Seanad Éireann díospóireacht -
Wednesday, 18 Jul 1962

Vol. 55 No. 9

Social Welfare (Miscellaneous Provisions) Bill, 1962— Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Social Welfare (Mr. Boland)

Is é príomh-chuspóir an Bhille údarás reachtach a fháil i gcomhair na méadaithe ó'n gcéad lá den mhí seo cughainn i níochaíochtaí chúnaimh shóisialaigh a fógraíodh sa Cháinaisnéis, agus i gcomhair moltaí chun feabhsú na scéimeanna árachais a luadh freisin sa Cháinaisnéis. Tá roinnt feabhasanna eile ann comh maith, go mór-mhór ar an dtaobh cúnaimh shóisialaigh de.

The main object of this Bill is to give effect as from 1st August next to the rate increases in non-contributory old age, blind and widows' pensions and in unemployment assistance announced in the Budget and to make improvements in the contributory schemes also foreshadowed in the Budget. Apart from this the opportunity has been taken to include a number of new proposals in the Bill for the further improvement of the social welfare codes. These additional features are mainly in relation to social assistance.

The Bill gives effect to the Budget increases by providing for an increase of two shillings and sixpence per week in all the existing rates of non-contributory old age and blind pensions; the new rates will be 32/6d., 27/6d., 22/6d., and 17/6d. a week, according to means as set out in Section 2 which also provides for two additional rates regarding which I shall have a word or two to say later on.

All unemployment assistance recipients will also get an increase of 2/6d. a week for themselves, and they will get the same extra amount for an adult dependant as well. Where the recipient has dependent children the weekly allowance for the first child is being increased from 8/- in urban areas and from 7/- in rural areas to 10/- in all areas; the allowance for the second child is being increased from 7/- in urban areas and 6/- in rural areas, to 10/- in all areas, and the allowance for the third and subsequent children is being increased from 2/6d. to 5/- in all areas. This will mean that a man who is on unemployment assistance and who has a wife and, for example, four dependent children, will get an extra 15/- a week from the beginning of August if he lives in an urban area. A man with a similar family in a rural area will get an increase of 17/-.

The personal rate of widows' non-contributory pension is being increased by 2/6d. and the weekly allowance for the second qualified child is being raised by 1/- to 10/-. This will mean a weekly increase of 3/6d. for a non-contributory widow pensioner with two or more qualified children. These increases are provided for in Section 4 which also contains other provisions which I shall later explain.

As I have already indicated the Bill proposes to make other substantial concessions in the assistance schemes apart from the Budget increases in present rates which I have outlined. The extension and alteration in favour of recipients of the means limits for old age, blind and widows' non-contributory pensions and for unemployment assistance is provided for in Sections 2, 4 and 5, to complement the successive increases made in the rates of payment in recent years, as well as the grant, in 1960, of an allowance for each dependent child of widow pensioners and of unemployment assistance recipients, instead of for the first two such children only.

Section 2 of the Bill provides for two additional rates of non-contributory old age and blind pensions, that is to say, 12/6d. and 7/6d. and a corresponding extension of the means scale from the existing upper limit of £104 15s. a year to a new yearly limit of £130 15s. At present, a person with means just under £104 15s. gets a pension of 15/- per week, which is being raised to 17/6d. in this Bill, while a person with means just over £104 15s. gets nothing. In future persons with means between £104 15s. and £117 15s. and between £117 15s. and £130 15s. will get pensions of 12/6d. and 7/6d. per week respectively. The number of new pensioners under this provision is expected to be about 3,000.

As regards unemployment assistance, the present yearly means limit is a fixed sum of £100, that is, 38/5d. a week, irrespective of the size of the family of the applicant. Owing to the many improvements made in the rates of unemployment assistance in recent years the fixed means limit gives rise to inequality in the treatment under the scheme of certain family men with means—particularly in the rural areas. For example, in a rural area, a man with a wife and two child dependants who has the maximum means of 38/5d. a week from a small farm is just inside the scheme, and would qualify from next month for 20/6d. a week unemployment assistance on the basis of the increased rates provided for in Section 3 of this Bill. The amount payable would become 40/6d. if there were six children, and would rise further by 5/-for each other child after the sixth. If, however, the means of any applicant are even slightly over the present limit of 38/5d. a week the person is outside the scope of the scheme altogether as it now stands and would not be entitled to any payment, so that in certain circumstances a very slight increase in means could result in a considerable drop in income by the complete loss of unemployment assistance.

