Ar dtús báire ba mhaith liom a rá go bhfuil lúcháir orm bheith ar ais arís sa Seanad agus an Bille seo á chur os a chomhair. I am pleased to bring this Bill before the Seanad. As has been the case in previous years, this is the second of two Bills to complete the implementation of the €630 million social welfare package of budget 2004, which brings the projected level of social welfare expenditure this year to over €11.26 billion. This is a 7% increase over and above the allocation for 2003.
Senators will recall that a separate Bill was enacted in December last to give effect to the increases in weekly social welfare payments from the beginning of January. In addition to a range of other measures, this Bill implements a number of key improvements in social welfare schemes, including increases in child benefit; improvements in the carer's respite care grant; increases in death benefit pension payable to recipients aged 80 years and over; and improvements in the payment after death arrangements.
I am proud to say that this Bill is yet another step in the Government's continuing commitment to fostering an inclusive society. Tangible evidence of delivering on this commitment includes a massive increase in spending on social welfare to more than €11.26 billion in 2004. This is almost double that available in 1997. It also provides substantial increases in child benefit resulting in the rates of payment being more than three times that payable in 1997.
It also includes real increases in social welfare pensions, with old age contributory pensioners now receiving €167.30 per week compared to the equivalent of €99 in 1997, as well as an average real increase, over and above the CPI, across all social welfare schemes of 3.43% since 1997.
I am providing for significant amendments to the social welfare code and the Pensions Act 1990 in this Bill. These include the introduction of an habitual residence test for certain social welfare assistance schemes and child benefit, the definition of "qualified adult" for administrative schemes and provisions to ensure equal treatment in occupational pensions schemes.
Senators will be aware of concerns regarding access to the Irish labour market and the social welfare system following accession on 1 May 2004. Ireland is in favour of enlargement of the European Union. We are champions of enlargement, as we have experienced at first hand the opportunities accession to a greater Europe have presented to our country. I have no doubt that a similar opportunity will present itself to the ten accession countries and, equally, we too will grow economically and socially as the EU horizon stretches further eastwards.
After 1 May, citizens of the new 25-state European Union will be free to travel anywhere within that union. Workers will be free to travel to any other member state to improve their own social condition, to earn a wage and to contribute to their new country of residence. Ireland is a growth economy, with a need for workers, and those new workers are welcome to come to Ireland.
The Government gave a commitment that EU citizens who want to come and work here from 1 May can do so and we will honour that commitment. However, the Government has decided to take certain prudent measures to ensure that the social welfare system does not become overburdened. The introduction of an habitual residence test will act as an additional condition to be satisfied by a person claiming a social assistance payment or child benefit and is designed to restrict access to such payments for people from other countries who have little or no connection with Ireland.
For the purposes of the social welfare code, the definitions of the words "spouse" and "couple" refer to a married couple or to an opposite sex cohabiting couple. These definitions apply both to the statutory schemes, such as weekly social welfare payments, and to the non-statutory schemes such as free travel, free electricity and free telephone rental allowance.
In general, when entitlement to social welfare benefits, whether statutory or non-statutory, is determined, members of same sex couples are treated as individuals. In other words, entitlement is assessed without any reference to the claimant's partner, which, in the main, is more advantageous to the person concerned. In 2003, however, a case was taken against my Department by the Equality Authority on behalf of a same sex couple, where the claimant was granted a free travel pass in his own right, but had been refused a married-type pass which would include his partner. The basis for the refusal was the definition of a couple contained in the social welfare code, which does not extend to same sex couples. Legal advice indicated that this refusal amounted to a breach of the Equal Status Act by discriminating against the claimant on the grounds of sexual orientation. It was considered that my Department was according differing treatment between opposite sex and same sex couples in the free travel scheme. In this instance, a married-type travel pass was issued. The net effect, however, is substantially differing treatment of couples, depending on whether the benefit at issue is non-statutory or is provided for in legislation. This position is not sustainable and must be addressed and I am doing so in this Bill.
