Seanad Éireann díospóireacht -
Wednesday, 2 Jun 1926

Vol. 7 No. 4

UNEMPLOYMENT INSURANCE BILL, 1926—SECOND STAGE.

Question proposed—"That the Bill be now read a second time."

Mr. FARREN

The Minister on the Second Reading Stage of this Bill in the Dáil intimated that it was purely administrative. I must say that considering the amount of unemployment in the country at the moment we very much regret that the Minister did not introduce a Bill which would be some help to people who are unemployed through no fault of their own. We have to bear in mind the conditions of people to whom it is new to be unemployed, people who had been in fairly constant employment for many years but who, through the unsettled conditions in this country or through having joined the National Army, and so forth, now find themselves in an extremely bad position. The Minister said in the Dáil that if he were to introduce a Bill of that kind it would have to be a comprehensive measure. I think the time has arrived when a comprehensive measure dealing with this question of insurance should be introduced.

As a matter of fact, it is extremely difficult for people who have to handle and deal with questions of claims for unemployment benefit as they arise, to deal with them without having to refer to three or four Acts of Parliament. I urge that some effort should be made to co-ordinate all those Acts and so render it unnecessary for one to have to look from one Act to another and from that again to another to know how one stands. There are in this Bill some things very different from administrative proposals. The Minister proposes under the Bill to seize the contributions for which unemployment benefit has not been paid to persons when they would reach a certain age. Under the previous Acts provision was made that persons who were insured under the Unemployment Insurance Act should, when they reached the age of sixty years, be entitled to receive the amount of the contributions they had paid less the amount of benefits drawn, plus compound interest on the contributions made. Under this Bill the Minister proposes that persons who have been insured heretofore and who have fifty odd contributions to their credit will be entitled to get credit for the amount of the contributions they have paid according to the original Act. But for the future no person who is insured will be entitled to receive a refund of the contributions which they paid less the amount of the grants they have received. I think that is something more than administration. That is a provision which is really something more than a measure making administrative changes in the Act.

There is another important question which was discussed in the Dáil and that is with regard to the position of ex-National Army men. Quite a number of these men have suffered a good deal of hardship because of the change which has taken place. That question was debated at great length in the Dáil, consequently there is no necessity for me to deal with it here. The position was that up to a certain date men who were discharged from the National Army would be entitled to a certain credit for contributions from insurance and would be entitled to certain benefit. But men who re-attested or who were kept on for a longer period lose the benefit. There are numbers of cases of men who had been in fairly constant employment and who had many years' stamps to their credit, but who on account of being kept on the Army beyond a certain date, kept on for a longer period, found that they had no contributions to their credit when they left the Army. If the same men had come out earlier they would be entitled to benefit. I think some effort should be made to put that matter right. The Minister when dealing with this Bill in the Committee Stage in the Dáil on more than one occasion said that certain changes that were proposed would bring the Saorstát into line with the alterations that have been made in Great Britain and Northern Ireland. I want to point out to the Minister that there were other changes made in Great Britain and Northern Ireland, changes of which the insured people did not get the benefit here. I think if the Minister is going to bring us into line on certain matters he should bring us into line on all matters and give the workers here the same benefits as they receive in Great Britain and Northern Ireland.

Another matter that is of some importance and that was dealt with in the Dáil is the question of some reciprocal arrangement between the Governments of Great Britain and Northern Ireland and our Government with regard to the payment of benefit to persons who work in one State but live in the other State. Those who have experience of dealing with these claims have come across numbers of cases of extreme hardship. People who through no fault of their own have been deprived of the benefits of their contributions are suffering much hardship to-day. A man may be working across the Border, his insurance card may be stamped, and he may have paid contributions at this or at the other side of the Border. Unfortunately when he or people like him become unemployed they find they are nobody's children. That is an outrage and some effort should be made by the Minister to end such a state of things. I know that he has done the best he could to get over the difficulty, but I think it is time that some arrangement should be arrived at which would enable those people to get the benefit which, in all justice, they are entitled to.

