I move: "That the Bill be now read a Second Time."
I am pleased to bring the Bill before the House. As has been the case in previous years, the Bill is the second of two Bills to complete the implementation of the €630 million social welfare package of budget 2004, which brings the projected level of social welfare expenditure in 2004 to more than €11.26 billion — a 7% increase on the 2003 allocation.
A separate Bill was enacted in December last to give effect to the increases in weekly social welfare payments from the beginning of January. This Bill implements a number of key improvements in social welfare schemes, including increases in child benefit, improvements in the carer's respite care grant, increases in death benefit pension payable to recipients aged 80 years and over and improvements in the payment after death arrangements, in addition to a range of other measures.
I am proud that the legislation is another step in the Government's continuing commitment to fostering an inclusive society. Tangible evidence of delivering on this commitment includes a massive increase in spending on social welfare to more than €11.26 billion in 2004, almost double that available in 1997; substantial increases in child benefit, resulting in the rates of payment being more than three times that payable in 1997; increases in social welfare pensions with old age contributory pensioners receiving €167.30 per week compared to the equivalent of €99 in 1997; and an average increase, over and above the CPI, across all social welfare schemes of 3.43%, since 1997.
The Bill also provides for amendments to the Pensions Act 1990. In particular, I am providing for an amendment to Part VII of that Act which deals with equal treatment between men and women in occupational pension schemes. The amendments to this section are intended to meet this State's obligation to implement community initiatives provided for under Council Directives 2000/43/EC and 2000/78/EC adopted under Article 13 of the EC treaty, in so far as they relate to occupational pensions. The Equality Bill, due to come before this House shortly, provides for the transposition of the directives with regard to other employment matters.
Council Directive 2000/43/EC, the race directive, sets out the framework for combating discrimination on the grounds of racial or ethnic origin in both employment and non-employment areas. Council Directive 2000/78/EC sets out the framework for combating discrimination associated with employment and occupation on the grounds of religion or belief, disability, age and sexual orientation.
In addition to these six grounds, and in line with a commitment in the social partnership agreement, Sustaining Progress, it is also proposed to extend Part VII of the Pensions Act to include the marital and family status and the Traveller community grounds. Taken together with the provisions of the Employment Equality Act 1998 and the Equal Status Act 2000 which prohibit discrimination in these areas in employment and access to goods and services, the amendment to Part VII ensures a coherent and consistent approach to equality across our legislation.
I now wish to outline the provisions contained in this Bill. As Members will already have considered it in detail, I will focus on a number of key provisions.
Child benefit is a universal payment made directly to families and, as such, it is the most efficient and effective way in which the Government can channel support to children. The rate for the first two children is being increased by €6.00 per month, and for the third and subsequent child by €8.00 per month. These increases, provided under section 3 of the Bill, will bring the monthly rates to €131.60 and €165.30, respectively. From April next, a family with three children will receive €428.50 compared to €408.50 at present — an increase of €20 per month.
These increases will mean that, since 2000, child benefit rates will have risen by €77.64 per month for each of the first two children and by €94.20 per month for the third and subsequent child. This measure continues the strategy of reforming income support for children by making child income support more neutral in the context of parental employment and reducing employment disincentives. An estimated 524,000 families with over 1 million children will benefit from these increases in 2004.
The Government, over successive budgets, has introduced measures to develop the services and supports which provide practical assistance to this country's carers. An Agreed Programme for Government included commitments to expand the income limits used to determine entitlement to carer's allowance and to increase the value of the carer's respite care grant. Measures aimed at addressing these commitments were announced in budget 2004 and, accordingly, the amount of income disregarded in the means test will be increased to €250 in the case of a single person and to €500 in the case of a couple. These improvements will be provided for in regulations which I intend to publish in April. In addition, in section 4 of the Bill, the Government is continuing to honour its commitment to supporting the valuable work undertaken by carers by increasing the annual respite care grant by €100 from €735 to €835, with carers looking after more than one person receiving a grant of €1,670 — an increase of €200. These increases take effect from June next. This measure, which is highly valued by carers, will benefit some 24,300 carers and will cost an additional €2.48 million per annum.
The six weeks' payment after death arrangements were designed to cushion and support the financial transition for the surviving spouse or partner following the death of a recipient of certain social welfare benefits. At present, payment of the existing rate of benefit or allowance to the spouse or partner of the deceased continues for the period of six weeks immediately following the death. While these arrangements are applicable to the majority of social welfare schemes, there are a small number of exceptions and in these circumstances the surviving spouse or partner may not be in a position to benefit from the scheme. I am pleased to say that, as the final part of my ongoing efforts to reform this scheme, all such anomalies will be removed from the governing legislation. Accordingly, section 5 of the Bill provides that the six weeks' payment after death will be extended to those benefits and allowances which would heretofore have been excluded from this payment arrangement. This provision will come into effect in June 2004 and completes the restructuring of the scheme, initiated in 2000.