To correct this kind of anomaly, Section 5 provides for a new self-adjusting means limit, which would make special allowance for each child dependant of an applicant and would automatically move upward in line with increases granted from time to time in the rates of unemployment assistance. Under this section and Section 3 a number of persons with families, who are at present outside the scope of unemployment assistance by reason of their means will qualify for weekly rates of assistance ranging downward from 40/6d. for a six-child family in a rural area, and downward from 48/6d. for a similar family in an urban area, with an extra 5/- a week in each case for each child after the sixth. The new yearly means limit for a six-child family in both urban and rural areas would be £214 10 0—as against £100 at present —and the rate of assistance payable would depend on the means of the applicant within that new limit. It is expected that about 1,000 persons, mainly in the rural areas, will benefit from this improvement in the means limit.

An extension of the means limit is also proposed in regard to widows' non-contributory pensions. The increases provided for in this Bill will allow widows with yearly means at the present permissible limit of £130 15s. 0d. to qualify for minimum pensions. A widow with means just above the present limit of £130 15s., no matter how many children she may have, does not now qualify for any pension. To remedy this situation, Section 4 also proposes to modify further the existing table of means and pension rates to provide a table in which the present overriding means limit of £130 15s. would be replaced by a scale of variable means limits related directly to the number of qualified children in the family. The proposed new scale proceeds in £13 steps from £130 15s. upwards and mainly benefits widows with large families. For example, a widow with four dependent children and means not in excess of, say, £169 15s. a year, that is 65/6d. a week, will get a pension of at least 21/- a week as against nothing at present. About 400 would benefit under the proposal.

I now come to a group of four amendments affecting the assistance services, two of which in Section 6 and part of Section 7, are intended to facilitate and encourage the rehabilitation of certain handicapped persons for employment. It has been represented to me that there are recipients of unemployment assistance or unemployment benefit, who, having, for example, recovered from an illness such as tuberculosis, are not fit to resume their normal occupation and are anxious to find an alternative. These persons can be rehabilitated and trained for some other occupation suitable to their diminished capacity but the law as it stands operates to prevent them from continuing to receive unemployment assistance or unemployment benefit during a training course. The Bill proposes to relax certain provisions of the Unemployment Assistance Acts in favour of such persons while they are undergoing training with any organisation approved of by the Minister for Health for the purposes of the provision of such training. Section 6 of the Bill therefore will enable persons receiving approved rehabilitation training to fulfil the prior conditions for entitlement to unemployment assistance apart from their means position namely to be regarded as unemployed, available for and genuinely seeking work. It is my intention to make a similar concession in relation to unemployment benefit, but this can be achieved by the amendment of existing regulations.

Section 7 includes an amendment associated with Section 6. Where trainees receive weekly allowances from the training organisation, such allowances would, unless it were specifically provided otherwise, be reckonable as means so that the amount of unemployment assistance payable during training could be reduced considerably, or even cease altogether, in such cases with the result that the concession provided in the previous section would be rendered largely ineffective. It is proposed, therefore, that any such training allowance should be excluded altogether in the calculation of means for unemployment assistance purposes and Section 7 includes provision accordingly.

Apart from the primary humanitarian motive for these concessions, the House will readily see that unemployment assistance or unemployment benefit paid in such circumstances, as well as, in many cases, being expenditure of an immediately productive kind during training, can be an investment likely to result eventually in greater gain to the community, since it will afford to the persons in question the chance of being able to take up regular employment again after training instead of having to depend on unemployment assistance for, possibly, the remainder of their potential working lives.

