When the debate was adjourned I was making a case that the extension of the Social Welfare Acts does not meet modern requirements. It improves the benefits that existed more than ten years ago. It is now only changing the scale in relation to wage levels, higher living costs and higher standard of living.
The proposed scheme will impose a burden of an extra £3 to £4 million on employers and that still will not relieve them of the major liability which exists in connection with workmen's compensation, that being, of course, the common law liability portion of the indemnity which is required for an employee. The extra charge per stamp will amount to more than £5 per man per year and more than £4 per woman per year in addition to the heavy cost of the social welfare card at the moment jointly borne by employers and employees. I should like to know from the Minister, when he is replying, whether the State will be making any contribution towards the scheme for the payment of compensation or whether it is purely and simply being financed by the employers' contributions, amounting to something around £3 million per year.
The Minister has indicated that although he gave, if you like, rough and round figures, he has indicated that, in fact, this scheme will be reviewed. He must have the feeling that, in fact, the extra £5 per man and £4 per woman will not be sufficient to pay the proposed scale of benefits under this extension of the Social Welfare Scheme.
Now this all comes at a time when we have in this country the lowest number of wage and salary earners in recorded history. This small number of people will come in for this benefit and it is a set benefit, not related to the wage levels or earning capacity of the workers involved. Under this scheme apparently no lump sum settlement is envisaged and workers will not have the option of seeking a lump sum settlement as they had under the existing legislation. They were able to sue for a settlement on a lump sum basis after the expiration of a certain period of incapacity. Now they have no opportunity to seek a lump sum settlement in relation to loss and incapacity resulting from an accident.
This lump sum settlement was of great advantage to certain classes of employees particularly if they were practical enterprising people who might be able to invest the money in worthwhile projects and provide employment for others. This imposition on employers is a double burden so far as insurance is concerned because when they have paid £5 per man on the insurance card for their employees they will still be required, so far as prudence is concerned, to go to an insurance company and pay a premium which will cover their common law liability and, in fact, the common law liability is a major portion of the risk so far as employers are concerned.
Many employers would not insure themselves against workmen's compensation if they had only to pay weekly compensation. They usually pay insurance premiums to cover themselves, their property and their interests against a heavy claim brought against them under the common law. They have not been relieved of that liability under this scheme. The Government have not taken over this portion of the liability for employers and the result is that when a small deduction is made from the premiums, where weekly compensation is concerned, they will be required to pay premiums now to cover their common law liability of almost 75 per cent and I should like to think of the premiums they are now paying as covering all their liabilities.
In addition to paying 75 per cent on the premium which they have normally paid, they will be required now to pay £5 per man and £4 per woman per annum under this extension. It is stated according to statistics that this scheme will actually withdraw from the insurance companies a premium income of almost £3 million. That is a considerable withdrawal when we remember that insurance companies have supported the State very handsomely throughout the year by making substantial contributions towards various national loans which were designed for our economic development and expansion. This £3 million per annum will be withdrawn now from the insurance companies in spite of the fact that they have made a major contribution to the building up of our industrial economy. I was disappointed not to see in the Minister's statement that any compensation for insurance companies was envisaged. He must know losses will result from this transfer of premium income. Staffs which were employed on the administration of the employers' liability insurance will become redundant, except in so far as the common law liability section of insurance is concerned. There is nothing in the Bill to say that compensation will be paid to employees who may lose their employment with insurance companies, possibly after a long number of years' service owing to the fact that this £3 million per year will be withdrawn from the insurance companies.
I should like to know from the Minister whether any suggestion has been submitted to him from the insurance companies regarding the question of compensation, and whether he has considered the number of persons who will be left without employment in the commercial insurance companies as a result of the withdrawal of this annual premium income of approximately £3 million. It is bound to have repercussions. With the shrinking number of people in employment we can only assume it will be compensated by an increased number of civil servants in the Department of Social Welfare who will be required to administer the weekly compensation section.
