I move: "That the Bill be now read a Second Time."
This Bill is intended to give effect to those major improvements in social welfare which were provided for in the budget in line with the Government's commitment to social reform.
The various sections of this Bill make provision for increases in rates of assistance and benefits and for significant new schemes designed to broaden the scope and effectiveness of our system of social protection. These advances represent another stage in the implementation of the Government's undertaking—made in the Statement of Intent—to bring "immediate assistance to those in need and lay the foundations of long-term policy that will root out the causes of low income ...". They also continue the work begun in last year's budget and Social Welfare Act in giving effect to the commitment "to deal with the plight of the aged, deprived children, the widowed, orphaned and deserted" and other groups in need.
The proposals contained in this Bill, which I commend to the House for its approval, form part of a coherent programme of reform of the social welfare system. Their implementation will have the effect of bringing practical assistance to certain categories of persons in need and, thus, of plugging gaps in our existing social welfare coverage. The Government are working systematically towards their declared goal of introducing a truly comprehensive system of social security covering all members of the community.
This task is a long-term one, involving as it does review and reform of a vast and complex system which will be changed in the year ahead with the expenditure of almost £300 million and which provides coverage of one kind or another for the great bulk of the population. I see the provisions of this Bill as a most significant and positive contribution to the evolution of our welfare system, strengthening the foundations upon which the Government can build the necessary structures for the future.
The Bill will implement the extensions and improvements of the social insurance and social assistance schemes for which financial provision was made in the budget. It includes a number of items which are consequential on these budgetary proposals and also some miscellaneous provisions to improve existing schemes. A number of the provisions in the Bill are necessarily technical and will no doubt be found to be somewhat obscure; with a view to clarifying those provisions an explanatory memorandum has been circulated with the Bill and I hope that it will have achieved the desired result of helping Deputies in their examination of the Bill.
As Deputies are aware, the budget proposals included a number of provisions to improve the scheme of non-contributory old age and blind pensions — substantial increases in rates of payment, further easing of the means test, the further reduction of the qualifying age for pension from 69 to 68 years and, an important innovation, the payment of allowances for adult dependants. Where a married couple are both of pensionable age, each can qualify for old age pension as their means are shared equally between them. A pensioner whose wife is not old enough to qualify in her own right for pension does not, however, receive any allowance for her in his pension at present. Consequently the anomalous position frequently arises where a man approaching pensionable age could be in receipt of, say, £9.25 by way of unemployment assistance for himself and his dependent wife at present rates and, on attaining pensionable age, could drop to £6.15 a week on qualifying for old age pension. To put an end to this unsatisfactory feature of the old age pensions scheme, an increase in old age pension will be provided under the Bill in respect of dependent spouses who are not themselves entitled to pension, as in the case of old age (contributory) pension and retirement pension. The maximum weekly personal rate of non-contributory old age pension is being increased from £6.15 to £7.30 for persons under age 80 and from £6.65 to £7.80 for those aged 80 and over. The maximum weekly rate of increase for an adult dependant—the new provision to which I have just referred—will be £3.65. Thus the overall weekly payment for a non-contributory pensioner with a dependent spouse will, at the maximum rates, be increased from £6.15 to £10.95 a week, or, if the pensioner is 80 or more, from £6.65 to £11.50 a week. Increases of pension for qualified children of pensioners are being raised to £1.95 a week for each of the first two children and to £1.50 a week for each additional child, while the payment for a prescribed relative looking after an incapacitated pensioner is being increased from £3.50 to £4.15.
The further easing of the means test by disregarding the first £5 of assessed weekly means instead of the first £4 as at present will again improve the position of all existing pensioners who have less than the maximum pension and will enable many persons who are at present debarred on grounds of means to qualify for pension. For example, a single person whose weekly means exceed £10.50 but do not exceed £11.50 who cannot get a pension at present will be able to qualify for a reduced rate of pension under the new conditions. In addition, the reduction in qualifying age from 69 to 68 will bring over 10,000 new pensioners into the scheme. Blind persons who are not affected by the reduction in pensionable age will benefit from the new rates of pension, the easing of the means test and the new allowance for adult dependants.
The total number of persons affected by the improvements in the old age and blind pensions schemes will be 144,500 made up of 115,000 existing pensioners, 11,500 new pensioners, 13,500 adult dependants and 4,500 children.