Two other amendments of the law are proposed in the Bill with the object of aiding efforts by voluntary bodies to assist certain handicapped persons to restore their morale through useful work. These amendments provide for disregarding, within limits, certain earnings of such persons in assessing means for unemployment assistance and for non-contributory old age and widow's pensions purposes. The earnings in question are those arising from work done in their own homes by persons affected in one way or another by physical or mental handicap on materials provided by organisations operating schemes which are charitable in character and purpose. Representations have been made to me on behalf of one such organisation—a co-operative guild founded a few years ago in Dublin by a religious order— that the application of the means test is discouraging or preventing the kind of person they are interested in from participating in such work because the people are afraid of losing their social assistance payments. Those concerned with the scheme have good reason to believe that the work has a profound and beneficial psychological effect on the morale of the persons participating. I am satisfied that a relaxation of the means tests is justified in the case of persons participating in schemes of this kind and that it is desirable that the praiseworthy social service being undertaken by voluntary charitable organisations providing such work should be facilitated. Accordingly, Section 7 also proposes the disregard of earnings of this kind of up to £104 a year for unemployment assistance purposes. Because non-contributory old age and widow pensioners can already have means of approximately £1 a week, apart from any other special disregards applicable, without affecting title to full pension, Section 14, which deals with non-contributory old age and widows' pensions, limits the additional disregard now proposed under these schemes to £52 a year, as against £104 for unemployment assistance. The people affected by the proposed amendments will in most cases, have their full earnings from such a source disregarded. It is intended by amending existing Regulations to put persons in receipt of social insurance benefits on the same footing in relation to work of this kind.

The remaining amendment relating to the assistance services is contained in Section 8, which provides for altering the statutory provision relating to the cessation of the pension of the non-contributory widow where she is under 48 years of age when the last child for whom an allowance in addition to pension is payable ceases to be a qualified child. At present, if a non-contributory widow has not attained the age of forty-seven years and six months when the allowance in respect of her last qualified child ceases to be payable for any reason, her personal pension ceases six months afterwards. It is proposed that the age requirement for the purposes of this provision should be reduced from 48 to 40 years. Experience of the operation of the present provision has shown that hardship was inflicted on the widow who was over 40 years of age but who had not attained 48 years of age when her last qualified child reached 16 years. I think it will be generally agreed that a widow who, up to the age of forty, has to look after young children, should not, thereafter, be deprived of pension. At that age, her chances of re-entering remunerative employment in a highly competitive labour market are not good. If she is able to obtain employment which will leave her in no need of assistance from the State the means scale will come into play to disqualify her or to reduce her pension as may be appropriate to the case. It is estimated that about 120 widows will benefit from this amendment.

I turn now to the provisions of the Bill relating to the social insurance scheme. Section 13 provides for an increase of 5/- weekly in the basic personal rates of disability and unemployment benefit, maternity allowance, widow's (contributory) pension, orphan's (contributory) allowance and old age (contributory) pension. It also provides that the allowance for an adult dependant, where payable with any of those benefits, shall be increased by 5/-, and that the special rate of disability and unemployment benefit for married women and persons under 18 years shall be increased by 4/-. Allowances for each qualified child, where payable with any of those benefits, go up by 3/-. The rate of benefit payable to a surviving adult dependant of a deceased old age (contributory) pensioner is also being increased, by 5/-, under Section 11, to keep it in line with the rate of adult dependant's allowance. The increased rates of disability and unemployment benefit and maternity allowance and of any associated dependants' allowances will come into effect on the first Monday in 1963, that is 7th January, 1963, from which date new rates of contribution will also operate. The new rates of widow's (contributory) pension, orphan's (contributory) allowance, old age (contributory) pension and survivor's benefit, and any allowances payable with them, will come into effect on the first Friday in 1963, that is to say, 4th January, 1963, the first normal payday in the New Year.

These increases in benefits are substantial and their effect can best be shown by some examples. An insured man with a wife and four dependent children will receive £5 4s. 6d. a week when ill or unemployed as compared with £4 2s. 6d. at present, an increase of 22/- or almost 27 per cent. A widow in receipt of widow's (contributory) pension who has four dependent children will receive £4 2s. a week as compared with £3 5s. at present, an increase of 17/-, or 26 per cent. A married man receiving full old age (contributory) pension which include an allowance for his wife will receive £4 a week as against £3 10s. at present, an increase of 10/- or over 14 per cent.

I need hardly say that these increased rates of benefit will increase expenditure from the Social Insurance Fund heavily and an increase in rates of contribution by employers and insured persons is, therefore, unavoidable. New rates of employment contributions effective from the 7th January, 1963, are provided for in Section 12. An increase of 1/6d. per week, or 9d. each for employer and insured person, is the most that will be required. This increase applies only to those contributions which count for all benefits. Contributions which give title to limited benefits are being increased by an amount related to the cost of the increases in those benefits only. A special concession is being made, however, in the case of male agricultural workers who, although covered for all benefits, will only be charged 1/- extra of which 6d. will be payable by the employer. The effect of these contribution increases will be seen from a few examples. The ordinary male worker at present paying 4/6d. per week will pay 5/3d. while his employer will pay a similar amount. An ordinary female worker will pay 4/2d. instead of 3/5d. a week and her employer will pay 4/11d. instead of 4/2d., that is, an extra 9d. each. The male agricultural worker will pay 3/-, as will his employer, as against 2/6 each at present.

