I move: "That the Bill be now read a Second Time."
I congratulate the Leas-Cheann Comhairle on her election to the esteemed position of Leas-Cheann Comhairle. I wish her well in her role, and particularly so as the first woman to hold that position. All very best wishes to her.
I am pleased to be here to introduce this important legislation. The Social Welfare (Covid-19) (Amendment) Bill 2020 is in many ways a straightforward piece of legislation which has two interrelated key purposes. The first is to place the pandemic unemployment payment, PUP, on a solid statutory basis within the framework of the Social Welfare Consolidation Act 2005, while the second is to provide that employees who have been directly affected by the Covid-19 pandemic will have their social insurance records protected.
The House will recall that when the economy had to be largely shut down in mid-March, my Department responded to this unprecedented emergency by introducing the pandemic unemployment payment, PUP. To enable this payment to be made quickly and regularly to a large number of people and households, my Department relied on section 202 of the Social Welfare Consolidation Act as the legal basis for this emergency payment. Essentially, the pandemic payment was paid as an urgent payment under the legislation governing the supplementary welfare allowance scheme. While this was appropriate at the time because it was an urgent response, the extension of the period for which the PUP is being made means that it is now appropriate to place it on a discrete statutory footing. Doing so will also mean that we can make arrangements to attribute full social insurance contributions to recipients of the payment.
I want to take this opportunity to express my thanks to the staff of the Department for the extraordinary efforts they put in, most especially in those early weeks, to ensure that 1.2 million weekly income support payments were processed. In total, approximately 800,000 individuals have received at least one payment under the pandemic unemployment scheme, with the total number receiving payment at any one time peaking at just over 600,000. While a great deal of work continues to be done, it is right that we acknowledge the outstanding public service delivered at that particularly difficult time.
The House will know that on foot of the announcement of the July stimulus package last Thursday, the Government will introduce some further changes to the Covid-19 pandemic unemployment payment with effect from 17 September. These changes will be introduced by way of regulation under the Bill before us today. I will refer to them when I am going through the various sections of the Bill. A primary purpose of the Bill is to ensure that we have the necessary legislative backing for a measure which offers support to those employees who would, in the ordinary course and were it not for Covid-19, have expected to continue in employment and to sustain and enhance their social insurance contribution records. This Bill will allow my Department to attribute these employees with paid PRSI contributions. This will ensure that they will maintain their entitlements to short-term payments, as well as enhancing their PRSI records for long-term entitlements such as the State pension.
I will now take Members through the various provisions of the Bill. Sections 1, 2 and 3 provide for the standard provisions as to the Short Title and construction of the Bill and the commencement provisions and definitions used in the Bill. While the establishment of the Covid-19 pandemic unemployment payment will take effect on enactment, section 2 provides that PRSI contributions may be attributed back to 13 March when the economy paused.
Section 4 provides for the insertion of new definitions into the Social Welfare Consolidation Act 2005 arising from the Bill.
Section 5 is another standard provision which extends the list of regulatory powers which require the formal consent of the Minister for Public Expenditure and Reform. Any regulations made under this Bill will require the consent and signature of that Minister.
Section 6 amends section 7 of the Social Welfare Consolidation Act, which identifies what expenditure should be charged to the Social Insurance Fund. This section simply provides that my Department will work with the Department of Public Expenditure and Reform to determine how much of the PUP expenditure incurred to date should now be properly charged to the Social Insurance Fund. Given that many people in receipt of PUP had an underlying entitlement to jobseekers' benefit, any expenditure on the Covid-19 PUP benefit will, following enactment of this legislation, automatically be charged to the Social Insurance Fund. This is an accounting mechanism that does not have any impact on the entitlements of claimants.
Section 7 is another technical amendment which is required to confirm that a self-employed contributor is entitled to claim the Covid-19 pandemic unemployment payment.
Section 8 inserts a new chapter 6A into the Social Welfare Consolidation Act specifically to address a key objective of the Bill, namely, the attribution of paid social insurance contributions. This new chapter defines the cohorts to whom contributions may be attributed. These will be predominantly those in receipt of the pandemic unemployment payment, jobseeker's benefit and jobseeker's allowance, as well as those on the temporary wage subsidy scheme, TWSS, who have lost their employment since 13 March 2020 as a result of the public health crisis arising from Covid-19. The new chapter also formally provides that employers and employees who have availed of the TWSS are exempted from the requirement to make the social insurance contributions which apply generally to all employed contributors and their employees. It also formalises the arrangements whereby employers availing of the TWSS are required to pay a notional 0.5% rate of PRSI in respect of any top-up payments to the employee. The amount of the subsidy paid to the employee is exempted from PRSI.
The new chapter also clarifies that the contribution will be attributed at the same rate as that previously paid. Put simply, if the employee was paying class A social insurance contributions before losing that employment as a result of Covid-19, then the attributed contribution will also be a class A contribution. For the avoidance of doubt, a provision is included to confirm that information may be exchanged between this Department and the Revenue Commissioners to ensure that employees benefiting from the TWSS can be identified and have paid contributions attributed to them.
Section 9 is a technical amendment which formally identifies the new Covid-19 PUP as a social insurance benefit within the social welfare code.
Section 10 is a technical amendment to reflect the fact that section 2 of the Social Welfare Consolidation Act 2005 will now include a definition of Covid-19 and it avoids repetition of that definition elsewhere in the Act.
Section 11 inserts a new chapter 12B into the Social Welfare Consolidation Act 2005 to provide for the establishment of the Covid-19 pandemic unemployment payment scheme in its own right. Within this new chapter, the new section 68L confirms the existing general conditions of eligibility for Covid-19 PUP, while the new section 68M confirms the PRSI contribution conditions. The new section 68N provides for the duration of the payment to be set by regulation. Following the launch of the stimulus package last week, I will introduce regulations in September to specify that new applications for the payment will be accepted until 17 September. The new section 68O provides that the weekly rates of Covid-19 pandemic unemployment payment are set out in Part 6 of Schedule 2 to the Social Welfare Consolidation Act 2005. Again, in line with the stimulus package, I will provide for revised rates by way of regulation in September. The new section 68P sets out the arrangements which apply when regulations are being introduced in relation to the Covid-19 PUP.
Section 12 is a technical amendment to allow for regulations on late claims to be introduced.
Section 13 of the Bill amends Schedule 2 to the Social Welfare Consolidation Act 2005 by introducing a new Part 6 to that schedule, specifying the rates of Covid-19 PUP. These are the rates which apply currently and, as I said, I will be introducing regulations to provide the revised rates, as announced, in September.
In summary, and against a background where much of our legislation has necessarily been concerned with the more negative aspects of the pandemic, the Bill before us today is here for positive reasons. We are putting the pandemic unemployment payment on a statutory footing, which will allow for the Minister or an Accounting Officer to be properly accountable to the Oireachtas and its committees in respect of the scheme. We are also protecting the position of employees who have lost their employment because of the Covid-19 measures in terms of their entitlement to social insurance benefits. I commend the Bill to the House.