Non-contributory widows' pensions are also being improved; the maximum weekly personal rate of pension will be increased from £6.15 to £7.30 and the weekly increases for qualified children are being raised to £2.40. Taken in conjunction with the existing amounts of a widow's earnings which may be disregarded in assessing her means, the ignoring of the first £5 of weekly income will further improve the position of a widow who supplements her income by working. Thus a widow with no other means who has two children could earn up to £8 a week without affecting her right to the new maximum pension of £12.10 for a widow with two children. A widow with four children will be able to earn up to £11 a week without affecting her entitlement to the new maximum pension of £16.90 appropriate in her case.
The new weekly rates and the easing of the means test in the case of widows' non-contributory pensions will apply also to the allowances for deserted wives and unmarried mothers.
It is estimated that not less than 15,000 widows will benefit from the improvements in the scheme, of whom about 250 will be new pensioners, while 7,000 children will be affected. In addition some 2,500 deserted wives with 2,900 children and 1,900 unmarried mothers with 2,400 children will also benefit from these improvements.
Orphans' non-contributory pensions are also being increased under the Bill—the increase being 75p, which will bring the maximum weekly rate for an orphan up to £4.75. About 185 orphans will benefit from the increase.
A word now on improvements in unemployment assistance. The maximum weekly rates for persons in urban and rural areas are being increased by £1 in the personal rate, with a further 70p where there is an adult dependant. This will raise the maximum rate for a single person to £6.35 in an urban area and to £6.05 elsewhere: the rate for a married couple will go up to £10.95 in an urban area and to £10.55 elsewhere. The rates for children go up to £1.95 for each of the first two and to £1.50 for each additional child.
The effect of these increases will be that the maximum weekly amount of unemployment assistance payable in an urban area to a married couple will go up from £9.25 to £10.95, from £12.55 to £14.85 if they have two dependent children and from £15.05 to £17.85 if they have four dependent children. The comparable increases for those in rural areas will be from £8.85 to £10.55 in the case of married couples, from £12.15 to £14.45 if they have two dependent children and from £14.65 to £17.45 if they have four dependent children. It is estimated that the average number of persons who will benefit from these increases will be some 53,000, including about 23,000 smallholders, and that these will have some 31,000 adult dependants and 83,000 dependent children.
This year again we have found it possible to improve the general children's allowance scheme. The rates payable for each qualified child are being increased by 30p a month. This will bring them up to £2.30 per month for the first child, £3.30 for the second and £4.05 for each additional child. The new monthly rates will therefore, be £2.30 for a onechild family, £9.65 for a three-child family and £17.75 for a five-child family. These rates compare very favourably with the rates payable under the general family allowances scheme in Britain and Northern Ireland where nothing is paid for a one-child family, £8.23 per month is paid for a three-child family and £16.90 for a five-child family. This, I think, is a quite remarkable improvement in the situation having regard, in particular, to the fact that the family allowances in Britain and Northern Ireland are treated as taxable income and also subject to "claw-back" whereas the Irish allowances are not taxable and as announced by the Minister for Finance in his Budget statement, the existing "claw-back" is to be abolished. The number of families who will benefit from the increase in rates is approximately 375,000, involving over 1,100,000 qualified children or some 37 per cent of the population. This illustrates how high the "young" dependency ratio is in Ireland.
I come now to increases in the rates of pensions and short-term benefits under the social insurance system. There is an increase of £1.30 a week in the personal rates of retirement and old age (contributory) pension for persons under age 80 and £1.40 for persons aged 80 or over. The increases in the allowances for adult dependants are 85p for those under 68 years and £1.35 for those who are 68 years or over. The rates of widow's contributory pension, deserted wife's benefit, maternity allowance, flat-rate unemployment and disability benefits and invalidity pension are all being increased by £1.20 a week. In the case of a recipient of widow's contributory pension, who is aged 80 or over, the increase will be £1.30 a week.
The allowances paid with pensions and other benefits in respect of qualified children are being increased also. In the case of widow's contributory pension and deserted wife's benefit the increase is 40p for each child and in the case of the remaining pensions and benefits, the increase is 35p for each of the first two children and 30p for each other child.