Finally, a word or two about the cost of the various proposals. In relation to Social Assistance the total costs are £1,377,000 in a full year and £925,000 in the current financial year, all of which will be borne by the Exchequer. The social insurance proposals will cost £2,823,000 in a full year, of which the increases in the contributions by employers and workers is estimated to yield about two-thirds, namely, £1,882,000, leaving £941,000 to be borne by the State. In the current year the cost to the Exchequer of the increases in insurance benefits will be about £235,000. Accordingly, the overall cost to the Exchequer will be £2,318,000—nearly two and one-third million pounds — in a full year and £1,160,000 in the present year.

I have pleasure in recommending this measure to Seanad Éireann. I am sure that Senators will give it speedy and favourable consideration so that its social assistance provisions can be put into effect, as proposed, on the first day of next month.

Professor Hayes

It is very easy to make a Second Reading speech on this Bill because it must necessarily be welcomed by everyone. It does some measure of justice—tardy justice some people would say — to a variety of citizens who, through no fault of their own, cannot provide entirely for themselves. The cost of living has increased; wages and salaries have increased; and living standards have been raised. It is natural, and indeed just and equitable, that social welfare beneficiaries should not be left behind.

The Second Reading of a Bill is intended to deal with the principle of the Bill and not, I suggest, with the details. The principle of the Bill is that certain increases are being made in social benefits, and certain measures are being taken to remedy defects and injustices which have revealed themselves. I am not criticising him personally because he is following a practice pursued by his colleagues over the years, but the Minister might have reserved for Committee Stage the details which he has given us. The Bill is putting into law certain provisions made by the Minister for Finance in the Budget. It contains amendments of the law and increases which only the Government could introduce and for anybody here, or, indeed, in the other House, to seek to improve these benefits is impossible under Standing Orders.

In an inflationary period, no class is harder hit than those living on fixed incomes, no matter how substantial they may be, and those in receipt of social welfare benefits. Social welfare benefits, in the nature of things, lag behind increases in costs, in prices and in wages. The Bill itself contains added burdens for contributors, employees and employers, which eventually must be made up by increases in prices to some extent, I think.

The Bill goes some way—not the whole way—to make up the difference between the position of social welfare beneficiaries and other classes of the community. It must be accepted on Second Reading and no doubt in Committee. Since it is an omnibus measure, anybody who wants information, expresses dissatisfaction or makes suggestions can do so, although everybody knows that the amount of money allocated, which is over £2 million, is very unlikely to be increased and so the position one really is in with a measure of this kind is that, however unsatisfactory it may appear in certain parts, it is a desirable measure and should be welcomed. With the nature of world economics at the moment and of Irish economics as part of world economics, it would appear that this will by no means be the last Bill of this kind. Personally, I welcome it and welcome it on behalf of those for whom I speak and will leave over any questions of detail for Committee Stage.

Mr. Moloney

I should like to congratulate the Minister on bringing in this Bill and particularly on bringing in such a comprehensive Bill. Most of us, when we heard this Bill was being introduced, thought it would be the usual measure to implement the decisions in the Budget of the Minister for Finance and I am glad that instead the Minister for Social Welfare has made a review of the general structure of social welfare benefits and has decided to remedy certain anomalies which existed in the legislation passed some years ago.

In particular, I welcome the extension of the means limits. Some of these limits are entirely unrealistic and out of date in present-day conditions. I congratulate the Minister on those extensions and particularly on the differentials, that is, that where there are dependants, there is a sliding scale such as has been introduced in other circumstances from time to time.

