Amendments Nos. 9, 10, 11, 12 and 13 have been ruled out of order.
SECTION 4.
Amendments Nos. 9 to 13, inclusive, not moved.
Question proposed: "That section 4 stand part of the Bill."
The amendments I tabled, which were ruled out of order sought to bring forward the payment dates of social welfare increases from 20, 25, 28 and 29 July to 6 April. I knew these amendments would be ruled out of order because amendments which pose a potential charge on the Exchequer are automatically ruled out of order. Bringing the payment dates forward from July to April would result in greater expenditure by the State on social welfare. The practice of delaying increases announced in the budget for social welfare recipients to July is unfair. Some increases, for example, child benefit, are delayed until October. It has become the case that these increases are deferred.
Tax increases will be implemented in April, the taxation of unemployment benefit will apply from 6 April and the abolition of pay-related benefit will apply immediately or from the beginning of the tax year, yet social welfare increases will not apply until July. It is sleight of hand to announce increases at the end of January which do not take effect until July and sometimes later, while there will be cuts in social welfare from April. I am speaking specifically of the taxation of unemployment benefit, which has been provided for in this year's budget, which the House already debated and approved, with the Labour Party and Fianna Fáil voting for it.
When does the Minister propose to implement the recommendations of the Commission on Social Welfare on minimum payments? I concede that the priority rates have been achieved in many cases but these were emergency rates specified by the commission at the time of the publication of the report. Today and on previous occasions the Minister gave the impression that we arespending more and more on social welfare. We may be spending more in absolute terms but the percentage of our GNP which we spend on social welfare has been decreasing consistently. When will the Minister deal comprehensively with the commission's report? He introduced some of the recommendations in a selective way, some of which resulted in cuts. However, he has not dealt effectively with the proposals which would result in improvements for recipients. In 1986 spending on social welfare accounted for 14.7 per cent of GNP. By 1993 this had fallen to 14.2 per cent. While the number of recipients and dependants were growing, the Government was allocating a smaller proportion of the national wealth to the victims of unemployment and illness.
My first objective in relation to budgets and Social Welfare Bills is to achieve the rates we wish to have. This year I was allocated £157 million from the budget and to bring the dates forward to April would cost a further £30 million. We would all like to see the dates brought forward but my major objective is to increase the rates. Increases take effect from July onwards. They are not just in effect for that year but going into the following year everybody concerned is on that higher rate, whether it is an old age pensioner or a person receiving unemployment payments. Unemployment and disability benefits are increased by 10 per cent and many of the other payments are increased by 6 per cent. Every other payment is increased by 3 per cent, which is greater than the rate of inflation. Deputy Allen referrred to the priority and other rates recommended by the Commission on Social Welfare. In this budget all payments have now reached those priority rates.
They were the emergency rates.
They are referred to as priority rates. We should stick to the language used by the commission. We have reached or passed the priority rate in every case. Old age contributory pensions for those aged under 80 is £16 greater than the recommended rate. Widows' contributory pensions are 99 per cent of the main rate recommended by the commission. Invalidity pensions and unemployment and disability benefits are 96 per cent and 93 per cent, respectively, of the recommended rate. The old age non-contributory pension is also 93 per cent and suplementary welfare allowance is 90 per cent. These percentages will apply from July. I wish to clarify the position of pay-related benefit in case the wrong impression is given. The new regulations relating to this benefit do not apply until after July. A great deal of progress has been made in relation to implementing the commission's recommendations. For example, a couple of long term unemployment assistance with two children will receive £124 a week. A person in receipt of a non-contributory pension with an adult dependant, will receive £97.60 a week. We have made much progress, given that there are 832,000 recipients and 661,000 dependants, which amounts to almost 1.5 million benefiting from the schemes. My main objective is to increase rates. Another objective, which I achieved, was to introduce a scheme for widowers. It would cost £30 million to bring the payment rates forward to April.
We could get into a complex mathematical argument about delaying the date on which increases apply. However, it is not beyond the wit or capacity of the Minister to know that applying the same expenditure of money from April instead of July would have the same net effect for the income of recipients as the current procedure. The problem presumably for the Minister is that he could not claim he is maintaining the level of social welfare payments in line with inflation. If increases are spread over the full period the percentage increases are diluted. The Minister, if he wished — this debate has been going on for some time, not just with the current incumbent but with previous Ministers — could on a phased basis, year by year, bring forward the increases month by month. Over three or four years the increases would be paid when the budget is announced. While the budget provides for social welfare increases, it also provides for tax and other increases. People living on social welfare must pay those increases while they are waiting for the social welfare increases to be introduced in July. This argument can be looked at from both angles. I do not have a copy of the report of the Commission on Social Welfare with me.