I am also providing in the Bill for amendments to the Pensions Act 1990. In particular. I am providing for an amendment to Part VII of that Act, which deals with equal treatment between men and women in occupational pension schemes. The amendments to this section are intended to meet this State's obligation to implement European Community initiatives provided for under Council Directives 2000/43/EC and 2000/78/EC adopted under Article 13 of the EC Treaty, in so far as they relate to occupational pensions. Senators will already have debated the Equality Bill, which provides for the transposition of these directives with regard to other employment matters.
Council Directive 2000/43/EC, the race directive, sets out the framework for combating discrimination on the grounds of racial or ethnic origin in both employment and non-employment areas. Council Directive 2000/78/EC sets out the framework for combating discrimination associated with employment and occupation on the grounds of religion or belief, disability, age and sexual orientation.
In addition to these six grounds, and in line with a commitment in the social partnership agreement, Sustaining Progress, it is also proposed to extend Part VII of the Pensions Act to include the marital and family status and the Traveller community grounds. Taken together with the provisions of the Employment Equality Act 1998 and the Equal Status Act 2000, which prohibit discrimination in employment and access to goods and services, the amendment to Part VII of the Pensions Act 1990 ensures a coherent and consistent approach to equality across the legislation.
I now wish to outline the provisions contained in the Social Welfare (Miscellaneous Provisions) Bill 2004. As Senators will already have considered it in detail, I will focus on the key provisions.
Child benefit is a universal payment made directly to families and is the most efficient and effective way in which the Government can channel support to children. The rate for the first two children will be increased by €6 per month and for the third and subsequent children will increase by €8 per month. These increases, provided under section 3, will bring the monthly rates to €131.60 and €165.30, respectively. From next month, a family with three children will receive €428.50 compared to the current payment of €408.50. This marks an increase of €20 per month. These increases will mean that since 2000, child benefit rates will have risen by €77.64 per month for each of the first two children and by €94.20 per month for the third and subsequent children. This measure continues the strategy of reforming income support for children by making child income support more neutral in the context of parental employment and reducing employment disincentives. An estimated 524,000 families with more than one million children will benefit from these increases in 2004.
Over successive budgets the Government has introduced measures to develop the services and supports which provide practical assistance to carers. An Agreed Programme for Government included commitments to expand the income limits used to determine entitlement to carer's allowance and to increase the value of the carer's respite care grant. Measures aimed at addressing these commitments were announced in the budget and, accordingly, the amount of income disregarded in the means test will be increased to €250 in the case of a single person and to €500 in the case of a couple. These improvements will be provided for in regulations due to be published next month.
In section 4, the Government is continuing to honour its commitment to support the valuable work undertaken by carers by increasing the annual respite care grant by €100 from €735 to €835, while carers looking after more than one person will receive a grant of €1,670. This marks an increase of €200 which will take effect from June next. This measure, highly valued by carers, will benefit some 24,300 carers and will cost an additional €2.48 million per annum.
The six weeks payment after death arrangements were designed to cushion and support the financial transition for the surviving spouse or partner following the death of a recipient of certain social welfare benefits. Currently, payment of the existing rate of benefit or allowance to the spouse or partner of the deceased continues for the six weeks immediately following the death of the recipient. While these arrangements are applicable to the majority of social welfare schemes, there are a small number of exceptions. In these circumstances the surviving spouse or partner may not be in a position to benefit from the scheme. As the final part of my ongoing efforts to reform this scheme, all such anomalies will be removed from the governing legislation. Accordingly, section 5 provides that the six week payment after death will be extended to those benefits and allowances which would heretofore have been excluded from this payment arrangement. This provision will come into effect this June and completes the scheme's restructuring.
Section 6 provides for an increase in the death benefit pension for recipients aged 80 years and over to €173.70 per week. This increase harmonises the rates of death benefit pension, widow's contributory pension and widower's contributory pension for pensioners aged over 80 years with effect from this May. Section 7 provides for an increase in the minimum amount of unemployment assistance payable where the claimant's means are derived from parental income. The payment is increased by €8.20 per week, bringing the minimum amount payable from €31.80 to €40.00, provided that the claimant establishes an underlying entitlement to unemployment assistance. This measure will come into operation shortly.
