will have the effect of further enhancing the social welfare system and demonstrate the desire of the Government to ensure that it is capable of providing the best possible service to all those who, for one reason or another, are reliant upon it.
I commend the Bill to the House.