Vol. 515 No. 4
14 Mr. Broughan asked the Minister for Social, Community and Family Affairs the projected income and expenditure of the social insurance fund in each of the years from 2000 to 2002 and the likely surplus in each of these years. [6112/00]
The data requested by the Deputy are contained in a following tabular statement. The table shows that the social insurance surplus is projected to be £198 million in 2000. However, the figures for potential surpluses contained in the table for 2001 and 2002 do not take into account increases in excess of prices inflation, in the rates of social insurance benefits and pensions, which may be introduced in those years. In this regard, the Government is already committed to raising the maximum personal rates of the lowest old age pensions to a figure of £100 per week by 2002. In addition, the Government has entered a commitment with the social partners as part of the Programme for Prosperity and Fairness to increase the rates of all social welfare payments in real terms over the lifetime of the programme and to make substantial progress towards a target of £100 per week for the lowest rates over the period of the programme. Clearly, these and other developments are likely to have a significant impact on any emerging surpluses over the next two years.
PRSI income is currently buoyant due to the increased numbers of persons in the workforce and the economic climate generally. The availability of social insurance fund resources has enabled me to widen the contingencies covered by the social insurance system. The Social Welfare Bill provides, among other provisions, for the introduction of a carer's benefit which will be paid, without a means test, to all workers who are required to take time out of the workforce to provide full time care and attention for incapacitated persons. This is an innovative enhancement of the social insurance system and will be of significant value to all workers who have to balance work responsibilities with their responsibilities to care for persons who are sick or incapacitated.
While the financial position of the fund is secure in the short-term, significant funding challenges lie ahead in the medium and long-term. These arise mainly from the increase in the numbers of older persons in society, the majority of whom will be entitled to a pension paid from the fund. The Government decision to set up a reserve fund to part pre-fund social welfare pensions in the long-term represents a significant commitment by the Exchequer towards ensuring pensions will be paid in the future. The current social insurance fund surplus will play an important role in the financing of projected growth in social insurance expenditure in the medium term as well as improvements in the rate and range of benefits provided.
I am fully committed to safeguarding the fund and to the enhancement of the social insurance system so that it continues to be a key component in the delivery of social protection in this country in the years ahead.
Projected income, expenditure and surplus of the Social Insurance Fund, 2000 to 2002.
|
2000 |
2001 |
2002 |
|
|
£ million |
£ million |
£ million |
|
|
Income (a) |
2,753 |
2,960 |
3,270 |
|
Expenditure (b) |
2,555 |
2,648 |
2,750 |
|
Surplus (c) |
198 |
312 |
520 |
(a)Provides for projected changes in employment and earnings; assumes no change in PRSI contribution rates.
(b)Provides for the cost of budget 2000 improvements and for increases in weekly rates of payment in 2001 and 2002 in line with projected increases in the Consumer Price Index – CPI.
(c)The surplus figures for 2001 and 2002 are likely to be reduced by further increases in expenditure arising from various commitments to increase rates of payment during this period over and above indexation to CPI.
A Cheann Comhairle, you ruled seven questions tabled by the Labour Party out of order.
That is in accordance with long established practice.
The Minister transferred three questions to other Departments.
Can I take it the increase in the net surplus figures for the social insurance fund from £107 million to £232 million in 1999 to £148 million to £257 million in 2002 are out of date and have been overtaken by the changes made by the Minister? The Minister referred to a surplus of £198 million for 2000. Can the Government be trusted with the administration of the social insurance fund given that a significant proportion of it is bitterly hostile to the entire concept? Many commentators feel that in the Social Welfare Bill and the fourth or fifth budget for 2000 the Minister has raided the social insurance fund to counter balance the mistakes made by the Minister for Finance before Christmas. In three or four years' time, there could be an insurance fund surplus of up to £1 billion but, because of the Minister's policies, it will be much smaller and the possibilities of developing it in the context of the national development plan will be lessened.
If the Deputy's party were in Government, we would not be discussing a PRSI surplus because when his party was in Government, there was no surplus. It is because of good economic management by this Government and previous Fianna Fáil-led Governments that there is a surplus.
The Minister has a blinkered view.
I make no apologies for using that surplus on the basis of representations I have received about anomalies in the social welfare system and the insurance fund. I have made changes, and I categorically deny that this Government cannot be trusted. I do not know what the Deputy means by his reference to certain elements of the Government being against social insurance.
They stated it when they sat on these benches year after year.
No element of this Government is against social insurance. We have been great advocates of the system and will continue in that vein. I refer the Deputy to the historic and far-seeing decision of the Government on the reserve fund to part pre-fund social welfare and public service pensions in the future.
We welcome the provision of the free schemes to the over-75s but does the Minister agree that our trade union colleagues' insistence in the Programme for Prosperity and Fairness that a supervisory board be established to manage the social insurance fund is testament to their belief that the Minister cannot be trusted to administer the fund in these good times or to turn it into the type of benefit fund for citizens the Labour Party desires? The Minister will not go down that route but will simply use the fund to bolster taxation changes.
We must proceed to the next question.
The social partners do not have the monopoly on suggesting the establishment of a social insurance board. In fact, that was one of the commitments contained in An Action Programme for the Millennium and is, therefore, one of the issues on my agenda which will be addressed in the partnership agreement.
