I move:
That a supplementary sum not exceeding £49,350,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1980, 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."
This Supplementary Estimate is required to meet increased expenditure arising from the payment of a double week to recipients of certain social welfare pensions and allowances in December 1980, increases of salaries, wages and allowances, an upward trend in the numbers claiming under various schemes and a shortfall in contribution income from employers and employees under the pay-related social welfare insurance system in the current year. The increases arise on all three sections of the Social Welfare Vote for the current year, namely, administration, social insurance and social assistance.
The original Estimate, which was passed by the House in April last, was for the sum of £353,685,000. A Supplementary Estimate for £90,200,000 was passed by the House in June last. The reason for taking the Supplementary Estimate at that time was the exceptional cost of continuing the October 1979 rates of payment throughout 1980 and of increasing long-term payments by 25 per cent and short-term payments by 20 per cent from April 1980. It was apparent that there would not have been sufficient voted moneys available to the Department to meet these costs during the period that the House was in recess. The sum of £90,200,000 was the estimated cost of the increases in rates of payments and other improvements in social welfare services provided in the 1980 budget. The present Estimate is for a sum of £49,350,000 which brings total Exchequer spending on the services administered by my Department in the current year to £493,235,000.
This sum represents an increase of £139,550,000, or almost 40 per cent on the amount provided in the original Estimate for 1980 passed by this House. Of this amount £65,476,000 is in respect of assistance services and £74,074,000 in respect of insurance services. In this connection I should point out that so far as insurance services are concerned the Exchequer's contribution to the cost of such services will have increased to 26.4 per cent of the total cost as compared with 20.1 per cent in 1979. The total cost of the assistance services is borne by the Exchequer.
I think that it will be agreed that an additional provision of this magnitude in 1980 is a clear indication of the Government's concern for the weaker sections of the community. Even in these times of financial stringency the Government have willingly honoured their commitment to protect social welfare recipients.
The increased expenditure of £139,550,000 arises from a number of factors. There is, for example, a sum of £25,859,000 to cover the cost of continuing throughout 1980 the increased rates of payment granted in October 1979 as part of the 1979 National Understanding. Deputies will recall that these increases were deemed to be of a temporary nature and were due to end at 31 March 1980. The Government decided, however, to continue them on a permanent basis. Not only were the increased rates continued but further increases of 25 per cent on all long-term payments and 20 per cent on all short-term payments were provided with effect from April 1980 at a cost to the Exchequer of £55,341,000 in 1980. As a further indication of their concern for the family the Government also provided increases in children's allowances in 1980 at a cost of £9,000,000. A sum of £880,000 was provided to cover the additional cost of the new national fuel scheme introduced in October 1980 and the cost of increasing the value of fuel vouchers by 33.3 per cent. This brings the total expenditure on the free fuel schemes to £5 million as compared with £2,900,000 in 1979.
The Government's concern for the weaker sections of the community is further evidenced by the fact that I have had legislation enacted providing for a Christmas bonus double-week payment for recipients of long-term social welfare payments at a cost of £8,685,000. A similar bonus payment is being made to recipients of certain health allowances such as disabled persons' maintenance allowances, infectious diseases maintenance allowances, constant care allowances and blind welfare allowances at a cost to the Department of Health of £0.5 million.
Having regard to the time available to me Deputies will forgive me for not detailing all the items which go to make up the additional sum of £139,550,000 being provided for social welfare in 1980. However, the examples which I have just given should be sufficient to show that the Government, despite the economic difficulties, are doing everything they can to ease the lot of the weaker sections of the community. I propose, however, to give Deputies particulars of the items which make up the present Supplementary Estimate of £49,350,000 which I am now asking the House to approve.
Under the sections for administration — subheads A to D — the net additional expenditure amounts to £1,721,120. This derives from increases amounting to £1,235,000 on subhead A.1 in respect of salaries, wages and allowances; £40,000 on subhead A.2 in respect of increased computerisation; £286,000 on subhead B.1 in respect of increased travelling and incidental expenses and £195,000 on subhead C in respect of an increase in the cost of Post Office services. These increases are offset by a small saving of £34,880 on subhead D in respect of an adjustment in the cost of insured persons' medical certificates.
