I move: "That the Bill be now read a Second Time."
The Bill is concerned mainly with the extension of the existing social insurance and social assistance schemes to implement the proposals in the Budget for improvements in those schemes and consequential matters. The explanatory memorandum circulated with the Bill is designed to clarify the provisions of the Bill which, because of its technical nature, tends to be difficult to understand in places, and should assist Deputies in their examination of the Bill.
The Budget increases in the field of social assistance will give an extra 40 pence a week to all existing non-contributory old age, blind and widow pensioners and to those in receipt of deserted wife's allowances. The maximum personal rate of old age, blind and widow's pension and of deserted wife's allowance will then be £4.65 a week. The increases in the personal rates of pension at the maximum will enable the scale of means and rates of pension to be extended in each case to give an additional rate at the bottom of the scale which will be payable to persons whose means are outside the present limits for pension.
Orphans' non-contributory pensions will be increased by 25 pence a week and the rates paid to widows and deserted wives in respect of qualified children will be increased by 15 pence in respect of the first and second child and by 40 pence in respect of each other child, thus bringing the payment for each child up to a level 90 pence.
The improved payments for orphans and for dependent children of widows and deserted wives are intended to assist persons in those classes who have the onerous task of rearing children. The maximum rate payable to a widow or deserted wife with two qualified children will go up from £5.75 a week to £6.45 a week; where there are four children, from £6.75 a week to £8.25 a week and where there are six children the rate will be increased from £7.75 a week to £10.05 a week. The maximum rate of orphans' non-contributory pension will rise to £2.50 a week in respect of each orphan.
A modification is being made in the means test for widows and deserted wives who have dependent children and who are employed. In such a case at present, earnings from personal exertions of up to £39 a year in respect of each qualified child are disregarded in the calculation of means for the purposes of widow's non-contributory pension or deserted wife's allowance. Under the Bill this amount will be increased to £78 a year in respect of each child. A widow or deserted wife with four children will thus be able to earn £6 a week, instead of £3 a week, without it affecting her title to pension or allowance.
The rates of unemployment assistance for persons in urban and rural areas are being increased by 35 pence a week for the recipient and by a further 30 pence a week where there is an adult dependent. The maximum rate will then be £3.95 for a single person and £7.05 for a married couple resident in an urban area. Outside urban areas the corresponding rates will be £3.65 for a single person and £6.65 for a married couple. These increases in unemployment assistance will have the effect of automatically extending the means limit for qualification for unemployment assistance.
All of the increases and improvements in relation to social assistance will operate from the beginning of August next.
The increases in rates of social insurance benefits and pensions announced in the Budget will come into operation at the beginning of October next. These will provide an extra 50 pence a week for recipients of old age contributory pension and widow's contributory pension. Recipients of disability and unemployment benefit, invalidity and retirement pension and maternity allowance will get an extra 45 pence a week. Orphans will get an extra 30 pence a week in their contributory allowances. There will also be additional payments for dependants. An extra 35 pence a week will be paid for an adult dependent of an old age, contributory, pensioner and an extra 30 pence for an adult dependant of a retirement or invalidity pensioner or of a recipient of disability or unemployment benefit. In addition, the amounts paid in respect of dependent children to widows receiving contributory pensions will be increased by 10 pence a week for each of the first two children and by 35 pence for each subsequent child bringing the payments for each child up to £1.
These increases will make substantial improvements in the payments under the various schemes.
From October next under the old age, contributory, pension scheme a single pensioner will get £5.50 a week and a married couple £9.35 a week. A widow without children will get £5.00 a week by way of widow's, contributory, pension. The personal rates of unemployment and disability benefit, retirement and invalidity pension will then be £4.95 a week and, where there is an adult dependant, the rate will be £8.40 a week. The increased payments for the qualified children of a widow in receipt of a contributory pension mean that a widow with two children will get £7.00 a week instead of £6.30; a widow with four children, £9.00 a week instead of £7.60 and a widow with six children, £11.00 a week instead of £8.90.
Certain rates of unemployment benefit which are payable where unemployment continues 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 are also being increased from then.
To meet the extra expenditure on the increased rates of benefits and contributory pensions, an increase in the social insurance contributions payable by employers and employees is necessary from the beginning of October next. The increase proposed in the rates of social insurance contributions which give cover for all benefits, is 19 pence a week, except in the case of agricultural workers where smaller increases are being applied. Lesser increases are also being applied where some only of the benefits concerned are covered. The increase of 19 pence in the ordinary rate of men's contribution will be shared by the employer paying ten pence and the employee nine pence and the total contribution will then be £1.72 a week of which 87 pence will be borne by the employer and 85 pence by the employee.
