I move that the Bill be now read a Second Time. The explanatory memorandum which was circulated with this Bill will have given Deputies a comprehensive outline of the proposals in it. As explained in the memorandum, the main purpose of the Bill is to give effect to the decision of the Government, as announced by the Minister for Finance in his Budget Statement on 19th April last, to grant—as from 1st August next—increases in the rates of non-contributory old age, blind and widows' pensions, of unemployment assistance, and of the married person's allowance in the scheme of old age (contributory) pensions. The second important object of the Bill, also adverted to by the Minister for Finance, is the introduction of substantial concessions in regard to the means conditions for the receipt of Unemployment Assistance.
Apart from these matters arising from the Budget Statement, the opportunity offered by the Bill is being taken to bring in a number of other amendments of the law which experience has shown to be either desirable or necessary. Two of those amendments relate to the non-contributory scheme of widows' and orphans' pensions and provide respectively for a relaxation in relation to the assessment of means in certain cases and for an easement in the residence condition for the receipt of widow's pension. Other amendments proposed are designed to clarify the law in relation to the powers of deciding officers under the Social Welfare Acts, and to repeal an inoperative provision in the Old Age Pensions Acts. The remaining provisions of the Bill are concerned with strengthening the law in relation to abuses and to the recovery of overpayments of pension, assistance and benefits. I shall explain these various provisions in greater detail later.
In the first place, then, the Bill, giving effect to the increase announced in the Budget, provides for an increase of one shilling and sixpence per week in all non-contributory old age and blind pensions; the new rates of these pensions will thus be 30/-, 25/-, 20/- and 15/- a week, according to the means category of the pensioner.
Under the increases in rates of unemployment assistance, recipients themselves will get an increase of 1/6d. a week also, and they will in addition get the same extra amount for an adult dependant. Furthermore, if the recipient has dependent children, the Bill provides for an increase of 1/- each for the first and second child and for an increase of 1/6d. a week for the third and each subsequent child. Accordingly, a man who is on unemployment assistance and who has a wife and four dependent children will get an extra 8/- a week as from the 1st August next, while a man with a wife and six children will receive a total increase of 11/- a week as from that date. As I shall explain in due course, these increases in unemployment assistance rates will be augmented somewhat in certain cases as a result of the proposed easing of the means conditions for that scheme.
Widows' non-contributory pensions will also be increased by 1/6d. on the personal rate, by 1/- for each of the first two qualified children, and by 1/6d. for each subsequent qualified child. A non-contributory widow pensioner with four qualified children, therefore, will receive a weekly increase of 6/6d. in her pension.
A contributory old age pensioner who receives an allowance in respect of a spouse will also benefit. At present, the allowance for a wife or dependent husband which is contained in the old age contributory pension equals the maximum rate of non-contributory old age pension, and this allowance normally continues to be payable as a benefit to the surviving spouse of a deceased pensioner. Payment of the allowance, or of the survivor's benefit, disqualifies the spouse for receiving a non-contributory old age pension. As the maximum non-contributory old age pension is being increased from 28/6d. to 30/- it is necessary to increase the dependant's allowance and survivor's benefit correspondingly, in order to preserve the existing parity and to prevent anomaly. This charge will bring the contributory old age pension and allowance, for a married couple entitled to the maximum rate, up to £3. 10.0. a week.
Apart from the increases in pensions and in assistance payments which I have outlined, the Bill proposes to make other substantial concessions on the unemployment assistance side, and to make some desirable relaxations in relation to certain aspects of non-contributory widows' and orphans' pensions. With regard to unemployment assistance, there are, as things stand, two yearly means limits for participation in the scheme—a limit of £72. 16.0. which applies in rural areas and a limit of £98. 16.0. which applies in urban areas. Under Section 8 of the Bill a single yearly means limit of £100 will, from the 1st August next, apply throughout the State.
I might say here that the means test for unemployment assistance is essentially a rural problem, affecting, in the main, smallholders and their families. The vast majority of applicants for unemployment assistance in urban areas possess little or no means and the means limit is of no practical significance, nor does it constitute any problem, so far as those people are concerned. This is because the income of urban applicants is usually confined to their earnings from employment and such earnings do not, of course, count as means for unemployment assistance purposes. On the other hands, rural applicants frequently have means derived from the occupation of land. Therefore, as I have said, the problem is essentially rural.
The effect of the introduction of the new means limit will be to bring within the scope of the scheme additional numbers of persons in rural areas, mainly smallholders, with means ranging from £72 16s. 0. to £100 a year, who by reason of their means, are not at present eligible for any unemployment assistance. It is estimated that the number of persons who will thus be brought into the scheme will be up to 1,200,apart from their dependants. These additional beneficiaries—when regard is had to their means, to the new maximum rates of unemployment assistance and to the further concession I am just about to refer to—will qualify for payment of assistance at rates ranging from 18/6d. a week downwards, plus 2/6d. a week for each dependent child after the second such child.