The Minister for Justice, Equality and Law Reform established a working group to review and make recommendations on improving maternity protection legislation. On foot of the group's deliberations, the Maternity Protection (Amendment) Bill 2003 was published which providesinter alia for a range of improvements in the maternity leave arrangements. It is my intention that these improvements should be reflected in the social welfare code. Accordingly, the Bill provides for a number of amendments to the maternity benefit scheme operated by my Department, consequential to the amendments to the maternity leave arrangements. Under the proposed new leave arrangements, the minimum period of maternity leave that must be availed of before the expected date of birth of the child will be reduced from four weeks to two weeks.
The maternity benefit payments are scheduled to coincide with the maternity leave timeframe. Section 8 of the Bill provides that a similarly amended arrangement will apply to maternity benefit payments. The section also provides for the power to make regulations, when an infant is hospitalised, to permit the interruption of the normally continuous period of maternity benefit payment. I plan to bring the measures into force by means of a commencement order, timed to coincide with the implementation of the amended maternity leave arrangements.
The maximum duration of adoptive leave is linked to the maximum duration of maternity leave excluding the period before the birth of the child. As a consequence of the proposed reduction by two weeks of the minimum period of maternity leave required to be taken prior to the expected date of birth, the maximum duration of adoptive leave will increase by two weeks, from 14 weeks to 16 weeks. Section 9 provides the legislative basis for the consequential increase in the duration of adoptive benefit, which is the income support payment paid by my Department to qualifying adoptive parents. The amendment will be brought into force by means of a commencement order, timed to coincide with the implementation of the amendments in the adoptive leave arrangements.
A person's entitlement to short-term insurance-based social welfare schemes, such as unemployment or disability benefit, is determined on the basis of social insurance contributions paid during the course of the "contribution year". The contribution year did not coincide with the calendar year before the alignment of the income tax and calendar years, with effect from January 2002. Special arrangements were put in place to secure the continuity of entitlement to short-term benefits following the alignment of the tax and calendar years. Section 10 provides for the continued application of the arrangements for the purposes of the social insurance schemes.
In An Agreed Programme for Government, the Government agreed to modernise public services to make them more relevant to citizens. We promised to improve access to public services by providing them electronically. The progress of the use of the personal public service number as a public service identifier is a key element of the e-government strategy. In that context, section 11 of the Bill provides for four new agencies to be added to the list of specified bodies that are authorised by legislation to use the PPS number during their customer business transactions. The new agencies are the Companies Registration Office, Enterprise Ireland, the Private Residential Tenancies Board and Coillte Teoranta.
The Pensions Act 1990 requires employers who do not provide a pension scheme for employees to facilitate access to at least one standard personal retirement savings account for such employees. Section 12 provides that when a social welfare inspector is conducting a PRSI investigation, he or she will also investigate compliance with the requirement to facilitate employee access to a PRSA in accordance with the requirements of section 121 of the Pensions Act 1990. Where necessary, the inspector will report issues relating to non-compliance to the Pensions Board.
Budget 2003 proposed the application of PRSI to benefits-in-kind granted to employees, with effect from 1 January 2004. The provision is important because it enhances overall equity and improves the coherence between the PAYE and the PRSI systems. Section 13 provides for technical amendments to the definitions of PRSI contained in social welfare legislation.
Sections 14 and 15 of the Bill provide for the charging of PRSI in cases when an employer has reached an agreed settlement with the Revenue Commissioners in respect of benefits-in-kind that are irregular in nature and minor in monetary terms. Contributions paid in accordance with that provision will not be reckonable for the purposes of establishing entitlement to benefits under the social welfare code because they will, in general, reflect an underpayment of PRSI for which a contribution has already been recorded.
Section 16 of the Bill provides for a minor technical amendment consequential to the change to the definition of PRSI contained in section 13. As I have already outlined, the provisions of section 17 and Schedule 1 to the Bill are designed to limit access to certain schemes. They will entail the application of a new habitual residency test. which will become an additional qualifying condition for the purposes of child benefit and certain social assistance payments. Claimants will be required to provide evidence that they have been habitually resident in the State, or within the common travel area of the United Kingdom, the Channel Islands and the Isle of Man, for a substantial continuous period. If they have been present in the State for less than two years, they will be presumed not to be habitually resident and the onus will be on them to prove otherwise. If they have been in the State for more than two years, they will still be required to satisfy the general habitual residence requirement.