Mr. O'FARRELL

I agree with Senator Farren that this Bill, so far from improving the present conditions with regard to unemployment insurance actually takes away from the insured persons something that they had got and gives nothing in return. The conditions of the insured person are at present much less favourable here than in Great Britain and Northern Ireland. As has been pointed out, under the old arrangement the insured person, when he arrived at the age of sixty, was entitled to a refund. He had the aggregate of his contributions computed, and the benefit he had drawn. There was refunded to him the difference between the amount of his contributions and the amount of the benefit drawn, if the contributions were the higher figure, plus 2½ per cent. compound interest. The employer's contributions still, of course, remained to the credit of the fund, and the fund was to that extent the gainer. Now it is proposed that this arrangement should be discontinued and that for the future the insured person, no matter how long insured, will get no refund of any kind. That may be a good insurance policy to adopt from the point of view of the State, but it is a breach of contract made with the insured person. When we have the case of Northern Ireland and Great Britain quoted as having set an example, as Senator Farren has pointed out, we can point to the fact that at the same time as this change was made in Great Britain that improved conditions of unemployment were brought into operation. In other words, what they took away from the worker they handed in increased benefit to his less fortunate colleague who was out of employment.

We do not object to taking it from the insured worker provided you give it back to the people who require it in the form of improved benefit or restore the old covenanted benefit as in the case of Britain. The Minister will say in reply that large amounts of State funds have been advanced by way of loans to the insurance fund. That is true. The same is true elsewhere. That is a continuing liability of the fund and will, eventually, have to be paid back. The Minister for Finance said there were better chances of being paid back than last year, and when there are better conditions regarding unemployment it will be paid back to the State in time. The fact that the fund has had to have advances made to it by the State is no reason why the State should appropriate the moneys which the individual had secured to him under the previous Act.

Regarding the administration of the fund, there are some extraordinary anomalies and curious decisions disclosed at times. One case was brought home to my notice recently where a small farmer's son was employed in an insured occupation. He paid his contribution in the ordinary way for quite a long time and was eventually out of employment. He had, of necessity, to go back to his father's little plot, and he claimed the benefits to which he was entitled as an insured person. He was turned down on the ground that he went back to his father's farm and that there was plenty of employment to be had on his father's little plot of bog land. If he had nothing else to do he would have been paid. I suppose when he went back to his father's farm he did everything that was to be done around the place. That was used as a pretext to deprive him of what he was entitled to under the Act. He was disallowed benefit because he came home. He was referred to five or six different people when he thought to press his case. Fortunately for himself a person who was a clerk took it up for him, but even he had considerable doubt as to where the case was going to end—there were so many different Departments to be dealt with. It was sent on eventually to me, and I sent it to the Labour Party. I say, certainly, it was deplorable, and from it one can see why it is that a number of unemployed people give up, in despair, the attempt to get unemployment benefit to which they are entitled when they are up against skilled people who even make it their principal object to deprive people of benefit to which they are entitled. I think some simplification of that ought to be arrived at in that respect and that they ought not to play on the ignorance of workmen who are unable to contend with the skilled officials of the Department.

MINISTER for INDUSTRY and COMMERCE (Mr. McGilligan)

Senator Farren and Senator O'Farrell both referred to unemployment. Senator Farren has stressed it in a different way from that which was done by Senator O'Farrell. Senator Farren says that I have said this Bill was an attempt to get in line with the British Act on the same subject.

Mr. FARREN

I did not say that.

Mr. McGILLIGAN

I certainly made no such comment. If I made any comment it was that we were in line with the British Act on this one single point and that has not changed. I raised against them the argument that we should get into line with the British administration and code. That is a too easygoing solution and has no reference to the state of the two countries. What has to be borne in mind by those connected with it is that it is a contributory scheme, and the old British rates which were established by the scheme were raised and we are working under what are called abnormal rates of contribution. The old Act referred to in Section 2 of the present Bill may be wiped out, but people must count the cost. It means increased contributions from the employed and unemployed, and as this fund must be kept solvent on a contributory basis there must be enough money left to pay all the demands made on it, and if people say, "Do not deprive these people of what was promised under Section 25 of the old Act," they must convince this House that it is a wise policy. Then there must be increased contributions. It is easy to say that Britain has done this and that Britain has done that. The answer is Britain has a much larger industrial population. In Britain you have a much larger number of industrial employees who are paying into the fund.

Mr. O'FARRELL

You have more unemployment.

Mr. McGILLIGAN

I doubt if there can be adduced any evidence to warrant the statement that there is more unemployment relative to the population. I should like evidence for the Committee Stage to see if that statement can be warranted in the slightest way. I have evidence to the contrary.

