I move: "That the Bill be now read a Second Time."
This year's Social Welfare Bill is the first major piece of legislation to come before the House in fulfilment of the new partnership Government's programme to protect and improve the position of those dependent on social welfare.
We are more than maintaining the real value of social welfare payments; substantially improving payments for children and providing extra support for families at work; restoring the confidence of workers and employers in the Social Insurance Fund; and providing improved benefits such as better maternity provision, including entitlement to maternity benefit on their return for volunteer development workers, easier access to invalidity pension for people who are very ill, and a free colour TV licence for certain pensioners, which I am introducing from the beginning of April next. Social welfare today is complex and far reaching. It touches the lives of almost every person in the country in one way or another. We provide a weekly payment to almost 1.5 million people — 800,000 persons and their 700,000 dependants — and spend over £10 million each and every day of the year.
In the recent MRBI opinion poll about the most beneficial aspects of the budget, the two items that by far made the most favourable impact were the increase in child benefit and the general social welfare increases. I am not surprised with that reaction given the role of social welfare in today's society.
I am reversing measures introduced last year. I am restoring disability benefit and dental and optical benefits to people who are long-term unemployed and people who have retired under the PRETA — pre-retirement allowance — scheme and pensioners who lost out under the 1992 change.
I am bringing back into entitlement to treatment benefits — this is dental, optical and aural benefits — workers earning up to £30,000 per annum, or £60,000 if the worker has a dependent spouse.
I am increasing substantially the amount of daily earnings to be disregarded for the purpose of unemployment assistance for casual workers. I am easing the conditions for receiving unemployment payments for the 27,000 part-time workers who, for the first time, came into benefit this year by reducing from two days to one day the loss of employment which a part-time worker must incur to claim.
I am providing an extra £12.5 million to address the needs of people who have recourse to supplementary welfare allowance for assistance with their exceptional needs.
Overall, we are providing an additional £180 million a year for social welfare. The extra money brings the overall expenditure this year to £3.7 billion, that is over £10 million a day for each day of the year.
The main improvements provided for in this Bill are: an increase of 3.5 per cent from next July in the weekly rates of social insurance and social assistance payments; a special increase of 4.9 per cent from next July in all short term rates of payment; a substantial increase of 26.6 per cent from next September in child benefit to £20.00 for each of the first three children. The rate for the fourth and subsequent child is being rounded up to £23.00; a new grant of £200 for mothers on the birth of twins; increases in the income limit for family income supplement from next July. All families in receipt of FIS will be £12 a week better off; a special increase of 11.7 per cent in the carer's allowance gives a new rate of £59.20 a week which is in line with long term payments; increases in the minimum and maximum rates of maternity benefit; a special increase of 20.6 per cent in the orphans's non-contibutory pension which will now be the same as the orphan's contributory allowance of £39.00 a week and the alignment and consolidation of parts of social welfare legislation to facilitate the introduction later this year of a Social Welfare Consolidation Bill.
The main business of my Department is ensuring that those who, through illness, unemployment or old age are unable to provide for themselves, are looked after financially. We are continually developing new ways of carrying out that business through improvements in the delivery of services and the introduration of alternative payment methods.
Faced, as we are, with the overwhelming problems caused by current levels of unemployment, I plan to expand our traditional role and become more pro-active in our response to this huge problem.
There are two key requirements for those who are seeking either their first job or a subsequent one. They are education and experience, preferably both. If we want to help job seekers who are unemployed, we need to provide more training, education and work experience for them. This applies in a special way to young people who are not receiving the State financial supports which go to those in third level education. It is right that we as a country invest heavily in third level education. But it is also right that we should invest in young people between 18 and 21 who do not get this opportunity. They especially need training, skills, work experience and often "second chance" education.
It is essential that we encourage younger unemployed people to avail of further education and training as soon as possible after leaving formal education. They must be diverted down that route rather than on to the unemployment cycle and dependency on social welfare.
We have made considerable progress in the last few years through initiatives which I introduced to make the regime of unemployment payments more flexible to the needs of our customers and more responsive to changing work patterns. We have now a range of educational oppportunities schemes which give unemployed people a second chance to complete or extend their education. They can even go further and take on third level courses.
Over 2,000 unemployed people are currently participating in second level courses and a further 330 are in full time third level study. Young lone parents also need access to this type of second chance education. I intend to encourage lone parents to take up these opportunities which do not affect their weekly payments.
