I hope that Senators have not been thinking that this is a very complicated measure. If their minds have been running on those lines, I hasten to reassure them. The Bill is not really of such complexity as it appears to be. It is necessary that the different services dealt with in the Bill be linked up with existing legislation. This means that each existing service has to have a separate part. It is, however, my intention to analyse the objects of the Bill in a general way and to give as clear a picture as possible of its general import. In doing this, it is my desire to put the House in as good a position as I can to give its consideration to the measure.
The Bill deals with seven services in my Department, namely, old age pensions, blind pensions, national health insurance, unemployment insurance, unemployment assistance, widows' and orphans' (contributory) pensions and widows' and orphans' (non-contributory) pensions. Those schemes may be divided into two classes—the contributory schemes and the non-contributory schemes. I propose to deal first with the non-contributory schemes.
Senators will remember that when the Government first took up office one of the items that stood in the forefront of their declared programme was the improvement of the social services. When I, as the responsible Minister, came to examine the details of those services, it was speedily borne in on my mind that something required to be done immediately for the beneficiaries of two of those services, where the need was great and the necessity for quick action urgent. There is no need for me to tell you that I am referring to the old age pensioners and the non-contributory widows and orphans. For the betterment of those two classes, increased funds to the amount of £2,500,000 are being provided, of which amount approximately £1,000,000 goes to the widows and orphans, and approximately £1,500,000 to the old age pensioners, in which category, through the vagaries of legislative improvisation, are also included those pensioners who are stricken with the misfortune of blindness.
Those additional funds will be distributed by way of increased pensions and allowances and through modifications of the means tests, which, in addition to improving the position of existing recipients, will also have the effect of making new claimants eligible.
The Bill, in Part II, introduces a new scale of pensions for old age pensioners and for blind persons. In this connection, Part II abolishes the existing differential against old age pensioners and blind persons who reside in the rural areas, and under the Bill a similar rate of pension is being provided for old age pensioners and blind persons; that is, a universal rate where the recipients live in rural areas or in the cities and urban areas. This section of the Bill modifies generally the means test applicable to these pensions so that the pensioner may enjoy greater means than at present without suffering the existing reduction of pension. It reduces the minimum age for blind persons' pensions from 30 to 21 years, and it excludes, within generous limits, the personal earnings of those pensioners from the computation of means. Pensioners in urban areas at present receive a weekly pension of 15/-, including cash supplements, which is reduced by 1/- down to a minimum of 1/- in accordance with a scale of annual means ranging from £15 12s. 6d. to £39 5s. 0d. No pension is payable where the annual means exceed £39 5s. 0d.
The Bill now before the Seanad substitutes a weekly pension scale of 17/6, reducible by 2/6 to a minimum of 5/-, with a new annual means scale ranging from £15 12s. 6d. to £52 5s. 0d, above which figure no pension is payable. In the reduction of the qualifying age for blind persons' pensions from 30 to 21 years of age, I am proceeding on the basis that 21 is nearer the age at which an adult, not suffering from an affliction such as blindness, might normally be expected to be self-supporting.
In order to encourage recipients of blind pensions to undertake gainful occupations and so improve their position generally, the Bill proposes to exclude within certain limits the personal earnings of a blind person in the calculation of means. It also seems to me reasonable that this exclusion should have regard to the blind person's family responsibility. The Bill, accordingly, allows £52 of such person's earnings to be excluded in calculating means, and, moreover, allows this sum to be increased by £39 for a wife or dependent husband, and by £26 for each child.
The second of the non-contributory schemes to which I have referred is the widows' and orphans' non-contributory scheme. This is dealt with in Part VI of the Bill. With regard to this scheme I felt that it would not be sufficient merely to merge the existing cash supplements in the basic pensions and allowances, and I have, therefore, decided that reasonable increases should be granted on this side. It will be seen from the explanatory memorandum how generous the proposed increases are.