The additional expenditure on Social Insurance — subheads E and F — amounts to £41,146,000 which is the result of an increase of £41,161,000 on subhead E (Social Insurance Fund) offset by a small saving of £15,000 on subhead F (Investment Return). The extra amount required for Social Assistance — subheads G to L — is £8,063,000. The overall increase on the three sections comes to £50,930,120. There is, however, an increase of £1,580,120 in the receipts from Appropriations-in-Aid — subhead M — which serves to reduce the net additional requirement to £49,350,000.
The sum of £41,161,000 required for subhead E is the additional amount payable by the Exchequer to the social insurance fund to meet the deficit on the working of the fund. The gross cost of the extra week's payment in December to receipients of contributory pensions and allowances is £5,282,000. There is also an increased expenditure of £34,756,000 arising mainly from an upward trend in the numbers claiming during the year. The main constituents of this sum are £18,985,000 in respect of unemployment benefit; £9,495,000 in respect of pay-related benefit; £3,282,000 in respect of old age contributory pensions, and in the case of pay-related benefit there is a further sum of £1,105,000 arising from the raising of the income limit from £5,500 per annum to £7,000 per annum from April, 1980. Increased provision of £3,560,000 is also being made in respect of disability benefit. This is due partly to increased numbers claiming disability benefit in the early part of the year and partly due to the fact that the transfer of recipients to invalidity pensions was fewer than expected. The total of these increases is £36,427,000 but variations from the original estimates in the remaining schemes had the effect of reducing this figure by £1,671,000.
On the income side there has been a deficiency of £8 million in the receipts from contributions payable by employers and employees while there has been a deficiency of £123,000 in other items of income. The deficit in contribution income is attributed to the difficulty experienced in making an accurate estimate of the amount of such income which might have been expected in 1980. Experience of the amount collected in a previous year would normally form the basis of calculation when making such estimates. However, collection in 1979 was affected by the postal dispute in that year. The deficiencies on the income side increased the deficit on the fund by £48,161,000. Receipt of final cash accounts from the Department of Posts and Telegraphs in respect of 1979 showed that there had been an overdraw of £7 million from the Exchequer at 31 December 1979. After making allowance for this sum the additional amount payable by the Exchequer this year to the Social Insurance Fund is £41,161,000.
Regarding the overdraw of £7 million, the position is that final draws must be made each year on an estimated basis because actual figures of expenditure and income are not available until after the close of the year. As already stated, the actual outturn on the fund for the financial year ended 31 December 1979 indicated that the sum of £7 million had been overdrawn from the Exchequer at that date. Accordingly, the revised Exchequer contribution for the current year, as now estimated under subhead E, is being reduced by that amount.
The additional expenditure required in the Supplementary Estimate for social assistance amounts to £8,063,000. This additional expenditure has arisen mainly from the payment of a double week's pension or allowance to recipients in December 1980 at a cost of £3,403,000 and from a carry-over of expenditure on children's allowances from 1979 amounting to £3,100,000 in respect of the payday which fell on 1 January 1980, which was a public holiday.
It was expected that most of the payments due on that day would be cashed on the previous day and fall into the 1979 year. However, many recipients deferred cashing their allowance orders until after 1 January resulting in a carry-over of expenditure into 1980. The balance of £1,560,000 is the net sum required to meet increases of £1,458,000 on supplementary welfare allowances; £800,000 on free electricity; £597,000 on unemployment assistance; £420,000 on widows' and orphans' non-contributory pensions and increases under various schemes totalling £406,000. These increases were offset by savings on certain schemes totalling £2,121,000, which was made up of £1 million on old age non-contributory pensions, due to a fall in numbers claiming; £800,000 on free fuel, due to an over-estimation of the numbers likely to avail of the scheme; £265,000 on free television licences and £56,000 on social assistance allowances.
The surplus of £1,580,120 in Appropriations-in-Aid arises mainly from the increase in the amount of the administration costs of the Social Insurance and Occupational Injuries Schemes which have to be refunded from the Social Insurance and Occupational Injuries Funds.
As I have stated already, this Supplementary Estimate, for an additional sum of £49,350,000, is required to meet the cost of the double week's payment in December and to meet other excesses on the original Estimates which could not have been foreseen when they were being prepared. Deputies may be interested to note that overall expenditure on social insurance and social assistance services will amount to more than £897 million this year, which is an increase of £217 million or 32 per cent on 1979. Expenditure in a full year at current rates will amount to some £970 million.
I have now covered the principal matters affecting this Supplementary Estimate. I shall be pleased to furnish any further information which Deputies may require.