The Bill, in section 6, provides for an increase in the death benefit pension for recipients aged 80 years and over, to €173.70 per week. This increase harmonises the rates of death benefit pension, widow's contributory pension and widower's contributory pension for pensioners aged over 80 years, with effect from May 2004.
Section 7 of the Bill provides for an increase in the minimum amount of unemployment assistance payable where the claimant's means are derived from parental income. The payment is increased by €8.20 per week, bringing the minimum amount payable from €31.80 to €40.00, provided that the claimant establishes an underlying entitlement to unemployment assistance. This measure will come into operation in April 2004.
My colleague, the Minister for Justice, Equality and Law Reform established a working group to review and make recommendations on improving maternity protection legislation. On foot of the group's deliberations, the Maternity Protection (Amendment) Bill 2003 was published, and it provides, inter alia, for a range of improvements in the maternity leave arrangements. It is my intention that these improvements should be reflected in the social welfare code. Accordingly, this Bill provides for a number of amendments to the maternity benefit scheme, which is operated by my Department, consequent on the amendments to the maternity leave arrangements. The proposed new leave arrangements entail a reduction from four weeks to two weeks in the minimum period of maternity leave which must be availed of prior to the expected date of birth of the child. As the maternity benefit payments are scheduled to coincide with the maternity leave timeframe, section 8 of this Bill provides that a similarly amended arrangement will apply to maternity benefit payments. This section also provides the power to make regulations to permit the interruption of the normally continuous period of payment of maternity benefit where an infant is hospitalised. I propose that these measures will be brought into force by commencement order, timed to coincide with the implementation of the amendments to maternity leave arrangements.
The maximum duration of adoptive leave is linked to the maximum duration of maternity leave, exclusive of the period prior to the birth of the child. Arising from the proposal to reduce the minimum period of maternity leave required to be taken prior to the expected date of birth from the current four weeks to two weeks, the maximum duration of adoptive leave will be increased by to weeks, thereby rising from 14 weeks to 16 weeks. Section 9 of this Bill provides the legislative basis for the consequential increase in the duration of adoptive benefit, the income support payment made by my Department to qualifying adoptive parents. This amendment will also be brought into force by way of commencement order, timed to coincide with the implementation of the amendments in the adoptive leave arrangements.
Entitlement to short-term, insurance-based social welfare schemes such as unemployment or disability benefit is determined on the basis of social insurance contributions paid during the course of the contribution year. Prior to the alignment of the income tax and calendar years with effect from January 2002, the contribution year did not necessarily coincide with the calendar year. As a result, special arrangements were put in place to secure the continuity of entitlement to short-term benefits following the alignment of the tax and calendar years. Section 10 of this Bill provides for the continued application of these arrangements for the purposes of the social insurance schemes.
In An Agreed Programme for Government we promised to modernise public services to make them more relevant to the citizen. We gave a commitment to improve access to public services by providing them electronically. Progressing the use of the personal public service number as a public service identifier is a key element of our e-Government strategy. In that context, section 11 of the Bill provides for four new agencies to be added to the list of specified bodies which are authorised by legislation to use the PPS number in the course of their customer business transactions. The new agencies are the Companies Registration Office, Enterprise Ireland, the Private Residential Tenancies Board and Coillte Teoranta.
The Pensions Act 1990 requires employers who do not provide a pension scheme or retirement benefits for employees to facilitate access to at least one standard personal retirement savings account for such employees. Section 12 of the Bill provides that, where a social welfare inspector is conducting an investigation in relation to PRSI, the inspector shall also investigate compliance with the requirement to facilitate employee access to a PRSA, in accordance with the requirements of section 121(1)(a) of the Pensions Act 1990. The inspector will, where necessary, report issues involving non-compliance to the Pensions Board.
Budget 2003 proposed that PRSI should be applied to benefits-in-kind granted to employees with effect from 1 January 2004. This provision is important in enhancing the overall equity as well as improving the coherence between the PAYE and PRSI systems. Section 13 of the Bill provides for technical amendments to the definitions of PRSI contained in social welfare legislation.
Sections 14 and 15 of the Bill provide for the charging of PRSI in cases where an employer has reached an agreed settlement with the Revenue Commissioners on benefits-in-kind which are irregular in nature and minor in monetary terms. Contributions paid in accordance with this provision will not be reckonable for the purposes of establishing entitlement to benefits under the social welfare code, as they will, in general, reflect an underpayment of PRSI for which a contribution has already been recorded.
Section 16 provides for a minor technical amendment consequent on the changes of definition of PRSI contained in section 13 which I have already outlined
Sections 17 and 18 mirror the provisions regarding the assessment of cases where an employer has reached an agreed settlement with the Revenue Commissioners on benefits-in-kind which are irregular in nature and minor in monetary terms of non-cash remuneration. Accordingly, the sections in question provide for amendments to the Health Contributions Act and the National Training Fund Act to facilitate the application of health contributions and training levies to the settlement figure agreed.
