I am pleased to be here to present my second Social Welfare Bill to this House. This is a significant Bill which provides for substantial improvements in the rates of social welfare payments announced in the budget. In addition, it also contains a significant package of improvements for carers, new schemes for low income farmers and fishermen and a new bereavement grant.
A number of these measures were already announced in the budget. Since budget day, however, I have secured Government approval for a number of further improvements, which are included in the Bill, costing over £15 million in 1999 and more in successive years. These include the provision of an additional £5 million in 1999 to bring forward the commencement of the farm assist scheme to the beginning of April; the introduction of measures to improve the position of low income fishermen, costing £1 million in a full year; very significantly, the introduction of a bereavement grant scheme, costing £10 million in a full year to replace the existing death grant scheme which incorporates a five-fold increase in the grant to £500, with easier qualifying conditions; additional enhancements to the pension improvements for self-employed persons aged over 56 in April 1988, costing £1 million in a full year, on top of my previous announcement; the significant extension of the back to work allowance to carers and changes in the provisions to allow certain lone parents retain their entitlement to deserted wife's benefit and allowance and prisoner's wife's allowance.
In overall terms, the resources provided by the Government for social welfare improvements in the Bill amount to more than £317 million in a full year. This is a 33 per cent increase on last year and a 49 per cent increase on the last budget of the previous Government in 1994.
The Bill addresses commitments set out in the Government's An Action Programme for the Millennium aimed at building an inclusive society and fulfilling key commitments in Partnership 2000. This Government is committed to a strategic approach to poverty and social inclusion. Immediately on taking office, we established a Cabinet Subcommittee on Social Inclusion and Drugs to co-ordinate policy across Departments. We have also made great progress in meeting the targets set out in the national anti-poverty strategy, NAPS. In the near future I will publish an assessment of how we are doing on the specific targets set out in NAPS on the basis of ESRI and other research. I would like to think we could update the key targets in NAPS in light of the rapidly changing circumstances as part of the Government's social inclusion strategy.
With regard to income adequacy, for example, a key commitment in this area was the achievement of the Commission on Social Welfare's minimum recommended rates by the end of 1999. This target is being achieved in the Bill. With regard to progress on unemployment, the rate of unemployment is 6.8 per cent for February 1999. This means the target for the end of 2000 set out in the employment action plan has been achieved. We are near to achieving the unemployment targets set out in NAPS. The live register has fallen by 53,500 since we took up office. Long-term unemployment has dropped by 40,000 in the past two years.
As part of the budget package I was pleased to announce new and enhanced employment support measures to help long-term unemployed people back to work. The number of places on the back to work allowance scheme is being increased by 2,000 to 29,000 from January 1999 and, from next July 1,000 places will be reserved for a special pilot scheme for the long-term unemployed – those unemployed for five years or more.
The Government is committed to adopting a families first approach by putting the family at the centre of all its policies as enunciated in the programme for Government and our pre-election policy documents. Through this Bill we are investing more than £40 million in the family this year through major increases in child benefit of £3 per month for the first two children to £34.50, and £4 for subsequent children to £46.
In line with this pro-family approach as set out in our programme and in response to the recommendations of the Commission on the Family we established a family affairs unit in the Department. More than £2 million is being provided by the Government to support marriage counselling, child counselling in relation to parental separation, marriage preparation programmes and bereavement counselling and support. The enhancement of the family and community centre programme is another important objective. By the end of this year, 50 centres will be funded under the programme.
The nationwide expansion of the family mediation service, a key objective in our action programme, is rapidly moving ahead. In addition to the Dublin and Limerick services, the family mediation service is now providing services from regional centres in Cork, Tralee, Wexford, Athlone and Dundalk. Next Monday I will officially open the Galway family mediation service providing services for people in Galway and Mayo. I also plan to expand the service to the western region of Dublin and the north-west of the country by the end of this year. This will fulfil our election promises.
In recent months, I was very pleased to have the opportunity to meet many of the voluntary groups who work with families at a local level. Many Senators will have received invitations to the family services information fora being held throughout the country. Thus far, fora have been held in Wexford, Dundalk, Athlone and Limerick and will continue throughout the country in the coming months. On Monday, the Galway forum will take place to coincide with the launch of the family mediation service. The fora provide an opportunity for local voluntary organisations and community groups who work with families to discuss with me and my officials the issues they encounter in their work in supporting families. Their views on the priorities for supporting families in today's changing social and economic environment are critically important for the future development of family services and policies.
The Bill contains a number of measures designed to improve the position of older people. In our action programme we committed ourselves to increasing the rate of contributory old-age pension to £100 over a five-year period. The Government provided a special increase of £5 per week in last year's budget in the maximum rates of payment. This year we are going a step further by providing an increase of £6 per week in such payments. This means the contributory old age pension will now amount to £89 per week, an increase of £11 or 14 per cent on the rate when the Government took office and one third more than the Rainbow Coalition provided in three budgets.
