Vol. 511 No. 1
26 Mr. Penrose asked the Minister for Social, Community and Family Affairs if, in view of the high levels of flexibility of the modern Irish workforce and the progress to full employment, there should be provision through the social insurance system for a pay related element in unemployment benefit in view of the fact that it may increasingly be paid for short periods of time to claimants between jobs. [23619/99]
The provision of a pay-related benefit with unemployment benefit was first introduced to the welfare system in 1974. It was gradually reduced over a number of years from 1983 onwards until it was finally phased out in respect of new claims from July 1994.
The discontinuation of the scheme at that time was part of the policy of directing available resources towards those most in need by increasing the basic rate of payment rather than through pay-related supplements. This was in line with the views expressed in 1986 in the report of the Commission on Social Welfare which recommended that pay-related benefit be phased out as basic payment rates were increased.
By way of illustrating the impact of this policy direction, it is worth noting that since July 1994 when pay-related benefit was phased out, the basic rate of unemployment benefit has increased by some 20.5% compared with an increase in the cost of living index of some 10.3% over the same period.
I am of the view that the policy direction which gave rise to the discontinuation of pay-related benefit in 1994 remains equally valid today and I have no plans, therefore, to re-introduce a pay-related benefit scheme.
As the Minister will know, this proposal was part of a submission he received from the Irish National Organisation for the Unemployed. It was based on the premise that in a fast moving economy – and I would like to hear the Minister's views on that—
A question, please, Deputy.
A workforce must be extremely flexible in a fast moving economy and be pre pared to move to different companies as others close down. There should be a decent level of social insurance guaranteed, particularly for those who might have contributed for 20 or 25 years. I know the Minister sits in Cabinet with an Attorney General who, in this chair a few years ago, advocated the abolition of PRSI.
The Deputy's time is over.
As the Deputy referred to a member of this Government, it was Barry Desmond who introduced the phasing out in 1983. It was an approach supported by the Commission on Social Welfare. The Deputy asked in a previous question about the position of the long-term unemployed and protecting them. Research into poverty shows that those on long-term unemployment are more liable to fall into poverty. It is for that reason more resources have been devoted to schemes for those in long-term rather than short-term unemployment.
The Minister did not do that either.
Does the Minister accept that circumstances may have changed since the commission report in 1986 and the phasing out in 1994 and that perhaps it is an issue that could be looked at again in view of the changes in society? Is it not worth considering again?
The circumstances have not changed dramatically in that the Government endeavours to pay whatever resources are available to the least well off in society, and that is those on long-term rather than short-term schemes. If we were to go back to the way it was it would cause some difficulties in that it might introduce disincentives to work.
Does the Minister accept we are talking about payments from the insurance fund and not the Exchequer? That is a different issue.
The development of the social insurance fund should be kept under review. That suggestion bears examination, as does the suggestion by some economists that we should examine the levels of employers' PRSI in relation to profitability. Very profitable companies might pay a bigger contribution to the State coffers as corporation tax will be only 12.5% in a few years.
I am a supporter of the PRSI system and the social insurance fund. I believe people want proper social services and I will endeavour to ensure that as long as I am Minister.
27 Ms B. Moynihan-Cronin asked the Minister for Social, Community and Family Affairs if he will address the inequity whereby women on disability benefit lose half their benefits on becoming widows in view of the fact these citizens have an independent entitlement through their insurance record. [23613/99]
The primary objective of the social welfare system is to provide income support and, as a general rule, only one social welfare payment is payable to an individual.
One exception to this rule is made in the case of widows, widowers and other lone parents who are sick or unemployed. Where a person who is in receipt of a widow-widower's pension or one parent family payment satisfies the relevant contribution conditions, they may be entitled to receive disability benefit or unemployment benefit at half rate for a period of up to 15 months, in addition to their long-term pension payment. Furthermore, if they are entitled to a widow-widower's pension or one parent family payment at a reduced rate, for example on the basis of insufficient PRSI contributions or on account of means, the rate of that payment is also increased up to the maximum level for the duration of their claim for disability benefit or unemployment benefit.
These provisions discriminate positively in favour of widows, widowers and lone parents and, as such, any future changes would have to be examined not only in a budgetary context but in terms of the impact on issues such as equity and redistribution within the social welfare code generally.
Does the Minister accept that in its submission to him today the National Association of Widows in Ireland makes a valid point about the position of widows, particularly those with young children? It is not so long ago since it occurred to a number of colleagues in this House. It is very mean of the State to allow a widow with a lengthy stamp record end up on either half rate or no rate of disability benefit. Most often it is a woman who is the survivor. As there is only a small number of women in such a position, surely it would take a small amount of money to rectify this injustice and give people a little extra scope, particularly widows with children?
The Deputy's time has concluded.
The Deputy misunderstands this. It discriminates positively in favour of widows.
It is not enough.
No other section of the community is able to get this benefit. Therefore, it favours widows. The number of widows or widowers with children is surprisingly small by comparison with the overall figure. Out of more than 120,000 widows and widowers there are 11,000 widows with children. Since coming into office, I have substantially increased payments to widows over the age of 66 and to widows under 66. Everywhere I travel I am complimented on the Government's increase of 500% in the bereavement grant, something all Members, no matter how biased, will welcome.
Will the Minister accept that widows generally have not been treated very well? For once I am not pointing the finger at the Minister. Over the years, Governments have not treated widows very well. Will he accept that the case of the National Association of Widows in Ireland is well made and that there are unfair anomalies such as the fact that widows cannot claim a carer's allowance? We must look more positively at widows. I ask the Minister to share in that approach and try to deal with these anomalies.
I thank the Member for not pointing the finger at me this time.
Like every Member of this House, I tend to agree that widows, particularly those with young children, have grave difficulties. Obviously, we are all aware of these problems. I have looked in great detail at this issue but the difficulty is that if one makes changes in some areas, it will cause discrimination and inequity in other areas. We must be careful, particularly in view of what happened over the years in relation to equal treatment in this area. However, that is not to say I do not accept that more should be done. This is one of the reasons the Minister for Finance in the Government's first budget increased dramatically tax allowances for widows. This issue will be considered in the future.