The new weekly rates of flat-rate unemployment and disability benefit will be £7.75 for a single person with an additional £5.05 for an adult dependant, £2.20 for each of the first two qualified children and £1.80 for each additional child. A married couple with two children will thus get £17.20 a week and a couple with four children £20.80 a week. In addition to these amounts of flat-rate benefit, pay-related benefit is payable also as a supplement to unemployment and disability benefit and maternity allowance and, in certain circumstances, with occupational injury benefit.
The personal rate of widow's contributory pension will go up to £7.80 and the allowance for each qualified child to £2.55. Thus a widow with two qualified children will get £12.90 a week compared with £10.90 at present and one with four qualified children will get £18.00 as against £15.20 at present.
In the case of retirement pensions and contributory old age pensions the personal rates go up to £8.50 where the pensioner is under the age of 80 and to £9.10 if he is 80 or over. The amount payable for an adult dependant will go up to £5.50 for one who is under the age of 68 and to £6.50 for one who has attained that age. Thus a married couple both of whom are aged over 68 will get £15.00 by way of weekly pension or £15.60 if, in addition, the pensioner is aged 80 or over.
The payment for a prescribed relative looking after an incapacitated pensioner is being increased from £3.50 to £4.15 as in the case of non-contributory old age pensioners.
Pensionable age under the social insurance system is being reduced again—this time to 68 years. This affects not only the qualifying age for old age contributory pension but also the maximum age up to which the short-term benefits such as disability and unemployment benefit can be paid. Liability for payment of social insurance contributions will, of course, also cease at 68 years instead of 69 as at present. Because of this the reduction in pensionable age could have undesirable repercussions on some contributory pensions. In order to prevent these, section 11 has some special provisions including a number of "saver" clauses to protect the position of existing pensioners and persons approaching the age of 69 years.
The first of these special provisions is aimed at preserving in so far as is possible the requirement that in order to qualify for pension under the old age contributory pension scheme a person must have had not less than ten years' insurance. When that scheme was introduced with a qualifying age of 70, the first contribution condition to be satisfied required that a person must have entered insurance before reaching the age of 60 years. With the reduction in pensionable age to 68 the age at entry into insurance should be reduced to 58. This is provided for in the Bill but only in respect of persons who have not yet reached the age of 57 years.
This new condition cannot be applied in all cases, however. There are insured persons already over the age of 58 who entered insurance before reaching the age of 60 but not before reaching the age of 58 and who thus satisfied the first contribution condition as it was when they became insured persons. This must be recognised and the rights of these persons preserved. Other insured persons cannot be affected by the change in the contribution condition as they have by definition already entered insurance and must be able to satisfy both the new and the old conditions.
There are four saver clauses in subsection (5) of section 11 of the Bill to deal with problems resulting from the reduction of pensionable age to 68. The first of these in paragraph (a) is designed to allow persons who will attain the age of 69 between the 1st of July next and the beginning of January 1976, to opt to have their entitlement to old age (contributory pension determined as if the pensionable age remained at 69. These people will thus be able to avoid having contributions which were paid or credited in the last contribution years before they reach the age of 69 omitted from the calculation of their yearly averages. Such omission could in certain cases adversely affect pension rights by reducing the yearly average. A similar saver is provided in paragraph (c) for widow's (contributory) pension and deserted wife's benefit.
The other two savers in paragraphs (b) and (d) will protect the position of persons who are already qualified for old age (contributory) pension, widow's (contributory) pension or deserted wife's benefit on the basis of insurance which ended at the age of 70, the former pensionable age; or 69, the pensionable age since 1st July, 1973. These savers will ensure that these persons will get the increased rates of pension or benefit payable from 1st July next without having to have their cases re-examined on the basis of insurance up to the new pensionable age of 68. The savers will not, of course, interfere with the right of any person who has failed to qualify for pension or benefit under the present conditions or who has been awarded a reduced rate of pension or benefit only, to have this case reconsidered under the new provisions effective from 1st July, 1974.
One of the basic truths that must always be borne in mind when considering improvements in social welfare schemes is that they cost money. The cost of the social assistance schemes falls wholly on the Exchequer and is met from general taxation. The cost of the social insurance system falls on the Social Insurance Fund which is financed by contributions from employers, employees and the Exchequer.