The new maximum pension for a widow without dependent children will be 14/- per week in an urban area, whereas at present it is as low as 7/6 and cannot exceed 11/6, and it will be 10/- in the rural area, where at present the rate of pension is 8/- a week. For a widow with ten children the maximum weekly pension will be 58/- in an urban area, where now the rate of pension is as low as 43/6 and cannot exceed 52/-. In the rural area the maximum pension for a widow with ten children will be 54/- in future, whereas the maximum rate of pension is now 32/6. These increases, together with the modification of the means test, to which I will be referring immediately, will have the effect of bringing into the scheme large numbers of widows at present excluded owing to the combined effect of the means test and the existing low rate of non-contributory pensions. The cost of these new proposals will be in the neighbourhood of £650,000 per annum.
To improve the scheme still further, and so make it more readily intelligible to the general public, there will be only two areas as against four areas at present for the purpose of relating the pension to the pensioner's place of residence. All the county boroughs, boroughs, urban districts and towns—that is, incorporate towns— will constitute the urban area, and the remainder of the country will be the rural area.
It is also proposed to modify the means for non-contributory pensions by disregarding the first 10/- of a widow's weekly earnings and any sums up to a maximum of 10/- per week received by a widow as voluntary contributions. These means exemptions, totalling a possible £1 weekly, represent a considerable improvement in the present position under which no special exemption applies to earned income. The exemption for gratuitous payments (as, for example, remittances in cash from members of the family), at present limited to 2/6 per week, is now raised to 10/- per week. The main purpose of these amendments is to encourage the widow to work and to provide for herself and her family by disregarding any income up to a maximum of 10/- per week—a concession which does not exist at the moment—and to allow a son, a daughter or any other relative or any organisation to come to her assistance to the extent of 10/- weekly without having that sum taken into consideration for the purpose of ascertaining the widow's means.
The limit of age (at present 55 years) for a childless widow has in the past caused considerable dissatisfaction. Widows have had their pensions terminated when the only dependent child left school or attained the age of 16 years and have had to wait until the age of 55 for the restoration of the pension. This is now remedied by reducing the qualifying age for all non-contributory pensions from 55 years to 48 years. The annual cost of this concession is £210,000. I might here say that it is anticipated that the effect of this amendment in the existing Acts will be to permit 7,000 widows, who are now ineligible, to qualify for a non-contributory pension under this Bill. The total annual cost to the Exchequer of the proposals regarding non-contributory pensions will be in the neighbourhood of £860,000 per annum. The over-all cost on this side of the Bill is estimated to be in the vicinity of £1,000,000 per annum.
The remaining non-contributory scheme is that relating to unemployment assistance, which is dealt with in Part V. The Bill makes provision for abolishing the temporary cash supplements and including equivalent permanent increases in the rates of unemployment assistance. Cash supplements are payable only to persons entitled to some unemployment assistance at the present rates. The substitution for cash supplements of increases in the rates of assistance will have the effect of admitting to assistance persons who, by reason of their means, cannot at present qualify for unemployment assistance.
This Part of the Bill also makes provision for enabling the disqualification for unemployment assistance imposed in the case of persons losing employment through misconduct or leaving voluntarily without just cause to be varied from one week to three months, thus giving to the disqualification considerable flexibility which will enable unemployment assistance officers and courts of referees to adjust the period of disqualification to the circumstances of the individual case.
The removal of the disqualifications for unemployment assistance applicable to persons convicted of an offence under the Unemployment Insurance Acts, or of any other crime or offence, which is also provided for in the Bill, will have the effect of ensuring that persons so convicted will not suffer loss of unemployment assistance in addition to any penalty imposed by the courts.
It is also proposed in the Bill to incorporate permanently in the unemployment assistance code the modified rule governing continuity of unemployment introduced by Emergency Powers Order in 1941.