The other concessionary provision affecting unemployment assistance is in Section 9 and proposes to increase the amount of assessed weekly means which is disregarded in determining the weekly rate of unemployment assistance payable in any particular case. At present, only the first 1/- of means is so disregarded. In future, the disregarded amount of assessed weekly means will be 2/- in the case of a person without a dependant and will be 5/- where the person has a dependant. Deputies will have noticed that in easing this condition of the scheme I have made a distinction between persons without dependants and persons with dependants. The House, I am sure, will welcome this innovation in favour of the person with family commitments. The concession will be of value to applicants with means and it will enable many recipients—approximately 16,000 at peak periods—to qualify for higher rates of unemployment assistance than heretofore, and, as I have said it will be especially beneficial to those who have large families.
The increase in the amount of weekly means disregarded will, of course, operate in addition to the increases in the rates of unemployment assistance provided for in Section 3 of the Bill. The effect of the improvement in the disregard will be to increase still further, by a 1/- a week for a person without a dependant, and by 4/- for a person who has a dependant, the rates of unemployment assistance payable where the assessed weekly means exceed 1/- and 4/- respectively. Taking this in conjunction with the increase in the rates, the combined result, in the case of a man with a wife and four children, with means in excess of 4/- a week, will be that he will receive a total increase of 12/- a week in his unemployment assistance as from 1st August next, while a man with a wife and six children, with more than 4/- a week means, will get a total increase of 15/- a week as from the same date.
I made passing reference earlier to concessions provided for in the Bill in relation to widows' and orphans' non-contributory pensions. One of these is similar to that introduced last year by the Social Welfare (Miscellaneous Provisions) Act, 1960, in relation to non-contributory old age pensions, and concerns widows or orphans who may be in receipt of small statutory pensions from some other source, for example, from another Government. It sometimes happens under existing legislation that a small increase granted in the pension from the other source can cause a greater decrease in the widow's or orphan's pension payable by my Department, the net result being that the pensioner's total income is reduced. Section 15 of the Bill will ensure that such net losses of income do not occur in future.
In Section 11, an alteration is made, in favour of claimants, in the residence condition for widow's pension. As the law stands, a widow is disqualified for receipt of non-contributory widow's pension unless she has been resident in the State during the period of two years immediately preceding the date of her claim. A widow who has been absent from the country cannot, therefore, qualify for a pension until two years after her return unless, of course, she was in receipt of the pension at the time of her departure. I think this condition is unduly strict and a cause of hardship in some cases. Under the altered condition proposed in the Bill, two years' residence here, at any time, will be sufficient.
I now turn to the group of amendments framed to improve and strengthen social welfare legislation generally. Some doubts have arisen as to the correct interpretation of Section 42 of the Social Welfare Act, 1952, in regard to the power of deciding officers appointed under that Act to decide whether a person is or was in insurable employment, and to give decisions in respect of past events in relation to other matters arising under that section. An amendment of the section, designed to put these matters beyond doubt, is therefore included in the Bill. There is a provision in the Old Age Pensions Act of 1908 for the making of regulations providing for notice to be given by registrars of births and deaths to pension officers or local pension committees, of the deaths of persons over seventy years of age. The provision has never operated in this country, and is now being repealed.
The purpose of the remaining provisions is to remove obstacles and to strengthen and improve the law in relation to abuses and to the recovery of overpayments of pension, assistance or benefit. When the Social Welfare (Miscellaneous Provisions) Act, 1960, was before the House last year, I referred to the fact that the State is at the loss of considerable sums of money every year as a result of fraudulent claims to non-contributory old age pensions and false statements as to means. That Act went some way towards strengthening the law in this respect. The present Bill similarly contains a number of provisions which will, it is hoped, help in the first place to discourage people from making fraudulent claims and giving false information in relation to unemployment benefit and unemployment assistance claims.
Of all the social insurance and assistance services administered by my Department fraud is most commonly experienced in relation to unemployment benefit and unemployment assistance. Special provisions to reinforce administrative measures against fraud and so help in reducing it to the minimum are being introduced. Anyone who is convicted in court of fraud in relation to an unemployment benefit claim will, apart from any penalty the court may impose, be disqualified for receiving unemployment benefit for six months from the date of the conviction. Similarly, anyone who is convicted of fraud in relation to an unemployment assistance claim will lose his right to unemployment assistance for six months, in addition to any penalty the court may impose. If the offence relates to a qualification certificate, the offender, on conviction, will be debarred from obtaining or holding such a certificate for a similar period.
