I move:
That a sum not exceeding £87,067,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1973, for the salaries and expenses of the Office of the Minister for Social Welfare, for certain services administered by that Office, for payments to the Social Insurance Fund, and for sundry grants.
The net estimate for Social Welfare for the current year as set out in the Estimates Volume is £87,067,000. This represents an increase of £11,818,000 over the original estimate for the year 1971-72. The amounts shown for 1971-72 against the different subheads of the Vote include the additional provision for that year made by way of Supplementary Estimate, and are therefore not comparable with this year's figures. We will need a Supplementary Estimate later this year to provide for the cost of the rate increases and other improvements following from this year's budget.
The figure of £87,067,000 which I have mentioned is the amount which the Exchequer will have to provide for the social welfare services. To arrive at the total expenditure on these services it is necessary to take into account expenditure from the Social Insurance Fund, the Occupational Injuries Fund, et cetera. On this basis, and applying the new rates of payment, total expenditure is running at a rate of about £170 million a year. As the increased rates of payment arising from this year's legislation will not operate for the full financial year, expenditure in 1972-73 will not reach this figure; it will in fact be about £154 million.
The main reason for the increased expenditure in 1972-73 as compared with 1971-72 is that the 1971 budget increases are payable for the full 12 months in the current year as against eight months and six months for assistance and insurance services respectively in 1971-72. I do not think it necessary to go through the figures for the different subheads of the Vote, particularly as these will fall to be increased by a Supplementary Estimate to allow for the 1972 budget increases. If Deputies have any questions on the specific provision under any subhead I will, of course, give them the information they require as far as possible.
It may be helpful to Deputies if I make some comments on our social welfare system generally. In developed countries it is accepted that nine major benefits should be provided by the social security system. These cover sickness, invalidity, unemployment, old age, widowhood, occupational injury, maternity, family allowances and medical care. The last-mentioned service is the responsibility of the Minister for Health, but the other eight are provided for in the social security system administered by my Department. On the insurance side we have unemployment, disability, maternity, marriage and occupational injuries benefit together with retirement, invalidity, widows' and orphans' and old age contributory pensions.
On the assistance side we have old age and widows' and orphans' non-contributory pensions, deserted wife's allowance, unemployment assistance and children's allowances. In addition we have other services which are not generally available elsewhere, such as free travel, free electricity, and free television licences. Accordingly, it must be accepted that we have broadly as comprehensive a spread of services as any other country. While our insurance coverage is not as wide as that found in many European countries, we cater under our assistance schemes for those not included under social insurance.
I have frequently expressed the hope that it will be possible to abolish the existing limit of £1,600 for insurability of non-manual workers and thus bring all employees within the scope of compulsory social insurance. The question of covering the self-employed against certain contingencies is a matter which is also being considered. This raises a number of issues in an economy like ours where the proportion of self-employed is relatively very high.
It seems to me, having regard to some Dáil questions on social security over the past few years, that certain Deputies are still under a misapprehension in relation to the matter of social security in the EEC and in particular in relation to our position on entry. I have tried to clarify the position in reply to questions and in the course of debates, but perhaps it would be useful to summarise the position once more. In the first place there is no uniform system of social security operating throughout the area comprising the EEC. Each member country has its own system, which it is free to develop in the directions it considers most appropriate to its own circumstances. Thus we may find in one country a particularly well developed family allowances scheme, in another the emphasis may be on pension schemes, and so on. It follows that there is no European standard to which we will be obliged to conform on entry. The fact, however, that we will be part of a community of nine nations working in collaboration in the field of social policy will undoubtedly foster a tendency towards harmonisation, if only as a result of each member studying and learning from the others' arrangements. The Community has adopted regulations dealing with the social security of migrant workers. These are binding on member states and will of course apply to us. I explained the provisions of these regulations in detail in the course of the debate on membership of the EEC in March last. Briefly, the purpose is to ensure that when a person moves from one country to another he carries with him his acquired rights to social security and will, therefore, not be at a disadvantage because of migration. So far as Irish workers are concerned these provisions will, in general, be much more favourable than the existing reciprocal arrangements. To take one example, children's allowances are not covered at all under the existing arrangements, whereas under the EEC regulations the allowances will be paid by the country in which a worker is employed even though his children may be resident in his home country.