The Government is also committed to substantial increases in other social welfare payments. The personal rates of social welfare payments other than those for older people are being increased by at least £3 per week. A special increase of £3.60 per week is being provided in the short-term rate of unemployment assistance and supplementary welfare allowance. This ensures these two rates now exceed the minimum rate set by the commission, thus fulfilling the commitment in Partnership 2000.
I will outline some of the key provisions in the Bill. Part III, sections 10 to 14, provides for the implementation of the package of improvements for carer's allowance. I want this Government to be known as the Government that put an end to taking carers for granted. We took a hard look at the situation by carrying out an interdepartmental review of the carer's allowance. That review resulted in a number of proposals for improvements. I have accepted and acted on those proposals. Last year some Members of both Houses said we did not go far enough concerning carers. At that time I gave a commitment that because of the on-going nature of the review we would look at the proposals once the review was completed. The review was published in the middle of 1998 and we have more than acted upon its recommendations. I have acted on those pro posals to the benefit of 11,500 carers. I have also ensured that almost 3,500 new people will qualify for the first time for the carer's allowance.
From now on those who care for children in receipt of a domiciliary care allowance will be eligible for the carer's allowance. This is the most significant move in this area even though it has not received the most publicity and will cost about £9 million. Eligibility is being extended to the carer of anyone between 16 and 65 who requires full-time care and attention. We are relaxing the residency conditions for receipt of the allowance and the full-time care and attention rules. This issue was raised by Senators and Deputies. Carers' social insurance records will be preserved and we are giving income disregards to carers in their own right.
One of the main problems facing carers can be isolation. We are addressing this in a number of ways. For example, we are extending the free telephone rental scheme to all people receiving carer's allowance and the free travel scheme to carers of people receiving constant attendance allowance and prescribed relative's allowance. One of the most important changes for many carers will be the annual payment of £200 as a contribution towards respite care to all qualifying carers – about 15,000 people. All of these moves add up to a 40 per cent increase on last year's expenditure which Members on all sides will accept is a major increase. It amounts to an extra £18 million for this year alone on top of £45 million spent last year, a total of £63 million. The carer's allowance started in 1990 with an estimate of £100,000. In the intervening nine years it has increased to £63 million.
A key recommendation of the review was the introduction of the system of needs assessment. This will take account of the needs both of the carer and the person being cared for. The Government has decided that such a system should be introduced and a working group chaired by the Minster of State at the Department of Health and Children, Deputy Moffatt, has been established. The review proposed the introduction of PRSI carer's benefit to facilitate carers in employment to temporarily leave work to care. This would be financed through the PRSI system. The proposal would require a small increase in each of the current employee and employer PRSI rates depending on the level of Exchequer contribution. The proposal deserves fuller examination and I would be interested in the views of the social partners in this regard.
Carers all around the country look after people in their homes and communities. They make a huge contribution to keeping our society humane and decent. I am committed to improving their situation, but it is not just the commitment of one Department. The Minister for Finance, the Minister for Health and Children and the Minister for the Environment and Local Government have recently introduced a range of measures to help carers because the Government sees it as an essential multi-faceted approach. The Minister for Finance extended the tax allowance of £8,500 available to the spouse being cared for to the extended family. While it diverges from the proposals in our general election manifesto and the programme for Government, it was considered after examination to be a more equitable beneficial change. The Minister for Health and Children has introduced other initiatives on respite care and the Minister for the Environment and Local Government has introduced changes to the disabled person's grant which were announced in the budget, where the Government decided to introduce a co-ordinated response to the issue of carers.
Part IV provides the legislative basis for the new farm assist scheme announced in the budget. The scheme represents an important new development in the provision of income support for farmers. While the impetus for its introduction stems from the current difficulties facing farmers, it must be recognised that the scheme is not a temporary one related to the current situation but will be an ongoing feature of the social welfare system.
Section 15 provides that the new allowance will be paid to farmers who are aged between 18 and 66 years and who satisfy a means test. The maximum weekly rate will be the equivalent of the long-term rate of unemployment assistance payable from next June, £73.50. Increases for qualified adults and child dependants will also be provided on a similar basis as for other social welfare payments. Income from capital will be assessed on the same basis as long-term social assistance payments.
Section 16 provides for the assessment of means for entitlement to the new payment. Under this section the farmer's net income from self-employment, including farming, will be assessed at the rate of 80 per cent instead of on a pound for pound basis, as currently applies under the smallholder's unemployment assistance scheme. In addition, in the case of the family farm, the amount of £100 per annum for each of the first two children and £200 for each subsequent child will be disregarded when assessing the net income from the farm.