I have provided also opportunities for part time work which include payment of a weekly allowance from my Department and opportunities to do voluntary work without interfering with the flow of unemployment payments.
In my view it is far better that unemployed people get work experience or training than be excluded from the workplace and left on the dole. It was for this reason that I proposed to the Government in 1991 that we pay the unemployment payments and the extra benefits for a period of, say, six to 12 months and allow people to work as an employee, or a self-employed person or to receive training. The proposal in relation to the self-employed was adopted by the Central Review Committee of the Programme for Economic and Social Progress and put into action in the 12 Programme for Economic and Social Progress unemployment black spots. At present we pay extra benefits to 2,200 people who are at work through these schemes and 240 self-employed people are receiving a payment while seven thousand five hundred are now at work in the work experience scheme — the employment subsidy scheme — and 610 in training, the job training scheme.
These initiatives are the success stories of the past few years. I intend to build on that success and expand them further. In addition, I will be paying particular attention to the needs of people with disabilities and groups such as lone parents.
Unemployment is the greatest challenge facing this Government. In real terms that means creating enough jobs. To achieve that we need a realistic and pro-active approach. I am considering at present a new programme of measures to support people in making the transition back into the workforce, either as employees or working for themselves. It will also embrace training opportunities, work experience and further second chance education. This programme of measures will build on the success of the area-based companies set up under the Programme for Economic and Social Progress working closely with the new county enterprise partnership boards.
The new initiatives will be directed to long term unemployed people and will offer a range of supports to get them back into the workforce in a manner and at a pace that suits their circumstances. They will also provide those working in the black economy with an opportunity to put their affairs on a proper footing. I plan to bring my proposals to Government shortly.
As part of our job creation drive, the Government announced last year the introduction of a new PRSI exemption scheme. The scheme applies to employers who took on additional full-time employees in the period from 19 October 1992 to 19 March 1993. The additional employees taken on must represent a net increase in the number of employees in their employment since September 1992. To date, applications have been received in respect of some 1,100 unemployed people. I am now in section 18 of this Bill, making legislative provision for this scheme and extending the date for applications to 19 September 1993.
The exemption means that employers will not have to pay their element of the PRSI contribution for each additional employee for the tax years commencing April 1993 and April 1994. Employers will also be exempt from payment of the employment and training levy and the health contribution where the new employee holds a medical card.
At the average industrial wage of £260 per week, the PRSI exemption amounts to a direct subsidy to employers of £31 per week of £1,647 per annum for each new employee taken on. This is a very valuable incentive for employers and I would urge as many employers as possible to avail of it before the closing date next September. The extended closing date will allow the exemption scheme to be included in the range of initiatives which I have already referred to in the context of back to work supports.
I want to say a few words about students in fulltime education and the proposal in this Bill concerning their eligibility for unemployment assistance during their summer holidays. Each year about 12.000 full-time students "sign-on" for the dole during their summer holidays. This summer dole costs in the region of £8 million. In addition to receiving unemployment payments, many students also claim rent supplements while living away from home during the holiday period. This cost could rise to at least £60 million a year, plus the cost of rent allowance, if all students were to take up this practice.
In future students in fulltime education will no longer be eligible to claim unemployment assistance or supplementary welfare allowance for their summer holidays other than in circumstances which will be prescribed in regulations. This measure will not apply to mature students or those in "second chance" education schemes. This will bring our arrangements for full time students into line with what happens in Northern Ireland, Great Britain and in other EC countries.
I have under consideration at present a scheme of summer work for students which would give them a weekly payment in place of what they would have got on unemployment assistance. I have in mind that this scheme will cater particularly for those students who depend on a summer job to supplement their grants and who cannot find summer work.
Essentially, what I have in mind is a scheme which would allow students to do community work, voluntary work or work provided by public sector bodies and receive a "wage" approximating to their unemployment payments. I would envisage the scheme operating for a fixed period over the summer holidays with the student working a certain number of hours or days in return for the payment he or she receives.
The total amount invested by taxpayers in a full-time third level student is in excess of £10,000 over the course. Contrary to what student representatives are suggesting, there are many thousands of students who would be anxious to put back into the community their skills, energy and enthusiasm.
I am sure that there are many voluntary organisations working the community who would welcome the opportunity to utilise the skills and expertise of our third level students for a number of weeks during the summer holiday period. Simiarly, local authorities, health boards and other public sector bodies could avail of that expertise for work which needs to be done in their respective areas.
