Go raibh maith agat, Chairman, and thank you and the members for the invitation to be with you today.
The Revised Estimates for Public Services 2020 were published in December last year. The projected expenditure for the Department in the original estimate was €21.2 billion. Just over €11 billion of this was voted expenditure, paid through the Exchequer, to provide in the main for social assistance payments to pensioners, people with disabilities, jobseekers, child benefit and so on. The remaining €10 billion was to provide for social insurance benefits paid for through the Social Insurance Fund.
In the subsequent period and prior to those Estimates being voted on by the Dáil, a number of decisions were made which required significant increases in the Department’s expenditure. The introduction of the pandemic unemployment payment, PUP, the Covid-19 illness payment, the temporary wage subsidy scheme, the increase in the payment for qualified adults, and the extension of the free fuel season required additional expenditure over and above that envisaged when the December Revised Estimates were published. The Revised Estimates, voted by the Dáil in May, provided for expenditure of in excess of €28 billion in 2020, or an increase of €6.8 billion over and above the Estimates published in December. The Further Revised Estimates being presented to the committee today include several components.
Following the formation of this Government, the Taoiseach announced that certain functions would transfer from what was then the Department of Employment Affairs and Social Protection to the Department of Business, Enterprise and Innovation, now the Department of Enterprise, Trade and Employment. Employment rights policy and legislation has now transferred to that Department, as well as legislation on the national minimum wage and the Low Pay Commission.
There are also a number of EU and international issues for which the Department of Enterprise, Trade and Employment will now assume lead responsibility. The details of the employment legislation that transferred from my Department following the Government decision are set out in the Employment Affairs and Employment Law (Transfer of Departmental Administration and Ministerial Functions) Order 2020. The transfer of functions involved 15 pieces of primary legislation in the suite of labour law. The transfer of funding associated with these functions amounts to just over €1.6 million. This transfer takes place on a cost-neutral basis between Departments. My Department’s title is now the Department of Social Protection following the transfer of these functions.
The Further Revised Estimate also provide for the apportioning of pre-5 August 2020 PUP expenditure between the Social Insurance Fund and Vote 37. To ensure that neither the Social Insurance Fund nor the Exchequer are disproportionately carrying the costs, the most appropriate way of apportioning the PUP expenditure during the period from March to August is based on the recipient’s underlying entitlement to a jobseeker's payment.
Accordingly, just under 60%, or €1.8 billion, of pre-August PUP expenditure will be charged to the Social Insurance Fund, with a corresponding reduction in expenditure on Vote 37.
The legal basis for this reapportionment is contained in the Social Welfare (Covid-19) (Amendment) Act 2020. Subsequent to the vote on the Department's Estimates on May, a number of significant decisions were made due to the evolving nature of the pandemic and associated policy responses. These decisions included the extension of the pandemic unemployment payment and the temporary wage subsidy scheme, as well as the introduction of the new employment wage subsidy scheme. By extension, this has had an impact on the provision for jobseekers, which has been reduced due to the extension of the schemes related to Covid-19.
The July stimulus package contained new measures related to my Department that were not included in the May Estimate. These measures included the establishment of a new work placement and experience programme, increased public employment service staff capacity, enhanced recruitment subsidies through JobsPlus, additional provision for the back to work enterprise allowance scheme, the extension of the back to education allowance scheme to recipients of the PUP, and additional places on State employment schemes such as community employment and Tús. While the bulk of the additional expenditure will take place next year, 2020 expenditure announced in the July stimulus package is included in the Estimate before the committee.
I was pleased to announced that, despite the challenging times we find ourselves in, the Christmas bonus will again be paid at a rate of 100% this December. Usually, the bonus is paid only to recipients of long-term social welfare payments who are dependent on their social welfare payment for most, or all, of their income for a prolonged period. The qualifying period for jobseekers to receive the bonus is usually 15 months. In recognition, however, of the impact the Covid-19 pandemic has had on employment levels, and the sudden financial impact on individuals, the bonus will be paid this year to jobseekers and people who have been in receipt of the pandemic unemployment payment for a period of four months or more. The cost is broken down into more than €131 million for Vote 37 recipients and almost €258 million for Social Insurance Fund recipients, constituting a total of €389 million for the Christmas bonus. In total, the Further Revised Estimate presented to the committee seeks additional funding of €3.5 billion across a number of subheads to provide funding for the Department to implement decisions taken since the original Estimate was voted.
Finally, as we speak about the Revised Estimates and reflect on the past year, I take this opportunity to acknowledge the extraordinary work by the staff of the Department during this unprecedented year. As public representatives, we all engage with staff of the Department at local level through our constituency offices and I know that members will agree with me in acknowledging the monumental effort the staff have put in this year at a time of national crisis to ensure that payments are issued to those who need them. To date, the Department has issued 12 million payments to more than 800,000 people under the pandemic unemployment payment. Since the start of October, it has processed more than 200,000 applications. That by itself is the equivalent of processing a full year's claims load in five weeks. It is sometimes forgotten that the Department and the staff have managed to do this on top of everything else they have had to do as part of their normal, day-to-day work, whether that is processing pensions, disability or carer's allowance applications, or all the other payments across the board. It can be easy to take for granted that everything will run smoothly and that payments will be there every week, but a great deal of work goes on behind the scenes to make that happen. It has been a monumental effort across the board by staff in every county to keep the show on the road this year and I acknowledge those efforts.
I thank the Chairman. I look forward to hearing members' questions and to working constructively with the committee in what will continue to be challenging times ahead.
