I move that the Bill be now read a Second Time. The purpose of this Bill is to give effect to the decisions of the Government announced by the Minister for Finance in his Budget Statement on 23rd April last to increase the rates of non-contributory old age, blind, widows' and orphans' pensions and unemployment assistance, to increase the rates of various social insurance benefits and pensions and to modify the means test for old age pensions in the case of veterans of the War of Independence. In addition, the Bill includes a number of provisions designed to amend and extend the social insurance and assistance schemes. Some of these changes are consequential on the decisions announced in the Budget Statement. Others are the outcome of examination of existing provisions with a view to effecting improvements or eliminating anomalies which is carried out as a normal part of the work of my Department.
The Bill is, of necessity, drafted mainly by way of amendments to existing Acts. I have, therefore, had the explanatory memorandum which was issued with the Bill made as comprehensive and informative as possible so that it will be clear what each amendment really does where the text of the Bill itself is not self-explanatory. I trust that Deputies will find it of assistance to them.
The Budget increases in social assistance, which it is proposed to bring into operation at the beginning of August next, will give an extra 7/6d a week to all existing non-contributory old age, blind, widow and orphan pensioners, making the maximum personal rate of old age and blind pension £3 5s a week and the maximum personal rate of widow's pension £3 3s 6d a week. In addition, an extra 2/6d a week will be given in respect of each qualified child of a pensioner making the weekly rate 12/6d for each of the first two children and 7/6d for each subsequent child. These increases in the pension rates will enable the scale of means and rates of pension to be extended in each case to give additional rates at the bottom of the scale which will be payable to persons who are outside the present means limit for pension. Where there are qualified children, the means limit is, of course, raised in respect of each qualified child.
The rates of unemployment assistance for persons in urban and rural areas are also being increased by 7/6d a week for the recipient himself. A further 7/6d will be payable where there is an adult dependant and an additional 2/6d for each qualified child. The maximum rate will then be £2 11s 6d for a single person and £4 17s 6d for a married couple resident in an urban area. It will be £2 5s 6d for a single person and £4 9s 6d for a married couple resident outside an urban area. These increases of unemployment assistance at the maximum will have the effect of automatically extending the means limit for qualification for unemployment assistance.
The increases in rates of social insurance benefits and pensions will come into operation at the beginning of January next. They will provide an extra 7/6d a week for recipients of disability benefit, unemployment benefit, maternity allowance, widow's (contributory) pension, orphan's (contributory) allowance and old age (contributory) pension. There will also be an additional 7/6d a week for an adult dependant and an extra 2/6d a week for each qualified child. The personal rates of unemployment and disability benefit will then be £3 5s a week for a single person and £5 17s 6d for a married couple. A widow without children will get £3 5s a week while an old age (contributory) pensioner who is single will get £3 12s 6d, the rate for a married couple being £6 12s 6d. The rates for children will be 15/6d for each of the first two and 10/6d for each subsequent child. Certain rates of unemployment benefit which are payable after 156 days are the same as the maximum rates of unemployment assistance payable in urban areas. As assistance rates are being increased from the beginning of August next, these particular rates of unemployment benefit will be increased at the same time.
To meet the extra expenditure on the increased rates of benefits and pensions, an increase in the social insurance contributions payable by employers and employees is necessary. In recent years, the Exchequer has had to bear considerably more than one-third of the cost of the social insurance scheme, and accordingly, and as forecast by the Minister for Finance in his Budget Statement, the increase in contributions from employers and employees provided for in the Bill has been calculated so as to adjust the Exchequer's burden nearer to the traditional one-third. It is proposed, therefore, to increase the rates of social insurance contributions, where all insurance benefits are covered, by 3s 4d a week, with lesser increases where only some of the benefits are covered. The increase of 3s 4d in the ordinary rate of men's contribution will be shared equally by the employer and employee and the total contribution will then be 21s 4d a week. To this, however, must be added the existing contributions of 2s 1d paid by the employer in respect of occupational injuries insurance and of 1s paid under the redundancy scheme, of which 8d is by the employer and 4d by the employee. The increase in the rates of voluntary contribution covering widows' and orphans' pensions will only be 6d, and will be 1s 2d in the contribution which covers also old age (contributory) pension. A table showing the present and proposed rates of contribution appears in the explanatory memorandum. On the basis of this year's estimates of expenditure plus the additional costs incurred by the provisions of the Bill, and taking account of the expected yield in a full year of the increases in contribution rates proposed, it is estimated that the Exchequer contribution will be close to one-third of the expenditure from the social insurance fund.
