I move:
That a supplementary sum not exceeding £10,500,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1987, 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 Supplementary Estimate of £10.5 million I am asking the House to approve today for my Department is essentially to provide part of the additional funds needed for the payment of the Christmas bonus to social welfare beneficiaries. This is the net additional cost for social welfare services which I am seeking from the Exchequer.
The gross Estimate would be considerably greater if it were not for the substantial savings achieved in 1987. We had to cope with an increase of 6,200 in the average live register figure at a cost of £16 million. A shortfall of £10 million occurred in PRSI contribution income and £2.5 million had to be found to continue the alleviating payments under equal treatment which, under the proposals of the former Government, would have ceased on 17 November. Finally, we had to find the resources needed to meet the cost of the Christmas bonus of £20 million, of which £18.8 million arises on the social welfare schemes.
Taking all of these factors into consideration, I should now be asking the House to vote an additional £47 million for my Department. That I do not have to do so and the fact that we are almost in a position to meet our commitments within our original allocation is due in large measure to our policy of making the social welfare system more effective and more efficient. We have improved the efficiency in the delivery of services to clients and strengthened the review and control procedures to ensure that the scope for abuse of the system is minimised, and that the services are provided to those most in need.
The original Estimate for my Department passed by Dáil Éireann on 11 June 1987 was for £1,595,945,000. The additional sum now required — £10.5 million — will bring the total Exchequer provision for the social welfare services this year to £1,606,445,000.
This Supplementary Estimate represents a series of excesses and savings on a number of subheads. The additional £10.5 million I am now seeking is a net amount needed essentially to provide the balance of the money required for the Christmas bonus. Of the full cost of the bonus of £20 million, £18.8 million arises on the social insurance and social assistance services provided by my Department. The occupational injuries benefit scheme, £0.2 million; health allowances, £0.8 million and certain AnCO and CERT courses for long term unemployed, £0.2 million are the other areas affected.
It has been possible to find part of the social welfare cost of the bonus — £8.3 million of it — from savings in other areas of my Department's spending. This has been achieved through decisive action to eliminate fraud and unwarranted claiming.
In relation to the £10.5 million sought in this Supplementary Estimate I can assure the House that this money has also been found from savings in the Government's overall expenditure allocations. The payment of the bonus will not consequently result in any overrun on Government expenditure. Indeed, but for the shortfall in PRSI contribution income it would have been possible to fund the Christmas bonus fully from savings within my Department's area of expenditure and the question of a Supplementary Estimate would not have arisen.
In keeping with the Government's commitment to protect those dependent on social welfare, we are maintaining the Christmas bonus at last year's level of 65 per cent. The provision of £20 million for the bonus this year, as against the £18.5 million last year, is a considerable achievement in the current extremely difficult financial circumstances.
Over 570,000 beneficiaries have received the bonus as compared with 508,000 last year. The bonus was paid in the first week of December to ensure that beneficiaries received it well in advance of Christmas. If we include dependants, the total number of people who benefit is well in excess of 900,000.
Some examples will serve to illustrate the effect of the bonus for social welfare beneficiaries. A couple on an old age contributory pension received a bonus of £58.60 bringing their total payment for that week to £148.80. A couple with three children on long-term unemployment assistance received a bonus of almost £60. Payment of the bonus will help people on social welfare to cope with the extra financial commitments they have coming up to Christmas.
The features of the Supplementary Estimate involve additional expenditures or deficiencies on seven subheads amounting to £22.36 million, offset by savings amounting to £11.76 million on a further nine subheads. The net additional requirement is £10.5 million.
The Social Welfare Estimate is complex because, while total expenditure this year will amount to £2.6 billion, only about £1.6 billion is accounted for through the Estimate for my Department. This is because all of the PRSI contribution income is paid directly into the social insurance fund and all social insurance benefits are paid directly out of that fund. The only element of the social insurance code which is paid through the Vote is the deficit on the fund which is paid out of subhead E. This year that will amount to just over £401 million.
The size of social welfare expenditure and the sheer volume of transactions involved means precision in estimating is difficult. This year, however, if provision had not to be made for the bonus, we would have been able to live well within our allocation. Even allowing for overruns on some schemes arising from increased numbers claiming, we were on target to save £8.3 million. We would have saved almost the full cost of the bonus were it not for the shortfall of £10 million on PRSI contribution income.