The budget provides a full-year allocation of £15 million to cover the cost of the scheme. The House will be pleased to note that the Government has decided to provide for entitlement to payment under the farm assist scheme from the first week of April 1999. We made this decision subsequent to the budget. We provided £5 million in the budget which would have allowed the scheme to start some time in June. We have now provided an extra £5 million to bring payments back to 1 April. To allow for the necessary means testing and other preparatory work, the first payments, including arrears, will be made in the first week of June and earlier where possible. These will be back-dated to the beginning of April.
Given that the farm assist scheme is being introduced shortly, I have already made arrange ments for the suspension of the signing-on arrangements for smallholder's assistance for those who now apply to seek a review of their existing claim. Any person thereby qualifying for the assistance will be transferred automatically to the new farm assist scheme from June and will have their additional entitlements under the scheme backdated to the first week of April.
In addition, an application for smallholder's assistance will be taken as an application for the new scheme for those who fail to qualify for smallholder's assistance but who will be entitled to some payment under the farm assist scheme. Application forms will be available almost immediately the Bill passes.
Section 19 provides for the introduction of a bereavement grant to replace the existing death grant scheme. I have secured an additional £10 million from the Government since the budget to improve the scheme, introduced in 1970, to alleviate the cost of funeral expenses. Some 10,000 grants are payable each year at a cost of £1 million to the social insurance fund. The maximum grant payable was £100 and a reduced grant of £95 is payable where the contribution conditions are partially satisfied.
Section 19 provides for three significant improvements in the scheme. First, it provides for a substantial increase, from £100 to £500, in the level of the grant. The last increase was made in April 1982. That represents a worthwhile contribution towards funeral expenses incurred by families. Section 4 also provides that the amount of the grant payable under occupational injuries will also be increased to £500.
Second, I am extending the scope of the scheme to include other insured persons, such as self-employed and people covered by the modified rate of social insurance, for example, all public servants. At present the scheme is largely confined to employees who pay the full rate of PRSI contribution. It makes no sense that people in such categories cannot qualify for a death grant but may qualify for a widow's or widower's contributory pension.
Third, I am proposing a substantial easing of the contribution conditions so that as many people as possible will qualify under the scheme. The present conditions require the insured person to have a minimum of 26 contributions paid since starting work or since 1 October 1970 and to have either 48 contributions paid or credited in a recent income tax year or an average of 48 contributions per year since October 1970 or since starting work if later.
I believe the grant should be payable to insured persons with the minimum level of contributions. In view of this, I propose that the grant be paid automatically on the death of a person receiving a contributory pension or deserted wife's benefit, his or her spouse or qualified dependants; a person receiving orphan's contributory allowance or his or her guardian. Since the announcement of the scheme the Government has decided that it will apply to bereavements which have occurred since 2 February, the date the decision was made at Cabinet, at an additional cost of £1.7 million, given that a number of people would have missed out on it in the intervening period. It was originally intended to bring it into force in April.
Section 21 provides for the payment of the special rate of old age pension to certain self-employed persons who were aged 56 years or over on 6 April 1988 when social insurance was extended to this group. This issue was raised in both Houses last year. I am delighted that the Government has delivered on its commitment in the programme for Government and the general election manifestos by introducing a special rate of contributory pension for those with at least five years' paid contributions since that date.
Entitlement to the new pension will begin in the first week of April but payments will not be made until October for logistical reasons. This allows for my Department to examine all the relevant claims and to ensure that refunds of contributions made already to 3,000 contributors in this group are recouped. Any arrears of payment due will be issued in October.
The new rate will be 50 per cent of the maximum personal rate plus 50 per cent of the appropriate increases for qualified adults and child dependants where appropriate. Up to 10,000 people – 8,000 pensioners and 2,000 qualified adults – should benefit from the scheme at an estimated cost of £18 million. Anybody who qualifies will also qualify for the free schemes as appropriate.
A comprehensive review of the qualifying conditions for entitlement to old age and retirement pensions is being undertaken by my Department this year. Particular attention will be given to the yearly average test. It will also deal with the treatment of pre-1953 contributions and the commitment given in the programme for Government to allow women who take time out for family reasons to continue contributions for pensions purposes.
Section 22 deals with the issue of low income fishermen. We are introducing for them a similar scheme to the farm assist scheme. It represents a substantial response from the Government to the difficulties experienced during prolonged bouts of bad weather by fishermen who operate out of small boats in our coastal communities.
I now turn to the provisions that deal with the powers of social welfare inspectors. Section 26 strengthens the powers of inspectors to allow them to remove, or secure for later inspection, documents or records from employers' premises and to require employers to provide reasonable explanations of their contents. These additional powers will facilitate inspectors in making sure employers meet their PRSI obligations and that their employees are not concurrently working and claiming social welfare benefits.