The Minister is doing a good job on the whole code, but there is one point which he might find time to look into and do something about: the assessment of the means of certain types of workers. If a man is employed on a weekly wage, it is possible to obtain a qualification certificate for unemployment purposes, though he may have a high wage like £15 or £20 a week. If he is engaged in manual labour, there is scarcely any limit. He can apply for a qualification certificate which is a prerequisite for obtaining unemployment assistance. But if his brother happens to work as a sub-contractor, it is very different. I know instances of fishermen employed by a fish vendor or of men employed by farmers to fish a river, to make drains, fences or roads on a system of sub-contract and they will fail to get a qualification certificate. Under the present system, different conditions apply to the man who is self-employed and to the ordinary wage earner.

There are many districts in the country where people of the working classes can get employment only on a task basis. A farmer who lives ten miles away comes to a workman living down at a bog the farmer owns and offers him so much to cut and save the quantity of turf he wants. He may pay £20 or £30. If the worker gets four or five of these operations and if he fishes for a month or two, his unemployment assistance is reduced. If there is a re-calculation of his means, he will fail to establish that his income in sufficiently low to qualify for unemployment assistance and that was never the intention. Why it is calculated on that basis, I do not know. There may be good reason, but I can quote cases to the Minister which, particularly in view of the scarcity of labour in the country, the difficulty of getting suitable labour, prove that the system should be revised. Take a tailor who works for a master tailor. He often works on a seasonal basis and may be out for two or three months, but he finds it impossible to get a qualification certificate to enable him to get assistance. If he got a weekly wage, he could have more money and still get a qualification certificate for the full amount. I suggest that the Minister might examine that position which it is not beyond his power to correct. If he rectified it, he would relieve a lot of hardship.

Professor Jessop

I should like also to support the Bill. I realise that the increases provided in the Bill are not very large, especially when compared with the allowances that operate in a welfare state, but I do not think we have any intention here of competing with the conditions in a welfare state.

I consider our whole approach here to the question of health and social welfare to be an excellent compromise between the comprehensive system of a welfare state, on the one hand, and the exclusively private enterprise system obtaining elsewhere, on the other. I had occasion a few months ago in a lecture in the United States to explain our system of health and social welfare on this basis and in spite of the fact that the system of private enterprise is almost sacrosanct there and that my audience was largely a medical one, I was very intrigued to find that I got a large measure of support for the type of service we have here.

The provisions of the Bill, as the Minister pointed out, give us the opportunity of increasing — not very substantially, it is true, but still increasing—various allowances and pensions. Though they may not in certain cases be a very great deal, the Minister, as we know, has only a very limited amount of funds to dispose of and he has disposed of them, as far as I can see, quite fairly. Increases of from ten to 30 per cent. in present pensions are not entirely insignificant and I think it of even greater importance that he has raised the ceiling above which persons are not eligible to receive pensions or allowances under the Bill and its predecessors. This has always been a headache to me.

I serve on a number of boards of schools, hospitals, and so on. From time to time, we have an employee who has served long and faithfully. If we give him a small pension, no matter how small it is—it is miserably small, anyway—it seems unfair that what he has a right to expect by way of some form of allowance in the State system may be reduced. The increases in this ceiling will be welcomed not only by the people who receive the benefits of them directly but also by all of us who have to work in such connections.

All of us with medical connections will welcome what the Minister has done about the earnings of people who are undergoing rehabilitation and who are engaged in what one might call occupational therapy. The Minister is quite right when he says that the value of the work done by people undergoing rehabilitation is greatly increased, psychologically if it brings them in a little money. The amounts are never very large. They work in sheltered workshops. They work at piecework at home. They earn a little money. If that can be retained by them, without affecting the amount they can expect from allowances from the State it considerably helps their improvement and treatment.

I have no major criticisms of these sections at all. I should like very strongly to support the measure.

Mr. Cole

There is one small point of which I should like the Minister to take note, if not in this Bill then perhaps at some future time. It concerns the method of calculating the means of old age pensioners or widows. We have been trying over the past number of years to encourage people to save. There have been circulars, advertisements, and so on, published to encourage people to save. A person who comes to pensionable age has perhaps saved £1,000. A husband or a husband and wife may have saved that much and the wife suddenly becomes a widow and there is £1,000 saved. The calculation of means for an old age pension or a widow's pension is not based on what that £1,000 would bring in to the widow—perhaps five or six per cent.