My Department is working on the details of the proposed new scheme and I will be consulting with organisations such as those in the voluntary sector, regional interests, the new partnership groups as well as local and public authorities. I intend to bring the scheme into operation this summer.
Section 14 also provides that young people leaving second level will not be eligible for unemployment assistance or supplementary welfare allowance for a period of three months after completing their second level education. I am making arrangements to ensure that these young people can register for FÁS immediately and that their eligibility for courses will be continued. Parents on social welfare payments will continue to receive the child dependant allowance in respect of children aged 18 or over for the three months in question. Up to this it was only families on long term payments who were entitled to child dependant allowances in respect of children over 18 in fulltime education.
I have outlined to the House already the adjustments which I propose to make to measures introduced last year. I have today made regulations which revoke a number of those measures and adjust others to substantially improve the position of people adversely affected by them. In addition, I have a number of regulations in hand which I propose to bring into force as soon as the Oireachtas passes this Bill.
The regulations revoke the condition for disability benefit requiring at least 13 paid PRSI contributions in a recent contribution year for people on long term unemployment assistance and pre-retirement allowance; revoke the condition for dental and optical benefits requiring at least 13 paid PRSI contributions in a recent contribution year for people on long term unemployment assistance and pre-retirement allowance. These measures will benefit some 140,000 people on long term unemployment assistance and 15,000 people on pre-retirement allowance immediately and many more in future; restore dental and optical benefits to workers earning up to £30,000 per annum; restore dental and optical benefits to pensioners affected by the change in the contribution conditions requiring five years paid contributions; relax the condition for entitlement to unemployment benefit for part-time workers by reducing from two days to one day the loss of employment which a part-time worker must incur. These regulations come into force immediately. They increase substantially the amount of daily earnings which will be disregarded in assessing earnings from casual insurable employment for the purposes of entitlement to unemployment assistance.
Section 13 of the Bill provides for regulatory powers to prescribe the amount of the daily disregards. The current level of disregard amounts to the daily rate of unemployment assistance for each day worked plus an additional amount of £10.
I propose to increase the total disregard to the daily rate of unemployment assistance plus an extra £15 for each day worked. This is a significant increase which makes casual employment a real option for unemployed persons. For example, a married man with two children will now be allowed to earn up to £34.42 for each day in which he works without affecting his rate of unemployment assistance for the days on which he does not work. The regulations will come into effect from the beginning of April.
I would like to outline to the House how I propose to address the supplementary welfare allowance scheme for dealing with payments to meet exceptional needs.
The measures which were introduced last year were not intended to remove the basic discretion which health boards have to make payments when they consider that circumstances warrant this. I recognise, however, that despite the various clarifications which issued last year, the circulars as they stand have given rise to serious concern. I want to ensure that the discretion which health boards have is exercised in a sensible way to ensure that people in genuine need are helped sympathetically and effectively.
I am drawing up a code of practice for dealing with fuel debts, which will involve fuel providers such as the ESB and An Bord Gáis. The code of practice, when developed, will replace the guidance originally offered by the circulars issued last year and those circulars will be withdrawn. I am consulting with the ESB, An Bord Gáis and with the health boards in relation to developing this code of practice. I am providing an additional £12.5 million this year to meet additional demands on the scheme and I will be publishing revised guidelines covering all aspects of the scheme following the review which is taking place at present. It is important that we have a consistent approach to the way the scheme is administered and the measures I am taking are designed to achieve this.
I would now like to mention briefly the main provisions of the Bill. However, for the benefit of Deputies, I wish to clarify some confusing statements that are not based on the facts which were made outside this House. I have made a great many adjustments, by regulation, and I have done so today. However, some changes require new powers and they will be dealt with in the legislation today. I have covered the changes that will be made in the Bill and by way of regulation.
Section 4 of the Bill provides for a significant increase in the weekly rate of carer's allowance from £53 to £59.20. This increase brings it into line with other long term assistance payments. I want to ensure, in so far as we can, that people who give up work or another social welfare payment to become a full-time carer will not find that their long term entitlements are adversely affected. I have under consideration at present the question of entitlement to credited contributions for periods in receipt of the carer's allowance. This is important because periods out of the workforce can have a detrimental effect on pension entitlements later in life. Section 10 provides for the extension of "after death payments" to a spouse in receipt of carer's allowance to include the adult dependant allowance. At the moment persons in this situation qualify for six weeks payments of the personal rate only.