The rates of unemployability supplement and of payments in respect of adult dependants and qualified children under the occupational injuries scheme are also being increased from January next. These payments came into operation on 1st May, 1967 and were then equal to corresponding payments under the disability and unemployment benefit schemes but they were not increased when the latter were increased in January, 1968. The increases now proposed will restore the parity that originally existed. It is estimated that the annual cost of these improvements in the occupational injuries scheme will be about £75,000. It is not, however, necessary to increase the present contribution of 2s 1d to meet them.
The Bill provides a new benefit for old age pensioners, both contributory and non-contributory, and for contributory widow pensioners aged 70 and over. This benefit takes the form of an increase of pension of 45/- a week in respect of a prescribed female relative where the pensioner is so incapacitated as to require full-time care and attention and is living alone or has no other adult living with him who is capable of looking after him. It will be necessary for the prescribed female relative to have a reasonably good employment record and to have specifically given up employment in order to look after the pensioner. It is my intention to prescribe a daughter under the regulations to be made, as a daughter is most likely to be concerned in such cases. There will, however, be power to prescribe other female relatives as satisfying the conditions for the payment, if it should ultimately be found desirable and feasible to do so.
The Minister for Finance in his Budget statement announced that the Government as a token of recognition to those who served in the War of Independence had decided that Old IRA pensions or allowances would be disregarded completely in future when assessing means for old age pension purposes, Hitherto only the first £80 of these pensions or allowances was disregarded. I have arranged to extend this total disregard to applicants for widows' pensions and unemployment assistance and the Bill provides accordingly.
Up to 1966 a person receiving old age (contributory) pension or widow's (contributory) pension was disqualified for receiving the corresponding non-contributory pension. In that year, statutory provision was made to enable the contributory pensioners mentioned to opt for the appropriate non-contributory pension, if they satisfied the conditions for its receipt and it would be of advantage to them to do so. The necessity for this arose because, as a result of increases in non-contributory pensions, some of the higher rates of these pensions exceeded some of the lower rates of contributory pensions. From August next, when non-contributory pensions are increased, until January next, when contributory pensions are increased, cases will arise where the non-contributory pension would be temporarily more favourable than the corresponding contributory pension. It was never the intention that the provisions of the 1966 Act should operate in such circumstances and the Departmental machinery is not geared for short-term switching from one pension to the other and back again. There is a provision in the Bill, therefore, to prevent switching from one pension to another where the advantage would be a temporary one only, but the right of a pensioner to switch where the advantage would be permanent will not be affected.
At present, redundancy contributions are collected by the Department of Labour by means of a separate stamp. From the beginning of January next, the Bill will enable these contributions to be collected with social insurance contributions by means of a single stamp and the necessary adjustments to be made between the social insurance fund and the redundancy fund. This arrangement will be more convenient for employers and employees.
A new superannuation scheme is being introduced by the Minister for Health to cover nurses and other persons employed in voluntary hospitals and by organisations providing district nursing services such as those providing Jubilee and Lady Dudley nurses. When admitted to the scheme, the position of these employees will be similar to that of their counterparts in the hospital and district nursing services of local health authorities who are insurable for widows' and orphans' pensions and occupational injuries purposes only. There is provision in the Bill, therefore, to enable the insurance position of employees being admitted to the new superannuation scheme to be modified so that they will be similarly insurable.
I do not propose to go into any greater detail at this stage as I feel sure that the explanatory memorandum will have given Deputies a good picture of the proposals in the Bill and of their effects. It may, however, be helpful to Deputies if I summarise the cost of the various proposals in the Bill. On the social assistance side, there is £2,284,000 for old age and blind pensions, £406,000 for widows' and orphans' pensions and £810,000 for unemployment assistance, the total cost being £3½ million in a full year, all of which will fall on the Exchequer. The gross cost of improvements on the social insurance side will be £5,719,000. Allowing for an increased annual income of £4,656,500 to be raised from the increases in rates of contributions, the cost to be met by the Exchequer will be £1,062,500 in a full year.
I have much pleasure in recommending the Bill to Dáil Éireann and I ask for speedy and favourable consideration of it.