When this scheme is not prepared to give lump sum settlements to employees, it is most unfair to have the provision that a deduction will be made from common law damages if they are received by an employee having taken his case to court and won it. Now if he wins his case the Department apparently will have the first claim on the amount of damages awarded to the injured man and his damages will be reduced by the amount of weekly compensation or other benefits paid to him in the meantime, up to a maximum of 5 years. There, again, we could calculate what a heavy loss it would be to an injured workman if five years' compensation paid to him by the Department of Social Welfare is deducted now from the common law damages which he receives independently of the Department, through the courts, having made a successful case for recovery of damages resulting from an accident.
These aspects of the changes should be made known to us. Possibly it will arise on Committee Stage of this Bill but there will be repercussions which are not immediately envisaged in this extension of the social welfare code. It is a major change in so far as workmen's compensation is concerned. We will now have the injured man dealing with Departments in the usual red-tape manner, rather than the more personal manner of dealing with him which exists under the present system of employers' liability insurance where he is immediately in contact with his doctor, his employer, his solicitor and, through him of course, with the insurance officials. I am sure we can expect that this scheme will be administered on much the same basis as the other social welfare schemes at the present time. As has been mentioned by a Senator, it frequently becomes necessary for these employees, or recipients, to contact their local TD or Senator regarding delays in the Department. Very often the delay is not the fault of the Department but the man does not understand that and he finds it necessary to consult the TD or Senator who immediately finds out the reason for the delay. That is because dealings with the Department are less personal than with his insurance company, his employers, local doctors,et cetera.
Possibly this scheme will also encourage malingering because it has a flat scale of benefits and there are circumstances where, in fact, if the benefits were added up, taking into consideration the wife, dependant children and others, the total amount to which a man would be entitled could be more than his actual wage level. He will not get more than he was earning in the ordinary way. It says the compensation he is to receive will not exceed his weekly earnings. In other words, the man on the lower scale of wages or salary will now be as well off receiving compensation under the social welfare scheme as if he were working. There was always the arrangement whereby the compensation was something less than the actual wages received in the course of employment. That was, of course, to encourage the man to go back to work as soon as he was fit to do so but if a man is receiving compensation equal to his normal weekly wage, or near it, I have no doubt there will be very little anxiety on the part of that man to return quickly to his employment, whereas under the present scheme, the injured man is always anxious to get back to work as soon as he has recovered from his injuries and is certified fit for work.
It will need to be a very carefully operated scheme if, all over the country, the condition of injured persons is to be kept up to date on the files in the Department. It is possible they will be overlooked for a number of weeks or months and will be receiving compensation from the Department of Social Welfare equal to the wages they would normally be earning if they had not qualified for the payment of the weekly compensation. It may be suggested that employees are honest, and, of course, they are. The point I am making is that an injured employee will probably convalesce for a longer period after the injury if his wages are about the same as the amount of compensation to which he is entitled, whereas the ordinary man is anxious to get back to work as soon as he is certified fit to begin work again.
I feel this arrangement is a stopgap measure only. It is designed only to improve the benefits which were decided in 1955. Of course, it is time that those benefits were brought up to date in relation to wage levels and costs, and the increased cost of living and higher standard of living. So, in fact, the Minister is merely effecting a remedy which is long overdue. It has been overdue for ten years, because costs have increased considerably during that time, and the compensation payable to injured employees should have kept pace with them, but no legislation was brought in to ensure that that was the case.
It must be said that the system of compensation for injured employees so far as administration is concerned was probably satisfactory. As it stood, the worker had the right to go to court. His case could be heard in the open, and it could be seen that he was fairly treated. Under this Bill an injured person has no right to take the Minister for Social Welfare to court, and to fight his case in court. Apparently he is bound by regulations, and that is the answer he will get. He is now purely and simply a cog in the wheel, and one of a list of persons to be treated in a certain manner under certain regulations. The human aspect never comes into it when it comes to enforcing regulations or determining regulations. That is the difference between the situation in which the injured man will now find himself, and the situation he was in before when all these things could be taken into consideration in open court.