The fact that we have legislation each year to give effect to improvements in our social welfare schemes affords the House regular opportunities for debating social welfare policy. The frequency of these debates may, however, tend to prevent us from realising just how appreciable are the advances made over a long period. For instance over approximately the last ten years major new schemes have been introduced covering contributory old age pensions, occupational injuries insurance, invalidity and retirement pensions, allowances for deserted wives, allowances for incapacitated pensioners and others over 70, free travel, free electricity and free television licences. The duration of unemployment benefit was extended from 156 to 312 days, the minimum age limit for entitlement to widow's non-contributory pension was removed and payment in respect of dependent children was extended to all such children where it had previously been confined to two. There were many other improvements in the schemes, all designed to remove hardships that came to light in the course of the ordinary day-to-day administration.
These extensions and improvements in the services, together with the regular increases in rates of payment, have naturally brought about a spectacular growth in expenditure on the social welfare services. In 1963-64 total expenditure, including administration, came to about £45½ million, of which the Exchequer met just over £31 million. For the current year it is estimated that total expenditure, including the cost in this year of the latest increases, will be approximately £154 million, of which £96 million will fall on the Exchequer. Total expenditure has thus grown by about 238 per cent between 1963-64 and 1972-73. It is significant, too, that the rate of increase has accelerated in recent years. Between 1963-64 and 1967-68 expenditure increased from £45½ million to over £68 million, an increase of 50 per cent, whereas the increase of £85½ million between 1967-68 and the current year represents an increase of 125 per cent. Total expenditure as a percentage of GNP increased from 5.4 per cent in 1963-64 to 7 per cent in 1971-72.
As Deputies are aware, the cost of the assistance services is borne by the Exchequer, while employers, employees, and the State contribute towards the cost of the insurance services. Of the total income of my Department 19 per cent comes from employers, 16 per cent from insured persons and slightly over 63 per cent from the Exchequer. The balance comes from investment income and from certain local authorities. Of every £1 spent in the year ended 31st March, 1972, 30.6 pence was spent on old age, blind and retirement pensions, 16.8 pence on unemployment benefit and unemployment assistance, 17.4 pence on disability, marriage, maternity and treatment benefit and invalidity pensions, 13 pence on children's allowances, 14.1 pence on widows' and orphans' pensions, 1.3 pence on occupational injuries benefit, 2.3 pence on miscellaneous services including deserted wives' and old age (care) allowances, and 4.5 pence on administration, including the cost of services rendered by other Government Departments.
In the year 1971-72 civil proceedings for the recovery of arrears of contributions were initiated in 355 cases. Decrees were obtained in all cases which came for hearing in that period. In the same year prosecutions for offences were commenced against 142 employers. Of the cases heard in the year, convictions were obtained in 134 instances. Fifty-seven persons were prosecuted for fraud in relation to social welfare payments, the most common type of fraud relating to claiming unemployment benefit or unemployment assistance while working.
The Department is a member of the International Social Security Association, an organisation with members in 100 countries throughout the world. Officers of the Department attend periodical meetings of the association and take part also in the work of the Council of Europe as members of committees of experts dealing with social security. Membership of organisations such as these is, in my view, very valuable in enabling us to keep abreast of developments in social security throughout the world. I have myself taken part in a number of meetings of Ministers responsible for social welfare matters and have found them of much benefit.
I mentioned earlier that Deputies have the opportunity of discussing social welfare matters each year when the Bill implementing budget improvements is before the House. In addition, we have a Supplementary Estimate each year to provide the money required for these improvements. Accordingly, it is hardly necessary for me to go into greater detail in explanation of an Estimate which I am certain Deputies will be prepared to accept.