I now pass to the contributory schemes which relate to national health insurance, dealt with in Part III of the Bill, unemployment insurance, dealt with in Part IV, and widows' and orphans' (contributory) pensions, dealt with in Part VI. By the Cash Supplements Orders of last year, recipients of benefit under those schemes are also entitled to cash supplements in addition to the basic benefits payable under the scheme. All those supplements are of a temporary and provisional nature, and their payment out of Exchequer moneys was a departure from the insurance principle on which the finances of the scheme have been based since their inception. It is proposed under the Bill that those cash supplements should become permanent and be merged in the basic benefits. Actually, more than the cash supplements are being incorporated in a limited number of cases in the widows' and orphans' (contributory) pensions, and in unemployment insurance the increased allowances payable for adult and child dependents are being made permanent.
At the same time, it is proposed to restore the old insurance basis so that the increases in the benefits being substituted for the cash supplements will in future be paid for by the employers, the insured contributors and the State in the same proportion as the basic benefits now payable are paid for. The increases in contributions will, in the case of national health insurance, also provide for an increase in the remuneration payable to doctors who issue medical certificates to insured persons and for the additional expense of administration of the National Health Insurance Society arising out of increases in salaries and wages granted in recent years to the staff of the society in common with all other employed persons.
It is considered better on general principles that this amalgamation of benefit and cash supplement should take place now, as the present schemes of social insurance will form the foundation of the future comprehensive scheme of social insurance. I do not think that exception will be taken to the increase in contributions. The British Beveridge Report stated that:—
"Benefits in return for contributions, rather than free allowances from the State, are what the people of Britain desire."
I feel confident that the great majority of Irish workers will echo that sentiment and that they will be happy to shoulder their part of a burden which will bring them their insurance benefits as a matter of right, rather than have such benefits subjected to political and financial vagaries.
In the widows' and orphans' (contributory) pensions scheme there will be in the future, as in the non-contributory scheme, only two areas as against the existing four, for the purpose of relating the pension to the pensioner's place of residence.
There are in the Bill some features relating to unemployment insurance to which I would like to refer specially. The proposal to raise the insurability limit for a non-manual worker from £250 to £500 per annum follows what was done last year in the schemes of national health insurance and widows' and orphans' (contributory) pensions. The insurability limit in unemployment insurance of £250 per year for non-manual workers, as well as being out of step with the other contributory schemes, is also out of date in the light of remuneration changes of recent years. Many workers who have ceased to be insurable by reason of increased remuneration would, in the course of time, lose the advantage of their contributions, whether paid under the general scheme or the special scheme for the insurance industry. In that event, the persons concerned would have no cover whatever, and they could no longer participate in our unemployment insurance merely because their remuneration passed over £250 per annum.
Provision is also being made in the Bill to ensure that workers who have ceased to be insurable will not, by reason of the lapse of time, lose any of the rights acquired before the cessation of insurance, and to incorporate permanently in the unemployment insurance code the modified rule governing continuity of unemployment introduced in 1941 by Emergency Powers Order, which is now being revoked.
I have now analysed the effects which the Bill will have on both the non-contributory and the contributory schemes. Before I close this part of my remarks, there is a provision affecting two non-contributory schemes and one contributory scheme to which I would like to refer. It is proposed in the Bill to adjust the position of persons resident in houses owned by the local authority of a city, urban district or incorporated town, but situated outside such area, so that such residents, in relation to the schemes concerned, will be treated as if they were resident in the adjoining city, urban district or incorporated town. This proposal will remove a long-standing grievance amongst the residents of certain areas adjoining Cork City. It will have effect also, of course, wherever an urban authority is compelled to go outside the urban boundaries for sites for the housing of the working classes. This provision affects the unemployment assistance scheme and the widows' and orphans' schemes, contributory and non-contributory.
To sum up, the general effect of the Bill will be to convert a temporary right to receive cash supplements dependent on Emergency Powers Orders into a permanent statutory right. This applies to all schemes, contributory and non-contributory. In addition, the recipients of non-contributory widows' and orphans' pensions and old age pensions, including blind pensions, will receive generous increases amounting in a full year to £2,500,000.