The major savings arose on the disability and unemployment benefits schemes largely as a result of the intensification of control and anti-abuse measures.
When I introduced the original estimate for my Department in June I expressed my concern then that, in the light of the vast amount now being spent on social welfare, it was more important than ever that every social welfare programme be examined to ensure that the resources involved are directed to those in greatest need. In that context I am determined to take whatever steps are necessary to eliminate social welfare fraud and abuse.
I accept, and I think there would be general agreement on all sides of the House to this, that the vast majority of those claiming benefit are entitled to their payments. My philosophy as Minister for Social Welfare is to support and protect the poor and needy and to ensure that they are provided with a speedy accessible service. At the same time, I am aware that the size of the social welfare system exposes it to certain risks of fraudulent claiming and this must be eliminated so that all of the available resources are targeted to those in most need.
This year special measures were directed towards suspect claims and I would like to give the House some examples of our successes in detecting abuse; of 7,000 claimants called for special control interviews to review their entitlement to unemployment payments, 1,900 left the register, 1,300 of them voluntarily and savings of £2.7 million have accrued to date this year; of 6,145 unemployment claims investigated by our special investigation unit following allegations by members of the public of working and drawing the dole, 1,622 were disallowed and savings of £4 million will result from all SIU activity this year; of 14,000 inquiries sent out to employers to check if the claimant was working or on holiday leave while claiming disability benefit, 1,100 cases of possible abuse were revealed and overpayments of £460,000 have been detected to date and of 88,000 disability benefit claimants referred to a medical referee, 22,000 had their claims ended because they were found capable of work or voluntarily ceased to claim.
The weekly number of claims for disability benefit has been reduced from 81,619 in February last to 72,528 in November 1987. This has resulted in a net saving on disability payments in excess of £8 million.
As a result of PRSI surveys of employers, arrears of £3.3 million have been reported to the Revenue Commissioners.
In this regard the Jobsearch programme calls for particular mention. The purpose of this programme is to help those on the live register, especially the long-term unemployed, in their search for work. An important side-effect of the programme is that many of those who should not be on the live register leave it voluntarily. The initial savings target set for the Jobsearch programme was £11.5 million. The latest indications now are that savings of the order of £18 million will be realised this year from the programme.
The figures for the numbers participating under the programme are equally striking. Up to 4 December this year 135,115 persons were interviewed by the NMS under the scheme of which 29,137 received places in schemes or programmes and a further 4,025 were placed in jobs. Of those who failed to avail of assistance under the programme, 1,785 were disallowed following review of their entitlements while 11,445 left the live register voluntarily.
A survey of participants has shown that a staggering 79 per cent had never participated in a scheme or programme for the unemployed. Of those who left school at primary level 57 per cent were unemployed for over three years.
Looking briefly to the detailed features of this Supplementary Estimate the main components are: a substantial increase of £7.3 million under subhead F for old age pensions because of the bonus, £3.8 million and increased numbers claiming; a net increase of £6.4 million on the Unemployment Assistance Scheme. This allows for the cost of the bonus, £4 million, and increased numbers claiming, and is offset by savings arising from the application of the control measures which I have spoken about; savings under various administration subheads through the application of good management housekeeping, and substantial savings under subhead E — the State contribution to the Social Insurance Fund — arising mainly on the disability and unemployment benefit schemes through the application of controls and anti-fraud measures, and despite the shortfall of £10 million on PRSI contribution income.
In the time available it has only been possible for me to give a brief outline of the features of this Supplementary Estimate. However, if any Deputy wishes clarification on any specific point I will, of course, be happy to elaborate.
This year has been a particularly difficult year for the social welfare finances and our additional requirement of only £10.5 million is an indication of the success of the policies we have pursued. The provision of this additional money for the Christmas bonus at a time of such acute financial pressure is an indication of the commitment of this Government to the needs of those on social welfare. The coming year will be no less difficult with increasing numbers of the elderly to be catered for. I will be seeking ways of making the system more flexible and adaptable, particularly for the unemployed, with the ultimate aim of a social welfare system which is in tune with the changing needs of our community today.
I commend the Estimate to the House.