Section 26 also makes specific provision for an inspector to be accompanied by a garda when exercising his or her statutory powers, when accompanied by a garda in uniform, to stop any which he or she reasonably suspects is used for the purpose of employment or self-employment, and make inquiries of any persons in the vehicle or require them to produce any record in their possession in connection with their employment or business.
Over the past year, at the invitation of the gardaí, my Department, the Department of Enterprise, Trade and Employment, the Department of the Environment and Local Government and the Revenue Commissioners have participated at 19 checkpoints in Counties Dublin, Kildare, Wicklow, Monaghan, Cavan, Louth and Meath. These checkpoints have largely focused on commercial vehicles or those used in the course of employment or self-employment. From my Department's perspective, it is primarily aimed at people who may be concurrently working and claiming social welfare payments. To date, as a result of follow up by social welfare officers, a total of 118 social welfare claims have been disallowed, giving savings of £350,000. In addition, gardaí and Customs have detected a number of road traffic, road transport and customs offences.
This approach has been very effective in detecting serious levels of fraud and abuse. For example, one checkpoint in February last year detected abuse in no less than 10 per cent of the 100 vehicles checked. A number of cases involving people from Northern Ireland are being followed up through the normal liaison arrangements with the social security agency there. To date, social welfare inspectors have operated under general powers contained in existing legislation. I was advised when preparing this Bill that it would be more appropriate to replace these existing general powers with more specific provisions.
Concern has been expressed about the exercise of such powers. I assure Senators that these powers will continue to be used responsibly. This programme is not aimed at ordinary citizens going about their business. It is the ordinary citizen who is being ripped off by all defrauders, including social welfare defrauders. It is those in most need who are losing out by this – OAPs, carers, widows, widowers, lone parents and the unemployed. I make no apology for doing all I can to stamp out fraud. Every £1 taken in fraud is £1 less for the needy in our society.
Those who find fault with multi-agency efforts to find out fraud surely are not asking us to turn a blind eye to what we all know is going on. If so, they are being extremely hypocritical. Fraud is fraud. Those most vocal on this cannot have it both ways. These powers will work only if they are used in a sensible and responsible manner. That is how they have operated in the past and that is how they will operate in the future.
Section 27, at the request of the Department of Health and Children, extends the scope of the legislative provisions I introduced last year for an integrated social services card, to include the General Medical Services Payments Board and voluntary hospitals operating in the health services area. The Department of Health and Children has plans for the voluntary hospitals to use the number for patient records and screening programmes. The GMS board will use it for the creation of a national patient index in the consolidated drug subsidisation scheme. Any data sharing will obviously be governed by the existing legislative provisions.
Section 32 provides for an increase in the health contribution from 1.25 per cent to 2 per cent and for an increase in the weekly exemption threshold from £207 to £217 from 6 April next. Section 33 repeals the relevant provisions underpinning the 1 per cent employment and training levy which, as announced in the budget, is being abolished from 6 April next.
I have been concerned for some time about the issue of integration, the process whereby occupational pensions effectively top up the social welfare pension to provide a total pension specified in the rules of the occupational pension scheme. I have referred to the issue on a number of occasions, most recently in my budget speech in December last. Integration is normally carried out on a once-off basis at the point of retirement, but I am aware that in a small number of pension schemes, the process is continued on an ongoing basis after retirement under a total pension scheme approach, which is provided for in the rules of these schemes.
In considering any reforms in this area I have to bear in mind that occupational pension schemes are voluntary arrangements. Nevertheless, I consider certain reforms in this area are warranted, and as a first step I am providing in the Bill that any reduction in occupational pensions in payment, as a result of increases in the social welfare pension, will be prohibited.
While there is little, if any, evidence that any pension scheme rules allow for such a reduction, the prohibition will obviously outlaw such a practice if it does exist and will also prevent employers considering such a rule in the future. Such a prohibition was recommended by the Pensions Board in its report on the national pensions policy initiative. In relation to the general issue of post-retirement integration, I have decided that it should be examined in the overall context of a review of the indexation of occupational pensions generally and I have requested the Pensions Board to prepare a report on this. I will consider the board's report and revisit this issue in the pensions Bill which I hope to publish towards the end of this year.
In the last election in June 1997, we promised to do three things – to cut taxes, to cut crime and to cut dole queues. We have succeeded dramatically in all three. A major reform of the tax system was announced in this year's budget by standard rating the basic single and married personal allowances and the PAYE allowance. The full year value of the main personal reliefs amount to £581 million, on top of £517 million last year. Crime has been cut by some 16 per cent and the live register has dropped by 53,500 since this Government took office. The Social Welfare Bill demonstrates the Government's commitment to building an inclusive society. I commend the Bill to the Seanad.