Section 19 of the Bill provides for a number of amendments to the Pensions Act. As I have already stated, Part VII of the Pensions Act 1990 is being extended to apply to eight other grounds — age, religion, sexual orientation, disability, race, marital status, family status and the Traveller community ground. The extension of the equal treatment provisions is required under two EU directives and also on foot of a commitment in Sustaining Progress.
Where feasible and appropriate, section 19 implements the directives in a way which applies their provisions consistently as between occupational pensions and other conditions of employment. Nonetheless, occupational pensions are different from other conditions of employment and, therefore, notwithstanding the prohibition on discrimination based on age, sexual orientation, marital and family status, certain practices will continue to be permitted, for example, occupational pension schemes will continue to be allowed to set length of service or age for admission to the scheme or for entitlement to benefits, for example, normal retirement age; use age in actuarial calculations; set age or service-based contributions rates in defined contribution schemes, for example, an employer may pay a contribution of 3% of salary between ages 20 and 30, 5% over that age, the same will apply in relation to accelerated accrual based on service or age in defined benefit schemes; pay survivors benefits to the legal spouse only, however, where a scheme pays to partners of the opposite sex, they must also pay in respect of partners of the same sex; and pay enhanced benefits to persons retiring early on grounds of disability.
The practice of allowing schemes to pay to the legal spouse only will be reviewed in the context of the outcome of the review of this issue in public sector schemes, which was announced by the Minister for Finance, Deputy McCreevy, at budget time in the context of the report of the Commission on Public Service Pensions.
As I mentioned earlier, I believe it is important to ensure a coherent and consistent approach to equality both in our legislation and also in the way our legislation is administered and enforced. For this reason I have provided in the Bill that complaints that a pension scheme breaches the principle of equal pension treatment will be dealt with by the Equality Tribunal — the Office of the Director of Equality Investigations — under the same procedures and machinery as are used in employment matters. This will mean there is a seamless approach to complaints no matter what area of employment those complaints relate to. However, pensions can be complex and require specialised knowledge and, for this reason, I have provided that the Pensions Board will provide technical assistance, as required.
With regard to redress, again pensions are different in that what we do today affects our future entitlements rather than current or historical ones. Therefore, I have provided in this Bill that where a rule of a scheme is found to be in breach of the principle, it will be rendered null and void and the more favourable provisions must be backdated to December 2003 or July 2003 — the dates from which the relevant directives apply.
With regard to time limits, I believe it is not appropriate to have any time limit for the bringing of a claim while a person is still in the employment to which the claim relates. Therefore, the only time limit which I have introduced is six months from the date that employment ceases. This is consistent with other provisions of domestic law which apply to pensions and also with European Court of Justice law.
I am also providing in section 20 for a number of other amendments to the Pensions Act, which are mainly technical in nature and some of which are consequential on the equal treatment provisions.
At this point I would like to inform the House that it is my intention to bring forward amendments to the Pensions Act on Committee Stage to clarify the jurisdiction of the Pensions Ombudsman in relation to members of the North-South bodies pension scheme and to make a number of minor technical amendments, on the advice of the Parliamentary Counsel, to the existing section 19 of the Bill.
Members will be aware of concerns about access to the Irish labour market and the social welfare system following accession on 1 May. Ireland is in favour of enlargement of the European Union. We are champions of enlargement, as we have experienced at first hand the opportunities accession to a greater Europe have presented to our own country. I have no doubt that a similar opportunity will present itself to the ten accession countries, and equally we too will grow economically and socially as the EU horizon stretches further eastward.
After 1 May, citizens of the new 25 state European Union will be free to travel anywhere in that Union. Workers will be free to travel to any other State to improve their own social condition, to earn a wage and to contribute to their new country of residence. Ireland is a growth economy, and there is a need for workers, and those new workers are welcome to Ireland.
This Government gave a commitment that EU citizens who want to come and work here from 1 May can do so and we will honour that commitment. We have a strong economy and we will welcome people who want to come here to work. Last year Irish businesses depended on 47,000 work permits to be issued to non-nationals to help them meet their labour supply requirements. The Department of Enterprise, Trade and Employment estimates that after 1 May this year, as much as 70% to 80% of that requirement will be met by workers from the accession countries.
I have said before that I will not allow our social welfare system to become overburdened and I will be taking steps to ensure that the system is protected. Up until this week, both Ireland and Britain were alone in the EU in not restricting incomers from the ten new member states. Britain has now put in place a series of measures, which will restrict access, including a new workers' registration scheme and new conditions on qualification for social welfare payments. Due to our common travel area with Britain it is now important that we put in place some conditions. I have a duty of care to both the recipients of social welfare payments and those who fund such payments, the taxpayer. Consequently, I will be proposing changes to the social welfare code which will be no less robust than those introduced in Britain. These measures will be sensible, considered and reasonable. I advise the House that I will bring forward amendments to this Bill, on Committee Stage, to introduce these measures.
This Bill builds on the progress made in the social inclusion area by this Government. It is based on objectives contained in the programme for Government and the commitments made in the social partnership document Sustaining Progress, and reflects the principles of the revised national anti-poverty strategy.
I commend the Bill to the House and look forward to a constructive debate.