The application of a residence condition is not exceptional in Europe, as most countries implement a form of it. The UK has operated an habitual residence test for some ten years. The European Court of Justice has set down the various factors which would have to be taken into account in assessing habitual residence. In implementing this provision, my Department will consider the applicant's length of residence in the State, continuity of residence in the State, employment prospects, reasons for coming to live in the State, future intentions and centre of interest such as family, home or other connections in the State. Those who claim social assistance payments but do not satisfy the habitual residency test will be assisted to return home and the necessary arrangements will be made in co-operation with the Department of Justice, Equality and Law Reform.
As I outlined, a key objective of the Bill is to remove the difference between the statutory and administrative schemes in the treatment of couples. Sections 18 and 19, which define "spouse" for the purposes of both scheme types, are designed to restore the position which obtained before the decision in the free travel case I mentioned earlier. I stress that the measure is an interim solution, pending an extensive review of the social welfare code in the context of the principles of the equal status legislation. The purpose of the review will be to ensure that any difference of treatment on any of the discriminatory grounds are justified by a legitimate social policy objective and that the means of achieving that objective are necessary and appropriate. It is expected that the review will take some years to complete, as it will examine complex issues with potential implications for matters outside the scope of the social welfare code. The review will be conducted in consultation with interested parties, including other Departments. The proposed format will be agreed with the Department of Justice, Equality and Law Reform.
Sections 20 and 21 mirror the provisions regarding the assessment of cases where an employer has reached an agreed settlement with the Revenue Commissioners in respect of benefits-in-kind that are irregular in nature, minor in monetary terms or involve non-cash remuneration. The sections in question amend the Health Contributions Act 1979 and the National Training Fund Act 2000 to facilitate the application of health contributions and training levies to the settlement figure agreed.
Section 22 of the Bill provides for a number of amendments to the Pensions Act 1990. Part VII of the 1990 Act is being extended to apply to eight additional grounds: age, religion, sexual orientation, disability, race, marital status, family status and the Traveller community ground. The extension of the equal treatment provisions is required under two EU directives and on foot of a commitment in Sustaining Progress. Where feasible and appropriate, section 22 implements the directives in a way that applies their provisions consistently in respect of occupational pensions and other conditions of employment.
Occupational pension issues are different from other conditions of employment, however, and certain practices will continue to be permitted, notwithstanding the prohibition on discrimination based on age, sexual orientation, marital and family status. Occupational pension schemes will continue to have the scope to set the length of service, for example, or the age for admission to the scheme or entitlement to benefits, such as normal retirement age. The schemes will be able to use age in actuarial calculations and to set age or service-based contribution rates in defined contribution schemes. An employer may increase contributions in line with an employee's age, for example. Similarly, the provision will apply to accelerated accrual based on service or age in defined benefit schemes. Occupational pension schemes will have the scope to pay survivor's benefits to the legal spouse only. If a scheme pays to partners of the opposite sex, it must also pay to partners of the same sex. The schemes will be able to pay enhanced benefits to persons retiring early on grounds of disability. The practice of permitting payment only to the legal spouse will be reviewed,inter alia, in light of the outcome of the review of this issue in public sector schemes announced by the Minister for Finance, Deputy McCreevy, at the time of the budget in the context of the report of the Commission on Public Service Pensions.
As I mentioned earlier, it is important to ensure a coherent and consistent approach to equality both in our legislation and in the way our legislation is administered and enforced. For this reason I have provided in the Bill that pension scheme breaches of the principle of equal pension treatment will be dealt with by the equality tribunal, the Office of the Director of Equality Investigations, under the procedures and machinery used for dealing with employment matters. This will result in a seamless approach to complaints irrespective of the area of employment to which they relate. However, pensions can be complex and require specialised knowledge. For this reason I have provided that the pensions board will provide technical assistance as required.