The Minister is claiming that a number of social welfare payments are ranging from 90 per cent to 116 per cent of the main rates recommended by the Commission on Social Welfare. Is the Minister comparing the current with the actual rate as recommended in 1986 or has he increased the 1986 rate with inflation? Secondly, could he give us the same kind of figures which he has given for the main payments for dependants' allowances? I am quite certain that those are nowhere near the rates recommended by the Commission on Social Welfare.
There are significant differences between the current payments, particularly to people on unemployment assistance and unemployment benefit, and the minimum income rate recommended by the Commission on Social Welfare. While the Minister argues that we should use the language of the Commission on Social Welfare in relation to the priority rate, which it said should have been implemented in 1986 and has finally been reached this year, he chooses to ignore the terminology used by the Commission on Social Welfare in relation to what he claims to be the main rate when in fact it referred to a minimum recommended income. It argued that people should not be expected to live below that rate. It is clear from what the Minister has outlined that even with the good news most payments are still below that minimum income level which the commission believes to be a poverty level. Could the Minister clarify whether he is comparing like with like?
The Minister's percentages were quite impressive. However, in 1993 money terms the minimum recommended by the Commission for a single person would be between £65 and £78 per week. The reality according to the figures in the Minister's information leaflet is £59. The rate recommended for a married couple was a range between £104 and £124. The amount here is £59 plus £35 which would be £94. For a single person, this constitutes between 35 and 40 per cent of the average net male industrial wage. According to a report by Murphy and Lawless in 1992, only four welfare payments had reached the adequacy rate recommended by the commission.
To repeat what I said earlier, the commission talks about priority rates which were the emergency rates which should have been reached eight years ago. The minimum acceptable rates as quoted by the commission are different entirely. It is impressive for the Minister to say 90 per cent but a 10 per cent shortfall for a married couple on minimum social welfare can be anything between £10 and £11 per week. Behind the Minister's statistics are stark figures which show that there is a serious shortfall.
In relation to the argument about bringing it forward and whether it costs more, the same amount of money could be spent this year and brought forward but the increase would be less. Naturally, I would go for the best increase which I can get because once one has the increase one has it not only for the remainder of this year but for every year from then on. With regard to what can be done in future to bring it back, I have noted the Deputy's comments and we will see what can be done about that in the future. Again, it depends on the priorities at the time of the next budget and what can be achieved.
I have achieved an historic break-through in this budget with the widower's scheme which will be there for all time. Administratively it will take some time to get under way but I am very happy with that scheme. Any future beneficiaries, and we reckon about 9,000 will qualify immediately.——
The Minister is trying to rob widows.
No, not at all, we will come back to that later on the relevant section. The other question is largely about whether we have updated the figures from the time of the commission's report. The commission suggested £45 as the priority rate which is £58.90 in 1994 terms. The main assistance rate was £50 which is £65.40 in 1994 terms. The main insurance rate was £55 which is £72 in 1994 terms. It actually recommended different rates.
From July 1994, for example, a family with three children on long term unemployment assistance, including child benefit, the child increases and the payment for a couple will be £152.20 per week. If there are five children they will receive £190.10 and if there are seven children they will receive £228. That is an indication of how much we are actually supporting families in terms of the overall payments. One can see that we begin to run into a problem there in relation to work which is why the family income supplement and the other measures taken by the Government in that regard are so important.
These rates keep us ahead of inflation. For example, from July 1987 to July 1994 there has been a 61.4 per cent increase in long term unemployment assistance which in net real terms is 32.8 per cent. Short-term payments are being increased by 73.2 per cent, which is a real increase of 42.6 per cent. There has been a differential applied which is what we said we were trying to do. We were trying to maintain the high levels and bring up those which were a long way behind which is what was done.
In the Minister's earlier contribution he referred to the priority rates of the Commission on Social Welfare and claimed that all of those were now met, although they were eight years late. In addition, the Commission on Social Welfare recommended a minimum income level. I cannot remember the precise figure but it was a minimum income level below which the commission believed no one should be expected to live. I understood from the Minister's earlier contribution he was claiming that some of those recommendations have been met. One has been met to the extent that it is now 116 per cent of what was recommended by the Commission on Social Welfare and others are 99, 93 and 90 per cent of the recommendations. Are those percentages of the original minimum rate which the commission recommended or is the Minister saying that, for instance, by increasing the old pension rate in line with inflation since 1986, it is now 116 per cent of that rate?
It is.
I welcome the widower's scheme and the Minister is to be congratulated for introducing it. I also welcome his change of mind on means testing.
Question put and agreed to.