Sections 3 and 4 provide for the increases from July next in the weekly rates of social insurance and social assistance payments as announced in the budget.
Section 5 provides for the increase in child benefit from 1 September next to £20 per month for each of the first three children. The rate for the fourth and subsequent children is being rounded up to £23 per month. This section also provides for the new £200 grant for twins, which will come into effect from 1 July next.
Section 6 provides for an increase in the amount of weekly earnings disregarded for pay-related benefit purposes.
Section 7 increases by £20 the weekly income limits below which families can qualify for family income supplement. The new income limit for a family with four children will now be £235 per week and £314 per week for a family with eight or more children.
Section 8 provides for increases in the minimum and maximum rates of maternity allowance payable from July next. The new rates will be £65 minimum and £159 maximum. This section also provides for regulatory powers to entitle to benefit certain applicants who do not meet the employment and contribution conditions attached to the scheme. This measure is designed to facilitate volunteer development workers who wish to claim maternity allowance on their return home.
Section 9 provides for regulatory powers to entitle to invalidity pension persons who are very ill but who cannot qualify because they have not been incapable of work for at least 12 months. That is, of course, an improvement.
Section 11 is a further improvement and extends the definition of an adult dependant to include one of a cohabiting couple who does not have the care of children. Formerly, only dependants having the care of a qualified child qualified for an increase as an adult dependant. This section brings the provisions for an adult dependant in the case of cohabiting couples into line with those applying to married couples for all social welfare payments.
Section 12 improves the provisions for entitlement to disability benefit. Payment of disability benefit is limited in certain cases to a maximum duration of 52 weeks, but a current claim may link with a claim in the previous three years for the purpose of reducing the duration of entitlement. The purpose of this section is to reduce that three year "linking" period to one year. Under existing provisions the total amount payable to a couple where one spouse/partner is getting unemployment assistance and the other spouse/partner is getting a social insurance payment or old age pension is limited to the appropriate married rate of payment. Section 15 brings the legal provisions for pre-retirement allowance into line with the arrangements for unemployment assistance in this regard.
As I have already said, section 13 provides for regulatory powers to prescribe amounts to be disregarded in assessing income from employment under a contract service. In addition, this section provides that long-term social welfare payments received by a spouse-partner, as in the case of short-term payments, will not be assessed as means.
Sections 16 and 17 provide for the usual increase, with effect from 6 April 1993, in the earnings ceiling up to which PRSI contributions are payable. The ceiling for employees and the self-employed is being increased by £1,000 to £20,000 per annum. The corresponding ceiling for employers is £21,300, also an increase of £1,000. These sections also increase the minimum annual contribution from the self-employed from £234 to £250 and the special reduced rate contribution payable by the self-employed from £116 to £124.
Section 18 provides for the introduction of a PRSI exemption scheme for employers who take new employees from the live register, which I have already explained.
Section 19 provides for regulatory powers to assign the collection of social insurance to persons other than the Collector General of the Revenue Commissioners. This section enables regulations to be made, subject to approval by the Minister for Finance, to assign part of that responsibility to other people.
Section 20 provides that old age (contributory) pension and widow's (contributory) pension will not be payable on the basis of an insurance record of a self-employed person unless all self-employed contributions which that person was liable to pay have been paid. The section also contains a provision enabling the Minister to exempt people from this requirement having regard to the circumstances of a particular case.
Section 21 exempts recipients of pre-retirement allowance who are in self-employment from their liability for social insurance contributions.
Section 22 disqualifies persons found to be fraudulently claiming a social welfare payment from receiving any social welfare payment, other than child benefit, for a period of nine weeks. Under current provisions, where a person is convicted of fraudulently receiving a payment, an automatic disqualification applies for the receipt of any social welfare payment, other than child benefit, for a period of three months. This section also provides that a person who receives an automatic disqualification for either nine weeks or three months shall not be entitled to claim supplementary welfare allowance during the period of disqualification other than in respect of his or her adult or child dependants.
Section 23 provides for the allocation and issue of personal social services numbers and requires any claimant to furnish his or her number and that of dependants when required to do so for the purposes of any social welfare payment. The personal social services number, formerly known as the RSI number, will become the social services number for all social welfare schemes and should not be confused with the former proposal for an ID number. I regret Deputy Allen is not listening.