To meet the extra cost of the improvements in the social insurance services provided for in this Bill it will of course be necessary to increase the rates of social insurance contributions payable by employers and insured persons. As announced by the Minister for Finance in his budget statement, employers are being asked as last year to bear a higher proportion of the cost of improvements in view of the further relief which they are getting in their rates liability on industrial and commercial premises.
A total increase of 60p in the rates of social insurance contribution which cover all benefits of the social insurance system is necessary. I propose in the Bill that the employer should bear 40p of this and the employee 20p. Increases of less than 60p will be applied to those rates of social insurance contribution which do not cover all the benefits of the system.
The ordinary rates of social insurance contribution, including the occupational injuries contribution, will thus be increased to £2.98 for men, of which the employers will pay £1.74 and the employee £1.24. For women the new ordinary rate will be £2.87 of which the employer will pay £1.69 and the employee £1.18. These rates do not include the health contribution of 15p where that is payable. Neither do they include the redundancy contributions which are 13p for men and 12p for women of which the employer pays 10p in each case.
In line with the improvements in the general social insurance system, the Bill also provides for increases in the rates of various benefits payable under the occupational injuries scheme. The increases in weekly rates will be broadly in line with those provided in the general social insurance benefits. It is not proposed on this occasion to increase the weekly contributions which are payable by employers only to the Occupational Injuries Fund from which the cost of occupational injuries benefits is met.
I have referred earlier to the new allowance for dependent wives of non-contributory old age pensioners. I am glad to be able to make provision in this Bill also for three other innovations. Two of them are designed to help certain persons for whom there is no specific provision at present under the social welfare code while the third will improve existing arrangements in special circumstances.
The first of these innovations is the introduction of a scheme of allowances for single women who have attained the age of 58 years. Many of these women have never been in wage-earning employment because they remained at home as housekeepers, for example, to look after ageing parents. Because of their age they can no longer be regarded as having a reasonable prospect of securing employment and thus they cannot come within the scope of the various social insurance schemes. The new scheme will be non-contributory and subject to a means test, and the allowance will be paid in the form of a pension, the maximum rate being the same as the urban rate of unemployment assistance. The means test to be applied will be broadly on the same lines as for unemployment assistance.
The second development is the introduction of a social assistance allowance for the wives of men committed to prison for a period of not less than six months. The rate of allowance payable to a prisoner's wife will be the same as the rate of widow's non-contributory pension which would be payable to her if she were a widow and there will be appropriate increases in respect of qualified children. The scheme will in fact be parallel to the schemes of allowances for deserted wives and unmarried mothers.
The third new scheme is designed to help the family of a social welfare beneficiary who dies leaving an adult dependant. Inevitably, in such cases there is an immediate drop in the family income. Where the adult dependant is the wife, she will usually be eligible for a widow's pension, either contributory or non-contributory, but some time must elapse before payment of pension can commence. Thus the stress and hardship which are occasioned by a family bereavement are aggravated.
To alleviate the plight of the dependants in these cases, it is proposed that where a person who is receiving benefit, including an increase in respect of an adult dependant, dies, payment of the benefit will continue to be made for six weeks to the surviving adult, normally the widow. As a corollary to this proposal, it is also proposed that title to the appropriate widow's or orphan's pension, which would be payable to the survivor, will not commence until after the six-week period has expired but regulations may modify this to save an individual from loss where the appropriate pension is greater than the benefit paid.
Detailed conditions of these new schemes will be prescribed in regulations which will be designed to provide, as flexibly as possible, a humane and dignified from of payment in these difficult circumstances.
The Bill also includes provision for a number of miscellaneous improvements in the social welfare code. The first relates to widows of retirement pensioners. At present the widow of an old age contributory pensioner receives a window's contributory pension automatically on the death of her husband without further reference to insurance records. The widow of a retirement pensioner does not and I propose to make provision to extend the concession to her. This automatic entitlement will simplify procedure and expedite the award of pension to these widows.
Deputies will recall that last year, widows, deserted wives and unmarried mothers who were receiving pensions or allowances as such under one or other of the Department's schemes were relieved of the liability to pay the employee's share of the social insurance contribution when working. I propose in the Bill to extend this concession to working widows receiving widow's pensions under the occupational injuries benefit scheme or from a member state of the EEC under legislation to which the EEC regulations concerning the social security of employed persons and their families moving within the Community apply. This will fill a gap which has come to light in the implementation of the arrangement.