The maximum fine which can be imposed by the court for offences in relation to unemployment assistance is being increased from £25 to £50, thereby bringing it into line with the limit already in operation in relation to other social welfare services. Section 58 of the Widows' and Orphans' Pensions Act, 1935, which deals with offences for which legal proceedings may be instituted, is being strengthened. In future, the concealment of any material fact for the purpose of obtaining or continuing a pension will also be an offence under that section. The House will notice that these provisions, which are contained in Sections 10, 13, 14 and 18, apply only to offences committed on or after the 1st August next.
Sections 7, 12, 17 and 19 of the Bill will facilitate the recovery of money obtained as a result of fraudulent claims to pensions, benefit or assistance. Provision is being made, for example, which will enable current payments of pension to be withheld in recovery of overpayments of old age pension and widows' pension fraudulently received and in respect of which a decree is being sought or has been obtained in court. Power is also being taken in the Bill to permit an over-payment of benefit, pension or assistance fraudulently received to be recovered by withholding all or part of any benefit, pension or assistance which may subsequently become payable to the claimant.
In the case of non-contributory old age pension, the right of recovery will extend to payments to which the spouse, widow or widower, as the case may be, of the claimant becomes entitled by way of pension, benefit or assistance. The Bill will also make it possible for the pension, or benefit or assistance of a third party to be offset, with his consent, against a debt due by someone else on foot of an overpayment of a non-contributory old age pension. In connection with these various proposals concerning fraud and the recovery of consequential overpayments, I should like to emphasise that the tightening up of the law in this way is aimed only at those claimants who dishonestly get, or attempt to get, public money to which they are not entitled.
I now come to the question of cost. On the basis of present numbers of pensioners and beneficiaries, the increases in pensions and assistance rates proposed in Sections 2 to 4 of the Bill will cost £768,000 in a full year. Of this sum £486,000 is in respect of non-contributory old age pensions, £170,000 is in respect of unemployment assistance and £112,000 is in respect of widows' pensions. In addition, the relaxations in the unemployment assistance means conditions will cost an extra £80,000 a year and the concessions in relation to widows' pensions an extra £1,500. The total yearly cost of the proposed increases and concessions in social assistance comes therefore to the very substantial sum of £849,500. The cost in the current financial year, as from the 1st August next, will be £567,000 and this amount will, of course, be additional to the £19 million already provided for in the Book of Estimates for social assistance requirements in the current year. The increase of 1/6d. in the old age (contributory) pension married person's allowance, which is provided for in Section 5 of the Bill, will be met out of the Social Insurance Fund and will cost in the region of £49,000 in a full year, or £33,000 in the current financial year. The total cost in the present year is therefore £600,000 as provided for by the Minister for Finance in his Budget Statement on the 19th April last.
The number of people who will benefit under this Bill is of the order of 220,000—old people and persons who are blind, widows and their children, and the unemployed and their wives and children. This is apart altogether from the 200,000 or so men, women and children who received new or extended benefits as from 6th January last under the various contributory schemes administered by my Department. Most of the beneficiaries will be the same people who had already received an increase as recently as August last year. In fact, this is the third successive year in which the non-contributory old age and widows' pensions and unemployment assistance rates have been increased. It constitutes the fourth general increase in the non-contributory assistance schemes since the present Government assumed office in 1957. Since then, the rate of non-contributory old age pension will, when this Bill takes effect, have been increased by a total of 6/- a week from 24/- to 30/- ; the weekly rate of unemployment assistance payable to a man with a wife and four children, who resides in an urban area, will have been increased by a total of 19/6d. from 38/- to 57/6d; and the weekly rate of a widow's non-contributory pension payable to a widow with four children will have been increased by a total of 21/- from 36/6d. to 57/6d.
It may be instructive to look at the figures which I have just quoted in the light of the movement of the consumer price index during the same period, since the case is not infrequently made that social assistance and benefit rates tend to lag behind increases in the cost of living. What are the facts? In mid-February, 1957, the consumer price index stood at 135. The figure at mid-May, 1961, was 150, an increase of slightly over 11 per cent. The maximum rate of old age pension provided for in this Bill, however, represents an increase of 25 per cent. since 1957. The improvement is even more striking in the case of the other services covered by the Bill, owing partly to the more liberal approach which has been adopted in relation to child dependants in social welfare schemes generally, by the extension of payments to cover all qualified children and not merely the first two. The increases as at 1st August next, since 1957, of 19/6d. a week in the unemployment assistance payable to a man with a wife and four children, and of 21/- a week in the rate of non-contributory pension payable to a widow with four children, represent increases of 51 per cent. and almost 60 per cent. respectively, in that period of four years.
It is with much pleasure that I recommend this measure to the House.