I am sorry I have not the details here as I did not expect this Bill to come on today. The calculation goes something like this: The first £25 is ignored. Then some hundreds of pounds are calculated at ten per cent. and the next few hundred pounds are calculated at 20 per cent. or 25 per cent. That calculation is totally unrealistic. In other words, the person is encouraged to liquidate the £1,000 or the £100 or whatever he or she may have straightaway or else have to settle for a very much reduced pension or no pension at all.

Take the case of a widow at perhaps 48 or 50 years of age. There might be £1,000 or £800, and so on. The income from that amount is calculated by this absolutely unrealistic method. The point is that the widow is encouraged to spend that money or else she will not get the full pension or she will not get even the interest that that money would bring into her in the normal course of events.

We should encourage these people to keep their money invested in State loans, for instance, in this country. Surely, at the most, the income should be calculated at the highest amount she would get if the money were invested in State loans in this country? It is very wrong for those people to be more or less encouraged to liquidate a nest egg which they would like to keep. Surely that money, being invested in the country, is of some advantage elsewhere to the Minister for Finance?

Mr. Desmond

Whilst it is important to pass this measure and to facilitate the Minister in arranging for payment, I would at the same time point out that in the 1955 Budget 2/6 was given to old age pensioners. At that time the Government argued that it was the same as what we are now calling a mean increase in this year's Budget.

An examination of the prevailing prices of essential commodities at the relevant dates shows that 2/6 in 1955 meant a great deal more than it does now. A representative selection of prices might bear me out. I shall give the prices prevailing at mid-May, 1955, and at mid-February, 1962. At mid-May, 1955, butter was 3/9 per lb. as against 4/7 in mid-February, 1962; milk 5d. per pint as against 6½d. The price of the 2 lb. loaf which was 9d. in 1955 is now 1/4. Flour cost 4/2½d. per stone in 1955 while in mid-February of this year it cost 8/3. Tea which cost 4/11¾ per lb. in 1955 cost 6/2¼ per lb. in mid-February, 1962. That is a low-priced tea. It is not the dearest class of tea. We could quote other figures.

The rise in contributions by both employer and employee in respect of social welfare makes a big difference. In 1960, the normal contribution of both employer and employee, in respect of both male and female workers, was raised by 1/9d. In return, unemployment and disability benefits were raised by 2/6d., maternity allowance by 5/-, widow's pension by 5/-, orphan's allowance by 3/- and the contributory old age pension of 40/- per week was introduced, with 28/6 for a dependent wife.

With regard to the insurance provisions of the Bill, it might be noted that the Minister is not expecting the new benefits to add anything to his contribution to the Social Insurance Fund. Under the 1952 Social Welfare Act, the Minister contributed the difference between income and expenditure to this fund. In fact, he expects to have to pay £80,000 less towards the fund during 1962-63 than he did in 1961-62. This certainly shows that the increased benefits are no generous gesture on the part of the Government. They will be more than paid for by the increased contributions.

With regard to the assistance provisions of the Bill, the total increase in the estimate for social assistance is £264,000, from £18,926,000 in 1961-62 to £19,190,000 in 1962-63—not a very generous increase considering the figures involved. I could continue to quote figures. There was a broadcast to the effect that the position is that since 1958 tax revenue has gone up £32,000,000 whereas only £2,000,000 more has been spent on social welfare. In 1958, 5/- in the £ of tax revenue was spent on social welfare whereas this year the figure is only 4/- in the £. The recent Budget provided for a tax revenue increase of nearly £10,000,000 and only one-tenth of this increase is devoted to social welfare.

Mr. Fitzpatrick

I should like to make a few very general remarks at this stage. Like some of the other speakers, I welcome this Bill. I should like to make it clear that I welcome it in the sense that any social welfare measure improving the lot of the social welfare classes must be welcomed. I welcome it, I regret to have to say, in the sense that half a loaf is better than no bread. This no doubt represents the proportion of the increased national income which the social welfare classes are receiving and about which we have heard a considerable amount recently. I submit that an increase of 2/6 per week to the old age pensioners against the background of a Budget which increased the price of several commodities which might be regarded as necessaries in present day circumstances, such as the pint and the cigarette, in the light of a budget that preceded it which increased the price of postage stamps, and in the light of another budget subsequent to the normal Budget which increased the price of cigarettes by a further penny, is anything but generous and is not the figure which was anticipated by some people. Furthermore, these people have to wait from the date of the Budget some months ago until 1st August to get the increase. It is true that the contributory social welfare classes have done slightly better under the provisions of this Bill but, if they have they have done so at the expense of the employers.