Mr. DOWDALL

I wish the Minister would produce it.

Mr. McGILLIGAN

It is a matter of calculation. The production of a very big number of figures in relation to the population of both countries in insurable employment is very much complicated by the matter to which Senator Farren refers. We have a tremendous number of people who never, in the ordinary course of events, would come under the heading of insurable occupations. Sometimes a farmer's son who found employment on the land but who during the last few years of depression went and got road work that was intended for the unemployed, having got a few stamps to his credit and a book, now ranks as being insurably unemployed. The figures can be produced.

Senator O'Farrell referred to one case and founded on it a series of statements; that there was a definite object on the part of those administering this fund to deprive people of benefits to which they were entitled; that people gave up in despair the pursuit of benefits to which they were entitled owing to the fact they were up against skilled people, whose object, really, was to defraud them. With reference to this particular case, I think the Senator made the comment that the pretext was that the claim was examined and then ruled out. The fact is that there cannot be any pretext. There is a very definite method by which a claim can be brought forward. There is an insurance officer who goes into every case; there is a court of referees entirely independent of the Department and of the employers and employees. Then there is an umpire before whom it can be brought. The case to which the Senator refers is only one of a great number. As I remember it, a boy got insurable occupation on some job and got contributions to his credit. After that he returned to his father's farm, and the Senator says he was then entitled to benefit as an insured person. That is the line taken by a great number of Deputies who ask Questions in the other House.

Apparently the assumption is that once a person has stamps to his credit and falls out of employment, benefit must immediately follow. There is considerably more required before that is the case. It must be proved that the person is unemployed and that he is available for suitable employment. If a person goes home and works on his father's farm he is not available for suitable employment. Apparently this man was in other occupation. Apart from that I have no voice in these cases. There are probably more decisions on that particular type of case than on any other—the agricultural labourer who, during a certain period of the year gets road work, which entitled him to certain contributions. When he falls out of employment he immediately makes a claim for benefit. In that case there has to be an examination of the case; what is the season of the year, if it is the proper season in which to provide employment, and also an examination of the applicant's previous industrial history. When all these things have been considered by a person who is entirely independent of my Department that person gives a decision which has to be followed. I have nothing to do with it, except to see that the law is carried out.

There is no provision to repeal Section 25 of the Act of 1920, which I have already briefly dealt with. It provides that a person reaching a certain age and having a certain amount of contributions to credit should get back the value of the unexhausted contributions plus interest. It is now proposed to repeal that. There are three reasons for doing so. One involves the illogical principle that in an insurance scheme a person who has never had occasion to make a claim should get back his money. That does not hold under any ordinary insurance scheme. There is also the great administrative difficulty of carrying it out owing to the varying rates of contributions and benefits. To calculate what a person is entitled to at any period, with interest, from funds that have accumulated to his credit over a certain period, would entail a tremendous amount of administrative work and expense.

There is a third point. Provision is being made for compensation to those who have been deprived of what was previously given to them under Section 25. Provision is made under Section 2 for a person to be compensated in respect of unexhausted contributions. How that value is ascertained is a rather difficult calculation and I do not want to enter into it now. The question of soldiers is dealt with under Section 8 and has not been quite accurately put by Senator O'Farrell and Senator Farren. Senator Farren said that certain provision was made for people who went into the National Army, and that after a certain date, which was fixed, if they re-attested and remained in the Army, they would be deprived of what was previously intended for them. The Senator adds that you have that peculiar position—

Mr. FARREN

Not alone were they deprived of the benefit they would get under the provision made for them when going into the Army, but they were prevented from getting benefit for the stamps they already had on cards when they went into it.

Mr. McGILLIGAN

I was going to add that. Take a person with 40 or 80 stamps to his credit. It is not the case that he is being deprived of the benefit of the contributions.

Mr. FARREN

He cannot get the benefit.

Mr. McGILLIGAN

It is the same as if a person has funds accumulated in the savings bank and is prevented from drawing them out at a particular time. They can be drawn out on certain regulations. I think the Senator gets back to what I described as a wrong attitude towards this fund. His contention is that if a person has money in the fund and is out of employment he should be able to draw it. That is not the regulation or basis of the fund.

Mr. FARREN

A person with stamps to his credit should not be deprived of benefit because he joined the National Army.

