Question proposed: "That the Bill be now read a Second Time."
Molaim, arís, an Bille a bheith léite don darna uair. Mar adúirt mé, is é mo chéad uair mar Aire sinsearach Bille a chur os comhair na Dála agus tá lúcháir orm é sin a dhéanamh.
This Bill is one of two Bills intended to implement the social welfare package announced in the recent budget. This year's social welfare package amounts to €530 million and represents 40% of the total budget allocation of €1.3 billion. It is a reflection of the Government's priority to protect the living standards of social welfare recipients at a time when difficult decisions had to be made with regard to the management of public finances. Since the Government took office in 1997, Ireland has changed dramatically for the better. The number of people at work has risen by 400,000 to 1.8 million. The rate of unemployment has fallen dramatically from 10.3% to 4.6%. The number of people in long-term unemployment has dropped from 90,000 to 22,000. Social welfare spending rose by over €3.5 billion between 1997 and 2002, well in excess of the rate of inflation. Payment rates for both recipients and their families have improved considerably in real terms. Between 1997 and 2002, we increased the main payment amount for a pensioner couple by 50%.
Real improvements in social welfare in recent years have led to a halving of the consistent poverty measure. In 1994, the level of consistent poverty was 15.1% and this was reduced to 6% in 2000, the latest year for which figures are available. However, the Government is most anxious to protect the weak and vulnerable in our society and to safeguard the gains made in building social inclusion. We are delivering an additional €833 million in social welfare spending next year, bringing the projected level of spending to over €10 billion for the first time. Social welfare expenditure in 2003 will be €4.5 billion higher than it was in 1997, an increase of almost 80%.
The objectives of the social welfare package are to increase or maintain the value of all rates of payment in real terms; give additional increases to those aged 66 and over, in particular those on widows and old age pension; continue to increase pensions in line with the programme for Government commitment to increase the State pension to €200 by 2007; increase or maintain the real value of all qualified adult rates of payment and to ensure they do not fall as a proportion of the associated personal rate and to make significant progress in our programme of increases in the level of child benefit. I will now outline the main provisions of the Bill.
Sections 2 and 3 of the Bill provide for an increase of €10 per week in the personal rates of old age, retirement and invalidity pensions for those aged over 65. This will bring the rate of old age contributory pension to €157.30 per week and the old age non-contributory pension to €144 per week. This confirms our commitment to pensioners and marks a substantial first step in implementing our intention announced in the programme for Government to increase the State pension to €200 per week. In overall terms, it represents an increase of 59% over the rate payable in 1997, well ahead of the increase in inflation. In 2000, we gave a commitment to increase the widow's and widower's contributory pension for those over 66 to the full old age contributory pension. I am pleased to say that the special increase of €11 for this category, provided for in section 2, will bring the new rate to €155.80, within €1.50 of the full old age contributory rates.
The Government is also conscious of the needs of other vulnerable groups in our society, particularly those who provide a caring role, widowers and those on invalidity pension. Accordingly, we are providing for an increase of €7 in the personal rates of these payments. This will bring the standard personal rates of invalidity and widow's or widower's pensions to €130.30 for a pensioner under age 65 and the rate of carer's allowance to €129.60 under age 66.
We are also committed to protecting the real value of other social welfare payments. Over the period from 1997, general social welfare increases have increased well ahead of inflation and ahead of average earnings. In this budget, we are maintaining the value of these payments in line with inflation by providing an increase of €6 per week in the personal weekly rate of disability and unemployment payments, one-parent family payments, supplementary welfare allowance and farm assist. We are also providing for further increases of €7.70 per week for qualified adults aged 66 and over of contributory pensioners with proportionate amounts for those on reduced payments. A pensioner couple on a full social welfare payment will, therefore, get an increase of €17.70 per week. The qualified adult allowance for a person over 66 has risen from 72% of the old age contributory pension in 1997 to 77% in 2003, and now represents 84% of the old age non-contributory pension.
As promised in the programme for Government, this will be increased in the coming years to the full old age non-contributory pension rate to benefit women in the home who do not qualify in their own right for the contributory pension. Other qualified adult allowances are being maintained in line with increases in the relevant personal rates. The increases in these allowances are as follows: €6.70 per week for old age non-contributory pensions where the qualified adult is aged under or over 66 and for contributory pensions where he or she is aged under 66; €5 per week for invalidity pension where the qualified adult is under 66; €4 per week for all other qualified adult payments and proportionate increases will be applied where persons are in receipt of reduced rate QAA payments.
Now that the tax year has moved to the beginning of January, the budget increases will again become payable from the first pay day in January. People receiving short-term payments such as unemployment payments will receive their increases immediately in the first week in January. In the case of certain people on long-term payments such as pensions, because of the time needed to print and distribute pension books, pensioners will receive their increases in arrears somewhat later.
However, those who receive long-term payment by means of electronic payment, some 130,000, through a post office or bank will, this year, receive their increases on the first pay day in January. Some 235,000 people, mainly widows and widowers, one-parent families, invalidity pensioners and persons receiving carer's allowance, will receive a lump sum arrears payment for six weeks of the budget increases in mid-February. This will be included in their new order books effective from that date. For example, a widow on a contributory pension over 66 years of age will receive a back-dated payment of €66. A further 262,000 recipients who are due to get their order books in April will receive a special payment in mid-February comprising six weeks arrears of the budget increase and seven weeks' advance payment. For example, a pensioner couple over age 66 will receive a lump sum payment of €260 in mid-February.
Section 4 of the Bill increases the weekly income thresholds for family income supplement from January next by €17 per week. This will lead to a net gain of €10.20 per week in the average FIS family payment. These increased payments will be paid immediately in the first week in January next. Sections 5 and 6 provide for an increase in the earnings ceiling from €38,740 to €40,420 per year for employees' social insurance (PRSI) contribution and the income ceiling for payment of optional contributions. Section 6 of the Bill also provides for a restructuring of the rate of optional contributions payable by share-fishermen. The standard rate of contribution is being reduced from 5% to 4% and the minimum flat rate contribution is being reduced from €253 to €200 per annum. In addition, the PRSI-free allowance is being increased from €1,321 to €2,500 per annum. These changes reflect reductions already made in recent years for most other PRSI contributors.
This Social Welfare Bill, the first of two instalments, builds on the progress made in social inclusion areas by the Government in recent years. It safeguards the living standards of those who rely on social welfare and prioritises the allocation of resources in favour of those most in need.
Mar a dúirt mé, molaim an Bille seo agus tá mé ag tnúth anois le díospóireacht thábhachtach ar feadh cúpla uair a chloig. Ach ós rud é go bhfuil an t-am thart molaim go gcuirfear an díospóireacht ar athló.