Joe Walsh
Ceist:29 Mr. J. Walsh asked the Minister for Social Welfare the cost to the Exchequer over the periods of five, ten, 15, 20, 25 and 30 years of the extra provisions as outlined in the Social Welfare (No. 2) Bill, 1995. [10648/95]
Ceisteanna—Questions. Oral Answers. - Divorce Costings.
Dermot Ahern
Ceist:144 Mr. D. Ahern asked the Minister for Social Welfare the views, if any, he has on whether the introduction of divorce will add additional Exchequer costs in the area of social welfare; and if he will make a statement on the matter. [10511/95]
Dermot Ahern
Ceist:145 Mr. D. Ahern asked the Minister for Social Welfare the way in which he calculated the estimated £1 million shortfall over five years in spouses' contributory pensions in the event of the introduction of divorce; and if he will make a statement on the matter. [10512/95]
I propose to take Questions Nos. 29, 144 and 145 together.
The programme for Government commits this Government to publishing a comprehensive paper dealing with all the relevant issues relating to divorce in advance of the referendum. One of the key issues which arose during the last referendum campaign on divorce was the extent of public disquiet about the implications of divorce across a wide range of issues, including social welfare entitlement. The Government is determined that there should be no ambiguity on the implications of divorce and has, therefore, decided that no spouse will be disadvantaged in terms of his or her social welfare entitlements as a result of a change in their legal status from married, separated or deserted to divorced. The Social Welfare (No. 2) Bill, 1995 gives effect to this decision.
The additional Exchequer costs in the social welfare area resulting from the possible introduction of divorce arise predominantly from the proposed payment of survivor's pension to divorced persons, as provided for in the Social Welfare (No. 2) Bill, 1995.
The cost of extending entitlement to survivor's pension to divorced people, who have not remarried on the death of their former spouses is estimated at £1 million by year five following the introduction of divorce. This estimate takes account of a number of relevant factors, including the number of separated persons who are likely to remarry following divorce and their age profile and mortality rates among potential divorcees in the various age groups.
The figure of £1 million must be put in the overall context of social welfare expenditure generally. In 1995 the cost of providing social welfare payments is £4.18 billion, of which £342 million relates to the provision of survivor's pension. The estimate of £1 million represents an insignificant proportion of total expenditure and less than 0.3 per cent of the cost of survivor's pensions.
It would not be practical for my Department to estimate the cost implications over a period of 30 years as requested by the Deputy. The variable nature of the factors upon which the estimate is based would tend to dilute the accuracy of any estimate of the costs arising over such a prolonged period.
The costs arising over a ten year period, however, are currently being estimated by my Department and I expect to be in a position to provide this information to the Deputy during the Second Stage debate on the Bill later this week.
I received a copy of the Social Welfare (No. 2) Bill, 1995 and the Explanatory Memorandum. No costings were given. If we ask the people to change the Constitution they are entitled to know the costs involved and whether they will be underwritten by the Government. I was appalled to see the unrealistic suggestion that the cost would be £1 million. The Minister has confirmed that it is impossible to give any relevant estimate of the cost. I look forward to his submission on the Bill during the Second Stage debate. The people will want to know if the costs have been estimated and properly researched.
The Deputy did not ask a question but I will provide some information which he might have looked for had he given more thought to his role as Opposition spokesperson. I have been a Member of the House since 1982 and have not seen estimated costs included in any Explanatory Memorandum or Bill. However, I made a point of ensuring that the costs were addressed in any public statement I made about the Bill. The Deputy mentioned the figures I gave in his question.
To imply that I am concealing the costs is misleading. The Deputy implied that it is impossible to state the costs conclusively. I have made it clear in my reply that it is impossible to give a costing over a 30-year period as there are many variables involved, for example, to try to estimate the number of people who will seek a divorce in 30 years time is impossible. However, based on the number of people who are separated we can estimate how many are likely to seek divorce. The assumptions for the estimate made regarding the 55,000 people classified by the Central Statistics Office as separated are that 75 per cent will avail of divorce, 50 per cent will remarry and 80 per cent of the women concerned will outlive their former spouses. These assumptions which underlie the estimate are conservative in that, given the religious ethos of the country, the number of separated people who seek a divorce will probably represent less than 75 per cent over the five-year period. The figure of 50 per cent for divorced people who remarry is also conservative. The experience elsewhere shows that fewer divorced people remarry. Anyone who studies pension reports knows that many more women than men survive their spouses. We have based our costs on these reasonable assumptions. Given possible variations in the figures, it would be impossible to give the cost over a 30-year period. However, I have given an undertaking to give the Deputy the figures covering a ten-year period during the debate on the Bill on Thursday.
This Bill is in preparation for the divorce referendum which we want to see carried.
Is the Deputy sure about that?
The Minister is great at giving smart replies but he is not so great when it comes to carrying out a proper assessment of this issue. The previous referendum was not carried because the electorate did not have assurances in regard to certain matters. We want to give them those assurances on this occasion.
Fianna Fáil opposed it.
Let us hear the question, please.
Unlike the Minister, the Minister for Equality and Law Reform, Deputy Taylor, spoke with Opposition spokespersons and sought consensus before he went on a mad rush, so to speak, without taking into account the costs. Has the Minister considered the additional costs of housing, FIS and the lone parent allowance? The figure of £1 million is unrealistic and the Minister has not properly worked out the costs. If the changes are not properly costed the electorate will not be impressed and the Government will find it very difficult to have this proposal carried.
Deputy Walsh should cop himself on in regard to this issue. He sounds like someone who has been put out in front to support the concept of divorce——
The Minister should answer the question and stop lecturing.
The Minister without interruption, please.
——but who does not really want to support it.
This is Question Time, not lecture time.
He is trying to undermine people's confidence in the steps being taken by the Government to ensure there is no ambiguity about social welfare rights once the legislation is passed.
That is what the Minister is doing.
This Bill deals with social welfare entitlements, not housing or health entitlements. The estimated cost of the change in FIS will be minimal. It must be borne in mind that this supplement is payable to people on low pay, people below a certain social welfare limit, and their being in a position to support a second spouse and maintain a first spouse is virtually impossible. The likelihood is that the former spouse would be better off claiming a lone parent allowance in his or her own right. The estimated cost of the change in FIS is so small that it is virtually impossible to measure.