Mr. McGILLIGAN

No one is deprived of benefit because he joined the National Army.

Mr. FARREN

I will produce a dozen men to-morrow who cannot get benefit.

Mr. McGILLIGAN

I am sure the Senator could produce people who, whether they were in the Army or not, would be out of insurable occupation. This can be dealt with again. There is a regulation, and it is one of many regulations, that this fund should be on a sound contributory insurance basis. There is a regulation that once a person leaves the state of being an insurable person he must pay an entrance fee to get back to the fund. The contributions are not forfeited, but he cannot touch them until he fulfils certain conditions. How is a person regarded as having left an insurable occupation? If a person does not get one stamp to his credit in an insurable year of 52 weeks, then that person is really considered to have lapsed from the insurance code. Until he gets 12 stamps to his credit in the new year, puts in twelve weeks in an insurable occupation, he is not entitled to benefit. Once that condition is fulfilled all the other contributions are put to his credit. I think it is a reasonable thing to say that a person who has failed to find one week in an insurable occupation should be regarded as having gone out of an occupation which is regarded as insurable.

The point in regard to the national soldiers is that there was special provision made for certain classes of men on leaving the National Army. About 30,000 men were to be disbanded in the summer of 1924, and it was thought that it would be a great hardship undoubtedly to throw that large body of men upon the unemployment market. Provision was made then that people discharged in such circumstances should have certain contributions, as deemed to have been made to their credit. There was then a transition period, and the attitude we have taken up is that if certain men, instead of going out in June, 1924, remained in the Army for a further year, they should get so much additional employment in the Army, and so much additional pay for the good work which they, no doubt, did. That was the transition period after 30,000 men had been launched upon the market. It was considered that it was not right that the provision extended to them should be extended beyond June, 1924, to other men who were lucky enough to get work in the Army during the transition period, and who were able to leave the Army afterwards, in different circumstances from that which attended the disbandment of the other men.

The reciprocal point has been raised. I have made continuous endeavours, by correspondence, with the Minister for Labour of the Northern Government, to have this matter put right. I have had deputations from trade unions in the North and South upon this matter, and I have done everything in my power to bring it to a satisfactory conclusion. Negotiations are, at the moment, going on, and I thought there was some likelihood of reaching a satisfactory issue until I saw the statement by the Northern Minister, in which he seemed to regard the situation without hope. However, I have received no answer from him in that way, and until I do, I shall continue to hope for a satisfactory settlement. I regard it as a very unsatisfactory state of things on both sides. There are certain difficulties about the different rates of benefit and arrangements have always been made, and will continue to be made, in the endeavour to put the thing right.

On the general question I have been asked if this is merely an administrative Bill, and not a general Bill, extending unemployment insurance. I can only say, as I said before, that whatever provision is made for the relief of the unemployed it cannot, for years to come, be by way of extended benefit from the insurance fund. That fund must be kept in a solvent condition. It is in this position now, that if anything more is added, all its entire annual increments would be necessary to pay off the debt and there would be no money left for contributions; the fund would be left simply insolvent. There are numerous other methods of meeting unemployment, and every one of them will be fulfilled this year. One million of money will be spent on road work, in addition to the ordinary moneys spent in every year, and that I consider to be sufficient provision for this year.

Mr. FARREN

I want to say a few words in regard to what the Minister has just stated. He said that several matters referred to could be raised upon the Committee Stage. There is one matter that cannot be raised on the Committee Stage, and which I would like to mention here. I want the Minister to see if it is not possible to do something for the ex-National Army men, I do not say by way of giving them a further gratuity to that of 1924. I do not want any credit for the men who lapsed after that time was expired. The point I wish to make is that there were stamps to the credit of many of them when they were in insurable employment, before they entered the Army, and because they cannot get insurable employment now to the extent of twelve stamps benefit is being withheld from them. The Minister described that as being the same as money in the savings bank that could not, for some reason or other, be drawn out at a particular time, but that is not a fair analogy. The benefit is there, but because these men were in the National Army, and because they cannot now find employment to enable them to secure twelve stamps, they are deprived of the benefit they would be entitled to. I appeal to the Minister, until some other opportunity presents itself, to make regulations whereby these men will get what they are entitled to receive and not be made to suffer a loss simply because they were in the National Army.

Question—"That the Bill be now read a second time"—put and agreed to.