Arising out of the increases and improvements in the general social insurance system provided for in the Bill, it is proposed also to improve the benefits payable under the occupational injuries scheme. The increases proposed are 50 pence in the rates of the main weekly paid benefits and allowances with proportionate increases in other payments. All benefits under this scheme are met out of the occupational injuries fund which is financed by contributions paid by employers only. It will not be necessary on this occasion to increase these contributions to meet the cost of the increases.
The overall weekly employment contribution payable in respect of men in ordinary industrial or commercial employment will, from October, 1971, be £1.88 made up of £1.72 in respect of social insurance, 11 pence in respect of occupational injuries insurance and five pence in respect of redundancy payments. Of this the employer will pay £1.01 and the employee 87 pence. In the case of women in such employment, the overall weekly contribution will be £1.76 made up of £1.64 for social insurance, eight pence for occupational injuries insurance and four pence for redundancy. Of this the employer will pay 96 pence and the employee 80 pence.
The increase in the rate of voluntary contribution covering widows', contributory, pensions only will be five pence making it 37 pence and the increase in the contribution which covers old age and widows', contributory, pensions, retirement pension and death grant will be ten pence making it 91 pence.
A table showing the present and proposed rates of contribution appears in the explanatory memorandum. As Deputies will already know, the Health Contributions Bill at present before the House provides for weekly health contributions of 15 pence to be collected by way of the social insurance stamp for those classes of employees to be covered by the provisions of that Bill. This 15 pence will be additional to the rates of contribution I have mentioned.
Apart from dealing with the Budget proposals and matters consequential on those proposals, the Bill proposes to deal with a further matter which has been the cause of some concern in recent years and which has already been the subject of much discussion in the House. This is the position of the employee who, through no fault of his own, may lose benefit by reason of his employer's failure to pay employment contributions for which he is liable in respect of him. As I have already indicated in reply to questions in the matter, steps have been taken by way of regulations under existing powers to enable employment contributions to be credited to an insured person where contributions properly payable have not been paid and the failure to pay is shown not to have been with the consent or connivance of, or attributable to any negligence on the part of the insured person.
These regulations go part of the way towards enabling an insured person to satisfy the contribution conditions for benefit where there has been failure on the part of the employer to pay contributions but they do not solve all the problems. If, for instance, any of the basic conditions which can only be satisfied by contributions which have been paid are not satisfied, credited contributions are of no avail. It is proposed in the Bill, therefore, to take power to enable regulations to be made which will allow contributions which have not been paid to be treated as having been paid subject to safeguards to ensure that in cases where there has been collusion between employee and employer in the non-payment of contributions the employee will not benefit. The concession is designed for the protection of employees and it is not proposed that the treatment of unpaid contributions as having been paid should remove any part of the liability of an employer to pay these contributions and to make good any benefit lost as a result of his default. There is provision in the Bill, therefore, to ensure that any employer who fails to pay contributions or who pays contributions late will be liable to pay to the Social Insurance Fund the amount of benefit which would have been lost but for the treatment of unpaid contributions as having been paid or the treatment of late paid contributions as having been paid in time. Such amounts will then come within the scope of the existing powers to recover amounts due to the fund by legal process. In addition the Bill provides for the imposition, on summary conviction, of heavier fines and, at the discretion of the court, terms of imprisonment or both fines and imprisonment, on employers who fail to comply with the provisions of the Social Welfare Acts regarding the payment of contributions.
As in previous years the position will arise in August next, when non-contributory pensions are increased, where for the period up to the end of September next, when contributory pensions are increased, cases may occur where the non-contributory pension to which a pensioner might be entitled would be temporarily more favourable than the corresponding contributory pension which he holds. It was never the intention that the option which was given to contributory pensioners by the 1966 Act to switch to non-contributory pensions where it would be to their advantage, should operate for very short periods and there is provision in this Bill as in previous years Bills to prevent such switching where the advantage would only be temporary. The right of pensioners to switch where the advantage would be permanent will remain.
To conclude I will summarise the cost of the various proposals in the Bill. On the social assistance side there is £2,350,000 for old age and blind pensions, £548,000 for widows' and orphans' pensions, £89,000 for deserted wife's allowances and £796,000 for unemployment assistance, the total cost being £3,783,000 in a full year, all of which will fall on the Exchequer. The gross cost of improvements on the social insurance side will be £6,709,000 in a full year, of which the increases in contribution rates will provide some £5,446,000.
I have much pleasure in recommending this Bill to Dáil Éireann for speedy and favourable consideration.