The present Bill does not abolish the means tests, but it considerably modifies them. I remain convinced of the desirability of doing away with them altogether, and I am hopeful that in the not too distant future it will be possible to do so. To do it now would require a sum of £3,500,000 per annum over and above the £2,500,000 per annum which is being disbursed by the Exchequer in the manner I have already described. In the coming comprehensive scheme of social insurance I propose to introduce a scheme of contributory old age pensions at 65 years of age. This will have the effect of abolishing the means test for anybody who in the future will qualify for such an old age pension. That is, however, in the future. At the moment we have to deal with things as they are. It is proper that, in order to secure the best value from our present limited financial resources, money should not be spent in directions where the need at present is not too severe. If we were to go beyond a certain limit of need, the taxpayers' money would be distributed in quarters where it was not needed. It should be remembered, too, that approximately 90 per cent. of old age pensioners are at present in receipt of the maximum rate of pension and so are not affected by further modifications in the means tests. I must say, however, that, on principle, I should like, if it were possible, to be able to avoid the necessity for inquiring into a person's means at all, but I must for the moment stand over what I regard as the more important principle that we should distribute what is available to the best advantage—that is, to those in the greatest need.
I need scarcely say that it is my earnest wish to grant these improvements at as early a date as possible. Were it not for certain administrative necessities, I should like to give effect to this Bill as soon as it has become an Act. The House, however, will hardly fail to appreciate that changes of this magnitude involve action which in the physical sense cannot be made to conform to one's personal desires. The present Bill, in fact, necessitates the following work: an examination of about 23,000 existing non-contributory widows' and orphans' pensions with a view to awarding new pensions, taking into consideration the increased rates and the modified means tests; an examination of thousands of new claims for widows' pensions; a review and adjustment to new rates of 150,000 existing old age and blind pensions; an investigation of many new claims for old age and blind pensions; the production, preparation and issue of about 23,000 pension order books for existing pensions under the Widows' and Orphans' Pensions Acts and some further thousands for new pensions; the production, preparation and distribution of about 150,000 pension order books for existing pensioners under the Old Age Pensions Acts and some additional thousands for new pensioners; the recall and cancellation of about 20,000 cash supplement and widows' and orphans' pension order books; and the recall and cancellation of about 150,000 old age pension order books.
A large amount of work has fallen on the Department of Social Welfare since its inception; for example, that arising out of the transfer of functions, the introduction of cash supplements last year, the conducting of talks with Great Britain and Northern Ireland on reciprocal arrangements, and, not least, the action preparatory to the present measure since the new Government took office almost six months ago. I am satisfied that my Department has done, and is doing, a considerable amount of solid work of lasting benefit to the community. Miracles, however, cannot be achieved, and there is a limit to what even the most earnest people can accomplish. I am constrained to wait until January 7th before the new conditions can be made operative. I may say here that even the fixation of that date will impose a very heavy strain on the resources of the Department, and the officers of the Department will be called upon to perform what in ordinary circumstances one would consider to be an exceptionally heavy volume of work.
This Bill is not in my view an end in itself, but it is an important step forward. It carries our social services and our social legislation a very substantial step forward to a new high level. It provides more security for the weak and the helpless, and it is calculated to brighten their lot by the distribution of a sum of £2,500,000 per annum additional to whatever income they have from our present social services. The fact that it does that, that it will help to brighten the lives of the weak and helpless members of the community will, I am sure, commend the Bill to this House.
Much, however, remains to be done before we can regard our social services as adequate to the requirements of our people, and no time must be lost in bringing before the House measures designed to lift our social services to a plane of which we can feel proud. When this Bill has been passed by the Oireachtas I hope to concentrate upon the production of a comprehensive scheme of social services. With this Bill out of the way, and in operation, the comprehensive scheme will be tackled with earnestness and expedition, and I hope the House will have the opportunity in the course of a few months of seeing the White Paper in connection with that scheme. Meantime, I would take this opportunity of bespeaking the support and warm endorsement by the members of this House of the long overdue provisions of this Bill.