I should like to join in the appeal made by Senator Cole that the method of assessing savings for the purpose of the means test for old age pension should be revised at once. It is absurd that an old age pensioner who has managed to save £1,000 should have that £1,000 assessed. It is an unreal method of assessment. The old age pensioner who is not married can have about £600 and get the full old age pension but after £600 this artificial valuation comes into force and he or she is presumed to be earning 10 per cent. on that amount. Everybody knows that the most one can earn under the best terms offered by the State is six per cent. I wholeheartedly agree with Senator Cole that these people should be encouraged to save and that savings within reason should be given a factual valuation.

Mr. Boland

I wish first of all to express thanks to the Senators who have spoken, for the manner in which they approached this Bill. There was some criticism but we have to expect some criticism. It is easy for Senators to talk contemptuously of 2/6 for non-contributory old age pensioners but unfortunately I have to think of that 2/6 in terms of the £783,000 that that aspect of this Bill alone will cost the State in a full financial year. The Government have to approach the matter from the point of view of raising the money. There is no source open to the Government from which to get this money except the community, in some form or other whether from the general taxpayer or by way of contributions from insured workers and the employers. All the money spent on the various social services is raised in that way. Naturally, therefore, in considering what increases it is possible to give the Government have to consider the capacity of the community to provide the money in these three ways.

The provision we have made in this one year for increases in social welfare payments is fairly substantial. As I said, the State's contribution in the full financial year as a result of the measures in this Bill will be an extra £2,318,000 and as a result of what is being done the recipients of social welfare payments in general will benefit by an extra £4,200,000, that is taking into account contributions from employers and employees plus the amount provided by the Exchequer. Of course the total amount comes from the people.

It is not correct to say, as Senator Hayes said, that social welfare payments are lagging behind the increases that have taken place in the cost of living. The figures show they have more than kept pace with the increase in the cost of living. I feel what the Senator really had in mind is that they still lagged behind the rates we would consider sufficient to provide a reasonably adequate standard of living. We all realise, of course, that it would be desirable to raise all these payments further. This Government have been gradually improving the situation of the recipients of social welfare benefits generally in comparison with the cost of living, according as the state of the economy has been improving.

The question of the assessment of capital for purposes of non-contributory pensions has been mentioned. I must admit that when I first became Minister I was somewhat of the same opinion as Senator Cole and Senator Fitzpatrick but when I looked into the matter I realised it was not, as the Senators think, an unrealistic way to assess capital and not an unfair way. The manner in which it is assessed is that the first £25 is ignored; the next £375 is assessed at five per cent. and the remainder at 10 per cent. The figure that an applicant for a non-contributory widow's pension, or an old age pension, can have and still qualify for the full pension is £720. A married couple, both applying for a non-contributory pension, can have double that amount. The reason I say it is not unfair is that an annuity purchased by a person over 70 years of age would earn a greater rate than the income that is assessed for capital according to the provisions I have specified. Therefore it is a fact that capital in the hands of applicants for these pensions does in fact represent a greater income than the income that is assessed according to the rules laid down. Of course, if the people concerned have saved that money for the purpose of passing it on to their heirs, needless to say, it does not represent any income to them. On the other hand, if they saved it in order to provide for their old age, or some misfortune, they can get a greater income from it than is assessed according to the rules.

Mr. Cole

What about the widow?

Mr. Boland

The same thing may not apply in the case of a young widow. I do not know exactly what is the rate of the annuity for younger widows. Senator Desmond referred to the fact that there was a 2/6 increase in the non-contributory old age pensions in 1955, and appeared to suggest that because of the fact that practically all commodities were cheaper at that time, something more was done by the Government then. That argument, I think, is not a legitimate one because, in 1955, no other social welfare recipients were aided except the non-contributory widows. This year, we have provided substantial increases for every class of social welfare recipient.

As I have said, by doing that, we have arranged that an extra £4,200,000 will be available for the recipients of social welfare payments. That is quite a considerable effort in the redistribution of income in favour of the necessitous classes of the community to make in any one year. I ask Senators, therefore, to pass this Bill in order that we will be able to make these payments as arranged on the first day of next month.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.

The Seanad adjourned at 10.55 p.m. until 3 p.m. on Wednesday, 25th July, 1962.