A scheme of deserted wife's benefit was introduced into the social insurance system last year. Provision is included in the Bill for some improvements in the scheme designed to bring it more closely into line with the widow's contributory pension scheme on which it is based. The first of these is necessary because there is no provision for payment of a prescribed relative allowance with deserted wife's benefit where the beneficiary being over pensionable age is incapacitated and requires full-time care and attention, as there is with other pensions and long-term benefits payable to persons over pensionable age. To remedy this situation the Bill includes provision which will enable such an allowance to be paid to an incapacitated recipient of deserted wife's benefit who is over pensionable age. The second improvement will enable a person who can quality for both deserted wife's benefit and non-contributory old age pension to draw only the deserted wife's benefit except where the rate of non-contributory old age pension would be greater, in which event the pension only will be paid. The third is concerned with the contribution conditions for deserted wife's benefit which are somewhat more stringent than those for widow's (contributory) pension. I propose to bring the contribution conditions of both schemes into line by providing that the yearly average of contributions for deserted wife's benefit may be calculated over the last three or five contribution years before desertion as an alternative to being calculated over the insurance lifetime. As a result of this change a deserted wife will have a better chance of qualifying for the maximum benefit.
I propose also a small improvement in relation to unemployment assistance. A person applying for unemployment assistance is required to serve a waiting period of three days before becoming entitled to assistance. The waiting days requirement was removed in 1960, for certain classes of persons who apply for unemployment assistance immediately after they cease to be entitled to unemployment benefit. This concession helps in some cases but it does not help a person who for one reason or another does not apply for unemployment assistance immediately on ceasing to draw unemployment benefit. I propose to extend the concession provided under the 1960 Act by removing the waiting days requirement where the application for unemployment assistance is made within 20 weeks of the date of cessation of unemployment benefit.
The remaining provisions of the Bill are largely technical. The first of these which is concerned with pay-related benefit, is designed to remove any doubt about the eligibility for pay-related benefit of a person receiving injury benefit under the occupational injuries benefit scheme in respect of an occupational disease, who would otherwise be getting disability benefit or maternity allowance. The provision in question will also ensure that a person may receive pay-related benefit for up to 147 days of incapacity for work or unemployment in a period of interruption of employment for which he is paid flat-rate disability or unemployment benefit. This will be achieved by eliminating any possibility of days, for which he may be suspended from or disqualified for the flat-rate benefit and thus unable to draw pay-related benefit, being counted in the 147 days.
The other technical provision concerns maternity allowance and, in fact, also arises out of the introduction of pay-related benefit. Hitherto there has been no statutory provision for the calculation of a daily rate of maternity allowance. The amendment which I propose will provide for a daily rate to be calculated on the basis of a six-day a week. This will bring the maternity allowance procedure into line with that for disability benefit and unemployment benefit and so facilitate the payment of pay-related benefit.
All the improvements proposed in the Bill are to come into operation at the beginning of July next or on the first pay day in July. As I mentioned earlier, social welfare improvements cost money and it follows, therefore, that if there are to be substantial improvements, there will be heavy extra cost involved. The magnitude of the improvements can thus, to a certain extent, be measured by their cost and on that basis the improvements in the Bill are very substantial. On the social assistance side, which includes children's allowances, it is estimated that the increase in cost to the Exchequer will be £26.23 million in a full year and £13.12 million in the current financial year up to the end of December, 1974. On the social insurance side, the gross increase in expenditure from the social insurance fund is estimated at £21.93 million in a full year, of which £17.92 will be met by increased contribution income leaving just over £4 million to be borne by the Exchequer in a full year and some £2 million in the current year. The total cost for the full year will, therefore, be £48.16 million.
These figures compare very favourably with the figures of the cost of last year's improvements which totalled £62.24 million including £20.20 million for children's allowances alone. These were the highest ever figures for a full year's cost of improvements in the income maintenance services of the Department of Social Welfare. The total extra cost this year will be shared between the Exchequer which will bear 63 per cent of the cost, employers 25 per cent and employees 12 per cent. Last year the breakdown was Exchequer 74 per cent, employers 19 per cent and employees 7 per cent.
I am happy to be able to sponsor the improvements which these costs represent as a further stage in the development of our social welfare services. I have great pleasure, therefore, in recommending the Bill to Dáil Éireann for speedy and favourable consideration.